[Senate Hearing 112-654]
[From the U.S. Government Printing Office]




                                                        S. Hrg. 112-654

 
           THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

=======================================================================

                                HEARINGS



                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE



                      ONE HUNDRED TWELFTH CONGRESS



                             SECOND SESSION



                               ----------                              

                   MAY 23, JUNE 14, AND JUNE 28, 2012

                               ----------                              



       Printed for the use of the Committee on Foreign Relations


      Available via the World Wide Web: http://www.gpo.gov/fdsys/
           THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)




                                                        S. Hrg. 112-654

           THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

=======================================================================

                                HEARINGS

                               BEFORE THE



                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                   MAY 23, JUNE 14, AND JUNE 28, 2012

                               __________

       Printed for the use of the Committee on Foreign Relations


      Available via the World Wide Web: http://www.gpo.gov/fdsys/
?



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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
BARBARA BOXER, California            RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey          BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   MARCO RUBIO, Florida
JIM WEBB, Virginia                   JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire        JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware       JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois          JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico                MIKE LEE, Utah
               William C. Danvers, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                              (ii)        

  
                            C O N T E N T S

                              ----------                              

                        Wednesday, May 23, 2012
          THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39):
                THE U.S. NATIONAL SECURITY AND STRATEGIC
                      IMPERATIVES FOR RATIFICATION

                                                                   Page

Clinton, Hon. Hillary Rodham, Secretary of State, U.S. Department 
  of State, Washington, DC.......................................     7
    Prepared statement...........................................    12
    Responses to questions for the record submitted by Senator 
      John F. Kerry..............................................    62
Dempsey, GEN Martin E., Chairman, Joint Chiefs of Staff, 
  Washington, DC.................................................    22
    Prepared statement...........................................    23
    Responses to questions for the record submitted by Senator 
      John F. Kerry..............................................    72
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................     1
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................     5
Panetta, Hon. Leon E., Secretary of Defense, U.S. Department of 
  Defense, Washington, DC........................................    16
    Prepared statement...........................................    19
    Responses to questions for the record submitted by Senator 
      John F. Kerry..............................................    70

              Additional Material Submitted for the Record

Letters submitted by Senator John F. Kerry received from:
    Lockheed Martin Corporation, Robert J. Stevens, Chairman and 
      CEO........................................................    74
    AT&T, Bill Smith, president, AT&T Network Operations.........    76
    Director of National Intelligence, James R. Clapper, director    78
    United States Northern Command, Gen. Charles H. Jacoby, Jr., 
      U.S. Army..................................................    80
    Chamber of Commerce of the United States, R. Bruce Josten, 
      executive vice president, Government Affairs...............    81
Letters submitted by Secretary of State Hillary Rodham Clinton 
  received from:
    Maritime Trades Department, Michael Sacco, president.........    83
    Seafarers International Union of North America, AFL-CIO, 
      David Heindel, executive vice president/secretary-treasurer    84
    American Federation of Labor and Congress of Industrial 
      Organizations, Richard L. Trumka, president................    85
    Defenders of Wildlife; Environmental Defense Fund; 
      International Union for Conservation of Nature; Marine 
      Conservation Institute; Natural Resource Defense Council; 
      The Nature Conservancy; Oceana; Ocean Conservancy; and 
      World Wildlife Fund US.....................................    87
    American Petroleum Institute, Jack N. Gerard, president and 
      CEO........................................................    89

                     Thursday, June 14, 2012 (a.m.)
 THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM 
                           THE U.S. MILITARY

Fraser, GEN William M., III, Commander, U.S. Transportation 
  Command, Scott Air Force Base, IL..............................   106
    Prepared statement...........................................   107
    Responses to questions submitted for the record by Senator 
      John F. Kerry..............................................   150
    Response of General Fraser, General Jacoby, and Admiral 
      Locklear to question submitted for the record by Senator 
      John F. Kerry..............................................   152
Greenert, ADM Jonathan W., Chief of Naval Operations, U.S. Navy, 
  Washington, DC.................................................    99
    Prepared statement...........................................   100
    Responses to questions submitted for the record by Senator 
      John F. Kerry..............................................   148
    Response to question submitted for the record by Senator 
      Robert P. Casey, Jr........................................   154
Jacoby, GEN Charles H., Jr., Commander, U.S. Northern Command, 
  Peterson Air Force Base, CO....................................   108
    Prepared statement...........................................   109
    Response to question submitted for the record by Senator John 
      F. Kerry...................................................   152
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................    91
Locklear, ADM Samuel J., Commander, U.S. Pacific Command, Camp 
  H.M. Smith, HI.................................................   110
    Prepared statement...........................................   111
    Responses to questions submitted for the record by Senator 
      John F. Kerry..............................................   152
    Response to question submitted for the record by Senator 
      Robert P. Casey, Jr........................................   154
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................    94
Papp, ADM Robert J., Jr., Commandant, U.S. Coast Guard, U.S. 
  Department of Homeland Security, Washington, DC................   101
    Prepared statement...........................................   103
    Responses to questions submitted for the record by Senator 
      John F. Kerry..............................................   149
Winnefeld, ADM James A., Jr., Vice Chairman, Joint Chiefs of 
  Staff, Washington, DC..........................................    96
    Prepared statement...........................................    98
    Responses to questions submitted for the record by Senator 
      John F. Kerry..............................................   149
    Response to question submitted for the record by Senator 
      Robert P. Casey, Jr........................................   153

              Additional Material Submitted for the Record

Letters submitted for the record by Senator John F. Kerry:
    James N. Mattis, General, U.S. Marines.......................   155
    Douglas M. Fraser, General, U.S. Air Force, Commander........   156
    J. Stavridis, Admiral, U.S. Navy.............................   157
    William H. McRaven, Admiral, U.S. Navy, Commander............   158
    C. Robert Kehler, General, USAF, Commander...................   159
Letters submitted for the record by Senator James M. Inhofe:
    Coalition to Preserve American Sovereignty...................   160
    Reserve Officers Association.................................   164

                     Thursday, June 14, 2012 (p.m.)
           THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39)

Bellinger, Hon. John B., III, former Legal Adviser, U.S. 
  Department of State, Partner, Arnold & Porter, LLP, Washington, 
  DC.............................................................   181
    Prepared statement...........................................   183
Groves, Steven, Bernard and Barbara Lomas Fellow, The Heritage 
  Foundation, Washington, DC.....................................   189
    Prepared statement...........................................   191
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................   169
Lugar, Hon. Richard G., U.S. Senator from Indiana, opening 
  statement......................................................   171
Negroponte, Hon. John, former U.S. Deputy Secretary of State, 
  Washington, DC.................................................   176
    Prepared statement...........................................   179
Rumsfeld, Hon. Donald, former U.S. Secretary of Defense, the 
  Rumsfeld Foundation, Washington, DC............................   173
    Prepared statement...........................................   175

              Additional Material Submitted for the Record

Letters submitted by Senator John F. Kerry received from:
    Lockheed Martin..............................................   232
    AT&T.........................................................   234
    Chamber of Commerce of the United States.....................   236
    American Petroleum Institute.................................   238
    ExxonMobile..................................................   240
    Chamber of Shipping..........................................   242
Letter from Heritage submitted by Senator James E. Risch.........   244
Paper by Bernie Oxman submitted by Hon. John B. Bellinger III....   247

                        Thursday, June 28, 2012
 THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM 
                         BUSINESS AND INDUSTRY

Donohue, Thomas J., president and CEO, U.S. Chamber of Commerce, 
  Washington, DC.................................................   263
    Prepared statement...........................................   266
    Responses to questions submitted for the record by Senator 
      James E. Risch.............................................   306
Gerard, Jack N., president and CEO, American Petroleum Institute, 
  Washington, DC.................................................   270
    Prepared statement...........................................   272
Kerry, Hon. John F., U.S. Senator from Massachusetts, opening 
  statement......................................................   257
Lugar, Richard G., U.S. Senator from Indiana, opening statement..   262
McAdam, Lowell C., chairman and CEO, Verizon Communications, 
  Inc., New York, NY.............................................   279
    Prepared statement...........................................   281
    Responses to questions submitted for the record by Senator 
      Jim DeMint.................................................   309
Timmons, Jay, president and CEO, National Association of 
  Manufacturers, Washington, DC..................................   275
    Prepared statement...........................................   277

              Additional Material Submitted for the Record

Marvin E. Odum, president, Shell Oil Company, prepared statement.   259


 THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): THE U.S. NATIONAL 
          SECURITY AND STRATEGIC IMPERATIVES FOR RATIFICATION

                              ----------                              


                        WEDNESDAY, MAY 23, 2012

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:04 a.m., in 
room SH-216, Hart Senate Office Building, Hon. John F. Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Boxer, Menendez, Cardin, Webb, 
Shaheen, Coons, Durbin, Udall, Lugar, Corker, Risch, Inhofe, 
DeMint, Isakson, Barrasso, and Lee.

            OPENING STATEMENT OF HON. JOHN F. KERRY,
                U.S. SENATOR FROM MASSACHUSETTS

    The Chairman. The hearing will come to order.
    Thank you all very much for being here with us today.
    Secretary Clinton, Secretary Panetta, and General Dempsey, 
welcome. We are particularly privileged to have you here today, 
and we thank you for joining us.
    It is really a rare occasion, I think, in any committee, 
but it is a rare occasion in this committee when we have 
simultaneously a panel of witnesses that brings together 
America's top diplomat, our country's top defense official, and 
our Nation's top military officer. Your presence here all 
together powerfully underscores the importance that you put on 
this issue.
    Our committee shares this sense of importance, which is 
why, I hope without respect to party or ideology, we will begin 
an open, honest, and comprehensive discussion about whether the 
United States of America should join the Law of the Sea 
Convention.
    I want to underscore the word ``comprehensive.'' I have 
heard from countless military and business leaders for some 
period of time who believe it is urgent that we ratify this 
treaty. And I have also spoken with Senators and some groups 
who oppose the treaty.
    I intend to make certain that the committee does its job 
properly and thoroughly. We will hear from all sides, and we 
will ask all the questions as we begin the process of 
educational hearings on this issue, the first since 2007.
    The Senate has seen a fair number of new members elected 
since then from both sides of the aisle, and our committee also 
has new members. So I think a thorough examination of the 
treaty is especially timely and relevant.
    Some of us have had the opportunity in the past to evaluate 
this treaty and even to vote on it in this committee. I am 
personally deeply supportive of it, and I believe it is now 
more urgent than ever that we ratify it because to remain 
outside of it is fundamentally directly counter to the best 
interests of our country.
    I am convinced beyond any doubt that joining the other 160 
nations that are party to the treaty will protect America's 
economic interests and our strategic security interests. And I 
believe the evaluation we make over these next weeks will 
document that beyond any doubt.
    I promise the committee and the Senate that, 
notwithstanding my support, we will conduct exhaustive and fair 
hearings to examine all of the arguments, pro and con.
    Now some may ask why now? Why consider a treaty that has 
been untouched by the Senate for the last 5 years and been 
hanging around for more than 25?
    Well, I think the real question is why we wouldn't have 
this discussion now when, today, we have the worst of all 
worlds? We have effectively lived by the terms of the treaty 
for 30 years, but as a nonparty, we are on the outside looking 
in. We live by the rules, but we don't shape the rules.
    It couldn't be more clear. Without joining the Law of the 
Sea, we are deprived of critical benefits and protections under 
the treaty. A few quick examples.
    Ratifying the treaty will lock in the favorable 
navigational rights that our military and shipping interests 
depend on every single day. It will strengthen our hand against 
China and others who stake out claims in the Pacific, the 
Arctic, or elsewhere. It will give our oil and gas companies 
the certainty that they need to make crucial investments to 
secure our energy future. It will put our telecommunications 
companies on an equal footing with their foreign competitors, 
and it will help secure access to rare earth minerals, which we 
need for weapon systems, computers, cell phones, and the like.
    It will also address issues of military effectiveness. As 
our national security focus shifts toward the Asia-Pacific 
region, it is more important than ever that we are part of this 
treaty. China and other countries are staking out illegal 
claims in the South China Sea and elsewhere. Becoming a party 
to the treaty would give an immediate boost to U.S. credibility 
as we push back against excessive maritime claims and illegal 
restrictions on our warships or commercial vessels.
    There is no doubt in my mind it would help resolve maritime 
issues to the benefit of the United States and our regional 
allies and partners, and we will hear from every single former 
Chief of Naval Operations and Commandant of the Coast Guard to 
that effect.
    The treaty is also about energy security. While we sit on 
the sidelines, Russia and other countries are carving up the 
Arctic and laying claims to the oil and gas riches in that 
region. We, on the other hand, can't even access the treaty 
body that provides international legitimacy for these types of 
Arctic claims.
    Instead of taking every possible step to ensure our stake 
in this resource-rich area, we are watching others assert their 
claims and doing nothing about it because we have no legal 
recourse.
    This treaty is also about rare earth minerals. China 
currently controls the production of rare earth minerals. 
Ninety percent of the world's supply, we are dependent on from 
China. There is no way that enhances American security. We need 
this for cell phones, computers, weapon systems. U.S. industry 
is poised to secure these minerals from the deep seabed, but 
they cannot do so through the United States as it is because we 
are not a party to the treaty.
    Don't take my word for it. Listen to our top companies. 
Just last week, Bob Stevens, the CEO of Lockheed Martin, wrote 
to me urging that the Senate pass the Law of the Sea Treaty. I 
want to just take a minute to read from his letter.
    He said, ``The multibillion dollar investments needed to 
establish an ocean-based resource development business must be 
predicated upon clear legal rights established and protected 
under the treaty-based framework of the Law of the Sea 
Convention, including the International Seabed Authority. Other 
international players recognize this same reality and are 
acting upon it. Countries, including China and Russia, are 
moving forward aggressively within the treaty framework, and 
several of these countries currently hold exploration licenses 
from the International Seabed Authority.
    ``Unfortunately, without ratifying the Convention, the 
United States cannot sponsor claims with or shape the deep 
seabed rules of the ISA. Yet that is the critical path forward 
if the United States intends to expand and ensure access for 
both U.S. commercial and Government interests to new sources of 
strategic mineral resources.''
    And without objection, I will place the full letter into 
the record.
    I also would just point out quickly that today there is a 
full-page ad in the Wall Street Journal, placed by the U.S. 
Chamber of Commerce. The U.S. Chamber of Commerce states three 
reasons, the first of which is pure economics--jobs. The United 
States economy depends on the passage of this.
    So whether it is rare earth minerals, the Arctic, or 
illegal maritime claims, China is moving the ball over the goal 
line while we are sitting on the sidelines. To oppose this 
treaty is actually to enable China and Russia to continue to 
utilize the treaty to their benefit and to our disadvantage. 
How does that make sense for American economic or strategic 
security?
    And the treaty is also about telecommunications. The treaty 
provides a legal framework to lay and protect submarine cables. 
I don't need to tell most people about how critical the 
Internet is to our economy and national security.
    We need to put ourselves on the best footing possible to 
protect those cables through which the Internet flows, and the 
treaty does that. And that is why AT&T, Verizon, Level 3, and 
others support this treaty.
    Again, don't take my word for it. In a recent letter, AT&T 
explained, ``Submarine cables provide the backbone of 
international transmission facilities for the global Internet, 
electronic commerce, and other international voice and data 
communication services that are major drivers of the 21st 
century global information-based economy. It has never been 
more important to our U.S. economic infrastructure and our 
participation in the global economy to strengthen the 
protection and reliability of international submarine cables. 
``The Law of the Sea Convention, particularly as assisted by 
the enforcement mechanisms available to parties under article 
297, is a critical element of this protection.''
    I would like to enter this letter into the record as well.
    Now let me say a last thing about the process and timing 
for consideration of this treaty, and I think that it is 
important what I am going to say. Obviously, this is a 
Presidential election year, and it is one that has already 
proven difficult, if not, at times, toxic.
    I do not want this treaty to become a victim to that race 
or to the politics of the moment. A number of colleagues on and 
off the committee have been very candid and suggested that they 
would be more comfortable if we can avoid pushing this 
deliberative process into the middle of an election. I would 
like to see this treaty stay out of the hurly-burly 
Presidential politics.
    So heeding that advice and preferring that we encourage the 
kind of evaluative and educational process which does justice 
to this committee and justice to the United States Senate 
ratification process, I announce today that I do not currently 
intend to bring the treaty to a vote before the November 
elections. We will have extensive hearings. We will do our due 
diligence. We will prepare for a vote.
    But unless somehow the dynamic were to shift or change, we 
will wait until the passions of the election have subsided 
before we vote. My hope and expectation is that everyone will 
exhaust all avenues of inquiry and carefully consider the 
arguments on both sides.
    The contentious political season will now give us a chance 
to do what this committee has historically done best, which is 
not to politicize, but to spend serious, thoughtful time 
deliberating and debating all of the questions of substance.
    I am pleased to see that the Internet is already beginning 
to buzz with some discussion of this. But I will say up front 
there 
is a lot of misinformation, and there is a certain amount of 
mythology.
    So I look forward to the process of clearing up that 
misinformation and the mythology. As my friend Senator Moynihan 
used to say, ``Everyone is entitled to his own opinion, but not 
to his own facts.''
    There are facts with respect to this treaty, and I look 
forward to this committee establishing what they are. 
Ultimately, this issue needs to be decided by the members of 
the committee asking tough questions of the witnesses and not 
by the outside groups.
    So I am pleased that we are going to have an opportunity 
over the next several weeks, the next couple of months, to hear 
from multiple witnesses, and we begin today with our top 
national security leaders. They will be followed by military 
commanders, including those who are in charge of our 
operations; by top business leaders, the Chamber of Commerce, 
others; by treaty experts; and by opponents.
    Once again, I simply ask that everybody work hard to find 
out what is factual and what the realities are with respect to 
how this works.
    And so, with that, I would like to welcome today's 
distinguished witnesses. As Secretary of State, Hillary Clinton 
has worked tirelessly to advance our security and economic 
interests abroad and, I think everyone agrees, has done a 
tremendous job of doing so.
    Secretary of Defense Leon Panetta has served with great 
distinction across four decades in government. He has earned 
broad respect from Democrats and Republicans for his pragmatic 
and thoughtful approach to national security.
    And General Martin Dempsey, the Chairman of the Joint 
Chiefs of Staff, has done a tremendous job in his stewardship 
of our military during a time of extraordinary challenge and 
transition.
    Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR, 
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Mr. Chairman, I join you in welcoming 
Secretary Clinton, Secretary Panetta, and General Dempsey. We 
are very pleased and honored that you have joined us today.
    Nine years ago, the Foreign Relations Committee began 
consideration of the Law of the Sea Convention after it was 
designated by President George W. Bush as one of five 
``urgent'' treaties deserving of ratification. The Foreign 
Relations Committee took up all five of those treaties during 
the 108th Congress, and all but the Law of the Sea eventually 
gained the advice and consent of the Senate.
    Our committee held two public hearings and four briefings 
to examine the Law of the Sea Convention. Six Bush 
administration Cabinet departments participated in the 
interagency group that helped write the resolution of advice 
and consent accompanying the treaty.
    In the private sector, every major ocean industry, 
including shipping, fishing, oil and natural gas, drilling 
contractors, shipbuilders, and telecommunications companies 
that use underwater cables, supported U.S. accession to the Law 
of the Sea and lobbied in favor of it.
    During the more than 4 months of consideration of this 
treaty, the committee received only one negative communication 
related to the treaty, and that was from a private individual. 
None of the 19 members of the committee requested additional 
witnesses or hearings, and the resolution of ratification 
passed on February 25, 2004, without a dissenting vote.
    Despite the unanimous vote in the Foreign Relations 
Committee, Senator Bill Frist, then the majority leader, 
declined to bring the Convention up in the Senate. In 2007 the 
committee undertook an even lengthier process resulting in a 
17-4 vote to refer the Convention to the full Senate. By that 
time, Senator Harry Reid had become majority leader, and he, 
too, declined to bring Law of the Sea before the full Senate.
    In 2009 and 2010, though discussions occurred on Law of the 
Sea within the Obama administration, passing the Convention was 
not accorded a high priority. There was no concerted effort on 
the part of the administration to move Law of the Sea as there 
had been under the Bush administration.
    The Obama administration's 2009 treaty priority list 
indicated no special emphasis on passing Law of the Sea, 
listing it among a general group of 17 treaties on which action 
was supported. To my knowledge, the only official mention of 
Law of the Sea by the President during his first 2 years was 
one line in his Executive order covering ocean policy, which 
was not issued until July 19, 2010.
    Clearly, the enthusiasm for Law of the Sea has increased 
within the administration during this Congress. The presence of 
the distinguished panel before us today surely underscores 
this. The substantive case for Law of the Sea is even stronger 
today than it was in 2004 when I brought it up as chairman of 
this committee.
    Every year that goes by without the United States joining 
the Convention results in deepening our country's submission to 
ocean laws and practices determined by foreign governments 
without U.S. input. Our Navy and our ocean industries operate 
every day in a maritime environment that is increasingly 
dominated by foreign decisionmaking. In almost any other 
context, the Senate would be outraged at subjecting Americans 
to foreign controls without U.S. input.
    What many observers fail to understand about Law of the Sea 
is that the Convention already forms the basis of maritime law 
regardless of whether the United States is a party. 
International decisions related to resource exploitation, 
navigation rights, and other matters will be made in the 
context of the Convention whether we join or not. Because of 
this, there is virtual unanimity in favor of this treaty among 
people who actually deal with oceans on a daily basis and 
invest their money in job-creating activities on the oceans.
    By not joining the treaty, we are abetting Russian 
ambitions in the Arctic. We are making the job of our Navy more 
difficult, despite the longstanding and nearly unanimous pleas 
of Navy leaders that U.S. participation in Law of the Sea will 
help them maintain navigational rights more effectively and 
with less risk to the men and women they command.
    We are turning our backs on the requests of important 
American industries that use the oceans and must abide by rules 
established under this Convention. We are diminishing our 
chances for energy independence by making U.S. oil and gas 
exploration in international waters less likely.
    And we will not even be able to participate in the 
amendment process to this treaty, which is far more likely to 
impose new requirements on our Navy and ocean industries if the 
United States is absent. We will feel these costs most keenly 
in the Arctic, which is why successive Alaskan Governors and 
Senators of both parties have supported this treaty.
    In 2007, Mr. Paul Kelly, testifying on behalf of the oil 
and gas industry, underscored how much we have to lose in the 
Arctic by remaining outside the treaty. He noted that under the 
Law of the Sea, the United States would have the opportunity to 
expand its economic sovereignty over more than 291,000 square 
miles of Extended Continental Shelf. Much of this is in the 
Arctic, which holds one quarter of the world's undiscovered oil 
and natural gas, according to the U.S. Geological Survey.
    Mr. Kelly said, ``By some estimates, in the years ahead we 
could see a historic dividing up of many millions of square 
kilometers of offshore territory with management rights to all 
its living and nonliving marine resources . . . How much longer 
can the United States afford to be a laggard in joining this 
process?''
    Suggestions that somehow our maritime interests can be 
asserted solely through robust naval power are not relevant to 
the real world. The overwhelming majority of ocean disputes do 
not involve enemies or issues that warrant military action.
    As ADM Patrick Walsh testified at our first hearing in 
2007, ``Many of the partners that we have in the Global War on 
Terror who have put life, limb, and national treasure on the 
line are some of the same ones where we have disagreements on 
what they view as their economic zone or their environmental 
laws.
    ``It does not seem to me to be wise to now conduct Freedom 
of Navigation operations against those very partners that . . . 
are in our headquarters trying to pursue a more difficult 
challenge ahead of us . . . a Global War on Terror.''
    Even a mythical 1,000-ship U.S. Navy could not patrol every 
strait, protect every economic interest, or assert every 
navigational right. Attempting to do so would be prohibitively 
expensive and destructively confrontational.
    The decision before this committee is whether the Senate 
should continue to consign the United States to a position of 
self-imposed weakness in our ability to influence ocean 
affairs, despite the fact that no other nation has a greater 
interest in navigational freedoms, a larger Exclusive Economic 
Zone, or a more advanced technological capacity to exploit 
ocean resources.
    The Senate should enthusiastically affirm the leadership of 
the United States in this vital area of international relations 
by giving advice and consent to the Law of the Sea Convention.
    I thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Lugar. I 
appreciate that very much.
    Madam Secretary, if you would lead off? Secretary Panetta 
second, and General Dempsey, if you would bat cleanup? Thank 
you.

 STATEMENT OF HON. HILLARY RODHAM CLINTON, SECRETARY OF STATE, 
            U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Secretary Clinton. Thank you very much, Mr. Chairman, 
Senator Lugar.
    After both of your opening comments, I think you have made 
the case, both eloquently and persuasively, for anyone who is 
willing to look at the facts. I am well aware that this treaty 
does have determined opposition: Limited, but nevertheless 
quite vociferous. And it is unfortunate because it is 
opposition based in ideology and mythology, not in facts, 
evidence, or the consequences of our continuing failure to 
accede to the treaty.
    So I think you will hear from both Secretary Panetta and 
General Dempsey, as well as myself, further statements and 
information that really reinforces the very strong points that 
both of you have made.
    We believe that it is imperative to act now. No country is 
better served by this Convention than the United States. As the 
world's foremost maritime power, we benefit from the 
Convention's favorable freedom of navigation provisions.
    As the country with the world's second-longest coastline, 
we benefit from its provisions on offshore natural resources. 
As a country with an exceptionally large area of sea floor, we 
benefit from the ability to extend our Continental Shelf and 
the oil and gas rights on that shelf.
    As a global trading power, we benefit from the mobility 
that the Convention accords to all commercial ships. And as the 
only country under this treaty that was given a permanent seat 
on the group that will make decisions about deep seabed mining, 
we will be in a unique position to promote our interests.
    Now the many benefits of this Convention have attracted a 
wide-ranging coalition of supporters. Obviously, as we heard 
from both Senator Kerry and Senator Lugar, Republican and 
Democratic Presidents have supported U.S. accession. Military 
leaders see the benefits for our national security. American 
businesses, including strongly the U.S. Chamber of Commerce, 
see the economic benefits.
    It has the support of every affected industry, including 
shipping, fisheries, telecommunications, energy, and 
environmental groups as well. We have a coalition of 
environmental, conservation, business, industry, and security 
groups all in support of this Convention.
    And I would ask that my longer written statement, along 
with the letters that I have received in support of the treaty 
be entered into the record.
    The Chairman. Without objection.
    Secretary Clinton. Now, one could argue that 20 years ago, 
10 years ago, maybe even 5 years ago, joining the Convention 
was important, but not urgent. That is no longer the case 
today. Four new developments make our participation a matter of 
utmost security and economic urgency.
    First, for years, American oil and gas companies were not 
technologically ready to take advantage of the Convention's 
provisions regarding the Extended U.S. Continental Shelf. Now 
they are.
    The Convention allows countries to claim sovereignty over 
their Continental Shelf far out into the ocean beyond 200 
nautical miles from shore. The relevant area for the United 
States is probably more than 1.5 times the size of Texas. In 
fact, we believe it could be considerably larger.
    U.S. oil and gas companies are now ready, willing, and able 
to explore this area. But they have made it clear to us that 
they need the maximum level of international legal certainty 
before they will or could make the substantial investments--
and, we believe, create many jobs in doing so--needed to 
extract these far-offshore resources.
    If we were a party to the Convention, we would gain 
international recognition of our sovereign rights, including by 
using the Convention's procedures, and therefore be able to 
give our oil and gas companies this legal certainty. Staying 
outside the Convention, we simply cannot.
    The second development concerns deep seabed mining, which 
takes place in that part of the ocean floor that is beyond any 
country's jurisdiction. Now for years, technological challenges 
meant that deep seabed mining was only theoretical. Today's 
advances make it very real.
    But it is also very expensive. And before any company will 
explore a mine site, it will naturally insist on having a 
secure title to the site and the minerals that it will recover. 
The Convention offers the only effective mechanism for gaining 
this title, but only a party to the Convention can use this 
mechanism on behalf of its companies.
    So as long as the United States is outside the Convention, 
our companies are left with two bad choices--either take their 
deep sea mining business to another country or give up on the 
idea. Meanwhile, as you heard from Senator Kerry and Senator 
Lugar, China, Russia, and many other countries are already 
securing their licenses under the Convention to begin mining 
for valuable metals and rare earth elements.
    As you know, rare earth elements are essential for 
manufacturing high-tech products like cell phones and flat-
screen televisions. They are currently in tight supply and 
produced almost exclusively by China.
    So while we are challenging China's export restrictions on 
these critical materials, we also need American companies to 
develop other sources for these materials. But as it stands 
today, they will only do that if they have the secure rights 
that can only be provided under this Convention. If we expect 
to be able to manage our own energy future and our need for 
rare earth minerals, we must be a party to the Law of the Sea 
Convention.
    The third development that is now urgent is the emerging 
opportunities in the Arctic. As the area gets warmer, it is 
opening up to new activities, such as fishing, oil and gas 
exploration, shipping, and tourism. This Convention provides 
the international framework to deal with these new 
opportunities. We are the only Arctic nation outside the 
Convention.
    Russia and the other Arctic States are advancing their 
Continental Shelf claims in the Arctic while we are on the 
outside looking in. As a party to the Convention, we would have 
a much stronger basis to assert our interests throughout the 
entire Arctic region.
    The fourth development is that the Convention's bodies are 
now up and running. The body that makes recommendations 
regarding countries' Continental Shelves beyond 200 nautical 
miles is actively considering submissions from over 40 
countries without the participation of a U.S. commissioner.
    The body addressing deep seabed mining is now drawing up 
the rules to govern the extraction of minerals of great 
interest to the United States and American industry. It simply 
should not be acceptable to us that the United States will be 
absent from either of those discussions.
    Our negotiators obtained a permanent U.S. seat on the key 
decisionmaking body for deep seabed mining. I know of no other 
international body that accords one country and one country 
alone, us, a permanent seat on its decisionmaking body. But 
until we join, that reserved seat remains empty.
    So those are the stakes for our economy, and you will hear 
from Secretary Panetta and General Dempsey that our security 
interests are intrinsically linked to freedom of navigation. We 
have much more to gain from legal certainty and public order in 
the world's oceans than any other country.
    U.S. Armed Forces rely on the navigational rights and 
freedoms reflected in the Convention for worldwide access to 
get to combat areas, sustain our forces during conflict, and 
return home safely, all without permission from other 
countries.
    Now as a nonparty to the Convention, we have to rely on 
what is called customary international law as a legal basis for 
invoking and enforcing these norms. But in no other situation 
in which our security interests are so much at stake do we 
consider customary international law good enough to protect 
rights that are vital to the operation of the United States 
military.
    So far, we have been fortunate. But our navigational rights 
and our ability to challenge other countries' behavior should 
stand on the firmest and most persuasive legal footing 
available, including in critical areas such as the South China 
Sea.
    I am sure you have followed the claims countries are making 
in the South China Sea. Although we do not have territory 
there, we have vital interests--particularly freedom of 
navigation. And I can report from the diplomatic trenches that, 
as a party to the Convention, we would have greater credibility 
in invoking the Convention's rules and a greater ability to 
enforce them.
    Now I know a number of you have heard arguments opposing 
the Convention, and let me just address those head on. Critics 
claim we would surrender U.S. sovereignty under this treaty, 
but in fact, it is exactly the opposite. We would secure 
sovereign rights over vast new areas and resources, including 
our 200-mile Exclusive Economic Zone and vast Continental Shelf 
areas extending off our coasts and at least 600 miles off 
Alaska.
    I know some are concerned that the treaty's provisions for 
binding dispute settlement would impinge on our sovereignty. We 
are no stranger to similar provisions, including in the World 
Trade Organization, which have allowed us to bring trade cases, 
many of them currently pending, against abusers around the 
world. As with the WTO, the United States has much more to gain 
than lose by being able to hold others accountable under clear 
and transparent rules.
    Some critics invoke the concern we would be submitting to 
mandatory technology transfer and cite this and President 
Reagan's other initial objections to the treaty. You know, 
those concerns might have been relevant decades ago, but today, 
they are not.
    In 1994, negotiators made modifications specifically to 
address each of President Reagan's objections, including 
mandatory technology transfer, which is why President Reagan's 
own Secretary of State, George Shultz, has since written that 
we should join the Convention in light of those modifications 
having been made.
    Now some continue to assert we do not need to join the 
Convention for U.S. companies to drill beyond 200 miles or to 
engage in deep seabed mining. That is not what the companies 
say. So I find it quite ironic--in fact, somewhat bewildering--
that a group, an organization, an individual would make a claim 
that is refuted by every major company in every major sector of 
the economy that stands to benefit from this treaty.
    Under current circumstances, the companies are very clear. 
They will not take on the costs and risk these activities under 
uncertain legal frameworks. They need the indisputable, 
internationally recognized rights available under the treaty. 
So, please, listen to these companies, not to those who have 
other reasons or claims that are not based on the facts.
    These companies are refuting the critics who say, ``Go 
ahead. You will be fine.'' But they are not the ones, the 
critics, being asked to invest tens of millions of dollars 
without the legal certainty that comes with joining the 
Convention.
    Now some mischaracterize the payments for benefit of 
resource rights beyond 200 miles as ``a U.N. tax''--and this is 
my personal favorite of the arguments against the treaty--that 
will be used to support state sponsors of terrorism. Honestly, 
I don't know where these people make these things up. But 
anyway, the Convention does not contain or authorize any such 
taxes.
    Any royalty fee does not go to the United Nations. It goes 
into a fund for distribution to parties of the Convention, and 
we, were we actually to join the Convention, would have a 
permanent veto power over how the funds are distributed. And we 
could prevent them from going anywhere we did not want them to 
go.
    I just want to underscore this is simple arithmetic. If we 
don't join the Convention, our companies will miss out on 
opportunities to explore vast areas of Continental Shelf and 
deep seabed. If we do join the Convention, we unlock economic 
opportunities worth potentially hundreds of billions of dollars 
for a small-percentage royalty a few years down the line.
    I have also heard we should not join this Convention 
because ``it is a U.N. treaty,'' and of course, that means the 
black helicopters are on their way. Well, the fact that a 
treaty was negotiated under the auspices of the United Nations, 
which is, after all, a convenient gathering place for the 
countries of the world, has not stopped us from joining 
agreements that are in our interests.
    We are party to dozens of agreements negotiated under the 
U.N. auspices on everything from counterterrorism and law 
enforcement to health, commerce, and aviation. And we often pay 
fees under those treaties, recognizing the benefits we get 
dwarf those minimal fees.
    And on the national security front, some argue we would be 
handing power over the U.S. Navy to an international body. This 
is patently untrue and, obviously, absolutely contrary to any 
history or law governing our Navy. None of us would be sitting 
here if there were even a chance that you could make the most 
absurd argument that could possibly lead to that conclusion.
    Disputes concerning U.S. military activities are clearly 
excluded from dispute settlement under the Convention. And 
neither is it true that the Convention would prohibit 
intelligence activities. The intelligence community has once 
again in 2012, as it did in 2007, as it did in 2003, confirmed 
that is absolutely not true.
    So whatever arguments may have existed for delaying U.S. 
accession no longer exist and truly cannot be even taken with a 
straight face. The benefits of joining have always been 
significant. But today, the costs of not joining are 
increasing.
    So much is at stake, and I, therefore, urge the committee 
to listen to the experts, listen to our businesses, listen to 
the Chamber of Commerce, listen to our military, and please 
give advice and consent to this treaty before the end of this 
year.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Clinton follows:]

    Prepared Statement of Secretary of State Hillary Rodham Clinton

    Mr. Chairman and members of the committee, it is a great pleasure 
for me to testify today on the Law of the Sea Convention, which I 
regard as critical to the leadership and security of the United States. 
Joining the Convention and the 1994 Agreement that modifies its deep 
seabed mining provisions is a priority for the Department of State and 
for me personally.
    U.S. interests are deeply tied to the oceans. No country is in a 
position to gain more from the Law of the Sea Convention than the 
United States:

   As the world's foremost maritime power, the United States 
        benefits from the Convention's favorable freedom of navigation 
        provisions. These are the provisions that enable our vessels to 
        transit the maritime domain--including the high seas, 
        international straits, and the exclusive economic zones and 
        territorial seas of other countries.
   Our economy depends on international trade, and the United 
        States benefits from the global mobility that those 
        navigational provisions accord to commercial ships of all 
        nations.
   We have the world's second-longest coastline, so the United 
        States benefits greatly from the Convention's favorable 
        provisions on offshore natural resources. The treaty accords 
        sovereign rights over natural resources within a 200-mile 
        Exclusive Economic Zone. The United States is further 
        advantaged by provisions in the treaty that allow the 
        Continental Shelf--and oil and gas rights--to extend beyond 200 
        miles in certain areas. Off the north shore of Alaska, our 
        Continental Shelf could extend 600 miles into the Arctic.
   American companies are equipped and ready to engage in deep 
        seabed mining. But the United States can only take advantage of 
        the Convention's provisions that accord security of tenure to 
        mine sites in areas beyond national jurisdiction as a party to 
        this treaty. The Convention, which was modified to meet U.S. 
        demands, accords the United States a guaranteed seat on the key 
        decisionmaking body.

    It is no wonder then that there is such a strong and wide-ranging 
coalition supporting U.S. accession. The U.S. military has consistently 
and unequivocally supported the Convention for its national security 
benefits. Affected U.S. industries, including shipping, fisheries, 
telecommunications, and energy, have consistently supported U.S. 
accession for its economic benefits. Nongovernmental organizations 
concerned with the protection of natural resources have consistently 
supported U.S. accession. And both Republican and Democratic Presidents 
have supported U.S. accession. I have never seen another treaty with 
such intensive and broad support.
    Furthermore, no treaty has been as thoroughly scrutinized by the 
Senate as the Law of the Sea Convention. This committee has twice 
examined it and sent it to the full Senate. Four other committees held 
hearings in 2004, including the Senate Armed Services Committee, of 
which I was a member. In 2007, the Foreign Relations Committee held two 
additional hearings and another favorable vote. Every conceivable 
question has been asked and answered.
    As President George W. Bush said in 2007, joining the Convention 
will serve the national security interests of the United States, secure 
U.S. sovereign rights over extensive marine areas, promote U.S. 
interests in the health of the oceans, and give the United States a 
seat at the table where rights essential to our interests are debated 
and interpreted. We need to get off the sidelines and start taking 
advantage of the great deal that the Convention offers the United 
States and our business community.

                                HISTORY

    By looking at the history that led to the adoption of the 
Convention and the 1994 Agreement on deep seabed mining, we can see how 
beneficial the Convention is to American interests. The United States 
became party to a group of earlier law of the sea treaties in 1958. We 
are still bound by them today. A number of the provisions in the 1982 
Convention are the same as the provisions in these 1958 treaties. But 
the 1958 treaties left some important issues unresolved, and some of 
their provisions are outdated and have been supplanted by more 
favorable provisions for the United States in the 1982 Convention.
    For example, the 1982 Convention established for the first time a 
maximum breadth of the territorial sea, an issue of critical importance 
to U.S. freedom of navigation. The 1982 Convention provides for 
exclusive jurisdiction of coastal States over economic activities out 
to 200 miles from shore. It also sets forth a procedure for providing 
legal certainty regarding the Continental Shelf. Both of these 
additions are critically important to U.S. economic interests in the 
oceans.
    These and other benefits of the 1982 Convention came about because 
the United States played a prominent role in negotiating this treaty, 
beginning in the Nixon administration. The Law of the Sea Convention, 
as adopted in 1982, represented a victory for U.S. navigational, 
economic, and other interests. Only one important issue area was 
flawed--deep seabed mining--and that one area is why President Reagan 
decided not to sign the 1982 Convention. I will discuss these flaws in 
greater depth below.
    All the other aspects of the treaty were so favorable that 
President Reagan announced in 1983 that the United States accepted, and 
would act in accordance with, the Convention's balance of interests 
relating to traditional uses of the oceans--everything but deep seabed 
mining. He instructed the entire United States Government to abide by 
the commitments, to exercise the rights set forth in the Convention and 
to encourage other countries to do likewise.
    President Reagan believed that the deep seabed mining chapter of 
the 1982 Convention would deter future development of deep seabed 
mining; establish a decisionmaking process that would not reflect or 
protect American interests; allow amendments to enter into force 
without U.S. approval; require mandatory transfers of technology; allow 
national liberation movements to share in the benefits of deep seabed 
mining and not assure access of future qualified miners.
    President Reagan's concerns were well placed and shared by many of 
our allies. Like the United States, many industrialized countries 
declined to become party to the Convention as originally adopted. 
President Reagan did not oppose all international regulation of mining 
in the portion of the seabed beyond national jurisdiction. Indeed, U.S. 
policy extending back to President Nixon has taken the view that such 
mining should be subject to international administration, primarily to 
enable companies to obtain secure title to mine sites in the deep 
ocean. U.S. law, specifically the Deep Seabed Hard Mineral Resources 
Act of 1980 (Public Law 96-283), also reflects that approach.
    With the end of the cold war, international support grew for a more 
efficient and market-oriented system. This spurred an initiative by the 
administration of President George H.W. Bush in the early 1990s to 
undertake a new round of negotiations with the aim of fundamentally 
overhauling the deep seabed mining provisions of the 1982 Convention.
    President Bush's efforts succeeded. The Part XI Agreement, adopted 
in 1994, modifies the Convention so as to satisfy each of President 
Reagan's objections. As a result, the present, modified Convention:

   Ensures that market-oriented approaches are taken to the 
        management of deep seabed minerals (e.g., by eliminating 
        production controls);
   Scales back the structure of the organization that 
        administers deep seabed mining;
   Provides the United States, once it becomes a party, with a 
        guaranteed, permanent seat on the Seabed Council--which would 
        ensure that U.S. approval would be necessary for any decision 
        that would result in a substantive obligation on the United 
        States, or that would have financial or budgetary implications;
   Ensures that the United States, once it becomes a party, 
        could veto and block the adoption of any amendment to the deep 
        seabed mining provisions that it opposes;
   Deletes the objectionable provisions on mandatory technology 
        transfer;
   Ensures that the United States, once it becomes a party, 
        would be able to veto any decision relating to the sharing of 
        benefits; and
   Provides assured access for any future qualified U.S. mining 
        companies.

    The United States signed the Agreement on the deep seabed mining 
provisions in 1994. As George P. Shultz, Secretary of State to 
President Reagan, said in a letter to Senator Lugar in 2007: ``The 
treaty has been changed in such a way with respect to the deep sea-beds 
that it is now acceptable, in my judgment. Under these circumstances, 
and given the many desirable aspects of the treaty on other grounds, I 
believe it is time to proceed with ratification.'' Indeed, every former 
Secretary of State since Secretary Shultz, Democrat and Republican 
alike, has called for the United States to secure and advance our 
national interests by joining the Convention.
    The Convention, as modified by the 1994 Agreement, came into force 
in 1994, and since has been joined by the industrialized countries that 
shared U.S. objections to the initial deep seabed mining chapter. There 
are now 162 parties to the Convention, including almost all of our 
traditional allies.
    The administration of George W. Bush strongly supported the 
modified Convention in testimony before this committee in 2003 and 
2007. Bush administration officials worked closely with the committee 
to develop a proposed Resolution of Advice and Consent, which this 
administration continues to support.

                                BENEFITS

    What are the benefits to joining the Law of the Sea Convention? To 
put it plainly, joining this Convention will bolster U.S. national 
security and provide economic benefits, including the creation of 
American jobs. U.S. companies, business groups, labor unions, the U.S. 
Navy, the U.S. Coast Guard, the Joint Chiefs of Staff, and a host of 
others support joining the Convention now.
    I'd like to take a few minutes to talk about the national security 
benefits. As the world's foremost maritime power, our security 
interests are intrinsically linked to freedom of navigation. We have 
more to gain from legal certainty and public order in the world's 
oceans than any other country. Our forces are deployed throughout the 
world and need guaranteed mobility on, over, and under the world's 
oceans. U.S. Armed Forces rely on the navigational rights and freedoms 
reflected in the Convention for worldwide access to get to combat 
areas, sustain our forces during conflict, and return home safely, 
without permission from other countries.
    In this regard, the Convention secures the rights we need for U.S. 
military ships, and the commercial ships that support our forces, to 
meet national security requirements in four major ways:

   By limiting coastal States' territorial seas to 12 nautical 
        miles;
   By affording our military and commercial vessels and 
        aircraft necessary passage rights, not requiring permission, 
        through other countries' territorial seas and archipelagoes, as 
        well as through straits used for international navigation (such 
        as the critical right of submarines to transit submerged 
        through such straits);
   By setting forth maximum navigational rights and freedoms 
        for our vessels and aircraft in the Exclusive Economic Zones of 
        other countries and in the high seas; and
   By affirming the authority of U.S. warships and government 
        ships to board stateless vessels on the high seas, which is 
        vital to our maritime security, counternarcotic, and 
        counterproliferation efforts and operations, including the 
        Proliferation Security Initiative.

    As a nonparty to the Convention, the United States must rely on 
customary international law as a legal basis for invoking and enforcing 
these norms. But it is risky to assume that customary law will preserve 
these norms forever. There are increasing pressures from some coastal 
States to augment their control over the activities of other nations' 
vessels off their coasts in a manner that would alter the balance of 
interests struck in the Convention.
    Joining the Convention would secure our navigational rights and our 
ability to challenge other countries' behavior on the firmest and most 
persuasive legal footing, including in critical areas such as the South 
China Sea and the Arctic. Only as a party to the Convention can the 
United States best protect the navigational freedoms enshrined in the 
Convention and exert the level of influence that reflects our status as 
the world's foremost maritime power.
    The highest levels of our Nation's military have expressed their 
solid and unwavering support for joining this Convention over and over 
again.
    Now I'd like to focus on economic benefits. Joining the Convention 
would advance U.S. economic and resource interests in ocean waters and 
seabed. For example,

   The Convention is the foundation on which rules for 
        sustainable international fisheries are based. For that reason, 
        the U.S. fishing industry supports U.S. accession.
   The Convention secures the rights for commercial ships to 
        export U.S. commodities and protects the tanker routes through 
        which half of the world's oil moves. For that reason, the U.S. 
        shipping industry supports accession.
   The Convention's provisions protect the laying and 
        maintaining of fiber optic cables through which the modern 
        world communicates, for both commercial and military purposes. 
        For that reason, the U.S. telecommunications industry supports 
        accession.

    There are two additional areas of economic benefits that deserve 
special mention: the provisions related to mineral resources in the 
seabed of our Continental Shelf and resources in the seabed beyond any 
country's Continental Shelf.
    The Convention provides for an Extended Continental Shelf, beyond 
200 nautical miles from shore, if certain criteria are met. A coastal 
State can exercise sovereign rights over its Extended Continental 
Shelf, including exploration, exploitation, conservation, and 
management of nonliving resources, such as oil, gas, and other energy 
and mineral resources, and of living, ``sedentary'' species, such as 
clams, crabs, and sponges. The size of the U.S. Continental Shelf--just 
the portion beyond 200 miles from shore--is probably more than one and 
one-half times the size of Texas, and could be considerably larger than 
that. For this reason, the U.S. oil and gas industry, including the 
American Petroleum Institute, are in favor of joining the Convention.
    Much is at stake in the vast areas of Continental Shelf beyond 200 
nautical miles from shore, and the Convention's procedures enable 
Parties--and only Parties--to fully secure their sovereign rights 
therein.
    Unlike the 1958 law of the sea treaty on the Continental Shelf, 
this Convention contains a detailed definition of the Continental Shelf 
and well-defined procedures for a country to establish the outer limits 
of its Continental Shelf. Specifically, Parties to the Convention enjoy 
access to the expert body whose technical recommendations provide the 
needed international recognition and legal certainty regarding 
Continental Shelf areas beyond 200 nautical miles.
    The ability to gain international recognition of a coastal State's 
sovereignty over the Continental Shelf resources beyond 200 miles from 
shore was a major achievement in the 1982 Convention for the United 
States and for other coastal States with an Extended Continental Shelf. 
International recognition is necessary for the legal certainty that 
will allow oil and gas companies to attract the substantial investments 
needed--and create the many jobs--to extract these far-offshore 
resources.
    More than 40 countries have made submissions regarding their 
Continental Shelves beyond 200 nautical miles to the expert Commission. 
Sixteen States, including Russia, Brazil, Australia, France, Indonesia, 
and Mexico, have received recommendations from the Commission and are 
proceeding to establish the outer limits of their Continental Shelves. 
As a nonparty, the United States is sitting on the sidelines while this 
happens.
    The second economic benefit I would like to highlight relates to 
mining in the deep seabed areas beyond any country's jurisdiction. Only 
as a party to the Convention could the United States sponsor U.S. 
companies like Lockheed Martin to mine the deep seabed for valuable 
metals and rare earth elements.
    These rare earth elements--essential for cell phones, flat-screen 
televisions, electric car batteries, and other high-tech products--are 
currently in tight supply and produced almost exclusively by China. 
While we challenge China's export restrictions, we must also make it 
possible for U.S. companies to develop other sources of these critical 
materials. They can only do this if they can obtain secure rights to 
deep seabed mine sites and indisputable title to minerals recovered. 
While we sit on the sidelines, companies in China, India, Russia, and 
elsewhere are securing their rights, moving ahead with deep seabed 
resource exploration, and taking the lead in this emerging market.
    I want to make two additional points about deep seabed mining. 
First, we cannot rely on customary international law here. For 
companies to obtain security of tenure to deep seabed mining sites, 
they must be sponsored by a party to the Convention. And without such 
security of tenure, industry has told us that it will not risk the 
significant investment needed to extract these valuable resources. I 
want to be clear that there is no means for the United States to 
support its domestic deep seabed mining industry as a nonparty.
    Second, once the United States becomes a party, we would have an 
unprecedented ability to influence deep seabed mining activities 
worldwide. In revising the Convention's deep seabed provisions in the 
1994 Agreement, our negotiators obtained a permanent U.S. seat on the 
seabed Council. This is the key decisionmaking body established by the 
Convention on deep seabed matters. I know of no other international 
body that accords one country, and one country only--the United 
States--a permanent seat on its decisionmaking body. In this way, the 
Convention's institutions provide the United States with a level of 
influence commensurate with our interests and global standing.
    Until we join, however, our reserved seat remains empty. As a 
result, we have limited ability to shape the rules and no ability to 
help U.S. companies pursue their job-creating initiatives to exploit 
deep seabed resources.
Other Benefits
    We should also join the Convention now to steer its implementation. 
The Convention's institutions are up and running, and we--the country 
with the most to gain or lose on law of the sea issues--are sitting on 
the sidelines. As I mentioned, the Commission on the Limits of the 
Continental Shelf has received submissions from over 40 countries 
without the participation of a U.S. commissioner. Recommendations made 
in that body could create precedents, positive and negative, on the 
future outer limit of the U.S. shelf. We need to be on the inside to 
protect and advance our interests. Moreover, in fora outside the 
Convention, the provisions of the Convention are also being actively 
applied. Only as a party can we exert the level of influence that 
reflects our status as the world's foremost maritime power.
    Are there any serious drawbacks to joining this Convention? 
Opponents of the treaty believe there are, but they are mistaken.

   Some critics assert that joining the Convention would 
        impinge upon U.S. sovereignty. On the contrary, joining the 
        Convention will increase and strengthen our sovereignty. The 
        Convention secures the United States an expansive Exclusive 
        Economic Zone and Extended Continental Shelf, with vast 
        resources in each. U.S. accession would lock-in our rights to 
        all of this maritime space.
   Some say that the Convention's dispute resolution provisions 
        are not in the U.S. interest. On the contrary, these 
        procedures--which the United States sought--help protect rather 
        than harm U.S. interests. As in many other treaties, including 
        free trade agreements, such procedures provide the United 
        States with 
        an important tool to help ensure that other countries live up 
        to their obligations. And U.S. military activities will never 
        be subject to any form of dispute resolution.
   Other critics have suggested that the Convention gives the 
        United Nations the authority to levy some kind of global tax. 
        This is also untrue. There are no taxes on any individuals, 
        corporations, or anyone else under the Convention.

                               CONCLUSION

    As Senator Lugar has said, to oppose this Convention on economic 
grounds requires one to believe that U.S. industries as diverse as oil 
and gas, fishing, shipping, seabed mining, and telecommunications do 
not understand how best to grow their businesses, create jobs, and 
protect their bottom lines.
    And to oppose this Convention on national security grounds requires 
one to believe that the Departments of Defense and Homeland Security do 
not understand how best to protect U.S. national security.
    The United States is long past due in joining this Convention. Our 
global leadership on maritime issues is at stake. I therefore urge the 
committee to give its swift approval for U.S. accession to the Law of 
the Sea Convention and ratification of the 1994 Agreement, and urge the 
Senate to give its advice and consent before the end of this year.

    The Chairman. Well, Madam Secretary, thank you for very 
important testimony. And I particularly appreciate the detail 
that you went into. I think it was very helpful.
    Mr. Secretary.

 STATEMENT OF HON. LEON E. PANETTA, SECRETARY OF DEFENSE, U.S. 
             DEPARTMENT OF DEFENSE, WASHINGTON, DC

    Secretary Panetta. Chairman Kerry, Senator Lugar, 
distinguished members, I want to thank you for the opportunity 
to appear here as the first Secretary of Defense to testify in 
support of the United States accession to the Law of the Sea 
Convention.
    I have been involved with ocean issues most of my career, 
and I strongly believe that accession to this treaty is 
absolutely essential not only to our economic interests, our 
diplomatic interests, but I am here to say that it is extremely 
important to our national security interests as well.
    I join a lot of the military voices of the past and present 
that have spoken so strongly in support of this treaty. The 
fundamental point is clear. If the United States is to assert 
its historical role as a global maritime power--and we have 
without question the strongest navy in the world. But if we are 
going to continue to assert our role as a maritime power, it is 
essential that we accede to this important Convention.
    Being here with Secretary Clinton, Chairman Dempsey, their 
presence alone is a testament to the conviction of our 
diplomatic and military leadership that this Convention is 
absolutely essential to strengthening our position in the 
world. Let me outline some of the critical arguments with 
regards to U.S. national security and why it is time to move 
forward with this issue.
    First of all, as has been pointed out, as the world's 
strongest preeminent maritime power, we are a country that has 
one of the longest coastlines and one of the largest Extended 
Continental Shelves in the world. We have more to gain by 
approving this Convention than almost any other country.
    There are 161 countries that have approved. We are the only 
industrial power that has failed to do that, and as a result, 
we don't have a seat at the table.
    If we are sitting at this international table of nations, 
we can defend our interests. We can defend our claims. We can 
lead the discussion in trying to influence treaty bodies that 
develop and interpret the Law of the Sea. We are not there. And 
as a result, they are the ones that are developing the 
interpretation of this very important treaty.
    In that way, we would ensure that our rights are not 
whittled away by the excessive claims and erroneous 
interpretations of others who would give us the power and 
authority to support and promote the peaceful resolution of 
disputes within a rules-based order.
    Second, we would secure our navigational freedoms and 
global access for military and commercial ships, aircraft, and 
undersea fiber optic cables. Treaty law remains the firmest 
legal foundation upon which to base our global presence, as the 
Secretary has pointed out. And it is true on, above, and below 
the seas. By joining the Convention, we would help lock in 
rules that are favorable to our freedom of navigation in our 
global mobility.
    Third, accession would help secure a truly massive increase 
in our country's resource and economic jurisdiction. Not only 
to 200 nautical miles off our coast, but to a broad, Extended 
Continental Shelf beyond that zone, adding almost another third 
to our Nation in terms of jurisdiction.
    Fourth, accession would ensure our ability to reap the 
benefits, again as the Secretary has pointed out, of the 
opening of the Arctic. Joining the Convention would maximize 
international recognition and acceptance of our substantial 
Extended Continental Shelf claims in the Arctic. And, as again 
pointed out, we are the only Arctic nation that is not a party 
to this Convention.
    More importantly, from our navigation and military point of 
view, accession would secure our freedom of navigation, our 
freedom of overflight rights throughout the Arctic. And it 
would strengthen the freedom of navigation arguments with 
respect to the northern sea route in the Northwest Passage.
    And finally, let me say that we at the Defense Department 
have gone through an effort to develop a defense strategy for 
the future. A defense strategy not only for now, but into the 
future as well. And it emphasizes the strategically vital arc 
that extends from the Western Pacific and Eastern Asia into the 
Indian Ocean region and South Asia on to the Middle East.
    By not acceding, we undercut our credibility in a number of 
focused multilateral venues that involve that arc I just 
defined. We are pushing, for example, for a rules-based order 
in the region and the peaceful resolution of maritime and 
territorial disputes in the South China Sea, in the Strait of 
Hormuz and elsewhere. How can we argue--how can we argue that 
other nations must abide by international rules when we haven't 
joined the very treaty that codifies those rules?
    We would also help strengthen worldwide transit passage 
rights under international law, and we would further isolate 
Iran as one of the few remaining nonparties to the Convention. 
These are the key reasons from a national security point of 
view for accession, reasons that are critical to our 
sovereignty, critical to our national security.
    Again, as the Secretary pointed out, I understand the 
arguments that have been made on the other side. But at the 
same time, I don't understand the logic of those arguments. The 
myth that somehow this would surrender U.S. sovereignty, 
nothing could be further from the truth.
    Not since we acquired the lands of the American West and 
Alaska have we had such an opportunity to expand U.S. 
sovereignty. The estimated Extended Continental Shelf is said 
to encompass at least 385,000 square miles, 385,000 square 
miles of seabed. As the Secretary pointed out, it is 1.5 times 
the size of Texas that would be added to our sovereignty, that 
would be added to our jurisdiction.
    Some claim that joining the Convention would restrict our 
military operations and activities or limit our ability to 
collect intelligence in territorial seas. Nothing could be 
further from the truth.
    The Convention in no way harms our intelligence collection 
activities. In no way does it constrain our military 
operations. On the contrary, U.S. accession to the Convention 
secures our freedom of navigation and overflight rights as 
bedrock treaty law.
    Some allege that the Convention would subject us to the 
jurisdiction of international courts and that this represents a 
surrendering of our sovereignty. Once again, this is not the 
case. The Convention provides that a party may declare it does 
not accept any dispute resolution procedures for disputes 
concerning military activities, and we would do the same, as so 
many other nations have chosen likewise to do. Moreover, it 
would be up to the United States to decide precisely what 
constitutes a military activity, not others.
    Others argue that our maritime interdiction operations 
would be constrained, and again, this is simply not the case. 
The United States and our partners routinely conduct a range of 
interdiction operations based on U.N. Security Council 
resolutions.
    On treaties, on port state control measures, and on the 
inherent right of self-defense, the United States would be able 
to continue conducting the full range of maritime interdiction 
operations. In short, the Law of the Sea Convention provides a 
stable, recognized legal regime that we need in order to 
conduct our global operations today and in the future. Frankly, 
I don't think this is a close call.
    The Law of the Sea Convention is supported, as pointed out, 
by major U.S. industries, by the Chamber of Commerce, by our 
energy, oil, shipbuilding, shipping, and communications 
companies, by our fishing interests, and by environmental 
organizations, along with past and present Republican and 
Democratic administrations, strong bipartisan majorities of 
this committee, and the entire national security leadership.
    By finally acceding to the Convention, we help make our 
Nation more secure and more prosperous for generations to come.
    America is the strongest power in the world. We have the 
strongest navy. And make no mistake, we have the ability to 
defend our interests anytime, anywhere. But we are strong 
precisely because we play by the rules--because we play by the 
rules.
    For too long, the United States has failed to act on this 
treaty. For too long, we have undermined our moral and 
diplomatic authority to fight for our rights and our maritime 
interests. And for too long, we have allowed our inability to 
act to impair our national security.
    For that reason the time is now for the Senate to do what 
others have failed to do, join the Law of the Sea Convention 
and help us remain the strongest maritime power in the world.
    Thank you.
    [The prepared statement of Secretary Panetta follows:]

       Prepared Statement of Secretary of Defense Leon E. Panetta

    Chairman Kerry, Senator Lugar, distinguished members. I want to 
thank you for the opportunity to testify in support of United States 
accession to the Law of the Sea Convention.
    I'm pleased to be here with Secretary Clinton and Chairman 
Dempsey--their presence here is a testament to the conviction of our 
diplomatic and military leadership that accession to this Convention 
will greatly strengthen America's position around the world.
    As many of you know, I've long been passionate about oceans policy, 
and the need to develop and protect our maritime resources for this 
country, for ourselves, for our children and for future generations. 
One of my proudest accomplishments as a Member of Congress was 
establishing the Monterey Bay National Marine Sanctuary. Recently, 
before I took the jobs in this administration, I had the honor to chair 
the Pew Oceans Commission, and later cochaired a Joint Oceans 
Commission Initiative with Adm. Jim Watkins--both commissions confirmed 
the importance of our oceans--but more importantly both strongly 
supported accession to the Law of the Sea Convention.
    For nearly two decades, the Department of Defense's civilian and 
military leadership has shown sustained, consistent, unequivocal 
support for the Law of the Sea Convention. And I am pleased to be the 
first Secretary of Defense to convey such support in hearing testimony. 
Today, I join the Department's many voices past and present that have 
spoken so strongly in support. The fundamental point is clear: if the 
United States is to fully assert its historic role as a global leader, 
it must accede to this important Convention.
    The Law of the Sea Convention is the bedrock legal instrument 
underpinning public order across the maritime domain. We are the only 
permanent member of the U.N. Security Council that is not a party to 
it. This puts us at a distinct disadvantage when it comes to disputes 
over maritime rights and responsibilities with the 162 parties to the 
Convention, several of which are rising powers.
    The basic idea of the Convention is to establish some basic rules 
of the road--to define what can be done, where, in the world's oceans. 
More precisely, it provides for:

   The legal divisions of maritime space and accompanying 
        rights of innocent passage through territorial waters;
   Transit passage through vital international straits;
   High seas freedoms of navigation, and overflight, and other 
        internationally lawful uses of the sea related to those 
        freedoms in the Exclusive Economic Zone, and beyond; and
   Sovereign immunity to warships, naval auxiliaries and other 
        government vessels and aircraft.

    In other words, it reflects what has been the longstanding practice 
of our military and gives the United States the international 
foundation to promote, project and protect its global role as the 
world's leading maritime power.
    Let me further outline why I believe this Convention is critical to 
U.S. national security in today's strategic context, why it is time to 
move forward, and why the longer we delay, the more we undermine our 
national security interests.
    The United States is at a strategic turning point after a decade of 
war. Yet, even as these wars recede, we face a challenging and complex 
global security environment. We confront multiple transnational threats 
including violent extremism, the destabilizing behavior of nations like 
Iran and North Korea, military modernization across the Asia-Pacific, 
and turmoil in the Middle East and North Africa. At the same time, we 
are dealing with the changing nature of warfare, the proliferation of 
nuclear, biological, and chemical weapons and technology, and the 
growing threat of cyber intrusion.
    The fact is that these real and growing challenges are beyond the 
ability of any single nation to resolve alone. That is why a key part 
of our new defense strategy is to meet these challenges by modernizing 
our network of defense and security partnerships across the globe, and 
supporting a rules-based international order that promotes stability. 
And that is also why the United States should be exerting a leadership 
role in the development and interpretation of the rules that determine 
legal certainty on the world's oceans.
    Let me give you five important reasons as to why joining this 
Convention would provide enhanced national security.
    First, as the world's preeminent maritime power, and the country 
with one of the longest coastlines and largest Extended Continental 
Shelf, we have more to gain from accession to the Convention than any 
other country.
    If we are not at the table, then who will defend our interests? Who 
will lead the discussion to influence the further development and 
interpretation of the Law of the Sea? It is only by being there to 
protect our rights that we would ensure that our sovereignty is not 
whittled away by the excessive claims and erroneous interpretations of 
others. It would give us the power and credibility to support and 
promote the peaceful resolution of disputes within a rules-based order.
    Second, by joining the Convention, we can secure our navigational 
freedoms and global access for military and commercial ships, aircraft, 
and undersea fiber optic cables. As it currently stands, we are forced 
to assert our rights to freedom of navigation through customary 
international law, which can change to our detriment. Treaty law 
remains the firmest legal foundation upon which to base our global 
presence, on, above, and below the seas. By joining the Convention, we 
would help lock in rules favorable to freedom of navigation and our 
global mobility.
    Third, accession would bring legal certainty to a truly massive 
increase in our country's resource and economic jurisdiction, not only 
to 200 nautical miles off our coasts, but to a broad Extended 
Continental Shelf beyond that zone.
    Fourth, accession would ensure our ability to reap the benefits of 
the opening of the Arctic--a region of increasingly important maritime 
security and economic interest. We already see countries testing new 
shipping routes and exploring for natural resources as Arctic ice cover 
recedes. Joining the Convention would maximize international 
recognition and acceptance of our substantial Extended Continental 
Shelf claims in the Arctic. As we are the only Arctic nation that is 
not a party to the Convention, we are at a serious disadvantage in this 
respect. Accession would also secure our navigation and overflight 
rights throughout the Arctic, and strengthen our arguments for freedom 
of navigation through the Northwest Passage and Northern Sea Route.
    Fifth, and finally, our new defense strategy emphasizes the 
strategically vital arc extending from the Western Pacific and East 
Asia into the Indian Ocean region and South Asia. Becoming a party to 
the Convention would strengthen our position in this key area. For 
example, numerous countries sit astride critical trade and supply 
routes and propose restrictions on access for military vessels in the 
Indian Ocean, Persian Gulf, and the South China Sea. The United States 
has long declared our interests and respect for international law, 
freedom of navigation, and peaceful resolution of disputes. We have 
demonstrated our commitment to those interests through our consistent 
presence and engagement in these critical maritime regions.
    By not acceding to the Convention, we give up the strongest legal 
footing for our actions. We undercut our credibility in a number of 
Asia-focused multilateral venues--just as we're pushing for a rules-
based order in the region and the peaceful resolution of maritime and 
territorial disputes in the South China Sea and elsewhere. How can we 
argue that other nations must abide by international rules when we 
haven't joined the treaty that codifies those rules?
    At the other end of this arc sits the Strait of Hormuz, a vital sea 
lane of communication to us and our partners. We are determined to 
preserve freedom of transit there despite Iranian threats to impose a 
blockade. U.S. accession to the Convention would help strengthen 
worldwide transit passage rights under international law and help to 
further isolate Iran as one of the few remaining nonparties to the 
Convention.
    These are the key reasons for accession, which is critical to our 
sovereignty and our national security. That is why I fail to understand 
the arguments opposed to the treaty.
    First, some have put forward the myth that the Law of the Sea 
Convention would force us to surrender U.S. sovereignty. Nothing could 
be further from the truth. Not since we acquired the lands of the 
American West and Alaska have we had such an opportunity to expand U.S. 
sovereignty.
    Second, there are some who claim that accession to the Convention 
will restrict our military's operations and activities, or limit our 
ability to collect intelligence in territorial seas. Quite simply, they 
are wrong. The Convention in no way harms our intelligence collection 
activities or constrains our military operations. On the contrary, U.S. 
accession to the Convention secures our freedom of navigation and over-
flight rights as bedrock treaty law.
    Third, some allege that in joining, our military would be subject 
to the jurisdiction of international courts--and that this represents a 
surrendering of U.S. sovereignty. But once again, this is not the case. 
The Convention provides that a party may declare it does not accept any 
dispute resolution procedures for disputes concerning military 
activities. This election has been made by 20 other nations that have 
joined the Convention, and the United States would do the same. The 
bottom line is that neither U.S. military activities nor a U.S. 
decision as to what constitutes a U.S. military activity would be 
subject to review by any international court or tribunal.
    Fourth, some argue that certain military activities--specifically, 
our ability to conduct maritime interdiction operations--will be 
constrained because the Convention only recognizes the right of 
warships to board ships suspected of engaging in piracy, the slave 
trade or being stateless. Again, this is simply not the case. The 
United States and our partners routinely conduct a range of 
interdiction operations at sea based on U.N. Security Council 
Resolutions, treaties, port state control measures and the inherent 
right of self-defense. Further, the Convention expands the range of 
interdiction authorities found in the 1958 Law of the Sea Conventions 
we've already joined. In short, the United States would be able to 
continue conducting the full range of maritime interdiction operations.
    In closing, our new defense strategy recognizes our return to our 
maritime roots, and the importance to our military of freedom of 
navigation and global mobility.
    Freedom of navigation is essential for any global power, but 
equally applies to all maritime states--everywhere. This Convention 
helps ensure that this freedom is preserved and secured through 
reasoned, deliberate, international rules which are fully in accord 
with the freedom of navigation asserted by the United States around the 
world for decades. It provides the stable, recognized legal regime we 
need to conduct our global operations today, and in the future.
    This Convention is supported by major U.S. industries, the Chamber 
of Commerce, our energy, shipbuilding, shipping, and communications 
companies, fishing, and environmental organizations--along with past 
and present Republican and Democratic administrations, and the entire 
national security leadership.
    By finally acceding to the Convention, we help make our Nation more 
secure and more prosperous for generations to come. America is the 
strongest power in the world. We are strong precisely because we play 
by the rules. For too long, the United States has failed to act on this 
treaty. For too long, we have undermined our moral and diplomatic 
authority to fight for our rights and our maritime interests. For too 
long, we have allowed our inability to act to impair our national 
security. The time is now, for this Senate to do what others have 
failed to do: ratify the Law of the Sea Convention.

    The Chairman. Mr. Secretary, thank you. Again, also very 
important testimony, and we appreciate it very much and respect 
the fact you are the first Secretary of Defense to testify in 
favor of this treaty.
    General Dempsey.

 STATEMENT OF GEN MARTIN E. DEMPSEY, CHAIRMAN, JOINT CHIEFS OF 
                     STAFF, WASHINGTON, DC

    General Dempsey. Thank you, Mr. Chairman, Senator Lugar, 
and other distinguished members of the committee.
    I join Secretary Clinton and Secretary Panetta in offering 
my support for the Law of the Sea Convention. My voice joins 
past and present senior defense leaders to include our Joint 
Chiefs of Staff. It echoes every Chairman of the Joint Chiefs 
of Staff since the Convention was sent to the Senate in 1994.
    This support has been so consistent because of what the 
Convention does for our Armed Forces and for our national 
security. Joining the Convention would strengthen our ability 
to apply sea power. It codifies the navigational rights and 
freedoms necessary to project and sustain our military force.
    These include the right of transit through international 
straits, the right to exercise high seas freedoms in foreign 
Exclusive Economic Zones, and the right of innocent passage 
through foreign territorial seas. And it reinforces the 
sovereign immunity of our warships as they conduct operations.
    By contrast, we currently rely on customary international 
law and assert it through our physical presence. This plays 
into the hands of foreign states that seek to bend the 
customary international law to restrict movement on the oceans, 
and it puts our warships and aircraft on point to constantly 
challenge claims.
    We can defend our interests, and we will do that with 
military force, if necessary. But the force of arms does not 
have to be and should not be our only national security 
instrument. Joining the Convention would provide us another way 
to stave off conflict with less risk of escalation.
    The Convention also offers us an opportunity to exercise 
global leadership. Over 160 nations are party to it, as you 
have heard, including every permanent member of the U.N. 
Security Council and every Arctic nation. Our absence separates 
us from our partners and allies. It limits our ability to build 
coalitions and work cooperatively to solve these pressing 
security problems that face us.
    Although the terms of the Convention are favorable to the 
United States interests, we are not positioned to further guide 
its interpretation nor its implementation. We need to join it 
in order to strengthen our leadership role in global maritime 
affairs.
    To close, America is a maritime nation, both militarily and 
economically. Our prosperity and security depend on the bounty 
of and access to the world's oceans. By joining the Convention, 
our forces would enjoy a firmer legal standing for operations 
on, over, and under the world's waters, and it would provide us 
an additional tool for navigating an increasingly complex and 
competitive security environment.
    I look forward to your questions. Thank you.
    [The prepared statement of General Dempsey follows:]

              Prepared Statement of GEN Martin E. Dempsey

    Mr. Chairman, Senator Lugar, and distinguished members of the 
committee, I appreciate this opportunity to discuss the military and 
security implications of the Law of the Sea Convention.
    The United States is a maritime nation--militarily and 
economically. We have the world's largest Exclusive Economic Zone and 
the world's largest and most capable navy. We stand to benefit from the 
additional legal certainty and public order this treaty would provide. 
Moreover, this certainty will become increasingly important as the 
global security environment becomes more competitive and more complex.
    It is with this in mind that I join Secretary Clinton, Secretary 
Panetta, the Joint Chiefs, and every Chairman of the Joint Chiefs of 
Staff and every Chief of Naval Operations since the Convention was 
submitted to the Senate in 1994 in offering my unqualified support for 
this treaty.
    There are many reasons for this support. I would like to highlight 
three.
    First, joining the Convention would give our day-to-day maritime 
operations a firmer, codified legal foundation. It would enable and 
strengthen our military efforts, not limit them.
    We currently rely on customary international law and physical 
presence to secure global freedom of access. But there is risk in this 
approach. Tradition is a shaky basis upon which to rest our national 
security and the protection of our forces. Customs can be disputed, and 
they can change.
    Joining the Convention would provide legal certainty to our 
navigational freedoms and legitimacy to our maritime operations that 
customary law simply cannot. It would affirm critical navigational 
freedoms and reinforce the sovereign immunity of our warships as they 
conduct these operations. These include the right of transit through 
international straits, the right to exercise high seas freedoms in 
foreign Exclusive Economic Zones, and the right of innocent passage 
through foreign territorial seas. The Convention would also provide a 
stronger legal basis for some important activities such as stopping and 
boarding stateless vessels--ships often used by pirates, traffickers, 
and terrorists.
    Second, joining the Convention would provide a consistent and 
effective legal framework for opposing challenges to the rules-based 
international order in the maritime domain. Around the globe we are 
witnessing nations expanding their naval capabilities. We are also 
seeing countries expand their maritime claims--in the direction of 
restricting movement on the oceans. Illegitimate expansionism could 
become particularly problematic in the Pacific and the Arctic, two 
regions whose importance to our security and our economic prosperity 
will only increase over the next several decades. The Convention would 
provide us an important tool to help stave off jurisdictional creep in 
these areas and to resolve future conflicts peacefully and with less 
risk of escalation.
    Last, being a member of the Convention would better allow the 
United States to exercise global security leadership--a critical 
component of our global strategy. Our absence from the Convention 
separates us from our Partners and allies. It places us in the company 
of those who disdain the rule of international law. We are the only 
permanent member of the U.N. Security Council and the only Arctic 
nation that is not a party to the Convention. As a result, there are 
limits to our ability to build coalitions for important international 
security efforts.
    From the beginning, U.S. negotiators have been involved in the 
development of the Convention and have ensured it would both serve and 
protect our interests. Not joining the Convention limits our ability to 
shape its implementation and interpretation. We will need that 
influence if we intend to continue to lead in global maritime affairs.
    Now is the time for the United States to join the Convention. We 
should not wait. The global security environment is changing. The 
Pacific and the Arctic are becoming increasingly important. And some 
nations appear increasingly willing to assert themselves and to push 
the boundaries of custom and tradition in a negative direction.
    This treaty has been thoroughly debated and vetted, and it has 
consistently received support from senior defense leaders. We should 
become party to the Law of the Sea Convention now and demonstrate our 
global maritime leadership.

    The Chairman. Thank you very much, General.
    As I mentioned earlier, we will be having Chief of Naval 
Operations, the Commandant of the Coast Guard, and the 
Commanders of the various forces, all of whom are affected by 
this, come in and be able to answer questions for Senators.
    But General Dempsey, if I could ask you, opponents of the 
Convention have argued that U.S. accession is somehow going to 
lead to an unacceptable restriction on the U.S. military--
Secretary Panetta addressed this a little bit--suggesting it 
would harm our national security. This has been a refrain 
repeated in a number of editorials and elsewhere.
    I want to ask you some questions about that, if I may? 
First of all, do they know something that you don't know? 
[Laughter.]
    General Dempsey. Well, I can't speak for them, but I know 
what I know. And I know that it will not do any of the things 
you just suggested.
    The Chairman. None?
    General Dempsey. None.
    The Chairman. And you are certain of that?
    General Dempsey. I am certain of that.
    The Chairman. And that is shared by every commander of the 
various combatant forces?
    General Dempsey. It is, sir. You have probably noticed that 
I am not exactly dressed exactly as someone who would speak 
with authority on the issue of maritime operations. But I am a 
student and, in fact, prior to my testimony and even before, I 
have made it a point to consult with those who are experts on 
this and have become, to the best of my ability, an expert as 
well.
    The Chairman. President Reagan decided in 1983 that the 
Convention's provisions relating to the traditional uses of the 
oceans generally confirmed existing maritime law in practice 
and fairly balanced the interests of all states. He, therefore, 
announced that the United States, including the U.S. military, 
will act in accordance with those provisions, notwithstanding 
we hadn't ratified it.
    Has that policy ever changed since President Reagan first 
made the announcement in 1983?
    General Dempsey. It has not changed for the United States 
military. No, sir.
    The Chairman. So in light of the fact, and I ask this of 
both the Secretary of Defense and you, as Chairman of the Joint 
Chiefs, that we are already following the Convention, would 
joining it require the military to make any change in existing 
policy or procedure with respect to use of the oceans?
    General Dempsey. It would not.
    The Chairman. Would it place any restraint whatsoever on 
any of our strategic goals?
    General Dempsey. It would not.
    The Chairman. As Chairman of the Joint Chiefs of Staff, do 
you believe that joining the Convention would harm the U.S. 
military in any way?
    General Dempsey. I believe it would not harm us in any way.
    The Chairman. And haven't you expressed, and I think, Mr. 
Secretary, you have said that rather than harm us, it would, in 
fact, enhance our strategic goals and our interests.
    Secretary Panetta. It would. It would give us--it would 
give us the opportunity to be able to engage when it comes to 
navigational freedoms and navigational rights. We can argue for 
those now. We can do what we do. But very frankly, we have 
undermined our moral authority by not having a seat at the 
table with these nations to make the arguments for these 
rights.
    The Chairman. I have a letter here from Director of 
National
Intelligence Clapper, dated May 16, 2012, in which he confirms 
that the Convention would not prohibit intelligence activities 
in any way. This is another one of those myths that get thrown 
out there.
    I want to enter that letter into the record.
    But the intelligence community made the same confirmation 
to this committee during the Bush administration, did it not, 
in 2003 and 2007?
    Secretary Panetta. That is correct.
    The Chairman. So, General Dempsey and Secretary Panetta, I 
ask you each the same question. Do you have any concern or any 
belief whatsoever that joining this Convention would harm the 
U.S. military's ability to collect intelligence?
    Secretary Panetta. Having served in a key intelligence 
position and now as Secretary of Defense, this would in no way 
inhibit our ability to conduct intelligence operations.
    The Chairman. General Dempsey.
    General Dempsey. It would not affect our intelligence 
operations.
    The Chairman. And is it not accurate that the Russians are 
about to send their fifth mission up to the Arctic this summer, 
and the Chinese are currently laying claims that may, in fact, 
impinge on U.S. interests and claims?
    Mr. Secretary.
    Secretary Panetta. That is correct.
    The Chairman. General Dempsey.
    General Dempsey. Yes, sir.
    The Chairman. And our ability to affect that is, in fact, 
enhanced by joining the treaty, is it not?
    General Dempsey. As I said, sir, acceding to the Convention 
would allow us to have another instrument with which to engage 
any nation that would potentially threaten our interests.
    The Chairman. Now, Secretary Panetta, we have heard 
arguments also that the military doesn't need the treaty 
because customary international law gives us the rights we will 
need. You addressed this to some degree, the whole issue of 
codifying a preference for gunboat diplomacy by not embracing 
this treaty.
    Can you speak, General Dempsey and Mr. Secretary, since you 
are the direct line commanders for sending people into 
conflict, how you react to the notion that we should just leave 
aside a legal regimen and rely on the fact that we have the 
strongest navy and our military force?
    Secretary Panetta. Well, look, first and foremost, there is 
no question that we have the strongest navy in the world. But 
if we are going to engage in gunboat diplomacy everywhere we go 
in order to assert our rights, then the end result of that is 
going to be conflict, and it could very well jeopardize our 
national security if we resort to that as our primary means of 
asserting our rights, you know, sending the destroyers in, 
sending the carriers in, in order to do that.
    The better approach is to have those carriers, have those 
destroyers, make very clear the power we have. But then sit 
down and engage these other countries in a rules-based format 
that allows us to make the kinds of arguments that we have to 
make when we engage with 160 other nations as to navigational 
rights.
    I mean, that is the way we do it. We are strong because we 
play by the rules, not because we go against those rules.
    The Chairman. And Madam Secretary, I have certainly run 
into this in discussions with people, and I think you and I 
have discussed. That the lack of our presence in the treaty is, 
in fact, thrown at us by various countries today. And they 
almost needle us about our inability to assert our rights.
    I partly put that in this context. Some opponents of the 
Convention say we don't need it in order to get the legal 
certainty on the Extended Continental Shelf. We can just get it 
by a series of bilateral agreements like Mexico and Russia and 
so forth. Could you speak to that?
    Secretary Clinton. Well, first, we have not been able to 
realize all the potential benefits, because we are not a party 
to the treaty. We cannot fully secure our sovereign rights to 
the vast resources of our Continental Shelf beyond 200 nautical 
miles. We cannot sponsor U.S. companies to mine the deep seabed 
for valuable metals and rare earth elements.
    We cannot count on what is called customary international 
law, that it won't change or it won't be subject to either 
being ignored or undermined over time that we cannot control 
because we are not taking our seat at the table. We only get 
future stability in what the legal framework is if we are a 
party to the Convention, and you know, many of the provisions 
enshrined in the Convention are very favorable to us.
    And finally, to your point directly, Chairman Kerry, we do 
find, and I certainly personally find, that when I am, for 
example, working on claims in the South China Sea that affect 
our treaty allies like the Philippines or Japan or others, the 
fact that we are not a party really undermines our position.
    And I would bet that there are many in the world who hope 
we never are a party, and they can go on and plot the way 
forward, set the rules, enforce them as they choose, putting us 
further and further at a disadvantage.
    The Chairman. Thank you very much.
    Senator Lugar.
    Senator Lugar. Thank you, Mr. Chairman.
    Each of you has been covering the ground that I am about to 
cover again. But let me just say that again and again during 
testimony in 2004, 2007, we had the thought that the opposition 
was not being heard, not being understood. So let me introduce 
some of the opposition today so that we have the benefit.
    For instance, on the editorial page or B4 of the Washington 
Times of Tuesday, May 22, 2012, Frank Gaffney writes about the 
situation. He says, ``If, on the other hand, the members of the 
U.S. Senate trouble themselves to study, or at least read, the 
text of the Law of the Sea Treaty, they would immediately see 
it for what it really is: a diplomatic dinosaur, a throwback to 
a bygone era when U.N. negotiations were dominated by 
Communists of the Soviet Union and their fellow travelers in 
the Third World.
    ``These adversaries' agenda was transparent and wholly 
inimical to American equities. They sought to: establish 
control over 70 percent of the world's surface; create an 
international governing institution that would serve as a model 
for bringing national states like ours to heel; and 
redistribute the planet's wealth and technology from the 
developed world to themselves. LOST codifies such 
arrangements--and would subject us to mandatory dispute 
resolution to enforce them via stacked-deck adjudication 
panels.
    ``And I would suggest even then Senators will not read the 
treaty, nor perhaps other national leaders. So I suggest that 
Dick Morris and his wife, Eileen, have just published an 
important book that addresses, among other outrages, LOST as a 
prime example of the title: `Screwed! How Foreign Countries Are 
Ripping Off America and Plundering Our Economy and How Our 
Leaders Help Them Do it,' '' and so forth.
    Now over on the next page, Ed Feulner writes, ``Without 
LOST, we are told, we will not be able to develop the 
hydrocarbon resources beneath the Extended Continental Shelf. 
Sounds pretty dire at a time of fluctuating prices for gasoline 
and other forms of fuel. Fortunately, it is not true. Under 
international law and longstanding U.S. policy, we already have 
access to these areas.
    ``Presidents dating back to Harry Truman have issued 
proclamations--and Congress has passed laws--establishing 
America's maritime laws and boundaries, and no one has 
challenged them.''
    Now, as you pointed out, we do have a navy, and perhaps 
opponents of the treaty would say why get involved in all of 
this nonsense? Send the fleet out. Shoot it up. If, in fact, 
you have got a problem, what is this navy for?
    Now I tried to mention this briefly in my comments, that 
even at a 1,000-ship level, the United States cannot cover all 
the disputes of the world.
    What we ought to have then maybe is an additional hearing 
on how many more ships, how much more military spending, and 
how much more infrastructure we will need to do it our way and 
to say let the rest fly by themselves.
    I take your time to listen to all of this because, 
essentially, you have presented a very strong case, and people 
from industry are going to present a strong case. And they will 
be pilloried as capitalists who are looking after their own 
stockholders, looking after their own interests once again 
without regard to our sovereignty and our ability to address 
disputes militarily if pressed to do so.
    And I don't know who else will come in. Perhaps we will 
have some who will say that peace in the world is important and 
that this treaty is an important means to strengthen 
international cooperation. But I am afraid they are going to 
get short shrift.
    How, Secretary Panetta, would you begin to describe the 
military problem here? In other words, we do have the Navy, we 
are not going to stand by, and we are worried about the South 
China Sea. And all of our Asian allies are coming, and we are 
placing Marines in Australia, and we are pivoting, as you 
described the policy.
    But what are the limitations, if there are any, to our 
ability to shoot it out?
    Secretary Panetta. Well, Senator Lugar, again, I think it 
is a question of looking at the facts that we are dealing with. 
The fact is that we are dealing with a world in which there are 
myriad threats that we confront now. This is--you know, we are 
not just dealing with the Soviet Union. We are dealing with 
myriad threats.
    In the South China Sea with rising powers, in the Pacific 
with North Korea, with Iran, with transit in the Strait of 
Hormuz, with turmoil in the Middle East, with a whole series of 
challenges, not to mention war, not to mention terrorism. All 
of those are the threats that we confront.
    And the reality is that we are now in a world in which, 
frankly, in order to be able to deal with that myriad 
challenges, it isn't enough for the United States Navy to go 
wandering around the world asserting its strength as a way to 
solve that myriad problems and threats I just defined.
    The only way we are going to do this in today's world is to 
engage in alliances and partnerships, work with other countries 
to develop some kind of rules-based approach to dealing with 
those threats so that other countries as well understand the 
threats they confront and can react to those threats. That is 
the kind of world we are part of. That is the kind of world we 
live in.
    And it is for that reason that the Law of the Seas becomes 
important because it is one of those vehicles in which to 
engage the world. One hundred sixty nations have acceded to it, 
and we say the hell with them, we are not going to participate 
in that. Then 160 nations are going to determine what happens 
in terms of the Law of the Sea, and we won't be there.
    So that is the reason from a national security point of 
view, from a very practical point of view, from the point of 
view of what is in the best interests of the United States, 
that we have to accede to this Convention so that we are part 
of a rules-based international order.
    We say that every time we go--we argue with Iran. Every 
time we argue with North Korea, we argue on the basis that they 
are not abiding by international rules. They are not abiding by 
the international standards that we have established.
    And here we are, trying to make the same argument with 
regards to navigation, and we aren't even a member of the 
Convention. That is the reason we need to accede to this 
Convention.
    Senator Lugar. Thank you.
    The Chairman. Let me just say, since there are a few 
seconds left, Senator Lugar, that neither President Truman's 
proclamation nor any act of Congress has ever delineated the 
outer edge of the Extended Continental Shelf of the United 
States. And currently, other countries can prohibit the United 
States from coming into an ECS. We can't because we are not a 
party to the treaty.
    So the only way to protect that outside of this is to 
accede to the treaty. And finally, no company is going to put 
millions of dollars into the effort to go out and do the mining 
or do the drilling if they don't have the legal certainty 
protection of the treaty.
    So there are further reasons in answer to Mr. Feulner. But 
we will have Mr. Feulner in here, and we will have others who 
oppose it and have a chance to explore this.
    Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman, for beginning 
this series of hearings, which I think are incredibly 
important.
    A couple of years ago, I chaired the beginning of one of 
these on your behalf, and I think it is even more important 
today than it was then. And I appreciate all of our 
distinguished witnesses and their service to our country.
    General Dempsey, when you took an oath as the Chairman of 
the Joint Chiefs of Staff and when you took an oath to the 
service that you originally joined from which you come, you 
took an oath to protect the United States of America. Is that 
not correct?
    General Dempsey. I did, sir.
    Senator Menendez. And is there anything in this treaty that 
you believe undermines the oath that you took both in your 
service, as well as the Chairman of the Joint Chiefs of Staff?
    General Dempsey. There is not.
    Senator Menendez. So you believe that the treaty clearly 
continues to allow for you, on behalf of all of those of the 
different services who serve this country, to protect and 
defend the United States of America and doesn't undermine any 
of those abilities?
    General Dempsey. It protects our ability to do what we need 
to do for this country.
    Senator Menendez. Thank you very much.
    Secretary Panetta, do you have any concerns that this 
treaty would impinge on either the rights or ability of you, as 
the Secretary of Defense, to protect the air, sea, or land 
territory of the United States? Or conversely, would the treaty 
impact the ability of the Department of Defense or the service 
branches to navigate or engage in freedom of navigation 
operations?
    Secretary Panetta. No, it would not. It would enhance our 
ability to be able to navigate because we would be able to be 
at the table to protect our interests and protect our claims.
    Senator Menendez. In fact, doesn't this treaty, if we were 
to ratify it, give us the wherewithal to extend our reach to a 
third more than the territory that we have beyond the 200 miles 
Exclusive Economic Zone? Is that a correct statement?
    Secretary Panetta. That is absolutely correct.
    Senator Menendez. In recent months, as I am sure many of 
you know, I have been following Iran with a laser-like focus. 
In these past few months, we have heard Iran threaten to close 
the Strait of Hormuz in response to United States and European 
Union sanctions.
    Beyond our own ability to respond in the national interest 
and security of the United States, which the administration 
made very clear at the time when that threat took place, my 
understanding of the treaty is that such an action by Iran 
would have violated the treaty because of the treaty's 
guarantee of the right of innocent passage even in a nation's 
territorial waters and even for United States military 
vehicles--vessels, I should say. Is that a correct statement?
    Secretary Panetta. That is a correct statement.
    Senator Menendez. The other thing that I focus a great deal 
on in our subcommittee role is proliferation of narcotics 
trafficking, as well as the proliferation of weapons of mass 
destruction. What benefits would the United States derive from 
joining the treaty with respect to countering and interdicting 
narcotics and the proliferation of weapons of mass destruction 
to and from state and nonstate actors of proliferation concern, 
such as Iran and Syria?
    For example, would joining the treaty advance interdiction 
efforts under the Proliferation Security Initiative, such as 
providing a basis for taking action against vessels suspected 
of engaging in proliferation activities?
    General Dempsey. Right now, sir, as you know, we use 
customary international law to assert our right to visit. This 
would be documented in the Convention of the Law of the Sea and 
preserve the right of visit, which would enhance our use of the 
Proliferation Security Initiative.
    Senator Menendez. Do we believe that joining the treaty 
would help our efforts to bring countries into the 
Proliferation Security Initiative and further undertake our 
efforts in needed interdiction efforts?
    Secretary Clinton. I believe it would, Senator. I think 
joining the Convention would likely strengthen the PSI by 
attracting new cooperative partners.
    Senator Menendez. Now, finally, this treaty has allowed for 
us, on a provisional basis, to participate and influence the 
work of various entities, such as the Commission on the Limits 
on the Continental Shelf and the International Seabed 
Authority, the body that regulates the exploration, 
development, exploration of international areas beyond national 
jurisdiction, such as oil, gas, and nonliving resources under 
the seabed and subsoil.
    However, because we have not ratified the treaty, we have 
been relegated to observer status on the Commission. What 
impact has the failure to ratify had on our ability to 
influence the actions on the Continental Shelf Commission and 
the international seabed activity?
    Secretary Clinton. Well, Senator, first of all, there are a 
number of observers who actually view this Convention as a huge 
win for the United States. In fact, it is called by some ``the 
U.S. land grab'' because of what it would mean for our ability 
to extend jurisdiction far beyond our shores.
    But unfortunately, our failure to accede to it limits our 
capacity to do so. We believe the seabed mining body's action 
on rules for mining, coming up in 2013, is something that we 
would heavily influence and would certainly influence in favor 
of our interests and our companies, if we were to accede by 
then.
    So the Convention bodies that are determining the rules are 
proceeding without us, and we are on the sidelines and do not 
have the authority needed to do much more than try to wave our 
arms and get attention to make points. But we would have direct 
influence and we would have, as I said in my testimony, what 
amounts to a veto because of the consensus rules if we were 
actually present.
    Senator Menendez. So, clearly, because a gift of God allows 
us access to the Atlantic, Pacific, Arctic, and gulf 
territorial waters, it is in our security interests, our energy 
interests and private sector interests to ratify this treaty. 
Is that a fair statement?
    Secretary Clinton. That is an absolutely fair statement.
    Senator Menendez. Thank you very much.
    The Chairman. And if I could just augment that by saying, 
Senator, that because of Guam, because of the Hawaiian Islands, 
because of the Aleutians, we have an extraordinary reach, which 
is why there is such a breadth here to what is available to us, 
which is unique.
    No other country in the world has as significant an 
extended zone as we do, and we are not taking advantage of 
that.
    Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    And thank each of you for your testimony and service to our 
country.
    And Secretary Clinton, I noticed you enjoyed your testimony 
more than most. I don't know if it is because January is just 
around the corner or not, but you seem very happy today, and I 
am glad to have you here.
    You know, I have been around here a while now, and this is 
sort of a Lazarus moment. This thing has been around for 30 
years. We are in the middle of a pretty contentious 
Presidential race, and we have a treaty that is coming up that 
both majority leaders on the Democratic side and Republican 
side have not wanted to bring to the floor.
    So I have my antenna up slightly. I do want everybody to 
know that I begin in a neutral place. I, too, want to make my 
decision on this treaty based on facts and not myths and 
certainly plan to go about learning as much as I can about the 
facts of where this treaty places our Nation.
    So I listened to the testimony, and again, I enjoyed all 
three of you. I am listening to cases being made about oil. And 
at the depths of exploration we are talking about, we are 
talking about really big oil. And I just find it interesting. I 
don't think this is a pejorative comment. The administration 
has not particularly been a great fan of big oil.
    As a matter of fact, we have restricted our own lands to 
their access in many ways. So I just find it an interesting 
point that is being made by an administration that has been 
anything but ``friendly'' to big oil, why all of a sudden on 
this particular treaty, such a big deal is being made out of 
that? And if you could just answer me briefly, Secretary 
Clinton, I would appreciate it.
    Secretary Clinton. Well, Senator Corker, I am always happy 
when I am appearing before this committee and back in the 
Senate. So thank you for the warm welcome.
    You know, I really believe that the United States has an 
opportunity in developing our natural resources, which we are 
currently doing, particularly with unconventional gas and the 
steps and progress that we are making in that arena, which are 
extremely important to our future.
    Yes, there are discussions and debates over where to do it, 
in whose backyard and the like. But we are making progress, and 
for the first time in many years, we actually are a net 
exporter. And as someone who spends a lot of my time promoting 
American jobs around the world and finding how interested 
people are in perhaps being able to import from us, I think 
that is all to the good.
    It is also important that we take advantage--that we have 
the opportunity to take advantage of what may be possible in 
the future. I don't want to close the door on anything. And 
that is what I fear we are doing. It is the opportunity cost of 
not acceding to the Convention now.
    I am not an expert in oil and gas exploration and drilling. 
But what the oil and gas industry tells us is that they are now 
in a position to take advantage of this; actually, our majors 
are among the very limited number of such companies anywhere in 
the world.
    And to shut the door on their ability to do that I just 
don't think is economically smart. So I think if you look at 
the whole picture, we are positioned well, and I want us to 
continue to be so in the future.
    Senator Corker. So second point, I know the administration 
has tried to push legislation relating to carbon, and I know 
cap and trade was discussed for a while. And that obviously 
didn't pass muster here in the Senate, and so the EPA has taken 
steps to, in many ways, make pieces of that happen through 
regulation.
    One of the things that the treaty does do is regulate 
pollution in the ocean from land-based sources, and one of the 
things you didn't mention in the comments about some of the 
negativity toward the treaty is a lot of people believe--and 
again, I am asking the question after reading, and I am not 
saying I am one of those. But a lot of people believe that the 
administration--my antenna is up--that the administration wants 
to use this treaty as a way to get America into a regime 
relating to carbon since it has been unsuccessful doing so 
domestically. And I wonder if you might respond to that?
    And if the treaty, in your opinion, does put us in a 
situation either to respond to international regimes or to be 
subject to lawsuits from people because of carbon that is 
emitted from the United States affecting the ocean bed?
    Secretary Clinton. Senator, I know some have been 
concerned, and I appreciate your raising it that somehow the 
Convention is a backdoor Kyoto protocol. It is our legal 
assessment that there is nothing in the Convention that commits 
the United States to implement any commitments on greenhouse 
gases under any regime.
    And it contains no obligations to implement any particular 
climate change policies. It doesn't require adherence to any 
specific emission policies, and we would be glad to present for 
the record a legal analysis to that effect.
    Senator Corker. How do we exit this treaty? Is there a way 
to--you know, typically treaties have ways of exiting. And 
again, briefly, I want to ask one other question. How would one 
exit this treaty if we became a party to it?
    Secretary Clinton. Again, I will submit it to the record, 
but it is my understanding that just as we accede to certain 
treaties, we can end our accession or our membership. There is 
no continuing obligation to be a member of a treaty that you 
freely joined.
    [The written response from the State Department follows:]

    During Secretary Clinton's May 23, 2012 testimony before the Senate 
Committee on Foreign Relations, you asked for more information on the 
Law of the Sea Convention's provisions that permit a party to withdraw 
from the Convention. You also asked about the relationship between the 
Convention and U.S. climate change policy. Please find our analysis 
below on both of these issues.
             withdrawal from the law of the sea convention
    Withdrawal by a State party from the Law of the Sea Convention is 
governed by Article 317, entitled ``Denunciation.''
    Article 317 provides that a State party may withdraw from the 
Convention at any time. It is not necessary to indicate a reason for 
denunciation. Denunciation takes effect 1 year after providing written 
notification.
    Article 317 is similar to withdrawal provisions found in other 
treaties to which the United States is a party.

                             CLIMATE CHANGE

    The Law of the Sea Convention is an oceans treaty, not a climate 
treaty. Joining the Convention would not require the United States to 
implement the Kyoto Protocol or any other particular climate change 
laws or policies, and the Convention's provisions could not 
legitimately be argued to create such a requirement.
    Part XII of the Convention addresses the marine environment. 
``Pollution of the marine environment'' is defined in Article 1, 
paragraph 4. Even if one assumed, for the sake of argument, that (1) 
Part XII applied to the issue of climate change; (2) ``pollution of the 
marine environment'' existed within the meaning of Article 1(4); (3) 
there was a causal link between a Party's GHG emissions and such 
pollution; and (4) other requirements were satisfied, Part XII would 
still not require a Party to adopt particular climate laws or policies.
    Part XII's arguably relevant provisions are either extremely 
general (e.g., Article 194) or expressly do not require a Party to 
implement any particular standards.

   Articles 207 and 212 call on Parties merely to ``tak[e] into 
        account internationally agreed rules, standards and recommended 
        practices and procedures.''
   Articles 213 and 222, which are the ``enforcement'' 
        analogues to Articles 207 and 212, would likewise not require 
        the United States to adopt or enforce particular standards 
        related to climate change. The ``enforcement'' section of Part 
        XII allocates responsibilities among flag States, coastal 
        States, and port States, depending upon the source/type of 
        marine pollution in question. Adoption and enforcement of laws 
        in relation to Articles 207 and 212 fall within the domain of 
        the State concerned. However, even if these articles applied to 
        climate change, they would not require adoption/enforcement of 
        Kyoto or other climate rules or standards. There are simply no 
        such international rules and standards relating to climate 
        change applicable to the United States.

    The Convention would also not provide a forum for challenging U.S. 
climate change policies.

   Domestically, the Convention could not be invoked in court; 
        it does not create rights of action or other enforceable 
        individual legal rights in U.S. courts. (See declaration 24 of 
        the draft resolution of advice and consent and the Committee 
        Report of December 19, 2007, at page 18.)
   Internationally, dispute resolution is not open to 
        individuals or groups, only States Parties. Were a State Party 
        to seek to challenge U.S. climate policies under the guise of a 
        ``marine environment'' dispute, the Convention's dispute 
        settlement procedures would not be available.

        Because of the sensitivities of coastal States concerning 
            their land-based (and certain other) activities, the 
            Convention sets forth limitations on the obligations 
            related to marine pollution that could be subject to 
            dispute resolution.
        Specifically, Article 297(1)(c) sets out the exclusive 
            bases upon which a coastal State would be subject to 
            dispute resolution for pollution of the marine environment.
        Among other things, there would need to be a ``specified'' 
            international rule or standard ``applicable'' to the 
            coastal State. As noted, no provision of the Convention 
            ``applies'' international rules or standards to the United 
            States in this area, much less a ``specified'' one. As 
            such, it would not be possible to invoke the dispute 
            resolution procedures to challenge the United States in 
            relation to climate change.
        Were a State Party to seek to invoke the Framework 
            Convention on Climate Change (to which the United States is 
            a Party) as the basis for a challenge under the LOS 
            Convention, Articles 280 and 281 of the Convention would 
            further preclude recourse to the Law of the Sea 
            Convention's dispute resolution procedures. (These Articles 
            provide that Parties can choose to resolve disputes by 
            means of their own choosing, including through other 
            agreements. The Framework Convention on Climate Change 
            already contains provisions for dispute settlement, and 
            those provisions do not entail any legally binding 
            procedures between Parties unless the Parties agree on such 
            procedures.)

    Thus, the Convention would not obligate the United States to have 
in place any particular climate laws or policies, and it would not 
subject U.S. climate change approaches to dispute resolution.
    U.S. agencies, including the Coast Guard, EPA, and the Justice 
Department, have been acting in accordance with Part XII of the 
Convention since President Reagan directed the U.S. Government to abide 
by the bulk of the Convention's provisions. Were the United States to 
become a Party to the Convention, U.S. agencies would implement Part 
XII under existing laws, regulations, and practices. This was confirmed 
in a March 1, 2004, letter to Chairman Lugar from William H. Taft IV, 
the State Department's Legal Adviser during the Bush administration. 
The letter provided, in pertinent part: ``The United States, as a 
Party, would be able to implement the Convention through existing laws, 
regulations, and practices (including enforcement practices), which are 
consistent with the Convention and which would not need to change in 
order for the United States to meet its Convention obligations.''
    We stand by the Taft letter.

    Senator Corker. And then, last, is this treaty subject to 
the typical resolution of ratification that happens in the 
Senate when treaties are--that is correct?
    Secretary Clinton. Yes, that is correct.
    Senator Corker. There is some language that stipulates no 
changes. But you are saying the Senate has the ability to put 
stipulations upon our entrance?
    Secretary Clinton. We always have a resolution for 
ratification that is prepared. I think there was one prepared 
in past times when it didn't get to the floor, but it was 
certainly part of the preparation work leading up to a 
potential vote.
    Senator Corker. OK. And on that note, and this is not 
directed at you in any way. We did have a resolution of 
ratification under the START Treaty, and I know we have had 
some conversations about this in the past. And I know that 
there are pieces of this that are outside the jurisdiction of 
the State Department.
    But I will say that I think the gentlemen on either side of 
you, I know the gentleman to your left, mentioned many times 
that the modernization of our nuclear armaments is very 
important to our Nation, especially if we are going to be 
reducing the numbers of those. And I want to say one more time 
in every public setting that I can, and I know this is not the 
State Department, but that resolution has not been honored.
    And for what it is worth, it is not a really good way to 
build trust with folks on future treaty resolution. So, again, 
none of this is directed at you, but the types of 
modernizations at Sandia and Los Alamos and Pantex and other 
places have been waiting for, and military leaders and civilian 
military leaders have said is very important, has not occurred, 
per the resolution of ratification.
    Not directed at you, but just to say that it is not the 
kind of thing that builds a lot of faith in those resolutions.
    Secretary Clinton. If I could respond, Senator, because I 
know this is a continuing concern of yours. And for the record, 
I just want to state that in FY12, the administration did live 
up to the obligations that we agreed on by requesting $7.629 
billion for NNSA weapons activities.
    Congress did not appropriate that full amount, instead 
appropriating only $7.214 billion. That did create a shortfall. 
So, in FY 2013, we continued to honor our commitments by 
requesting $7.6 billion. That is $363 million, or 5 percent, 
above the amount appropriated by Congress for FY12.
    It is one of the very few accounts in the entire Government 
to receive an increase of this size. And we would like to work 
with Congress to be able to have everybody on the same page 
concerning this.
    Senator Corker. Well, I will close with that if it is OK. I 
appreciate that. And yet, this year, that request was not made. 
And I want to say that the resolution states that if those 
funding requirements are not met, it is incumbent upon the 
administration to come forth with a report showing how that 
affects the overall process.
    That has not happened. And again, none of that is directed 
at you. It is directed overall at the administration. But it 
does creation problems as it relates to overall trust issues.
    I thank you all for your testimony and look forward to the 
future hearings.
    Secretary Clinton. And Senator, I take very seriously this 
concern of yours. We will be submitting the 9(b) report 
shortly.
    The Chairman. Thank you, Senator Corker.
    Senator Cardin.
    Senator Cardin. Well, Mr. Chairman, let me thank all of our 
witnesses. I found your presentations to be as comprehensive a 
presentation that I have ever received on the treaty, and I 
thank you for that. I thank you for particularly addressing the 
criticisms that have been made about this treaty, but of 
course, it is typical of any treaty that we hear some of these 
complaints.
    I want to go into an issue that I think, Secretary Clinton, 
you alluded to. And that is that this is not a static 
situation. It is changing, changing all the time. And there are 
now groups that are meeting that will affect U.S. interests 
that we are not a party to. We don't have our representative 
there.
    The Law of the Sea is changing because of the treaty. And 
there is now discussion as to what should be the appropriate 
use of sea-lanes, and where should the mineral rights in the 
future go, what should be the international regime for dealing 
with some of these issues? And the United States, of course, is 
perhaps the most significant player in these issues, and yet 
our interests are not being represented as these types of 
changes are being debated.
    Can you just elaborate a little bit more as to what type of 
discussions are currently taking place that we truly are not 
part of, we are not involved, as far as having our 
representative at the table during these discussions, that 
could very much affect U.S. companies, could affect the 
commercial operations, could affect all the interests that you 
have mentioned?
    Secretary Clinton. Well, Senator, you are absolutely right 
with respect to demarcating, claiming, and asserting sovereign 
jurisdiction over the Continental Shelf, that is ongoing. 
Countries are doing that. As has been already said, we stand to 
gain more than any country in the world, and we have not done 
so.
    Going beyond the Extended Continental Shelf, which is of 
great importance to us, are the rules on deep seabed mining 
that will influence whether a number of the supporters of the 
treaty--Senator Kerry mentioned one, Lockheed Martin--who are 
interested in the rare earth minerals, can participate. Because 
in the absence of setting the right rules and then being a 
party to the treaty, it may or may not be as advantageous to us 
as it should be.
    We have a seat on that body, and we are not filling it.
    So we will really only have ourselves to hold responsible 
if the bodies that are now gearing up and working under this 
Convention begin to make decisions that are not in our 
interest.
    And I think Secretary Panetta made a great comment. You 
know, we like to use our military power to promote our national 
security. We have a lot of economic interests at stake here 
that will be very hard for us to exercise, even with the 
largest, most professional military in the world, if we don't 
get in under the Convention's rules. And we have a chance still 
to shape those rules.
    Senator Cardin. Normally, on these international treaties 
and organizations, the U.S. participation is looked upon 
internationally with great importance, because it adds to the 
comprehensive nature of the organization. You mentioned the 
Arctic area. Without having the United States, you're missing 
one of the key players in the Arctic. So I know that there are 
strong international interests for us to become a party to the 
treaty.
    But I would expect that there is some interest in other 
countries that are saying, we hope you don't ratify this 
treaty. After all, it gives our companies a better edge on some 
of these issues and puts us in a stronger position on some of 
the economic and legal issues, as it affects U.S. operations.
    Am I correct? I assume that there is strong international 
support for U.S. interests, but in some respects, they may be 
saying, if you don't want to take advantage of it, we will fill 
the void.
    Secretary Clinton. Well, the United States was certainly 
among the relatively small group of nations that drove the 
treaty in the first place, and then led the modifications in 
1994 to make sure that nothing in the treaty would be adverse 
to our interests.
    And so we have a lot at stake. We have already invested a 
lot in it. I think most of the world wants to see us accede, 
because they know that with the United States as the principal 
driver of a rules-based international system, our being inside, 
helping to devise and execute those rules, is in their 
interests as well.
    But I have to agree with you, Senator, that there are 
nations who would be perfectly happy to be in the driver's seat 
instead of us, and we're letting them be in the driver's seat, 
by our failure to be party to the Convention.
    Senator Cardin. We just had the NATO summit in Chicago, and 
one of the issues that was raised pretty vocally by this 
committee is that we want our NATO partners to carry out their 
responsibility. The responsibility for international security 
should rest with all of our partners, not just principally with 
one country, the United States.
    And, Secretary Panetta, it seems to me that our allies have 
to have some concern about the U.S. participation in this 
treaty, as it relates to the coordination of our security 
issues, as it relates to the sea.
    Secretary Panetta. That's absolutely correct. We sit down 
with these countries. We develop strategies. We develop plans. 
We develop military operations. We develop naval operations, 
working with them as well.
    And if we are not operating based on the same rules, it 
puts us at a disadvantage.
    I am sure this is true for Secretary Clinton, but I can't 
tell you--I've been in meetings with both those that are 
considered our allies as well as those that are considered our 
competitors, and make the argument with regards to navigational 
rights, make the argument with regards to our ability to 
exercise rights in the open seas.
    And they have said in these meetings, how can you even 
assert that when you are not even--have acceded to the Law of 
the Seas Convention? That has been thrown right in our face.
    And I am sure they would love to continue to have that 
argument. That is the concern.
    Senator Cardin. It does make our arguments for parity that 
much more difficult, particularly when there really is, as you 
have all pointed out, it is hard to defend an argument as to 
why we have taken so long and why we have not, in fact, 
ratified the treaty.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator.
    Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    Secretary Clinton, in your opening statement, you addressed 
the people who oppose the ratification of the treaty, and 
particularly spoke to the ideology and the philosophical 
opposition that some people have to this. And I hope you 
weren't scoffing at us. I am one of those who fall into that 
category, because I have some deep-seated reservations on that 
basis.
    Indeed, most wars we have fought have been fought over 
ideology and philosophy. Indeed, our country was founded on 
that, because we had a difference with Great Britain over that.
    So I consider that an important point. And to get this down 
even narrower, my problem is with sovereignty. There are 288 
pages here. And as you read it, there is some good stuff in 
here. But if we give up one scintilla of sovereignty that this 
country has fought, has bled for, have given up our treasure, 
and the best that America has, I can't vote for it.
    So I want to talk about a couple of those, and focus on 
those, if we can.
    First of all, with all due respect, you defended the 
opposition, or you challenged the opposition. You said that 
there is nothing in here that requires that we do certain 
things regarding the Kyoto protocols and environmental-type 
things. If you look at article 222, and I am going to quote 
from that article, which says that signatories to this treaty, 
``shall adopt laws and regulations, and take other measures 
necessary, to implement applicable international rules and 
standards established to competent international organizations 
or diplomatic conference to prevent, reduce, and control 
pollution of the marine environment from or through the 
atmosphere.''
    That has got Kyoto written all over it.
    And what it's got written all over it is any time the U.N. 
calls a conference or what have you, they all get together, 
they all sign onto it, and even though we disagree, by adopting 
this treaty, we have said that we will adopt it, even though we 
don't agree with that particular treaty.
    So with all due respect to the legal interpretations you 
say you have, and I have read thousands of pieces of 
legislation, this is written in plain English. And I don't know 
how you can argue that, after this is adopted by Congress or by 
the Senate, if it is, how we're going to get around the fact 
that we have agreed that we will adopt these laws and 
regulations.
    Secretary Clinton. Well, Senator, I join you in being 
absolutely, 100 percent, supportive and protective of American 
sovereignty. I've spent much of my adult life, in whatever role 
I have found myself in, defending and arguing on behalf of our 
country and our rights, and I will continue to do so.
    But I would strongly argue that, No. 1, our sovereignty 
will be considerably enhanced by joining this treaty. And No. 
2, with the specific to the question you asked, our reading of 
that, and the information about the meaning of it goes back to 
the very beginning of the treaty, because we have had American 
negotiators at the table from the very beginning, is that there 
is nothing in what you read that requires any particular 
standards. There is nothing that requires this subject to be 
put to dispute settlement. It calls on parties to participate 
in discussions, conferences, and the like, concerning 
environmental issues that might come to impact the oceans.
    And for the record, I will give you a longer written 
response, because I really do want to put your mind at ease, as 
much as I am able to, because I believe so vehemently that 
acceding to this treaty is in America's sovereign interests, or 
I would not be sitting here.
    [The written response from the State Department follows:]

    During Secretary Clinton's May 23, 2012, testimony before the 
Senate Committee on Foreign Relations, you discussed the relationship 
between the Law of the Sea Convention and climate change. Please find 
our analysis below on this issue.

                             CLIMATE CHANGE

    The Law of the Sea Convention is an oceans treaty, not a climate 
treaty. Joining the Convention would not require the United States to 
implement the Kyoto Protocol or any other particular climate change 
laws or policies, and the Convention's provisions could not 
legitimately be argued to create such a requirement.
    Part XII of the Convention addresses the marine environment. 
``Pollution of the marine environment'' is defined in Article 1, 
paragraph 4. Even if one assumed, for the sake of argument, that (1) 
Part XII applied to the issue of climate change; (2) ``pollution of the 
marine environment'' existed within the meaning of Article 1(4); (3) 
there was a causal link between a Party's GHG emissions and such 
pollution; and (4) other requirements were satisfied, Part XII would 
still not require a Party to adopt particular climate laws or policies.
    Part XII's arguably relevant provisions are either extremely 
general (e.g., Article 194) or expressly do not require a Party to 
implement any particular standards.

   Articles 207 and 212 call on Parties merely to ``tak[e] into 
        account internationally agreed rules, standards and recommended 
        practices and procedures.''
   Articles 213 and 222, which are the ``enforcement'' 
        analogues to Articles 207 and 212, would likewise not require 
        the United States to adopt or enforce particular standards 
        related to climate change. The ``enforcement'' section of Part 
        XII allocates responsibilities among flag States, coastal 
        States, and port States, depending upon the source/type of 
        marine pollution in question. Adoption and enforcement of laws 
        in relation to Articles 207 and 212 fall within the domain of 
        the State concerned. However, even if these articles applied to 
        climate change, they would not require adoption/enforcement of 
        Kyoto or other climate rules or standards. There are simply no 
        such international rules and standards relating to climate 
        change applicable to the United States.

    The Convention would also not provide a forum for challenging U.S. 
climate change policies.

   Domestically, the Convention could not be invoked in court; 
        it does not create rights of action or other enforceable 
        individual legal rights in U.S. courts. (See declaration 24 of 
        the draft resolution of advice and consent and the Committee 
        Report of December 19, 2007, at page 18.)
   Internationally, dispute resolution is not open to 
        individuals or groups, only States Parties. Were a State Party 
        to seek to challenge U.S. climate policies under the guise of a 
        ``marine environment'' dispute, the Convention's dispute 
        settlement procedures would not be available.

        Because of the sensitivities of coastal States concerning 
            their land-based (and certain other) activities, the 
            Convention sets forth limitations on the obligations 
            related to marine pollution that could be subject to 
            dispute resolution.
        Specifically, Article 297(l)(c) sets out the exclusive 
            bases upon which a coastal State would be subject to 
            dispute resolution for pollution of the marine environment.
        Among other things, there would need to be a ``specified'' 
            international rule or standard ``applicable'' to the 
            coastal State. As noted, no provision of the Convention 
            ``applies'' international rules or standards to the United 
            States in this area, much less a ``specified'' one. As 
            such, it would not be possible to invoke the dispute 
            resolution procedures to challenge the United States in 
            relation to climate change.
        Were a State Party to seek to invoke the Framework 
            Convention on Climate Change (to which the United States is 
            a Party) as the basis for a challenge under the LOS 
            Convention, Articles 280 and 281 of the Convention would 
            further preclude recourse to the Law of the Sea 
            Convention's dispute resolution procedures. (These Articles 
            provide that Parties can choose to resolve disputes by 
            means of their own choosing, including through other 
            agreements. The Framework Convention on Climate Change 
            already contains provisions for dispute settlement, and 
            those provisions do not entail any legally binding 
            procedures between Parties unless the Parties agree on such 
            procedures.)

    Thus, the Convention would not obligate the United States to have 
in place any particular climate laws or policies, and it would not 
subject U.S. climate change approaches to dispute resolution.
    U.S. agencies, including the Coast Guard, EPA, and the Justice 
Department, have been acting in accordance with Part XII of the 
Convention since President Reagan directed the U.S. Government to abide 
by the bulk of the Convention's provisions. Were the United States to 
become a Party to the Convention, U.S. agencies would implement Part 
XII under existing laws, regulations, and practices. This was confirmed 
in a March I, 2004, letter to Chairman Lugar from William H. Taft IV, 
the State Department's Legal Adviser during the Bush Administration. 
The letter provided, in pertinent part: ``The United States, as a 
Party, would be able to implement the Convention through existing laws, 
regulations, and practices (including enforcement practices), which are 
consistent with the Convention and which would not need to change in 
order for the United States to meet its Convention obligations.''
    We stand by the Taft letter.

    Senator Risch. Thank you, and I want to see the additional 
explanation. I am open-minded on it.
    But I tell you, this language is just so black and white 
and so straightforward that says America shall adopt laws and 
regulations that are in conformance with anything adopted by a 
competent international organization.
    Well, let's turn to another provision that I have real 
difficulty with. As I understand it, since 1776, we have never 
ceded our authority, as far as taxing American people or 
American companies are concerned. If you read article 82, 
subsection 4, it talks about--well, start with article 82. It 
talks about us taxing or us requiring a tax of these companies 
that operate out in the waters, mining or pumping or what have 
you.
    Section 4 says the payments or contributions shall be made 
through the authority, which shall distribute them to states 
parties to this Convention on the basis of equitable sharing 
criteria, taking into account the interests and needs of 
developing states, particularly the least-developed and 
landlocked among them.
    Why oh why oh why, as we as Americans, give up our taxing 
authority, handing money over to the United Nations to develop 
some kind of a formula that we have no idea what it is going to 
say, and allowing them to distribute our tax money according to 
some formula that is very vaguely set out here? Why would we do 
that?
    Secretary Clinton. Well, Senator, we're not doing it. And I 
can tell you that without fear of contradiction. The Convention 
does not provide for or authorize taxation of individuals, 
corporations, or otherwise.
    There is a royalty arrangement that kicks in after 5 years 
of drilling and extraction from the ocean. Payments that would 
be related to the Continental Shelf beyond 200 nautical miles 
go through, not to, one of the Convention bodies, the Seabed 
Authority. They are held there until agreement is reached on 
disbursement of the funds, if agreement is ever reached.
    The distribution formula has to be agreed to. The United 
States, with its permanent seat, would have to agree to it. And 
the payments would mean that we were actually extracting 
valuable resources from the Extended Continental Shelf. This is 
supported by the American oil and gas industry, because it only 
applies to such areas beyond 200 nautical miles.
    And I would note, too, Senator, there is nothing 
unprecedented about payment being made under treaties for 
various benefits, because here the benefit is being absolutely, 
legally assured of sovereign rights over a vast area of common 
ocean, and the legal certainty that comes with that.
    And we already make payments to the International 
Telecommunications Union, for example, because it helps to 
regulate the use of spectrum and associated orbital slots to 
protect U.S. radio communications from harmful interference.
    So there are precedents that demonstrate why this is in our 
interest. Nothing is agreed to, unless everybody in the 
Convention agrees to it.
    Now standing on the outside, there may be something agreed 
to which will later be something we don't like, but we will not 
have been able to veto it, which we could if we were on the 
inside.
    Senator Risch. My time is up. Thank you, Mr. Chairman.
    I would just say that I find very little comfort in taking 
this seat, as Secretary Panetta talks about, in a group of 160 
countries, most of whom don't like us, many of whom hate us. 
And us having one vote amongst 160, I think we're going have a 
really tough time.
    Secretary Clinton. But, Senator, it is a consensus, which 
means it has to be unanimous, so our 1 vote counts as much as 
159 other votes. And not every country will be represented on 
this body, but the United States will be.
    Senator Risch. On this particular provision, but there are 
others in here that there is not--we don't have a veto 
throughout everything that the conference does.
    The Chairman. But the point, Senator, is that there is a 
veto with respect to the distribution of any money whatsoever. 
And I think, as we go forward in this, we will have the legal 
experts in who will define precisely how that works. But I 
think you will come to see----
    Senator Risch. I look forward to that.
    The Chairman. We have protected that.
    But the other thing I was going to say is the application 
of the section that you raised with respect to the ``shall 
apply'' is only with respect to if you have already signed up 
to an international law that applies with respect to that.
    So, in fact, it's not an ad hoc provision that says you 
have to go out and adopt this. It is if you have already signed 
an international agreement, and we haven't.
    Senator Risch. That's not what it says, Mr. Chairman.
    The Chairman. Again, I will have a panel of experts who 
will come in and clearly define that, because it's very 
important.
    Senator Risch. No question about that.
    The Chairman. And we obviously want you to understand that. 
And we want you to be satisfied with respect to that, and I 
believe you will be.
    But I think it's important to have that done that way.
    Senator Boxer is back.
    Thank you.
    Senator Boxer. Thank you. Forgive me, please, I had to go 
deal with the transportation bill, and that's moving ahead very 
well, I will tell my colleagues on both sides.
    Well, Mr. Chairman and Senator Lugar, thank you so much for 
this important hearing.
    And I want to say to the panel what an honor it is to be in
the same room with you all. You give every day to your country, 

24/7, and we all appreciate it so much.
    This is a very important issue, and I thanked the chairman 
privately, because we're just late in the game with this, so we 
need to make up for lost time.
    And Senator Lugar went through the history. I well remember 
in 2007, when we voted 17-to-4 to report the Convention to the 
full Senate. And as rightly pointed out, it wasn't taken up 
because there were threats of filibusters and everything else. 
And when you are the majority leader, you want to go to 
something you can get done.
    So I am hopeful this time we are going to get it done, 
because of everything that was said.
    The Convention has the unequivocal support of our national 
security community, the business community, the tech community, 
the oil and gas companies, and environmental groups.
    Now, I tell you, it's tough to find that kind of coalition, 
but we've got it here.
    And here's the puzzling part to me, I say to my colleagues, 
that this Convention should bring us together, not tear us 
apart.
    My chairman has said it's his best opinion that we go for 
this after the election. So be it. But I find that kind of 
shocking, since, again, I'm confounded that with so much 
support, Senators consider this so controversial.
    U.S. accession would help give the U.S. Navy maximum 
navigational rights in a dangerous world, help protect U.S. 
rights in the Arctic, afford greater flexibility to U.S. tech 
companies to lay their fiber optic cables under the sea. The 
Convention provides mechanisms for peaceful resolution of 
disputes.
    So the Law of the Sea protects U.S. national interests, and 
joining is the right thing to do.
    And it brings me to my question for you, Madam Secretary, 
and it has to do with China. And we have a little map here, if 
people will bear with me. It tells the story.
    China has made aggressive claims to a massive portion of 
the South China Sea, one of the world's busiest shipping lanes.
    The blue lines show a 200-nautical-mile maritime area that 
each respective country, such as Vietnam or the Philippines, is 
entitled to under the Law of the Sea Convention. It is called, 
as was referred to, the Exclusive Economic Zone.
    The red line shows what China is claiming for itself. As 
you see, it goes far beyond China's own 200-mile Exclusive 
Economic Zone. It reaches far into other nation's zones, a 
significant territorial grab that comes very close to the land 
borders of countries in the region.
    Now this dispute has already led to confrontation on more 
than one occasion. In fact, just last month, the Chinese Navy 
sent surveillance ships to block the efforts of a Philippine 
Coast Guard cutter that was trying to stop activities of 
Chinese fishermen who were within 200 miles of the Philippine 
coastline.
    Now, Secretary Clinton, I understand that you have been 
personally involved in trying to help resolve territorial 
disputes within the South China Sea. And I would ask you this 
question: Has the United States failure to join the Convention 
had an impact on your efforts to resolve disputes in the South 
China Sea? And if you could explain to us why and how.
    And I thank you. You did a great job up there.
    Secretary Clinton. Well, thank you very much, Senator 
Boxer, for raising this issue, because you are right. I am 
personally engaged in many bilateral and multilateral 
discussions on South China Sea issues.
    And the claims that China has made, and I'm not saying 
anything other than what I have said repeatedly to the Chinese 
themselves, are, in our view, beyond what is permitted under 
the Law of the Sea. We are working to try to help to resolve 
these disputes peacefully, and particularly to give support to 
the countries that are being threatened by these claims.
    Yet, as a nonparty to the Convention, we are forced to 
advance our interests from a position of weakness, not 
strength. As a nonparty, we cede the legal high ground to 
China. We put ourselves on the defensive. We're not as strong 
an advocate for our friends and allies in the region as I would 
like us to be. And I don't think that's anyplace for the 
world's preeminent maritime power to find ourselves.
    So the common thread, and this is something that Secretary 
Panetta stressed, is when I make an argument to the Chinese 
about resolving these disputes, I premise it on a rules-based 
order in the region, that they cannot have a Chinese rule, they 
have to be bound by the treaty obligations and the legal 
framework set forth in the Convention. And our credibility and 
our strategic position would be strengthened were we a member.
    Senator Boxer. Thank you.
    My last question I would give to Secretary Panetta. And I 
know you spoke about Iranian threats to close the Strait of 
Hormuz. You alluded to that. But I have a specific question.
    According to the U.S. Energy Information Administration, 
they said, ``Hormuz is by far the world's most important 
chokepoint due to its daily oil flow with approximately 20 
percent of the world's oil traveling through the strait.'' 
Furthermore, energy analysts say that, ``even a partial 
blockage of the strait could raise the world price of oil by 
$50 a barrel within days.''
    So would you elaborate more on how U.S. accession to the 
Law of the Sea Convention could help us address such threats 
from Iran?
    Secretary Panetta. Senator, for those that have not had a 
chance to look at the Strait of Hormuz, it is a very tight area 
that is located there. And it is under the Law of the Sea, 
there is an international passageway that is allowed, so that 
ships can carry oil through the strait.
    And it gives us the argument that we absolutely have to 
have, which is that we need, in order to protect the world's 
oil supply, which goes through the Strait of Hormuz, we have to 
do it based on the international rules provided through the Law 
of the Sea that allows for transit in that area.
    And if Iran were to engage in efforts to block the Strait 
of Hormuz, that is the very reason we have made clear that that 
is a redline that we would not tolerate. We have to keep that 
strait open.
    Senator Boxer. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Boxer.
    As I recognize Senator Inhofe, let me just say, Senator 
Risch, we are already working on and will work, and we want to 
work closely with Senators, Senator Inhofe and others, who may 
have questions about this, or reservations about it, to 
specifically adopt in the resolution of ratification 
appropriate reservations and/or understandings and 
declarations, and we're working on some of them now.
    And I think as this hearing process goes on, and things are 
fleshed out where there may be those issues, we are ready to 
work with you to do that.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    And also, thank you for our conversation we had on the 
floor a couple days ago, where you did agree to hold a hearing 
with those who are in opposition to the ratification of the Law 
of the Sea Treaty, which I am. So I appreciate that very much.
    And I remember so well back in 2004, when this committee 
passed out the ratification. I believe it was 16 to nothing. It 
was unanimous. We looked at it, and at that time, and still 
today, I'm a senior member of both the Armed Service Committee 
and the Environment and Public Works Committee, and so we had 
hearings. And in these hearings, we had witnesses that totally 
changed this around, so I really believe that's important. And 
I appreciate the fact that you're going to be doing that.
    Now in the limited time that we have, I'm going to really 
quickly go over two items, then I have a question for Secretary 
Panetta and General Dempsey.
    First of all, I know you talked about this in my absence 
before I came in, because I was watching part of it. If the 
United States approves the Law of the Sea Treaty, it would be 
forced to transfer billions of dollars in royalties generated 
from oil and gas production on the U.S. Extended Continental 
Shelf to the U.N. International Seabed Authority for 
redistribution to the developing world.
    Now, I grant you, in terms of the EEZ, the Exclusive 
Economic Zone, this treaty doesn't affect that. And that would 
be something we could continue to do.
    But outside the 200 nautical miles, allows the ECS--over 
which the United States currently enjoys total sovereignty and 
has been for as long as I can remember, and, thus, has the 
right to exploit all of its natural resources. So the problem 
isn't there.
    The problem is outside of the 200-nautical-mile radius. We 
have appointed, and I have read the work of the U.S. 
Interagency Extended Continental Shelf Task Force, that the 
resources there may be--talking about how to quantify the 
amount of money that we would be losing, whether we say it is 
an arrangement or a tax. I think it's a tax if it costs money.
    And they have said it would be somewhere between billions 
and trillions of dollars that we would not have in the United 
States and would be transferred in accordance with the U.N. 
International Seabed Authority.
    Now the way we arrive at this, and to put this in context, 
I would say that between 12 and 18 percent of royalties is 
about as much as they are going to allow and still continue to 
develop those resources. So the United States would receive in 
that area, according to this task force, somewhere between 12.5 
percent and 18.75 percent in royalties.
    Now the problem with this is, under article 82, the Law of 
the Sea Treaty would require the United State to give up, after 
a period of time, between 7 and 12 years, about 7 percent of 
this. And so if we take the conservative side of what the task 
force has said and say just $1 trillion, $1 trillion would 
equate to $70 billion that would be royalties that would be 
paid to the ISA as opposed to the United States. And of course, 
they would go to the organization in Kingston, Jamaica, for 
redistribution to the developing world.
    And this is the first time in history that an international 
organization, the U.N. in this case, would possess taxing 
authority over this country.
    Now, I've heard the veto argument. And I think that was 
discussed by one of the other members here. I think it Senator 
Risch.
    It is really not too important to discuss that, because 
there are two entities that would make that determination. You 
have the Council, the 36-member Council. You have the Assembly 
that would ultimately make these decisions.
    But the point is, under article 160, it is going to cost 
us--well, let's see--yes, under article 82, the payments and 
contributions shall be made annually with respect to all 
production at a site after this period of time. So what we're 
saying is, it is going to be paid regardless of where you think 
it should go or where you think it is going to go.
    The second thing that I want to cover is the environmental 
end. You know, we, for 10 years now, have rejected in both the 
House and the Senate, but primarily in the Senate, because it 
started with the Kyoto treaty, rejecting the cap and trade that 
would amount to a tax on the American people of somewhere 
between $300 billion and $400 billion. We have rejected this 
over and over and over again. There may be, at most, 25 
Senators who would vote for a cap-and-trade bill now.
    So what they are attempting to do is to do what they 
couldn't do through legislation under this treaty. Under this 
treaty, any country could sue the United States in the 
international tribunal Law of the Sea, not in the United States 
courts, I might add, or take the United State before binding 
arbitration.
    I only say this because already people are out there 
planning their lawsuits, and I would also quote from article 
212, ``adopt laws and regulations to prevent, reduce, and 
control pollution of the maritime environment from or through 
the atmosphere,'' if applicable.
    Now, what we're talking about there is what they would use 
as the basis for the lawsuit. Under the treaty, it says, 
``States are responsible for the fulfillment of their 
international obligations.''
    Well, we know what would happen. In fact, we have 
statements by lawyers, trial lawyers around the country, saying 
that one of them here is from William C.G. Burns, citing that 
the lawsuits would come forth. He named the United States as 
the, ``the most logical state to bring action against,'' 
given--to us.
    Now with that, it's understandable why groups such as 
Greenpeace and the Natural Resources Defense Council, 
Environmental Defense Fund, all have this as their top 
priority.
    So let's get back to the $70 billion. And the question I 
would have would be for Secretary Panetta and for General 
Dempsey.
    If we are talking about $70 billion, would it be better to 
have the $70 billion go to Kingston, Jamaica, to bail out some 
of the developing nations, or the following list: The Ohio-
class ballistic missile submarine, which they have been 
wanting, that's $3 billion; to maintain the Navy's ship and 
aircraft and ground modernization program is $12 billion; 
eliminate the Navy's gap by providing 240 F-35 fighters, that's 
$3 billion; eliminate the gap in the Ford-class carrier, $11 
billion. And again, I say all five of these meet the Navy's 
request for six more Aegis ships, that's $12 billion. It adds 
up to $70 billion.
    General Dempsey, do you think it serves our national 
defense better to give that $70 billion to the ISA in Kingston, 
Jamaica, or to accomplish these programs?
    General Dempsey. Senator, I'm not going to comment on the 
hypothetical use of money we don't have. I will tell you that 
the budget we submitted supports the strategy we have 
developed.
    Senator Inhofe. No, what I'm saying is, this is money that 
I've documented pretty well, General Dempsey, that would be 
there and would be lost through this process.
    Now, on these five issues, you are very familiar with all 
of them. You know that they have been requested. You know that 
there is a gap.
    And my question again, is fulfilling those five gaps in the 
best interest of our national defense, or sending the money to 
Kingston, Jamaica?
    General Dempsey. Senator, I will only comment that I 
support this Convention on the Law of the Sea because it 
enhances my ability to provide security of the maritime domain.
    Senator Inhofe. Secretary Panetta.
    Secretary Panetta. You know, I share, obviously, the 
chairman's viewpoint with regard to why we consider this 
important.
    But I guess what I would ask, Senator, I know you've come 
up with the $70 million.
    Senator Inhofe. It's billion.
    Secretary Panetta. Or billion. But what about the literally 
billions of dollars in economic benefit that would flow from 
these companies providing energy and being able to go at our 
seabed and provide that part of the economic benefit.
    I mean, that's what you have to focus on, is that, yes, 
there may be $70 billion that may be paid in royalties, but 
what about the economic benefit that these companies would 
render to the United States?
    Senator Inhofe. The economic benefit, in answer to your 
question, Mr. Secretary, would be coming from companies that 
are already in this area, the controversial area that I 
described, I think in a very exact way.
    So if we've been doing it before, but with bilateral 
treaties with China, bilateral treaties with Russia, we can 
continue to do it, and there would be no loss there. The loss 
would be $7 billion, and that would affect our national 
security.
    And I'm looking forward, Mr. Chairman, to the hearing where 
we have those in opposition.
    The Chairman. Well, I promised you that, and we'll have 
plenty of people here to do that.
    But let me just say to you, Senator, with all due respect, 
there is no way to contemplate what you just contemplated in 
terms of the number, because, first of all, there is no 
drilling in the extended shelf.
    The royalties only come from extended shelf. They only come 
after a certain period of time, and they are in a range of 1 
percent up to the high-end, depending on how much you extract. 
And there's no way to tell today how much has been extracted.
    Senator Inhofe. But the task force has come up with a 
figure, and I'm using their figure.
    The Chairman. I understand, and we will examine the premise 
of it and the nature of the task force and the interests of the 
task force and all of those kinds of things. We will look at 
all of that.
    But the fundamental premise here still remains this: Ronald 
Reagan renegotiated this with the oil companies and gas 
companies at the table, and they signed on to these royalties, 
which are far less than the royalties that they pay today to us 
in the Gulf of Mexico or elsewhere. And they pay them into an 
international entity that we will have a veto over as to where 
or how it may be spent.
    Senator Inhofe. And Ronald Reagan opposed this in this last
effort, as you well know.
    The Chairman. Well, we'll hear from George Schultz, we'll 
hear from some of these people. But I think what is important 
here is to recognize you're here protecting companies from 
paying a royalty that they want to pay. You're here protecting 
companies from being able to drill where they can't drill 
without this. So they'd rather have 93 percent of something 
than 0 percent of nothing.
    Senator Inhofe. But they currently are producing and 
they're currently able to do that through bilateral treaties.
    Anyway, this will be a subject at the next hearing.
    The Chairman. We're going to go through this. They can't do 
it, because there is no bilateral treaty that can apply to the 
extended shelf. It is only through the international rules that 
come through the Law of the Sea that you can do that.
    So unless you have this in place, no company is going to 
drill. And you will sit here and say why are we importing it 
from other places, why are we buying it from other countries 
and not drilling it ourselves?
    So we are going to have this thoroughly vetted in the 
course of the next 2 months. This will be coming out of 
everybody's ears and people will be tired of it, and they will 
understand it. But we will look at every aspect of that, I 
promise you.
    And those companies will come in here and themselves tell 
you why they are not prepared to invest millions of dollars and 
put it at risk without the certainty of the claims that come 
through this treaty.
    So we'll look forward to that debate.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    And thank you for holding this hearing, you and Ranking 
Member Lugar.
    And thank you all for being here.
    General Dempsey, at an Atlantic Council forum earlier this 
month, you said that the Convention, ``gives us the framework 
to counter excessive claims by states seeking to illegally 
restrict movement of vessels and aircraft.''
    I wonder if you could elaborate a little bit on that and 
tell us specifically where we've seen these excessive claims 
and how they affect our ability to freely move around in our 
seas?
    General Dempsey. If I could, Senator, if we were here 20 
years ago, we would have all been predicting that growing world 
population, the rise of regional powers like China and India, 
would place extraordinarily challenging demands for resources, 
and that that could become destabilizing. And here we are, 20 
years later, and it's playing out.
    So the reason I'm supportive of the Convention on Law of 
the Sea is that it provides clarity on the definition of 
maritime zones, it provides clarity on navigational rights. And 
from that clarity comes stability.
    And as we now begin to rebalance our security interest into 
the Pacific, this becomes very important.
    Senator Shaheen. So I appreciate that it's a sensitive 
topic to speak to some of those excessive claims, and Senator 
Boxer had an interesting map to show what China is looking at 
versus other countries in the region, but are we seeing, in 
fact, those kinds of claims from China and other countries in 
the Pacific that are affecting our freedom of movement in those 
areas or that we are concerned might in the future?
    General Dempsey. Let me go to ``might in the future,'' as I 
said, the demand on resources or the competition for resources 
is becoming far more pronounced and could potentially become 
far more dangerous. And that is true not just in the South 
China Sea, but it's also true in the Arctic.
    And I think that being part of a Convention that would help 
manage that as another instrument for our use, recognizing we 
always have sovereign interests and a military, and a Navy in 
particular, that will protect those, I do think that is wise at 
this point.
    Senator Shaheen. You know, I know we have heard some 
objections from some of our colleagues, and I'm sure we are all 
getting letters reflecting different perspectives on the 
treaty. But I want to read to you something from a letter that 
I got from a constituent, and ask you if you could respond to 
it.
    It says, and I'm quoting from the letter, ``Even the 
freedom of navigation provisions add nothing to the existing 
customary international law of the sea that seafaring nations, 
including United States, have observed for centuries.''
    Given that we haven't to date had any major disruptions at 
sea, can you respond to that and talk about why the sense now 
is that it's imperative to ratify the treaty?
    General Dempsey. I can. The customary international law 
evolves, and I can give you an example of something on the land 
domain in a moment, but it evolves, and it is subject to 
individual interpretations.
    So threading this back to my earlier answer, the rise of 
new nations competing for resources, Brazil, Russia, India, 
China, and the list goes on and on, puts us in a position 
where, unless we have this Convention with which to form a 
basis to have the conversation about resources of the sort you 
are talking about, does cause us to be increasingly at risk to 
instability.
    Now that's my job, instability. The Secretary can speak 
eloquently about the economic issues, but I'm speaking about 
the security issues.
    And so that is what has changed. And I'll give you the 
example of the land domain made that I mentioned. We are party 
to the Geneva Convention from which we derive our law of armed 
conflict. There were plenty of customary international laws 
related to the use of force, but we consciously and 
deliberately signed on to the Geneva Convention as a mechanism 
by which to have this conversation among a community of 
nations.
    And that is what's different today than was different 20 
years ago, this competition for resources, which is migrating 
increasingly into the maritime domain.
    Senator Shaheen. And thank you, General Dempsey.
    As you pointed out, Secretary Clinton, you were very 
eloquent in talking about the economic urgency of ratifying the 
treaty. And one of the areas you mentioned was the Arctic, 
we're the only Arctic nation that hasn't ratified the treaty.
    I would point out that there were a lot of people when we 
acquired Alaska, which gives us access to the Arctic, there 
were a lot of people in this country who thought that was 
folly, Seward's Folly, as we remember. And history has shown 
very differently.
    But can you talk about where we are with respect to the 
other countries who have ratified the treaty, who border the 
Arctic, and where they are in terms of exploration and any 
other activities they may be doing in the Arctic? And how we 
compare to that and how much, to what extent we might be left 
behind if we don't ratify the treaty?
    Secretary Clinton. Well, thank you for that, Senator, 
because I actually think that the Arctic is one of these areas 
where potential instability as well as economic competition are 
going to be played out. The largest single portion of the U.S. 
Extended Continental Shelf is in the Arctic, and other Arctic 
coastal nations--Russia, Canada, Norway, Denmark/Greenland--are 
all in the process of establishing the outer limits of their 
Continental Shelves in the Arctic, using the provisions of the 
Convention.
    I think we all remember Russia going down and planting a 
flag under the water, claiming the Arctic. You know, we don't 
think that has any force of law, certainly, but it demonstrates 
the intense interests in staking a claim in the Arctic.
    Further, as the Arctic warms and frees up shipping routes, 
it is more important that we put our navigational rights on a 
treaty footing and have a larger voice in the interpretation 
and development of the rules, because it won't just be the five 
Arctic nations.
    You'll see China, India, Brazil, you name it, all vying for 
navigational rights and routes through the Arctic. And the 
framework that we should establish and support is the one based 
in the Convention that will help us deal with expanding human 
activity in the Arctic, which is why I think that the time is 
so pressing for us to make this decision.
    Senator Shaheen. Thank you.
    Secretary Panetta, did you want to add to that at all?
    Secretary Panetta. No, she did it.
    Senator Shaheen. OK, thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Shaheen.
    I think it's an appropriate moment to place in the record, 
since we're putting a record together here, a letter from the 
commander of the United States Northern Command, General 
Jacoby, to Senator Lugar and myself.
    And the commander states: ``National security is dependent 
on cooperative partnerships, and peaceful opening of Arctic 
waters is in the interests of the community of Arctic nations. 
The United States is the only Arctic nation that has not 
acceded to the Convention. Consequently, the Nation risks being 
excluded from strategic discussions for advancing the 
Convention with our maritime partners and for resolving 
sovereignty, sea boundary, and natural resource issues. Future 
defense and civil support scenarios in the maritime domain will 
require closely coordinated, multinational military operations 
to include the formation of coalition task forces. Our Nation's 
accession to the Convention will set the conditions for 
partnership and cooperation.''
    It goes on and says further things, but I place that in the 
record.
    Senator DeMint.
    Senator DeMint. Thank you, Mr. Chairman.
    And thank you for beginning a process of hearings. I 
appreciate the panelists and their testimony today.
    The fact is that most of the testimony today dealt with 
navigation issues and things that affect the Navy on the waters 
around the world. That is about 10 pages of the treaty.
    And certainly, we need to deal with this. There are a lot 
of theoretical advantages that I think that have been 
discussed. As has been mentioned, I think by the General, the 
United States plays by the rules, and the idea that we get into 
a rules-based system with other nations that establish some 
international rules of engagement, theoretically, I think we 
could have some honest debate on how we come out on that. It 
doesn't always come out OK.
    I know we brought China into the WTO, because we thought if 
we could get them in a rules-based system, then we would have a 
fairer system. It hasn't worked out that way.
    Only a few months ago, a lot of us here on the panel were 
squealing about China manipulating their currency and not 
playing by the rules. We know when we try to deal with the U.N. 
on sanctions against Iran, not all of the members play by the 
rules. They're not always that effective.
    And of course, we have a history of arms treaties, when we 
go back and find that the other players are not playing by the 
rules.
    So we could have a reasonable debate that there is a 
possibility that when we enter into an agreement with other 
nations that don't play by the rules, we could put ourselves at 
a disadvantage. We could talk about that later.
    The concern I have is almost 300 other pages of the treaty 
that has really not been dealt with much today. And just for a 
few clarifications, we don't have a veto in the Assembly of 
this Convention. We can have a veto in the Council, just a 
Sudan has, one of the world's leading sponsors of terror, but 
we cannot have a veto in what the Assembly decides as a whole.
    And also, the oil companies don't pay the royalties. The 
United States does. The treaty specifically says that the State 
Members pay that, and the taxpayer will ultimately pay it.
    I just want to make a few points, ask a short question.
    Of course, 160 other nations want us in this thing. We need 
to think that through, because as has been said, maybe we have 
a lot to gain, but we will pay more than any other nation that 
is part of this agreement, because of the royalties that have 
been discussed.
    Of course, they want us in this. They also get to help 
define the rules of engagement for the U.S. Navy all over the 
world. And that may be, theoretically, a good idea, but there's 
been a lot of testimony that the international rules of 
engagement on the ground for our troops in Afghanistan have put 
our folks in harm's way. So we do need to debate that.
    And we do know from the treaty that it very clearly 
subjects our states, our electric utilities, our businesses, to 
environmental lawsuits that will be arbitrated by panels that 
could be slanted against us. Because it's very clear from the 
treaty, if we have a dispute with another nation, we appoint 
two arbitrators, they appoint two arbitrators, and the 
Secretary General of the United Nations appoints the fifth. 
Those aren't odds I want to deal with when it comes to doing 
business in America.
    And I would just ask, and we talked about this already, and 
it may be directed to the General, because I certainly respect 
his advocacy for what he feels like is important to the Navy, 
but this treaty is much bigger than that, involves a lot of 
other things. And given the fact American oil companies already 
leased a lot of land 200 miles out in the gulf to begin 
development of that, and we've done that without the Law of the 
Sea Treaty.
    And we can keep the strait open, and we have committed to 
do that whether we are in this treaty or not.
    But, General, how is it in the interests of the United 
States to turn the royalties over to an unaccountable 
international bureaucracy?
    And I know Senator Inhofe asked this, but given the fact 
that we are facing billions of dollars in shortfalls and cuts 
in our military, and this is something that is real money, that 
is going to be paid to an international body at a time our 
country is almost hopelessly in debt, and it will be 
distributed to countries that may be our enemies, like Sudan, 
again, I respect your advocacy for the naval aspect of this, 
the navigation aspect, but what we're trying to deal with is 
the whole treaty, and what it might do as far as cost to the 
American taxpayer, cost to American business, and just our 
ability to operate freely around the world.
    And I know that's a loaded question, but maybe you have an 
opinion you would like to swing back at me.
    General Dempsey. Well, what I would like to say, sir, is 
that the economics of it, I will leave to the economic experts.
    But from the security perspective, I would want to have a 
further conversation about where in the treaty you see our 
rules of engagement or our activities limited, because they're 
not limited in any way.
    And by the way, sir, we never cede the rules of engagement 
on the ground, to include in Afghanistan, to any other nation 
on the face of the Earth or any other international 
organization.
    Senator DeMint. Well, I appreciate that answer, because, on 
one hand, I think we're arguing that, hey, we need this for our 
military to operate freely around the world in a rules-based 
system, and then I hear the treaty allows us, on a military or 
defense front, to completely opt out of this thing anytime we 
want.
    So why do we need to get into all of this in order to be 
able to operate our Navy as we have for years around the world?
    General Dempsey. Well, I will take a shot at it and maybe 
pass it off to either of the Secretaries.
    But right now our freedoms of navigation, right now the 
description of maritime zones and the freedoms of navigation, 
or the rights of navigation, are codified in international 
customary law. I'm not comfortable with that any longer, 
because of the reasons that I gave to Senator Shaheen, on the 
way that the security in the maritime domain is being 
challenged by some of the rising powers, by the opening of the 
Arctic and other areas around the world, where that customary 
international law is now being subjected to individual's 
interpretation. So I think it is in our benefit to become part 
of that conversation.
    Senator DeMint. General, just as a followup, some of those 
countries that are interpreting the law are already parties to 
the Law of the Sea Treaty. They're not following the rules, or 
at least they are arbitrarily interpreting them.
    What is going to be different that we are in it? Are they 
going to now abide by the rules the way we see them?
    My concern is we will abide, but they're already violating 
the rules that they have ascribed to. I don't know how this 
creates a system of rules that we can count on.
    General Dempsey. Go ahead, sir.
    Secretary Panetta. Senator, I think the question you have 
to ask yourself is whether or not acceding to this Convention 
gives us the best of both worlds. It gives us the ability to 
protect or military activities. It gives us the ability to 
conduct what we have to do in terms of our ability to operate 
in the seas. It gives us the ability to avoid any kind of 
dispute resolution with regards to military activities.
    So it does give us the ability to opt out of that with 
which we don't want to participate in.
    But at the same time, it gives us the ability to engage 
when we have to engage. I mean, better to have a seat at the 
table than not at the table, when they're dealing with issues 
that affect our claims, that affect our economy, that affect 
our rights. That is the key here.
    Senator DeMint. Mr. Secretary, is there any table in the 
world that we're not sitting at right now?
    Secretary Clinton. Well, yes, we're not sitting in the seat 
that's reserved for us at the deep seabed mining table.
    And to be clear, Senator, any Assembly decision, because 
you referenced that, has to go through the Council. We have a 
permanent seat on the Council; other members rotate.
    But I really want to do everything I can, and I know my 
colleagues feel the same way, to try to explain over the next 
months, in the process that Chairman Kerry has started, why we 
do think, as Secretary Panetta said, this is in our interests, 
and it is, for us, the best of all worlds. Because otherwise, 
we will put our economic interests and our economic players in 
a disadvantageous, uncompetitive position.
    And I think what you're hearing from both General Dempsey 
and Secretary Panetta is that when we are now facing new 
threats that largely arise out of the incredible race for 
natural resources that will be primarily based in the oceans, 
we need to be able to play any card at our disposal. And we 
think we will have more cards if we are member than if we are 
not a member.
    Senator DeMint. Thank you. Thanks to you all.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    And I'd just point out to the Senator, we'll go into this 
further, but the veto, you are correct, is not within the 
Assembly. But there is a restriction specifically defined 
within the treaty as to what can go to the Assembly. And the 
royalties are specifically reserved to the Council to send, and 
that has to be by consensus.
    Consensus is specifically defined as requiring, any form of 
objection.
    Senator DeMint. I'd like to get into that, because it begs 
two questions. First of all, Sudan is on the Council. If we 
have a veto, they have a veto. Their interest is very different 
than ours.
    Is there a question about whether they are on the Council 
or not?
    Secretary Clinton. They are a member. They have acceded to 
the Convention.
    Senator DeMint. And they are on the Council of 
International Seabed.
    Secretary Clinton. Well, you know, a lot of Member States, 
over 160 of them, are technically within an all-member body, 
but all the important decisions are made by the Council, and 
there's absolutely nothing in this Convention which says that--
--
    Senator DeMint. I'm speaking of the Council. I'm looking at 
the list of members right now, and Sudan is on it.
    And so if we have a veto, they have a veto. And so it's 
just something we need to look into.
    Again, the devil is in the details. We talked about some 
theoretical advantages that might address some navigation 
issues, but that only assumes if other countries are playing by 
the rules. There's very little indication within the Treaty 
Convention of the members already that that is happening or 
that we can count on it in the international community as we go 
forward.
    But again, I want to thank all of the----
    The Chairman. Let me just say to the Senator, for the 
period of time that Sudan is on the Council, it is possible, 
hypothetically, that they could veto something, and therefore, 
you could wind up with gridlock and they would look like the 
United States Senate or Congress. [Laughter.]
    But the fact is, they're not a permanent member of the 
Council. We are.
    In fact, I think we are the only permanent member. So we 
stand in a very special status that we are not currently able 
to exercise.
    And I think with respect to the Senator's fears, and other 
fears, what you're trying to protect is something that would go 
against the interests of our country. That's what we need to be 
able to protect. If Sudan votes to do something or blocks us 
from doing something that we're interested in doing, then there 
are plenty of other avenues of recourse for that, too.
    But if you're dealing with the oceans and dealing with this 
question of royalties and other things, the fact that we would 
preserve the right to protect our interests, I think what the 
Senator and others have raised as an issue is they don't want 
money going to dictators, they don't want money going to bad-
actor countries. We can block that. We can block that until the 
cows come home.
    And so I think we can be protected.
    So again, we will go into that. And while the veto word is 
not used, it's also not used, incidentally, in the Constitution 
of the United States, but no one doubts the President has it.
    So we have the ability to be able to do it through the 
language that is there. That will become, I think, more clear 
as we go forward.
    Senator Coons.
    Senator Coons. Thank you, Chairman Kerry. I'm very glad 
that we're having this hearing today, and I appreciate all of 
you for being here.
    Senator Webb and I sent Chairman Kerry and Ranking Member 
Lugar a letter back in April, urging that we move forward to 
consideration of the Law of the Sea Treaty, and I'm grateful to 
your broad and searching and supportive testimony here today.
    When I was brand new to the Senate, one of the earlier 
meetings I took was with the then-outgoing Chief of Naval 
Operations, Adm. Gary Roughead. And when I asked him, what is 
the single most important thing we can do to help the Navy over 
the next decade, he said, without hesitation, ratify the Law of 
the Sea Treaty. I was taken aback by that, given very urgent 
shipbuilding needs, other budgetary priorities, other staffing 
issues, operational issues.
    As it turned out, Admiral Roughead's estimation, his 
assessment of the importance of this treaty, is shared, as I 
understand, 
by every living Chief of Naval Operations, not to mention every 
living Secretary of State and Secretary of Defense, and, of 
course, strongly supported by both and by Chairman Dempsey here 
today.
    I note that Senator Warner, former Senator Warner, a former 
chairman of the Armed Services Committee, former Secretary of 
the Navy, is with us here today. And I have a copy of a letter 
that he submitted to then-Chairman Biden and Ranking Member 
Lugar, commenting on incoming Chief of Naval Operations Admiral 
Roughead and how he had given very strong testimony in support 
of this treaty in 2007.
    My concern, Mr. Chairman, members of the panel, is that 
this is the treaty that time forgot, that we are locked in a 
debate that is literally decades out of date.
    And I understand some of the concerns raised by members of 
this committee. There were some flaws and some issues in this 
treaty when first negotiated in 1982. Many of them hammered 
out, resolved by 1994, by amendments, certainly by the time 
this was previously considered several times by this committee 
during your service here, Senator, now Secretary.
    I believe it is well past the time when the questions and 
concerns raised here today were compelling. And if I have to 
face questions about whether this is a critical firefight in 
the defense of American sovereignty, or a self-inflicted wound 
in a rapidly emerging global theater where our competitors are 
taking advantage of our absence, that empty seat at the table, 
then I would rather take my naval strategic advice from the 
Chief of Naval Operations, and the Chairman of the Joint Chiefs 
of Staff, and the Secretary of the Navy, than from the 
editorial pages of the Washington Times.
    So frankly, if I could, I have a few questions I would like 
to ask you. But I think what you've laid out here today is an 
overwhelming response to the question, Is the ratification of 
this treaty in the best interests of the United States?
    Senator Menendez before me asked, in sort of rapid-fire 
succession, a series of questions. Does this in any way put the 
security of the United States at threat? Does this in any way 
compromise the sovereignty of the United States? Does this in 
any way compromise our intelligence-gathering ability? And my 
recollection was, you all said no.
    Let me put it in the opposite: Does failure to ratify this 
treaty, General Dempsey, in any way compromise the ability of 
the United States to project force around the world, to support 
and sustain our allies, and to meet the threats within the 
constraints that we have, in a balanced and responsible way? 
Are we at risk as a result of failure to ratify this treaty?
    General Dempsey. Based on our current application of 
customary international law, we will, of course, assert our 
sovereignty and our ability to navigate.
    However, what it does do--and, therefore, it won't 
deteriorate, our ability to project force will not deteriorate.
    What it could cause, if we do not ratify over time, what 
could happen is that we put ourselves at risk of confrontation 
with others who are interpreting customary international law to 
their benefit. So the risk of confrontation goes up. Our 
ability to project power is unaffected.
    Senator Coons. So failure to ratify puts us at some greater 
risk of conflict. You are confident we continue to have the 
resources to meet that, but we are, as it were, unilaterally 
choosing not to use one potential tool for our national 
defense.
    General Dempsey. I would agree with that phraseology.
    The Chairman. Secretary Panetta, do you want to----
    Senator Coons. If I might, Secretary Panetta, I have the 
same question for you.
    Secretary Panetta. Senator, let me just make the point, it 
does put us at risk, and the risk is this, that if we face a 
situation that involves navigational rights, if we are not a 
party to this treaty and can't deal with it at the table, then 
we have to deal with it at sea with our naval power. And once 
that happens, we clearly increase the risk of confrontation.
    Senator Coons. And if I might, Secretary Panetta, given the 

Pacific pivot, given the aggressive, expansive actions that 
others have referred to in the South China Sea by China and 
others, in your view, does this put our allies at any risk, in 
terms of their confidence about our willingness and ability to 
fight for their territorial issues, to fight for their freedom 
of navigation of the seas?
    Secretary Panetta. Well, the majority of our allies are 
signatories. They have acceded to this Convention. They are 
part of it. And they have a difficult time understanding why we 
aren't there at the table alongside of them, making the 
arguments we need to make.
    Sure, they know we are a strong naval power. They know that 
we can exert ourselves militarily wherever we want to. But they 
also know that, in today's world, they are dealing at the table 
trying to negotiate resolutions to conflicts in a rules-based 
manner. That is the way to deal with issues like that.
    And somehow, they are concerned, and I think rightly so, 
that a great power like the United States is not there 
alongside of them.
    Senator Coons. Secretary Clinton, if I might, in 2007, 
during a previous consideration or debate over this treaty, 
Senator Murkowski voted for the Convention. Then-Governor Sarah 
Palin endorsed the Convention. You referenced earlier that this 
would extend our reach from 200 miles to 600 miles, and provide 
some predictability for investment for oil and gas extraction, 
for transoceanic cables, for seabed mining, a whole variety of 
things that are newly emergent opportunities.
    And in the Arctic, if we remain the only Arctic nation not 
to accede to the treaty, not ratify the treaty, puts us at some 
risk, both in terms defending shipping lanes and commercial 
opportunities for our own country.
    What challenges is the State Department facing in 
protecting U.S. interests in the Northwest Passage in the 
Arctic? And in your view, are we at some risk if we fail to 
ratify this treaty?
    Secretary Clinton. Well, I think one of the reasons there 
has been such strong bipartisan support coming from Alaska over 
the last decades is because they are truly on the front lines. 
We know there are natural resources there that are likely to be 
exploitable if we have the opportunity to do so.
    And so, I think, Senator, the fact that we are an Arctic 
nation, we are the only Arctic nation that has not taken the 
step of acceding to the Convention and, thereby, being able to 
demarcate our Continental Shelf and our Extended Continental 
Shelf, is seen in Alaska as a missed opportunity and a 
strategic disadvantage that is increasingly going to make us 
vulnerable as the waters and the weather warms. And there are 
going to be ships from all over the world exploring, 
exploiting, fishing--taking advantage of what rightly should be 
American sovereign territory. And nobody wants to see that 
happen.
    Senator Coons. Well, Madam Secretary, Mr. Secretary, Mr. 
Chairman of the Joint Chiefs, I am grateful for your testimony 
today.
    I'm struck, Mr. Chairman, in listening to this testimony, 
in reading the background materials and reflecting on it, how a 
fight over some of the details of this treaty that was largely 
resolved in our favor in 1994, remains frozen in time. And I 
conclude, from what I've heard so far today, that the real risk 
we face is that we are letting others draw boundaries, we are 
letting others set rules, we are leaving our economic interests 
out of the fight, and we are putting our national security 
interests at risk by failing to ratify this treaty.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator. I appreciate 
it.
    Senator Lee.
    Senator Lee. Thank you, Mr. Chairman. I thank each of the 
witnesses for joining us today.
    I am one of the people who have some concerns with this 
treaty, and I assure you that my concerns are rooted in 
something more than mythology. They're rooted in something more 
than an editorial page. They are rooted, first and foremost, in 
America's national sovereignty. And I think that is not 
something that is to be discounted here.
    One of the exchanges that I have appreciated during the 
course of our discussion this morning has surrounded what has 
been described at times as a veto on the Council. I want to 
drill down on that issue a little bit and make sure I 
understand it correctly.
    My reading of article 158 of the treaty is that it creates 
three basic bodies. It creates the Assembly, it creates the 
Council, and it creates the Secretariat, as outlined in section 
1 of article 158.
    Now in article 160, we have a basic definition of the 
purpose of the Assembly, and it describes that purpose as 
follows, it says that the Assembly shall be considered the 
supreme organ of the authority, meaning the International 
Seabed Authority based in Kingston, Jamaica.
    Then we move to article 162, which describes the purpose of 
the Council. This is the 36-member body, not to be confused 
with the 160-plus-member body that is the Assembly.
    The Council, as I understand it, is empowered to do a 
number of things, including to exercise the power outlined in 
section 2 of article 162, subsection o(i), which is to 
recommend to the Assembly rules, regulations, and procedures on 
the equitable sharing of financial and other economic benefits 
derived from activities in the area, and the payments and 
contributions made pursuant to article 82.
    So these are the royalties we are talking about, the 
escalating royalties that begin at 1 percent 5 years into the 
operation of the treaty, escalate gradually up until they get 
to 7 percent, where they remain thereafter, once they achieve 
that level.
    It appears to me, based on my reading of article 162, that 
the power of the Council, this body on which the United States 
has a seat and has what you described as veto power, is a 
recommending body.
    And it appears also to me, as I look back at 160, section 
160, subsection 2(g), that it is up to the Assembly and not to 
the Council to decide upon the equitable sharing of financial 
and other economic benefits from activities in the area.
    So, Secretary Clinton, I was wondering if you could help me 
understand, is my reading correct or am I missing something?
    Secretary Clinton. Senator, the Assembly cannot take up an 
issue unless recommended by the Council. Any decision that 
would impose any obligations on the United States or otherwise 
deal with substance must go through the Council. The 
Secretariat has no decisionmaking authority.
    So in effect, the practical consequences of this is that 
the United States would have the right to reject or, in our 
parlance, veto any decision that would result in a substantive 
obligation on the United States or that would have financial 
and budgetary implications. And that is due to the fact that 
the United States is unique in having a permanent seat on the 
Council of the International Seabed Authority, which is its 
main decisionmaking body, and that important decisions must be 
made by consensus.
    So it is our very strong conviction that, as a party, the 
United States would have an unprecedented ability to influence 
deep seabed mining activities worldwide.
    There is no other international organization that gives one 
country, and one country only, a permanent membership on a key 
decisionmaking body.
    So as examples of decisions subject to U.S. approval would 
be any rules, regulations, or procedures implementing the 
seabed mining regime or amendments thereto; any decisions 
relating to the distribution of payments for oil and gas 
production on the Continental Shelf beyond 200 nautical miles; 
adoption of any amendments to the seabed mining regime.
    And just, finally, I think it is worth saying, and this 
really echoes something that the chairman said: royalties under 
this Convention are not a net loss to the United States, but a 
net gain, because companies will not drill that far out, so 
there is no money that would be coming to the Treasury or to 
the profit of the companies. And if we are a party, we gain 
from both domestic royalties and oil production.
    So I know that there is, with any written document, and I 
am a recovering lawyer, so I have been in this position in my 
past life, there is a way to, you know, raise questions about 
where the comma is placed or where the parenthesis occurs, but 
this debate over this Convention has now gone on for 20 years. 
And when you look at the people from Jim Baker to Condi Rice to 
George Schultz to Michael Chertoff to Stephen Hadley, who have 
supported this in both administrations, Republican and 
Democratic, I just don't think we are all missing something, 
Senator.
    I think that we are trying our best to make a case that the 
United States will be advantaged and that, in fact, our 
sovereignty will be advanced.
    Senator Lee. Thank you, Secretary Clinton. And I appreciate 
your analysis on that. I appreciate the fact that that is your 
position, that it is the position of the administration.
    As I read, as I, too, am a recovering lawyer, we have to 
call ourselves recovering rather than cured or ex-lawyer.
    As I read this, I see the fact that the Assembly shall be 
considered the supreme organ, and I also see that the Assembly 
and not the Council has ultimate power to decide upon the 
equitable sharing of financial and other benefits.
    And so, that causes me to ask the question, what if those 
who serve on the Assembly disagree with your interpretation? I 
understand it is your interpretation and that of the 
administration. I also understand that it is your 
interpretation of that of the administration, that of the 
United States of America, I suppose you could say, that the 
treaty does not, as you point out, adopt any framework to tie 
the United States into a climate change control regime or any 
kind of system that could limit the emission of greenhouse 
gases.
    But in that context, the climate change context, and in 
this context, what happens if the Assembly takes a different 
position? And in the climate change context, could not the 
Assembly reach a different conclusion and read several 
provisions of the treaty, including articles 207 and 212, 
coupled with the dispute resolution provisions of annex VI, 
could it not take that interpretation and conclude differently 
from the conclusions that you have reached today?
    Secretary Clinton. We do not believe that that they could, 
on 
either the plain reading or the intent of the Convention. But 
we also believe, Senator, that concerns such as these are not 
only going to be properly vetted in this series of hearings, 
but certainly can be taken into account with the resolution of 
ratification.
    You know, there is no obligation that the United States, in 
the area of climate change, would be forced to accept or adopt 
anything done by the Assembly under the Convention of the Law 
of the Sea.
    But, as an abundance of caution, that could certainly be 
clarified and insisted upon in ratification resolution 
language.
    Senator Lee. I see my time has expired, Mr. Chairman.
    As I close, I would just like to point out that there is 
not just the Assembly. We could get hauled into a tribunal 
called for under the annex. And at that point, if this is a 
ratified treaty, arguably, our courts would be bound to enforce 
the judgments of an international tribunal convened under the 
authority.
    Thank you.
    The Chairman. Senator Lee, I'm just checking in on that, 
and it's my understanding that we would not be subject to that, 
because we would be able to choose arbitration, and arbitration 
is actually limited.
    But I see you're ready to leap.
    Senator Lee. Yes, so arbitration, so we get to choose two 
arbitrators, and the other side gets to choose two. And if we 
can't come to an agreement as to the fifth, then that person is 
chosen, I believe, by the Secretary General.
    The Chairman. But it's limited as to what it is.
    We will go through this. We're going to go through this. We 
will clarify it.
    And as the Secretary just said, this exercise is not to 
diminish our sovereignty. It's to grow our sovereignty. And we 
believe this treaty, in its whole, will grow the sovereignty. 
And we hope we can persuade you of that in the end.
    And so we have the ability, through the ratification 
process, to be able to clarify some of that.
    But second, I believe it will be clarified. If you look at, 
I think it's 160(g) that you referred to, about the rules and 
regulations, they are only able to make that decision in the 
Assembly, ``consistent with the Convention and the rules and 
regulations and procedures of the authority.'' The rules and 
regulations and procedures of authority are specifically set by 
the Council. And that is how it has worked, and that is how it 
does work.
    So in the end, the Assembly is simply implementing what has 
been put forward. And we have a veto over what that rule or 
regulation will be that they are implementing.
    So again, this will be clarified appropriately, and we will 
have the experts here who can make that clear.
    In fact, I would like to ask, I think it would be helpful, 
Madam Secretary and Mr. Secretary, if your legal teams would 
put their heads together, and I'm going to leave the record 
open for a week, if you could submit your formal legal 
understanding of that, to answer the Senator's question, I 
think that would be particularly helpful to the record.
    Secretary Panetta. We would be happy to, Senator.
    [The written response from the State Department follows:]

    During Secretary Clinton's May 23, 2012, testimony before the 
Senate Committee on Foreign Relations, you discussed whether the United 
States, as a party to the Law of the Sea Convention, would be able to 
veto decisions on distribution of royalty payments. You also discussed 
the relationship between the Convention and climate change. Please find 
herein further information on both of these issues.
legal basis for u.s.veto over international seabed authority decisions 

                  ON DISTRIBUTION OF ROYALTY PAYMENTS

    As a party to the Law the Sea Convention, as modified by the 1994 
Agreement, the United States would have the ability to veto any 
decision related to the distribution of payments resulting from 
production on the Continental Shelf beyond 200 nautical miles (Article 
82).
    Summary:

   Decisions on the distribution of any payments resulting from 
        production on the Continental Shelf beyond 200 nautical miles 
        are made by the Assembly of the Seabed Authority.
   However, the Assembly can only make such decisions ``upon 
        the recommendation of the Council'' of the Seabed Authority.
   Any Council recommendation on this matter would need to be 
        by consensus, which is defined as the absence of any formal 
        objection.
   As a Party, the United States--and no other country--is 
        guaranteed a permanent seat on the Council.
   Thus, as a Party and member of the Council, the United 
        States could formally object to (and thereby block consensus) 
        any Council recommendation on this matter.
   There would then be no Council recommendation, which would 
        preclude any decision by the Assembly.

    Detailed explanation:

   Royalty payments are made ``through''--not ``to''--the 
        International Seabed Authority. They are held there for 
        distribution to States Parties to the Convention. Article 
        82(4).
   The rules and procedures for distributing royalty payments 
        are to be decided by the International Seabed Authority's 
        Assembly (comprising all States Parties) only upon the 
        recommendation of the Seabed Authority's Council (comprising 36 
        States Parties).

        Article 162(2)(o)(i) provides that the Council ``shall . . 
            . recommend to the Assembly rules, regulations and 
            procedures on the equitable sharing of . . . the payments 
            and contributions made pursuant to article 82 . . . .''
        Article 160(2)(f)(i) provides that the Assembly ``shall . 
            . . consider and approve, upon the recommendation of the 
            Council, the rules, regulations and procedures on the 
            equitable sharing of payments and contributions made 
            pursuant to article 82.''
        Thus, the Council is not a merely a ``recommending body'' 
            in the sense that its recommendations are merely advisory. 
            Assembly decisions must be ``upon the recommendation'' of 
            the Council.
        Article 160(2)(f)(i) provides further that ``If the 
            Assembly does not approve the recommendations of the 
            Council, the Assembly shall return them to 
            the Council for reconsideration in light of the views 
            expressed by the Assembly.''

   Any Council recommendation to the Assembly on this matter 
        must be taken by consensus.

        Article 161(8)(d) provides that decisions arising under 
            Article 162(2)(o) ``shall be taken by consensus.'' As noted 
            above, Article 162(2)(o) pertains to Council 
            recommendations on benefit sharing.
        Article 161(8)(e) provides that `` `consensus' means the 
            absence of any formal objection.''

   The 1994 Agreement guarantees the United States, and only 
        the United States, a permanent seat on the Council.

        Section 3, paragraph 15 of the Annex to the 1994 Agreement 
            provides that ``The Council shall consist of 36 members 
            [including]: (a) Four members from among those States 
            Parties which, during the last five years for which 
            statistics are available, have either [met certain 
            consumption/imports criteria for seabed minerals], provided 
            that the four members shall include . . . the State, on the 
            date of entry into force of the Convention, having the 
            largest economy in terms of gross domestic product, if such 
            States wish to be represented in this group'' (emphasis 
            added);
        The United States had the largest economy in terms of GDP 
            at the time of entry into force in 1994.

    Thus, as a Party and member of the Council, any formal objection by 
the United States would preclude consensus and therefore block any 
Council recommendation to the Assembly on this matter. Without a 
recommendation, the Assembly has no authority to take a decision on the 
matter.
    Furthermore, if the United States were to agree to a Council 
recommendation but the Assembly did not support it, the matter would 
have to be returned to the Council for reconsideration. Therefore, the 
Assembly could not change a recommendation of the Council without the 
Council's approval.
    Finally, as a Party, the United States would have a veto over far 
more deep seabed mining matters than just those on the distribution of 
royalty payments. The Convention, as modified by the 1994 Agreement, is 
structured to ensure consensus decisionmaking not just for distributing 
royalty payments but for any decision that would result in a 
substantive obligation on the United States or that would have 
financial and budgetary implications. For instance, the United States 
could block a decision on any rules, regulations and procedures 
implementing the seabed mining regime or amendments thereto.

                             CLIMATE CHANGE

    The Law of the Sea Convention is an oceans treaty, not a climate 
treaty. Joining the Convention would not require the United States to 
implement the Kyoto Protocol or any other particular climate change 
laws or policies, and the Convention's provisions could not 
legitimately be argued to create such a requirement.
    Part XII of the Convention addresses the marine environment. 
``Pollution of the marine environment'' is defined in Article 1, 
paragraph 4. Even if one assumed, for the sake of argument, that (1) 
Part XII applied to the issue of climate change; (2) ``pollution of the 
marine environment'' existed within the meaning of Article 1(4); (3) 
there was a causal link between a Party's GHG emissions and such 
pollution; and (4) other requirements were satisfied, Part XII would 
still not require a Party to adopt particular climate laws or policies.
    Part XII's arguably relevant provisions are either extremely 
general (e.g., Article 194) or expressly do not require a Party to 
implement any particular standards.

   Articles 207 and 212 call on Parties merely to ``tak[e] into 
        account internationally agreed rules, standards and recommended 
        practices and procedures.''
   Articles 213 and 222, which are the ``enforcement'' 
        analogues to Articles 207 and 212, would likewise not require 
        the United States to adopt or enforce particular standards 
        related to climate change. The ``enforcement'' section of Part 
        XII allocates responsibilities among flag States, coastal 
        States, and port States, depending upon the source/type of 
        marine pollution in question. Adoption and enforcement of laws 
        in relation to Articles 207 and 212 fall within the domain of 
        the State concerned. However, even if these articles applied to 
        climate change, they would not require adoption/enforcement of 
        Kyoto or other climate rules or standards. There are simply no 
        such international rules and standards relating to climate 
        change applicable to the United States.

    The Convention would also not provide a forum for challenging U.S. 
climate change policies.

   Domestically, the Convention could not be invoked in court; 
        it does not create rights of action or other enforceable 
        individual legal rights in U.S. courts. (See declaration 24 of 
        the draft resolution of advice and consent and the Committee 
        Report of December 19, 2007, at page 18.)
   Internationally, dispute resolution is not open to 
        individuals or groups, only States Parties. Were a State Party 
        to seek to challenge U.S. climate policies under the guise of a 
        ``marine environment'' dispute, the Convention's dispute 
        settlement procedures would not be available.

        Because of the sensitivities of coastal States concerning 
            their land-based (and certain other) activities, the 
            Convention sets forth limitations on the obligations 
            related to marine pollution that could be subject to 
            dispute resolution.
        Specifically, Article 297(1)(c) sets out the exclusive 
            bases upon which a coastal State would be subject to 
            dispute resolution for pollution of the marine environment.
        Among other things, there would need to be a ``specified'' 
            international rule or standard ``applicable'' to the 
            coastal State. As noted, no provision of the Convention 
            ``applies'' international rules or standards to the United 
            States in this area, much less a ``specified'' one. As 
            such, it would not be possible to invoke the dispute 
            resolution procedures to challenge the United States in 
            relation to climate change.
        Were a State Party to seek to invoke the Framework 
            Convention on Climate Change (to which the United States is 
            a Party) as the basis for a challenge under the LOS 
            Convention, Articles 280 and 281 of the Convention would 
            further preclude recourse to the Law of the Sea 
            Convention's dispute resolution procedures. (These Articles 
            provide that Parties can choose to resolve disputes by 
            means of their own choosing, including through other 
            agreements. The Framework Convention on Climate Change 
            already contains provisions for dispute settlement, and 
            those provisions do not entail any legally binding 
            procedures between Parties unless the Parties agree on such 
            procedures.)

    Thus, the Convention would not obligate the United States to have 
in place any particular climate laws or policies, and it would not 
subject U.S. climate change approaches to dispute resolution.
    U.S. agencies, including the Coast Guard, EPA, and the Justice 
Department, have been acting in accordance with Part XII of the 
Convention since President Reagan directed the U.S. Government to abide 
by the bulk of the Convention's provisions. Were the United States to 
become a Party to the Convention, U.S. agencies would implement Part 
XII under existing laws, regulations, and practices. This was confirmed 
in a March 1, 2004, letter to Chairman Lugar from William H. Taft IV, 
the State Department's Legal Adviser during the Bush administration. 
The letter provided, in pertinent part: ``The United States, as a 
Party, would be able to implement the Convention through existing laws, 
regulations, and practices (including enforcement practices), which are 
consistent with the Convention and which would not need to change in 
order for the United States to meet its Convention obligations.''
    We stand by the Taft letter.

    The Chairman. Senator Lugar, do you have additional 
questions?
    On that basis, let me just thank all of you. I think this 
has been a terrific opening engagement. I appreciate, 
obviously, the focus of everybody on it.
    I'm confident that these questions are going to be answered 
as we go forward. There is going to be plenty of opportunity.
    We will have more of the active commanders of each of the 
areas of concern, who will speak to their experience in the 
field. We will have the businesses themselves come forward. We 
will have some other groups and entities who are concerned. And 
we'll have plenty of opportunity to be able to vet this as we 
go forward.
    I think your testimony today was excellent and a terrific 
beginning to this process. We're going to build the most 
extensive, exhaustive record that has yet been on this, and I 
think provide our colleagues in the Senate with ample 
opportunity to be able to make a sound decision.
    So with that, we thank you very, very much for joining us 
today. And we thank you for the jobs you are doing, all of you. 
Appreciate it very much.
    We stand adjourned.
    [Whereupon, at 12:55 p.m., the hearing was adjourned.]
                              ----------                              


        Letters and Additional Material Submitted for the Record


  Responses of Secretary of State Hillary Rodham Clinton to Questions 
                   Submitted by Senator John F. Kerry

    Questions 1a-1g. Some have expressed concerns that the Law of the 
Sea Convention would require the United States to accede to, or 
otherwise comply, with international climate change agreements, such as 
the Kyoto protocol. Among other things, they point to article 212 of 
the Convention, which provides, inter alia, that states parties shall 
``adopt laws and regulations to prevent, reduce, and control pollution 
of the marine environment from or through the atmosphere, applicable to 
the air space under their sovereignty and to vessels flying their flag 
or vessels or aircraft of their registry, taking into account 
internationally agreed rules, standards and recommended practices and 
procedures and the safety of air navigation.'' They also point to 
article 222 of the Convention, which provides, inter alia, that states 
parties to the Convention ``shall adopt laws and regulations and take 
measures necessary to implement applicable international rules and 
standards established through competent international organizations or 
diplomatic conferences to prevent, reduce, and control pollution of the 
marine environment from or through the atmosphere, in conformity with 
all relevant international rules and standards concerning the safety of 
air navigation.''

   (1a). Would United States accession to the Law of the Sea 
        Convention require the United States to sign or accede to the 
        Kyoto protocol or to sign, ratify, or accede to any other 
        international agreement, legally binding or otherwise, 
        concerning climate change?

    Answer. No. The Law of the Sea Convention is an oceans treaty, not 
a climate treaty. Joining the Convention would not require the United 
States to implement the Kyoto Protocol or any other particular climate 
change laws or policies, and the Convention's provisions could not 
legitimately be argued to create such a requirement.

   (1b). Would United States accession to the Law of the Sea 
        Convention require the United States to adopt any new laws or 
        regulations to implement rules or standards related to climate 
        change established by international organizations or at 
        diplomatic conferences?

    Answer. No. The Convention would not obligate the United States to 
adopt any such laws or regulations.

   (1c). If your response to questions 1(a) and/or 1(b) is 
        ``no,'' please explain in detail why the Convention, including 
        Articles 207, 212 or 222, would not require such action by the 
        United States.

    Answer. These articles appear in Part XII of the Convention, which 
addresses the marine environment. ``Pollution of the marine 
environment'' is defined in Article 1, paragraph 4. Even if one 
assumed, for the sake of argument, that (1) Part XII applied to the 
issue of climate change; (2) ``pollution of the marine environment'' 
existed within the meaning of Article 1(4); (3) there was a causal link 
between a Party's GHG emissions and such pollution; and (4) other 
requirements were satisfied, Part XII would still not require a Party 
to adopt particular climate laws or policies.
    Part XII's arguably relevant provisions are either extremely 
general (e.g., Article 194) or expressly do not require a Party to 
implement any particular standards.

    Articles 207 and 212 call on Parties merely to ``tak[e] into 
            account internationally agreed rules, standards and 
            recommended practices and procedures.''
    Articles 213 and 222, which are the ``enforcement'' analogues 
            to Articles 207 and 212, would likewise not require the 
            United States to adopt or enforce particular standards 
            related to climate change. The ``enforcement'' section of 
            Part XII allocates responsibilities among flag States, 
            coastal States, and port States, depending upon the source/
            type of marine pollution in question. Adoption and 
            enforcement of laws in relation to Articles 207 and 212 
            fall within the domain of the State concerned. However, 
            even if these articles applied to climate change, they 
            would not require adoption or enforcement of Kyoto or other 
            climate rules or standards. There are simply no such 
            international rules and standards relating to climate 
            change applicable to the United States.

   (1d). Has any dispute resolution proceeding been instituted 
        under the Convention against a country alleging failure to 
        adopt or implement the Kyoto protocol or another international 
        climate change agreement or climate change rules and standards 
        established by international organizations or at diplomatic 
        conferences?

    Answer. No. In the 18 years since the Convention has been in force, 
climate change has not been the subject of any dispute settlement 
proceedings.

   (1e). Would United States accession to the Law of the Sea 
        Convention require the United States to adopt ``cap and trade'' 
        legislation or regulations?

    Answer. No. The Convention would not require the United States to 
adopt ``cap and trade'' legislation or regulations or any other 
particular climate laws or policies.

   (1f). If your response to question 1(f) is ``no,'' please 
        describe in detail why the Convention, including Articles 207, 
        212 or 222, would not require the United States to adopt ``cap 
        and trade'' legislation or regulations.

    Answer. See Answer (1c) above.

   (1g). Has any dispute resolution proceeding been instituted 
        under the Convention against a country alleging failure to 
        adopt or enforce ``cap and trade'' legislation or regulations?

    Answer. No. Climate change has not been the subject of any dispute 
settlement proceedings.

    Questions 2a-2c. Some have expressed concerns that United States 
accession to the Law of the Sea Convention will expose the United 
States to baseless environmental lawsuits, including lawsuits relating 
to land-based sources of pollution of the marine environment.

   (2a). Are there any environmental provisions of the Law of 
        the Sea Convention that the United States does not already 
        follow as a matter of domestic law and regulation?

    Answer. No. U.S. agencies, including the Coast Guard, EPA, and the 
Justice Department, have been acting in accordance with the Convention 
since President Reagan directed the U.S. Government to abide by the 
bulk of the Convention's provisions in 1983. Were the United States to 
become a Party to the Convention, U.S. agencies would implement its 
``marine environment'' provisions under existing laws, regulations, and 
practices. This was confirmed in a March 1, 2004, letter to Chairman 
Lugar from William H. Taft IV, the State Department's Legal Adviser 
during the Bush administration. The letter provided, in pertinent part: 
``The United States, as a Party, would be able to implement the 
Convention through existing laws, regulations, and practices (including 
enforcement practices), which are consistent with the Convention and 
which would not need to change in order for the United States to meet 
its Convention obligations.'' We stand by the Taft letter.

   (2b). Would United States accession to the Convention 
        require the United States to adopt new or different 
        environmental laws or regulations?

    Answer. No. As discussed in Answer (2a), the United States would be 
able to implement the Convention through existing laws and regulations, 
including those related to the marine environment.

   (2c). Has any dispute resolution proceeding been instituted 
        under the Convention against a country for failing to adopt or 
        enforce environmental standards or rules contained in 
        international agreements to which that country was not a Party, 
        or that were adopted by international organizations or 
        diplomatic conferences over that country's objection?

    Answer. No. In the 18 years since the Convention has been in force, 
no such proceeding has been instituted.

    Question 3. Article 309 of the Convention states that no 
reservations or exceptions are permitted unless they are expressly 
permitted by other articles of the Convention. Article 310 of the 
Convention states that a State acceding to the Convention may make 
declarations or statements concerning the Convention ``provided that 
such declarations or statements do not purport to exclude or to modify 
the legal effect of the provisions of this Convention in their 
application to that State.'' In 2007 the Senate Foreign Relations 
Committee recommended that the following declaration be included in a 
resolution of advice and consent for the Convention: ``The United 
States further declares that its consent to accession to the Convention 
is conditioned upon the understanding that, under article 298(1)(b), 
each State Party has the exclusive right to determine whether its 
activities are or were `military activities' and that such 
determinations are not subject to review.''

   Has any court or arbitration tribunal established under the 
        Convention contradicted a State Party's exclusive right to 
        determine whether its activities are or were ``military 
        activities''?

    Answer. No State Party has challenged and no court or arbitration 
established under the Convention has contradicted a State Party's 
exclusive right to determine whether its activities are or were 
``military activities.''
    The exemption of U.S. ``military activities'' from dispute 
settlement procedures is consistent with the terms of the Convention. 
If a tribunal were nevertheless to second-guess a U.S. judgment as to 
what constitutes a U.S. ``military activity,'' the United States would 
view that judgment as lacking a legal basis and invalid, and it would 
therefore have no legal effect on the United States.

    Questions 4a-4e. The Law of the Sea Convention contains several 
provisions relating to the Extended Continental Shelf--the area of a 
coastal State's Continental Shelf that extends beyond 200 nautical 
miles from the coast--including that a coastal State's establishment of 
the outer limits of its Continental Shelf on the basis of 
recommendations from the Commission on the Limits of the Continental 
Shelf ``shall be final and binding'' on all State Parties to the 
Convention.

   (4a). Has the United States of America issued any oil or gas 
        leases relating to the U.S. Extended Continental Shelf?

    Answer. Yes, the Department of Interior has issued leases in the 
``western gap,'' a small high seas area in the Gulf of Mexico, beneath 
which is Extended Continental Shelf of the United States and Mexico.

   (4b). If the answer to question 7(a) is ``yes,'' are any of 
        these lease areas currently in the production stage--i.e., are 
        resources actually being extracted at this time?

    Answer. According to the Department of Interior, it has not 
received any exploration plans for these areas and no exploratory 
drilling has taken place in the leased areas.

   (4c). If the answer to question 7(a) is ``yes,'' please 
        explain why accession to the Law of the Sea Convention remains 
        necessary.

    Answer. The best way to achieve international recognition of our 
Continental Shelf is as a Party to the Convention. The U.S. Chamber of 
Commerce, the American Petroleum Institute, and the companies that 
would potentially be involved in resource development on the 
Continental Shelf all support accession to the Convention because they 
desire such international legal recognition and certainty.
    A key element of achieving this legal certainty and international 
recognition is access to the Commission of technical experts set up 
under the Convention. If the United States remains a nonparty, and 
attempts to establish its Continental Shelf limits without a review by 
the expert Commission, it is unlikely the international community would 
give those limits the same sort of recognition and acceptance that 
Parties to the Convention will enjoy.

   (4d). Rather than acceding to the Law of the Sea Convention, 
        could the United States achieve the same level of legal 
        certainty for drilling activities on the U.S. Extended 
        Continental Shelf by negotiating bilateral agreements with 
        neighboring countries? To fully replicate the Extended 
        Continental Shelf protections of the Convention, how many 
        agreements would the United States need to conclude?

    Answer. No. Two countries can agree on how to divide their own 
maritime claims, but they cannot decide what is, and what is not, 
Continental Shelf that extends beyond their Exclusive Economic Zone 
limits. That is a matter that concerns all countries. As such, a series 
of bilateral agreements, assuming other countries were even willing to 
negotiate such agreements and agree to U.S. terms, would not be the 
equivalent of joining the Convention and using its mechanisms to get 
binding international recognition of our shelf beyond 200 nautical 
miles from the over 160 States Parties to the Convention.
    In short, we cannot gain the certainty and security over our 
Continental Shelf that our industry needs to be prepared to make the 
substantial investments necessary to exploit it by negotiating 
bilateral agreements with individual nations. The way to secure our 
Continental Shelf rights is to become a Party to the Convention.

   (4e). How are foreign governments likely to react if the 
        United States were to approach them and ask that they sign a 
        separate deal that replicates the protection for Extended 
        Continental Shelf activity that is contained in the Convention?

    Answer. It is not clear how other countries would react and 
whether, if they agreed to such negotiations, they would be prepared to 
conclude agreements on terms favorable to the United States. At 
present, the United States has 17 unresolved maritime boundaries with 
various neighbors. The process of addressing those disputes and 
concluding them pursuant to a mutually acceptable agreement is 
challenging and time-consuming, and it is important that the United 
States not conclude such agreements unless they are on terms favorable 
to the United States. Even neighboring countries that may be interested 
in negotiating boundary agreements with us understand that such 
agreements cannot ``replicate'' the Convention in regards to the 
Continental Shelf.

    Questions 5a-5b. In your testimony you noted that the International 
Seabed Authority may begin as early as 2013 the process of developing 
rules governing mining in the deep seabed.

   (5a). As a nonparty to the Convention, what ability will the 
        United States have to shape those rules in ways favorable to 
        U.S. interests or to block attempts by other states to shape 
        the rules in ways contrary to U.S. interests?

    Answer. As a nonparty, the United States participates as an 
observer to the International Seabed Authority. As an observer, without 
a vote or formal voice, the United States has very limited ability to 
shape deep seabed mining rules in its interests. For instance, the 
United States has no ability as an observer to block
 proposals by members of the Seabed Authority's Council, including 
proposals by members related to deep seabed mining rules and proposals 
for the distribution of payments made for oil and gas production on the 
Continental Shelf beyond 200 nautical miles.

   (5b). How would this change if the United States were to 
        become a Party to the Convention this year? What provisions of 
        the Convention support your conclusions in this regard?

    Answer. As a Party, the United States would have an unprecedented 
and unparalleled ability to influence deep seabed mining activities 
worldwide. No other international organization gives one country, and 
one country only--the United States--permanent membership on its key 
decisionmaking body. If the United States acceded to the Convention 
this year, it would be able to fill this seat at the Seabed Authority's 
meeting in 2013.
    The 1994 Agreement guarantees the United States, and only the 
United States, a permanent seat on the 36-member Council. Specifically, 
Section 3(15) of the Annex to the Agreement provides that Council 
membership shall include the State having the largest gross domestic 
product at the time of entry into force of the Convention, which was 
1994. That country was the United States.
    Furthermore, the Convention, as modified by the 1994 Agreement, is 
structured to require consensus decisionmaking for any decision that 
would result in a substantive obligation on the United States or that 
would have financial and budgetary implications. For instance, the 
United States could use its permanent seat to block a decision on any 
rules, regulations, and procedures implementing the seabed mining 
regime or amendments thereto.

    Questions 6a-6b. In your testimony you made repeated references to 
the fact that the United States would, upon its accession to the 
Convention, have an effective veto over the way that the International 
Seabed Authority distributes any royalties or fees that it receives 
with respect to exploitation in the Extended Continental Shelf or the 
deep seabed.

   (6a). Please describe in detail the provisions of the 
        Convention that support this conclusion.

    Answer. As a Party to the Law the Sea Convention, as modified by 
the 1994 Agreement, the United States would have the ability to veto 
any decision related to the distribution of payments resulting from 
production on the Continental Shelf beyond 200 nautical miles (Article 
82).
    Summary of Convention provisions supporting this conclusion:

    Decisions on the distribution of any payments resulting from 
            production on the Continental Shelf beyond 200 nautical 
            miles are made by the Assembly of the Seabed Authority.
    However, the Assembly can only make such decisions ``upon the 
            recommendation of the Council'' of the Seabed Authority.
    Any Council recommendation on this matter would need to be by 
            consensus, which is defined as the absence of any formal 
            objection.
    As a Party, the United States--and no other country--is 
            guaranteed a permanent seat on the Council.
    Thus, as a Party and member of the Council, the United States 
            could formally object to (and thereby block consensus on) 
            any Council recommendation on this matter.
    There would then be no Council recommendation, which would 
            preclude any decision by the Assembly.

    Detailed explanation of Convention provisions supporting this 
conclusion:

    Royalty payments are made ``through''--not ``to''--the 
            International Seabed Authority. They are held there for 
            distribution to States Parties to the Convention. Article 
            82(4).
    The rules and procedures for distributing royalty payments are 
            to be decided by the International Seabed Authority's 
            Assembly (comprising all States Parties) only upon the 
            recommendation of the Seabed Authority's Council.

      Article 162, paragraph (2)(o)(i) provides that the Council 
            ``shall . . . recommend to the Assembly rules, regulations 
            and procedures on the equitable sharing of . . . the 
            payments and contributions made pursuant to article 82 . . 
            . .''
      Article 160, paragraph (2)(f)(i) provides that the Assembly 
            ``shall . . . consider and approve, upon the recommendation 
            of the Council, the rules, regulations and procedures on 
            the equitable sharing of payments and contributions made 
            pursuant to article 82.''
      Thus, the Council is not a merely a ``recommending body'' in 
            the sense that its recommendations are merely advisory. 
            Assembly decisions must be ``upon the recommendation'' of 
            the Council.
      Article 160, paragraph (2)(f)(i) provides further that 
            ``[i]f the Assembly does not approve the recommendations of 
            the Council, the Assembly shall return them to the Council 
            for reconsideration in light of the views express by the 
            Assembly.''

    Any Council recommendation to the Assembly on this matter must 
            be taken by consensus.

      Article 161, paragraph (8)(d) provides that decisions 
            arising under Article 162, paragraph (2)(o) ``shall be 
            taken by consensus.'' As noted above, Article, paragraph 
            162(2)(o) pertains to Council recommendations on benefit 
            sharing.
      Article 161, paragraph (8)(e) provides that `` `consensus' 
            means the absence of any formal objection.''

    The 1994 Agreement guarantees the United States, and only the 
            United States, a permanent seat on the Council.

      Section 3, paragraph 15 of the Annex to the 1994 Agreement 
            provides that ``The Council shall consist of 36 members 
            [including]: (a) Four members from among those States 
            Parties which, during the last five years for which 
            statistics are available, have either [met certain 
            consumption/imports criteria for seabed minerals], provided 
            that the four members shall include . . . the State, on the 
            date of entry into force of the Convention, having the 
            largest economy in terms of gross domestic product, if such 
            States wish to be represented in this group;''
      The United States had the largest economy in terms of GDP at 
            the time of entry into force in 1994.

    Thus, as a Party and member of the Council, any formal objection by 
the United States would preclude consensus and therefore block any 
Council recommendation to the Assembly on this matter. Without a 
recommendation, the Assembly has no authority to take a decision on the 
matter.
    Furthermore, if the United States were to agree to a Council 
recommendation but the Assembly did not support it, the matter would 
have to be returned to the Council for reconsideration. Therefore, the 
Assembly could not change a recommendation of the Council without the 
Council's approval.
    Finally, as a Party, the United States would have a veto over far 
more deep seabed mining matters than just the distribution of royalty 
payments. For instance, the United States could block a decision on any 
rules, regulations, and procedures implementing the seabed mining 
regime or amendments thereto. As explained in the answer to question 7, 
this includes rules, regulations, and procedures relating to any 
royalties relating to deep seabed mining.

   (6b). How many other countries are guaranteed a permanent 
        seat on the Council of the International Seabed Authority?

    Answer. None. No countries other than the United States have a 
permanent seat on the Council of the International Seabed Authority.

    Questions 7a-7c. What payments, if any, must Parties to the 
Convention or companies that they sponsor pay to the International 
Seabed Authority in connection with exploitation of the deep seabed? To 
the extent that the rules or regulations concerning such payments are 
not yet in place, please describe:

   (7a). The process by which the amount of such payments will 
        be determined.

    Answer. With the exception of an application fee, described below, 
there are presently no payments that Parties or companies must make for 
exploitation of the deep seabed.
    Prior to the 1994 Agreement, the Convention contained extensive 
provisions on payments related to deep seabed mining. These problematic 
provisions were eliminated by the 1994 Agreement, which takes a ``cost-
effective'' and ``evolutionary approach.'' (Agreement, Annex, Sections 
1 and 8) Specifically, in lieu of the Convention's original provisions, 
the Agreement provides a set of principles that provide the basis for 
establishing future rules, regulations, and procedures for financial 
payments related to deep seabed mining. (Agreement, Section 8) For 
instance, the Agreement provides that the system of payments:

    ``Shall be fair to both the contractor and to the Authority'';
    ``Shall . . . avoid giving deep seabed miners an artificial 
            competitive advantage or imposing on them a competitive 
            disadvantage'' relative to land-based mineral producers; 
            and
    ``should not be complicated and should not impose major 
            administrative costs on the Authority or on a contractor.'' 
            (Agreement, Section 8(1))

    These provisions reflect market principles and are a fundamental 
change from the original Convention. They also reflect the cost-
effective and evolutionary approach adopted in the Agreement; rather 
than decide on financial matters in advance, the Agreement provides 
that rulemaking within the Seabed Authority be undertaken ``at various 
stages of the development of activities in the area.'' (Agreement, 
Annex, Section 1) Since activities in the Area presently remain at the 
exploration (rather than exploitation) phase, the Seabed Authority has 
not yet developed any rules for payments related to exploitation.
    The Agreement provides for a fee of US$250,000 ``for processing 
applications'' of either exploration or exploitation. (Agreement, 
Section 8(3)) The amount of that fee is to be ``reviewed from time to 
time by the Council in order to ensure that it covers the 
administrative cost incurred. If such administrative cost incurred by 
the Authority in processing the application is less than the fixed 
amount, the Authority shall refund the difference to the applicant.'' 
(Convention, Annex III, Article 13(2))
    Finally, it is important to note that the purpose of payments to 
the Seabed Authority is to cover its expenses and enable it to be a 
financially self-sufficient entity. When the Seabed Authority is able 
to meet its administrative expenses from funds received in connection 
with mining activities, it will no longer request assessed 
contributions from Parties.

   (7b). [To the extent that the rules or regulations 
        concerning such payments are not yet in place, please 
        describe:] the extent to which the United States, as a nonparty 
        to the Convention, would have the ability to influence the 
        rules and regulations relating to such payments; and

    Answer. As a nonparty, the United States participates as an 
observer to the International Seabed Authority. As an observer, without 
a vote or formal voice, the United States has very limited ability to 
influence rules and regulations relating to payments from deep seabed 
mining, and no ability to block objectionable proposals on payments 
related to deep seabed mining. Thus, it is particularly important that 
the United States accede to the Convention prior to key decisions by 
the Seabed Authority on this and other deep seabed mining issues.

   (7c). [To the extent that the rules or regulations 
        concerning such payments are not yet in place, please 
        describe:] the extent to which the United States, as a Party to 
        the Convention, would have the ability to influence the rules 
        and regulations relating to such payments.

    Please explain the provisions of the Convention that support your 
conclusions in this regard.

    Answer. As a Party to the Convention, the United States would have 
an unprecedented and unparalleled ability to influence deep seabed 
mining activities worldwide, including with respect to rules and 
regulations relating to such payments. As a Party, decisions on the 
rules, regulations, and procedures implementing the seabed mining 
regime could not be adopted without approval of the United States. This 
is provided for in the following provisions:

    Article 160, paragraph (2)(f)(ii), on Assembly approval,
    Article 162, paragraph (2)(o)(ii), on powers of the Council, 
            and
    Article 161, paragraph (8)(d), on consensus decisionmaking in 
            the Council.
    1994 Agreement, Annex, Section 3(15)(a), providing the United 
            States with a permanent seat on the Council.

    Questions 8a-8e. Article 160, Subsection 2(g) of the Convention 
states that a duty of the Assembly of the International Seabed 
Authority is to ``decide upon the equitable sharing of financial and 
other economic benefits derived from activities in the [Deep Seabed] 
Area, consistent with this Convention and the rules, regulations and 
procedures of the Authority.''

   (8a). What are the ``rules, regulations and procedures'' 
        referenced in this provision?

    Answer. The reference to ``rules, regulations and procedures'' in 
Article 160, paragraph 2(g) refers to all rules, regulations, and 
procedures of the Seabed Authority.
    Of particular relevance would be any ``rules, regulations and 
procedures'' adopted relating to the ``sharing of financial and other 
economic benefits'' derived from activities in the deep seabed area. 
(Article 160, paragraph (2)(f)(i)) to date, however, no such rules, 
regulations, and procedures have been adopted.

   (8b). Which body or bodies of the International Seabed 
        Authority promulgates them?

    Answer. Decisions on ``rules, regulations and procedures'' that 
relate to ``sharing of financial and other economic benefits'' derived 
from activities in the deep seabed area are made by the Assembly of the 
Seabed Authority. However, the Assembly can only make such decisions 
``upon the recommendation of the Council'' of the Seabed Authority, and 
such decisions must be taken by consensus. Along the same lines as 
detailed in the response to Question 6a, this is provided for in 
Articles:

    160, paragraph (2)(f)(i), on Assembly approval,
    162, paragraph (2)(o)(i), on powers of the Council, and
    161, paragraph (8)(d), on consensus decisionmaking in the 
            Council.

    As a Party, the United States would have a permanent seat on the 
Council (1994 Agreement, Annex, Section 3(15)(a)) and, therefore, the 
United States would have the ability to veto any proposed decision on 
this matter at any time.

   (8c). Can the Assembly take a decision under Article 160, 
        Subsection 2(g) of the Convention that contravenes these rules, 
        regulations and procedures?

    Answer. No. Article 160, paragraph 2(g) itself states that such 
decisions must be ``consistent with this Convention and the rules, 
regulations, and procedures of the Authority.''
    Furthermore, the Assembly may not take a decision on those ``rules, 
regulations, and procedures'' unless it is ``upon the recommendation of 
the Council.'' Specifically, Article 160, paragraph (2)(f)(i) states 
that ``[i]f the Assembly does not approve the recommendations of the 
Council, the Assembly shall return them to the Council for 
reconsideration . . . .'' Thus, if the United States were to agree to a 
Council recommendation, but the Assembly did not support it, the matter 
would have to be returned to the Council for reconsideration. The 
Assembly could not change a recommendation of the Council without the 
Council's approval.
    Thus, the Council is not a merely a ``recommending body'' in the 
sense that its recommendations are merely advisory. Assembly decisions 
must be ``upon the recommendation'' of the Council.

   (8d). Can the Assembly take such a decision without first 
        receiving a recommendation from the Council?

    Answer. As discussed above, decision on any rules, regulations, and 
procedures related to ``sharing of financial and other economic 
benefits'' must be upon the recommendation of the Council, and no such 
decision or recommendation has been made.
    Whether the Assembly can ultimately take decision under Article 
160, paragraph 2(g) without first receiving a recommendation from the 
Council will depend upon the rules, regulations, and procedures decided 
upon by the Council itself. To date, no such rules, regulations, and 
procedures have been adopted. As a Party, the United States could 
ensure--through the development of the rules, regulations, and 
procedures--that any Assembly decision under Article 160, paragraph 
2(g) is made only on the basis of a prior Council decision.
    In addition, the Convention as modified by the 1994 Agreement 
already provides that any actions taken by the Assembly under Article 
160, paragraph 2(g) need to first go through the Finance Committee. 
Specifically, the Agreement provides that decisions by the Assembly 
(and the Council) on ``[r]ules, regulations and procedures on the 
equitable sharing of financial and other economic benefits derived from 
activities in the Area and the decisions to be made thereon'' shall 
take into account recommendations of the Finance Committee. (Agreement, 
Annex, Section 9(7)) Thus, the Assembly could not act in the absence of 
a prior recommendation of the Finance Committee. The Agreement further 
provides that the United States is guaranteed a seat on the Finance 
Committee (until such time as the Seabed Authority is financially self-
sufficient) and that decisions by the Finance Committee on any question 
of substance shall be taken by consensus. (Agreement, Annex, Section 9)

   (8e). Can the Assembly take such a decision contrary to the 
        Council's recommendation?

    Answer. As discussed above, the Assembly may not take a decision on 
rules, regulations, and procedures that relate to ``sharing of 
financial and other economic benefits'' unless it is ``upon the 
recommendation of the Council.'' Article 160, paragraph (2)(f)(i) 
states that ``[i]f the Assembly does not approve the recommendations of 
the Council, the Assembly shall return them to the Council for 
reconsideration . . . .''
    As discussed above, whether the Assembly can ultimately take an 
action under Article 160, paragraph 2(g) without first receiving a 
recommendation from the Council will depend upon the rules, 
regulations, and procedures adopted by the Council itself and 
subsequently approved by the Assembly. As a Party, the United States 
could ensure--through the development of the rules, regulations, and 
procedures--that the Assembly can take no such a decision contrary to a 
prior decision of the Council.
                                 ______
                                 

     Responses of Secretary Leon E. Panetta to Questions Submitted
                        by Senator John F. Kerry

    Question.Freedom of Navigation Operations.--It is absolutely 
imperative that we retain the capability to protect our access to the 
skies, the high seas, the straits, and even the territorial waters of 
other nations with respect to innocent passage. The U.S. Navy has run, 
and will continue to run, multiple Freedom of Navigation operations 
every year in areas--including the South China Sea--where countries try 
to place unlawful restrictions on the freedom of navigation, to ensure 
that we and the international community do not accept as a precedent 
these unlawful claims.

   Is it correct to say that these operations are going to 
        continue apace whether we're a party to the treaty or not?

    Answer. Yes, regardless of whether the United States is a party to 
the Law of the Sea Convention, U.S. Military assets will continue to 
conduct operational assertions under the U.S. Freedom of Navigation 
Program. It remains our primary operational means to challenge 
excessive maritime claims and excessive assertions of jurisdiction by 
coastal States.

   Would being a party to the Convention help our forces when 
        they're out there trying to get countries to drop their 
        spurious restrictions on freedom of navigation? If so, how?

    Answer. Yes. I believe strongly that joining the Convention would 
assist U.S. efforts to get countries with excessive maritime claims to 
drop their spurious restrictions on freedom of navigation. Joining the 
Convention would reinforce our position as a global maritime leader in 
shaping the discussion interpreting the Law of the Sea; and being a 
party would certainly afford us increased authority in the conduct of 
our operational assertions.

   Would being a party to the Convention help you enlist 
        support from other countries to get the offending countries to 
        drop their spurious claims? If so, how?

    Answer. Yes. I believe that being a party to the Convention would 
help enlist support from other countries to get offending countries to 
drop their spurious claims. Much of our defense strategy is based upon 
modernizing our network of defense and security partnerships and 
supporting a rules-based order that promotes stability. In joining the 
Convention, we would be demonstrating, actively, our commitment to such 
an order and to working with others in support of the rule of law.

   Does the fact that the United States is not now a party to 
        the Convention hamper our ability to push back against these 
        spurious claims?

    Answer. Yes. The fact that the United States is not a party to 
Convention complicates our ability now to challenge spurious claims. At 
present, the United States is unable to participate fully in some of 
the Convention's key institutions and meetings where these very issues 
are being discussed and shaped. Without a full seat at the table, we're 
unable to participate in these important discussions, defend our 
interests, and shape the outcome.

    Question. Dispute Resolution Mechanism.--Based on the treaty text 
and on how it is already being implemented, do you have any concern 
whatsoever over whether the United States will be able to exclude 
disputes concerning military activities from the Convention's dispute 
resolution mechanism, and that the United States will be able to decide 
for itself whether an activity is a ``military'' one for the purposes 
of the Convention?

    Answer. No, I have no concerns about U.S. ability to exclude 
military related disputes from the Convention's dispute resolution 
mechanism, should we accede to the Convention. Article 298 of the 
Convention expressly allows States to exclude ``disputes concerning 
military activities'' from dispute resolution mechanisms and 
procedures; if the United States accedes to the Convention, we would 
invoke that exception. This exception has been invoked by numerous 
States that are already parties to the Convention, including Russia, 
China, the United Kingdom, and France. Moreover, the United States 
would retain the right to determine what activities constitute 
``military activities''--and would not be subject to review by an 
international tribunal or court.

    Question. Mandatory Technology Transfer.--Some have asserted that 
the Convention provides for mandatory technology transfer and would 
require the United States to equip adversaries with sensitive 
technology, such as antisubmarine warfare technology. Do you agree with 
this assertion?

    Answer. No, I do not agree with this assertion. There is absolutely 
no provision in the Convention that would require the United States to 
equip adversaries with sensitive technology. When the Convention was 
originally negotiated, there was a provision providing for mandatory 
technology transfer relating to deep seabed mining technology, but this 
provision was superseded by the 1994 Agreement relating to the 
Implementation of Part XI, which has no mandate for technology 
transfer.

    Question. Use or Threat of Military Force.--Some have asserted that 
because certain articles of the Convention such as Articles 88, 141, 
and 301 state that the high seas and the deep seabed should be reserved 
for ``peaceful purposes'' that U.S. accession to the Convention will 
impose new restrictions on the United States with respect to the use or 
threat of military force. Do you agree with this assertion?

    Answer. No. I do not agree with this assertion; the Convention's 
``peaceful purposes'' provisions would not impose any new restrictions 
with regard to the United States use or threat of military force and 
would not impair the inherent right of individual or collective self-
defense or rights during armed conflict. In fact, U.S. military 
operations and activities would not be inhibited or constrained in any 
manner if the United States became a party to the Convention. The 
``peaceful purposes'' provisions merely repeat the same obligations 
under the United Nations Charter to which the United States has been 
obligated since 1945. This has not kept the United States from 
responding to an attack or protecting our national interests.

    Question. Size of the U.S. Navy.--Some have characterized the Law 
of the Sea Convention as a way to shrink the U.S. military--and in 
particular the U.S. Navy--by allowing the United States to rely on a 
treaty instead of military force. They argue that instead of joining 
the Convention, the United States should increase the size of the U.S. 
Navy.

   Is your support for United States accession to the Law of 
        the Sea Convention motivated by a desire to shrink the size of 
        the U.S. Navy and its fleet?

    Answer. No. My strong and unwavering support for U.S. accession to 
the Law of the Sea Convention is not at all motivated by a desire to 
shrink the size of the U.S. Navy and its fleet; my support is not 
linked in any way whatsoever to the size of the U.S. Navy or the size 
of DOD forces. Instead, my support is based on a fundamental belief 
that joining promotes U.S. national security interests, for several 
reasons. Joining the Convention preserves and protects our navigational 
freedoms and global access for military and commercial ships, aircraft, 
and undersea fiber optic cables. We depend on the navigational 
provisions for global access to train our forces, get them to the 
fights, sustain them and then return them home--all without a 
``permission slip'' from other countries. Although we have succeeded to 
date in preserving and protecting our navigational freedoms through 
reliance on customary international law, joining the Convention places 
our national security on firmer footing. Customary international law 
changes over time, subject to state practice. Treaty law remains the 
firmest legal foundation upon which to base our global presence--that 
is precisely why I support U.S. accession.

   If the United States Naval fleet were doubled or tripled in 
        size, would you still support immediate U.S. accession to the 
        Convention?

    Answer. Yes. If the U.S. Navy fleet were doubled or tripled in 
size, I would continue to support unequivocally U.S. accession to the 
Convention. As noted earlier, I support U.S. accession regardless of 
the size of our fleet.

    Question. U.S. Maritime Interdiction Efforts.--Some have asserted 
that U.S. accession to the Convention would hurt U.S. maritime 
interdiction efforts under the Proliferation Security Initiative (PSI). 
Do you agree?

    Answer. No. U.S. accession to the Convention would not hurt U.S. 
maritime interdiction efforts under the Proliferation Security 
Initiative (PSI). It is important to note that the United States 
ability to conduct the full range of maritime interdiction operations 
would not be hampered at all by joining the Convention. In the Defense 
Strategic Guidance issued earlier this year, countering weapons of mass 
destruction remains a primary mission set for U.S. forces. PSI is a key 
tool in our arsenal for executing this mission across the maritime 
domain. To this end, joining the Convention would not interfere with 
U.S. participation in PSI; to the contrary, it would reinforce our 
long-held position that PSI is entirely consistent and compatible with 
the Convention. In fact, PSI's Statement of Interdiction Principles 
states that interdiction activities under PSI will be conducted 
``consistent with national legal authorities and relevant international 
law frameworks.'' Rather, U.S. accession could encourage other States 
to join PSI as it would convey our commitment to the rule of law for 
the oceans to the same degree they are already committed.
                                 ______
                                 

       Responses of Gen. Martin E. Dempsey to Questions Submitted
                        by Senator John F. Kerry

    Question. Freedom of Navigation Operations.--It is absolutely 
imperative that we retain the capability to protect our access to the 
skies, the high seas, the straits, and even the territorial waters of 
other nations with respect to innocent passage. The U.S. Navy has run, 
and will continue to run, multiple Freedom of Navigation operations 
every year in areas--including the South China Sea--where countries try 
to place unlawful restrictions on the freedom of navigation, to ensure 
that we and the international community do not accept as a precedent 
these unlawful claims.

   Is it correct to say that these operations are going to 
        continue apace whether we're a party to the treaty or not?

    Answer. Yes. U.S. forces will continue to conduct operational 
assertions against excessive maritime claims as part of the Freedom of 
Navigation Program.

   Would being a party to the Convention help our forces when 
        they're out there trying to get countries to drop their 
        spurious restrictions on freedom of navigation? If so, how?

    Answer. Yes. The rules of the Convention that guarantee the freedom 
of navigation are favorable to our interests. Being a party to 
Convention would enhance the credibility of our operational assertions 
and diplomatic challenges against excessive maritime claims throughout 
the world.

   Would being a party to the Convention help you enlist 
        support from other countries to get the offending countries to 
        drop their spurious claims? If so, how?

    Answer. Yes. Being a party to the Convention would demonstrate U.S. 
commitment to the rules based international order and strengthen the 
foundation for partnerships with countries that share our national 
interest in preserving the navigational rights that are codified in the 
Convention.

   Does the fact that the United States is not now a party to 
        the Convention hamper our ability to push back against these 
        spurious claims?

    Answer. Yes, our status as a nonparty does hamper our ability to 
push back against spurious claims. Joining the Convention would allow 
us to bring the full force of our influence as the world's foremost 
maritime power to bear against countries with excessive maritime 
claims.

    Question. Dispute Resolution Mechanism.--Based on the treaty text 
and on how it is already being implemented, do you have any concern 
whatsoever over whether the United States will be able to exclude 
disputes concerning military activities from the Convention's dispute 
resolution mechanism, and that the United States will be able to decide 
for itself whether an activity is a ``military'' one for the purposes 
of the Convention?

    Answer. No, I do not have the concerns you mentioned. The United 
States has the right to forgo participation in any of the Convention's 
dispute resolution mechanisms for disputes concerning military 
activities. Other nations, including China, France, Russia, and the 
United Kingdom have exempted their military activities. This right is 
not subject to review.

    Question. Mandatory Technology Transfer.--Some have asserted that 
the Convention provides for mandatory technology transfer and would 
require the United States to equip adversaries with sensitive 
technology, such as antisubmarine warfare technology. Do you agree with 
this assertion?

    Answer. I do not agree with this assertion. Although mandatory 
technology transfer was one of the objectionable provisions related to 
deep seabed mining in the original 1982 Convention, the 1994 Agreement 
eliminated that provision. In addition, the Convention expressly 
provides that nothing in it shall be deemed to require a party to 
disclose information contrary to the essential interests of its 
security.

    Question. Use or Threat of Military Force.--Some have asserted that 
because certain articles of the Convention such as Articles 88, 141, 
and 301 state that the high seas and the deep seabed should be reserved 
for ``peaceful purposes'' that U.S. accession to the Convention will 
impose new restrictions on the United States with respect to the use or 
threat of military force. Do you agree with this assertion?

    Answer. I do not agree with this assertion. Those provisions simply 
incorporate into the Convention the same obligations that the United 
States already has under the U.N. Charter.

    Question. Size of the U.S. Navy.--Some have characterized the Law 
of the Sea Convention as a way to shrink the U.S. military--and in 
particular the U.S. Navy--by allowing the United States to rely on a 
treaty instead of military force. They argue that instead of joining 
the Convention, the United States should increase the size of the U.S. 
Navy.

   Is your support for United States accession to the Law of 
        the Sea Convention motivated by a desire to shrink the size of 
        the U.S. Navy and its fleet?

    Answer. No. My support for the Convention is not motivated by a 
desire to shrink the U.S. Navy. The Convention codifies rules that are 
very favorable to U.S. national security interests. Joining the 
Convention would give the men and women of our Armed Forces another 
tool to accomplish the mission.

   If the United States naval fleet were doubled or tripled in 
        size, would you still support immediate U.S. accession to the 
        Convention?

    Answer. Yes. Joining the Convention would strengthen our military 
operations by preserving essential navigation and overflight rights and 
providing legal certainty to the world's largest maneuver space.

    Question. U.S. Maritime Interdiction Efforts.--Some have asserted 
that U.S. accession to the Convention would hurt U.S. maritime 
interdiction efforts under the Proliferation Security Initiative (PSI). 
Do you agree?

    Answer. No, U.S. accession to the Convention would not hurt U.S. 
maritime interdiction efforts. The PSI specifically requires 
participating countries to act consistently with international law, 
which includes the law reflected in the Convention. Most PSI partners 
are parties to the Convention. Further, joining the Convention is 
likely to strengthen PSI by attracting new cooperative partners.

    Question. Customary International Law.--In your testimony you 
stated that you were not now comfortable relying solely upon customary 
international law with regard to rights of navigation because of, among 
other things, the fact that customary international law evolves and may 
be subject to individual interpretation by countries attempting to 
interpret customary law to their benefit. Some of those countries--like 
China, for example--are parties to the Convention. If these parties to 
the Convention already interpret both customary international law and 
the Convention in ways that are inimical to U.S. interests, why would 
United States accession to the Convention matter?

    Answer. U.S. accession would increase our credibility and influence 
in defending the Convention's existing norms that enable the access, 
mobility, and sustainment of our military forces and commercial fleet. 
Our nonparty status detracts from our ability to lead developments in 
the maritime domain, and enables emerging powers to advance their 
contrary interpretations of the Convention. As the global security 
environment changes, it will become increasingly important for the 
United States to use all elements of national power.
                                 ______
                                 

               Letters Submitted by Senator John F. Kerry



















     Letters Submitted by Secretary of State Hillary Rodham Clinton



















 THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM 
                           THE U.S. MILITARY

                              ----------                              


                     THURSDAY, JUNE 14, 2012 (a.m.)

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m., in 
room SH-216, Hart Senate Office Building, Hon. John Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Cardin, Webb, Coons, Udall, Lugar, 
Corker, Risch, Inhofe, DeMint, Isakson, Barrasso, and Lee.

           OPENING STATEMENT OF HON. JOHN F. KERRY, 
                U.S. SENATOR FROM MASSACHUSETTS

    The Chairman. The hearing will come to order.
    Thank you all very much for being here with us today. This 
is the second hearing on the Law of the Sea Convention and we 
are very pleased to welcome six individuals with long and 
remarkably distinguished careers in defense of America's 
security. ADM James A. Winnefeld, Jr., is the Vice Chairman of 
the Joint Chiefs of Staff. ADM Jonathan Greenert is Chief of 
Naval Operations. ADM Robert J. Papp, Jr., is Commandant of the 
U.S. Coast Guard. Gen. William M. Fraser III is Commander of 
U.S. Transportation Command. GEN Charles H. Jacoby, Jr., is the 
Commander of U.S. Northern Command, and ADM Samuel J. Locklear 
III is Commander of the U.S. Pacific Command.
    I cannot think of any time, certainly not since I have been 
here and I doubt even before that, that we have had so many top 
military leaders come before the Senate Foreign Relations 
Committee at one time, and I thank you all for being here.
    I want to make clear why the committee is so interested in 
this testimony and why it is so important.
    There are many people--there are some people who raise 
questions about the treaty inevitably as they have about any 
treaty that we have ever passed. But this treaty particularly 
has two components that those of us who support it believe are 
important for the country.
    One is, above all, the economic component. And we will have 
a hearing shortly with major leaders from American industry, 
the mining industry, oil and gas, communications, others, 
transportation, who are deeply concerned about the legality of 
their claims, should they capitalize and spend millions of 
dollars exploiting resources from the ocean seabed, and that is 
worth enormous competitive advantage to the United States of 
America and it is worth enormous numbers of jobs.
    But second, there is a very significant national security 
component to this. And we have asked as many of the different 
commanders to come here because each of them in their own way 
will have an ability to be able to share with America their 
individual reasons. And there are individual reasons. They 
differ in some cases of what is most important to them about 
the passage of this treaty. And in its sum total, it is a 
compelling rationale for why this is in America's interest. And 
the committee this afternoon will have another hearing. We will 
have some opponents to the treaty there and we will have others 
who want to come in and oppose it because we think it is very, 
very important. Senator Lugar and I are committed to hear from 
everybody so that the Senate can build the strongest record 
possible and then act in its, hopeful, wisdom based on facts 
and based on that record that is compiled here.
    We have heard from Secretary of State Hillary Clinton. We 
have heard from Secretary of Defense Leon Panetta, and we have 
heard from the Chairman of the Joint Chiefs of Staff, GEN 
Martin Dempsey.
    In addition to support from the witnesses here today, we 
have letters that have urged ratification of the treaty from 
General Mattis, the Commander of the U.S. Central Command; 
General Fraser, Commander of the U.S. Southern Command; Admiral 
Stavridis, Commander of the U.S. European Command; Admiral 
McRaven, Commander of U.S. Special Operations Command; and 
General Kehler, Commander of the U.S. Strategic Command. And I 
will place each of those letters in the record so that people 
can read them in full.
    The Chairman. We do want to have an open and honest 
discussion regarding this. I think that is the important thing 
in building a record regarding this treaty. But today we are 
going to focus on the national security component, and at the 
appropriate time, probably after the election, we will have a 
full Senate classified briefing because there is classified 
material that needs to be digested by Members of the Senate, 
but I think the appropriate time would be sometime after the 
election.
    As the world's foremost maritime power, our national 
security interests are intrinsically linked to freedom of 
navigation. There is a reason that every living Chief of Naval 
Operations has supported the U.S. accession to the Law of the 
Sea during the time that they were serving as Chief of Naval 
Operations. They know that the United States needs the treaty's 
navigational bill of rights for worldwide access to get our 
troops to the fight, to sustain them during the fight, to get 
back home without the permission of other countries or without 
the diversion of having to force one's way into those passages 
and have a secondary struggle apart from the primary conflict 
that one might be engaged in.
    Now, critics say that these navigational provisions are 
nothing new because they are already protected under customary 
international law. But most legal experts and most practical 
analysts of our security will tell you that relying on 
customary international law puts the legal basis for our 
actions outside of our ultimate control. By joining, we would 
maximize U.S. influence on the treaty bodies that play a role 
in interpreting, applying, and developing the Law of the Sea.
    Former Secretaries of State, Henry Kissinger, George 
Shultz, James Baker, Colin Powell, and Condoleezza Rice 
recently wrote an op-ed driving this point home, and I just 
want to quote it. ``Some say it's good enough to protect our 
navigational interests through customary international law, and 
if that approach fails, then we can use force or threaten to do 
so. But customary law is vague and doesn't provide a strong 
foundation for critical national security rights. What's more, 
the use of force can be risky and costly. Joining the 
Convention would put our vital rights on a firmer legal basis, 
gaining legal certainty and legitimacy as we operate in the 
world's largest international zone.''
    I would call everybody's attention to a full-page 
advertisement in today's Wall Street Journal featuring the five 
Secretaries, all of whom cite these reasons for why they 
believe we should ratify this treaty.
    The bottom line is this. Do we really want to entrust our 
national security to an unwritten set of rules where our 
security would be enhanced by having clarity ahead of time? Is 
there any other area in which we choose to leave important 
matters of national security simply to customary law where we 
have an option not to? And the answer to both questions is 
``No.'' Just look at the numbers of treaties we have engaged in 
with respect to nuclear weapons, chemical weapons, and other 
issues.
    We need to join the treaty to ensure critical navigational 
rights and high seas freedoms are protected. Nowhere is the 
nexus between our national security and this treaty more clear 
than in the South China Sea. Becoming a party would give an 
immediate boost to U.S. credibility as we push back against 
excessive maritime claims and illegal restrictions on our 
warships and commercial vessels and those of our allies. There 
is no doubt in my mind that it would help resolve maritime 
issues to the benefit of the United States and our regional 
allies and partners, and I believe if our colleagues have the 
opportunity to hear the classified briefing, which they will, 
and also the testimony here, I think they will come to that 
conclusion.
    It is true that the United States has used diplomatic and 
military assets to refute excessive maritime claims, and I am 
sure we will continue in the future. These freedoms of 
navigation of operations efforts on our behalf will continue 
for sure. But they entail a degree of risk and our Navy cannot 
be everywhere at once no matter what the size of our fleet.
    As leaders and citizens, we owe it to our men and women in 
uniform to provide them with every available means at our 
disposal to perform their dangerous mission. Let me be clear. I 
am not advocating that our military take a step backward, and I 
am not advocating that we replace a strong military with a 
piece of paper. I would never do that, nor would anybody who 
advocates this. What I am advocating is common sense and giving 
the military all of the tools that it needs.
    General Dempsey said it best. This treaty would ``provide 
us an additional tool for navigating an increasingly complex 
and competitive security environment.''
    Ratification would also give the United States greater 
credibility and legitimacy as we seek to hold others to the 
treaty's terms. It would demonstrate by deed, not just by 
words, America's commitment to the rule of law and strengthen 
the foundation for the alliances and partnerships that are 
critical to U.S. national security and global stability.
    So you do not have to take my word for that, but let me 
quote our current Secretary of Defense. Secretary Panetta said: 
``We are pushing for a rules-based order in the region and the 
peaceful resolution of maritime and territorial disputes in the 
South China Sea, in the Strait of Hormuz, and elsewhere. How 
can we argue that other nations must abide by international 
rules when we haven't joined the very treaty that codifies 
those rules?'' I think that is exactly right. The Law of the 
Sea ensures and secures the rights that we need for our 
military and commercial ships to meet our core national 
security requirements.
    Now, some will say that perhaps we should not bother 
joining the treaty because China and some other countries that 
are parties do not always follow the rules. Well, it is true 
that they do not always, but it does not make sense not to join 
the treaty to have a tool to be able to try to force them to or 
hold them accountable. And I will tell you--and we will hear 
the testimony--that there are occasions when our Secretaries 
have raised this issue with the Chinese at various meetings 
from ASEAN to elsewhere, and the Chinese look at us and say you 
are not even a party to the treaty. Who are you to tell us?
    The United States is the greatest maritime power in the 
world, the greatest maritime power the world has ever seen. We 
have the strongest navy, and our economy relies heavily on our 
imports and exports that move by sea. As a result, we have an 
enormous stake in ensuring a stable and predictable set of 
rules for the oceans. Joining the treaty helps us do this.
    So with that, I welcome our distinguished witnesses again. 
Thank you for bringing your expertise to this committee at this 
important moment. We look forward to hearing your insights.
    Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR,
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you, Mr. Chairman. I join you in 
welcoming our distinguished military panel to the Foreign 
Relations Committee.
    I want to underscore for my colleagues a fundamental 
starting point for this hearing. The Commander in Chief, the 
Joint Chiefs of Staff, the United States Navy, the United 
States Coast Guard, and individual combatant commanders are 
asking the Senate to give its advice and consent to the Law of 
the Sea Convention. Our uniformed commanders are telling us, 
unanimously, that U.S. accession to this treaty would help them 
do their job in a time of considerable international threat.
    We have charged the United States Navy with maintaining 
sea-lanes and defending our Nation's interests on the high 
seas. They do this every day, and even in peacetime these 
operations carry considerable risk. The Navy is telling us that 
U.S. membership in the Law of the Sea Convention is a tool that 
they need to maximize their ability to protect United States 
national security with the least risk to the men and women 
charged with this task.
    This request is not the result of a recent reassessment by 
Navy authorities or the enthusiasm of a few leaders. The 
support of the military and the Navy for this treaty has been 
consistent, sustained, and unequivocal. All the members of the 
Joint Chiefs support advice and consent. Their predecessors 
likewise supported the Convention. As seven CNOs wrote in a 
joint letter back in 1998, ``there are no downsides to this 
treaty--it contains expansive terms, which we use to maintain 
forward presence and preserve U.S. maritime superiority. It 
also has vitally important provisions which guard against the 
dilution of our navigational freedoms and prevent the growth of 
new forms of excessive maritime claims.''
    The military is not always right. But the overwhelming 
presumption in the United States Senate has been that if 
military leaders ask us for something to help them do their job 
we do our best to provide them with that tool within the 
constraints of law and responsible budgeting. Articles and 
statements opposing the Convention often avoid mentioning the 
military's longstanding support for Law of the Sea. This is 
because to oppose the Convention on national security grounds 
requires one to say that military leaders who have commanded 
fleets in times of war and peace and who have devoted their 
lives to naval and military studies have illegitimate opinions.
    Those critics who do mention the military's support 
sometimes spin theories as to why the military would back this 
treaty. One explanation that was offered in 2007 was that 
somehow military commanders had been misled by their service 
lawyers. As a former Navy officer who served as an intelligence 
briefer to CNO ADM Arleigh Burke, I can attest that CNOs are 
not easy to deceive. These are some of the most talented and 
politically adept individuals to serve our Nation. The 
suggestion that CNOs, service chiefs, and other military 
leaders are blithely allowing themselves to be led astray by 
Defense Department lawyers is nonsense.
    Other critics have suggested that military support for the 
Convention is simply a function of top uniformed officers 
taking orders from Presidents and Secretaries of Defense. But 
this theory relies on a simplistic understanding of how 
military decisions are made, and it fails to explain why Navy 
leaders have continued to support the Law of the Sea Convention 
long after they have left active service.
    Still other critics suggest that the Navy's expression that 
it will be able to maintain freedom of navigation with or 
without U.S. ratification of Law of the Sea means that 
accession is unnecessary or even undesirable. But the Navy's 
assertion that it will protect sea-lanes under any circumstance 
does not relieve us of the responsibility to give them tools to 
make their job less arduous, less expensive, and less complex. 
The Navy will always have a ``can do'' attitude regarding its 
freedom of navigation mission, but that should not make us 
cavalier about the seriousness of their request for Law of the 
Sea. Navy leaders are not looking for a substitute for naval 
power, they are hoping for a tool that will help resolve 
navigation disputes with all types of nations, including 
allies. They are hoping for a tool that will allow them to 
reduce the share 
of naval assets that must be devoted to freedom of navigation 
missions.
    The ongoing delay in ratifying the Convention would be just 
an interesting political science case study if the United 
States were not facing serious consequences because of our 
nonparticipation. As a nonparty we have little say in 
amendments that could roll back navigational rights that we 
fought hard to achieve. In addition, as a nonparty, our ability 
to influence the decisions of the Commission on the limits of 
the Continental Shelf is severely constrained. Every year that 
goes by without the United States joining the Convention 
deepens our country's submission to ocean laws and practices 
determined by foreign governments without U.S. input.
    I thank once again our distinguished panel for joining us 
today. We certainly look forward to their testimony.
    And I thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Lugar. I 
appreciate it.
    Senator Corker and, I think, Senator Risch, I do not think 
you were here when I mentioned it. You may have been, Senator 
Risch, but we will have a classified briefing at the 
appropriate time down the road, and I think Senators will be 
interested in that and I am asking just to withhold judgment in 
a sense till then.
    I want to recognize that our former colleague and former 
Secretary of the Navy, John Warner, is here, and we are 
delighted to have him as part of the proceedings, and I think 
he has a number of friendly admirals, retired, who are here 
with him, and we appreciate their interest in this.
    I neglected to mention I think today is the Army's 
birthday. Is that correct? Happy Birthday to all of the members 
of the United States Army. And I think it is your birthday, 
General Jacoby, tomorrow. So I wish you many happy returns, 
sir.
    We will begin in this order, if we will: Vice Chairman 
Winnefeld and then Chief of Naval Operations Greenert, Coast 
Guard Commandant Papp, General Fraser, General Jacoby, and 
Admiral Locklear. Admiral thank you for being with us. 
Appreciate it.

STATEMENT OF ADM JAMES A. WINNEFELD, JR., VICE CHAIRMAN, JOINT 
                CHIEFS OF STAFF, WASHINGTON, DC

    Admiral Winnefeld. Mr. Chairman, Senator Lugar, 
distinguished members of the Foreign Relations Committee, good 
morning and thank you for the opportunity to appear before you 
on this topic.
    I appear today as a career sailor, a former combatant 
commander, and in my current position, all assignments that 
have informed my perspectives on the Law of the Sea Convention.
    It is also a privilege to appear alongside another 
generation of military leaders as we join in sharing the view 
that now is the time for the United States to join the Law of 
the Sea Convention.
    I have come to my own judgment on this, not informed by 
lawyers--or actually informed, but not influenced by lawyers--
that joining this treaty will have positive implications for 
our operations across the maritime domain. The Convention 
improves on previous agreements, including the 1958 Geneva 
Convention. It will further protect our access to the maritime 
domain. It will fortify our credibility as the world's leading 
naval power and allow us to bring to bear the full force of our 
influence on maritime disputes. In short, it preserves what we 
have and it gives us yet another tool to engage any nation that 
would threaten our maritime interests.
    We have listened very closely over the many years to the 
rationale for why we should not accede to the Convention, 
including a number of items in public debate, and we take these 
concerns very seriously. We read this and we study it and we 
want to understand it.
    But I would say that some say that joining the Convention 
would result in the loss of sovereignty for the United States. 
I believe just the opposite to be true. Some of these op-eds 
and the like would say that joining the Convention will open 
U.S. Navy operations to the jurisdiction of international 
courts. We know this is not true. The 2007 proposed Senate 
declarations and understandings specifically express our right 
to exempt military activities from the Convention. Many other 
nations that have acceded have already exempted their military 
activities from the treaty without dispute.
    Some say that joining the Convention will require us to 
surrender our sovereignty over our warships and other military 
vessels. I can assure you that we will not let this happen and 
the Convention does not require it. If anything, it further 
protects our sovereignty in this regard well before we would 
have to resort to any use of force.
    Others say that it will cause us to have to alter our rules 
of engagement. This is also false. I can tell you that joining 
the Convention would not require any change whatsoever in the 
rules of engagement that we employ today, including and 
especially our right to self-defense.
    Still others say that it means our naval activities will be 
restricted in or beyond areas in which we now operate. Rather, 
if we do not join the Convention, we are at more risk than ever 
of nations attempting to impose such limitations under evolving 
interpretations of customary international law. That body of 
law is not static. Joining the Convention will protect us from 
ongoing and persistent efforts on the part of a number of 
nations, including those with growing economic and military 
power to advance their national laws and set precedents that 
could restrict our maritime activities particularly within the 
bounds of their Exclusive Economic Zones.
    We attach the term ``lawfare'' to these efforts to erode 
the protections of customary international law. It is a trend 
that is real and pressing and that could place your Navy at 
legal disadvantage unless we join the Convention. And the 
nations that would challenge us in this and other ways are, 
frankly, delighted that we are not a party to the Convention.
    Joining will also give us a stronger moral standing to 
support partners who are being intimidated over questions of 
sovereignty that should be resolved peacefully and voluntarily 
under the Convention. Candidly, I join my boss, Secretary 
Panetta, and Marty Dempsey in finding it awkward to suggest 
that other nations should follow rules that we have not yet 
agreed to ourselves.
    And joining will give us the ability to influence key 
decisions that could affect our sovereign rights and those of 
our partners and friends in the Arctic and elsewhere, and this 
grows more important each day.
    The real question to me is whether our country will choose 
to lead in the maritime environment from the inside or will 
follow from the outside.
    Senator, you know, I tell my sons that there are three 
kinds of people in this world: those who make things happen, 
those who watch what happens, and those who wonder what 
happened. I do not want to see the United States or our Navy or 
Coast Guard wondering what happened when key decisions, 
potentially detrimental to our sovereignty, are made in our 
absence by the 161 members of the treaty.
    Our recommendations to join reflect nearly 2 decades of 
military leaders who have studied this problem closely and 
arrived at the same conclusion that ratification is in our best 
interests. Today I join these officers, including every 
chairman of the Joint Chiefs since 1994, in giving my support 
to the Law of the Sea Convention and in asking for your advice 
and consent.
    I thank you for the opportunity appear this morning, and I 
look forward to your questions. I thank you, sir.
    [The prepared statement of Admiral Winnefeld follows:]

           Prepared Statement of ADM James A. Winnefeld , Jr.

    Mr. Chairman, Senator Lugar, distinguished members of the Foreign 
Relations Committee, thank you for the opportunity to appear before you 
this morning.
    I appear here today as a career Sailor, as a former Commander of 
United States Northern Command, and in my current position--all 
assignments that have informed my perspectives on the Law of the Sea 
Convention.
    It is a privilege to appear alongside so many uniquely qualified 
leaders, each with their own unique perspectives, to join in sharing 
our view that it is time for the United States to join the Law of the 
Sea Convention.
    Joining this treaty will strengthen our posture and operations 
across the maritime domain, including in the Arctic, the Asia-Pacific 
region, the Strait of Hormuz, and the global shipping lanes at the 
heart of our military sealift capabilities.
    Joining will solidify our global maritime leadership, enhance our 
credibility, and, as the world's foremost naval power, allow us to 
bring to bear the full force of our influence on maritime disputes.
    We've listened closely over many years to the rationale for why we 
should not join, and take these concerns very seriously.
    Some say that joining will result in a loss of sovereignty for the 
United States. I believe the opposite to be true.
    Some say joining the Convention will open U.S. Navy operations to 
the jurisdiction of international courts. This is not true, as was 
specifically declared in the 2007 proposed Senate declarations and 
understandings. Many other nations who have joined have exempted their 
military activities from the treaty.
    Some say it will require us to surrender our sovereignty over our 
warships. This is erroneous. We will not let this happen, and the 
Convention does not require it.
    Others say it will cause us to have to alter our rules of 
engagement. This is also false--joining the Convention would not 
require any change whatsoever to our rules of engagement
    Still others say it means our naval activities will be restricted 
in or beyond areas in which we now operate. This is false as well. In 
fact, if we do not join the Convention, we are more at risk than ever 
of nations attempting to impose such limitations under evolving 
interpretations of customary international law.
    Customary international law is not static and joining the 
Convention will protect us from persistent attempts to erode the 
protection of customary international law, as a number of states, 
including those with growing economic and military power, advance 
national laws that attempt to restrict our maritime activities, 
particularly within the bounds of their Exclusive Economic Zones. This 
is contrary to the Convention, but is a trend that is real and pressing 
and that could place your Navy at an enormous legal disadvantage. 
Joining will allow us to go on the offensive against such self-serving 
``lawfare'' activity that runs counter to our vital interests. Nations 
that would challenge us in the maritime domain are delighted that we 
have not joined. Meanwhile, there are other nations--such as North 
Korea, Iran, Syria, and Venezuela--in whose company I believe it is not 
in our interest to remain as nonparties to the Convention.
    Joining will also give us stronger standing to advance treaty 
arguments in support of partners who are being intimidated over 
disputes that should be resolved peacefully and voluntarily under the 
Convention. Candidly, I find it awkward to suggest that other nations 
should follow rules that we haven't even formally agreed to ourselves.
    And joining will give us a seat at the table when key decisions are 
being made that could affect our sovereign rights and those of our 
partners and friends in the Arctic--this is more timely than it has 
ever been in the history of the Convention.
    Our recommendation to join reflects nearly two decades of military 
leaders who have studied this problem and who have continued to come to 
the clear conclusion that ratification is in our best interests.
    Today, I join those officers, including every Chairman of the Joint 
Chiefs since 1994 when this was first submitted, in giving my 
unwavering support to the Law of the Sea Convention and in asking for 
your advice and consent.

    The Chairman. Thank you very much. Appreciate it.
    Admiral Greenert, proceed.

     STATEMENT OF ADM JONATHAN W. GREENERT, CHIEF OF NAVAL 
             OPERATIONS, U.S. NAVY, WASHINGTON, DC

    Admiral Greenert. Thank you, Chairman Kerry, Ranking Member 
Lugar, distinguished members of the committee. I am honored to 
appear before you to discuss the Law of the Sea Convention. You 
will have to excuse me. I have a little bit of laryngitis, but 
I will get through this.
    This morning I would like to make three points, if I may.
    No. 1, the Law of the Sea Convention will help ensure the 
access that the Navy needs to operate forward, and Senator, 
operating forward is what we are about. That is where we are at 
our best.
That is where we serve the Nation best. That is the key to our 
effectiveness.
    No. 2, the Convention will provide a formal and consistent 
framework with legal certainty to peacefully settle maritime 
disputes.
    And No. 3, the Convention will help ensure we remain 
consistent with our principles and will enhance our 
multilateral cooperation. That I have found in spades as I have 
interfaced with heads of navy around the world.
    As the world's preeminent maritime power, the U.S. Navy 
will benefit from the support the Convention provides our 
operations, especially the broad navigational rights that are 
guaranteed on the high seas and inside Exclusive Economic Zones 
of the other nations. For example, in the past several years, 
some nations in the Middle East and the Asia-Pacific region 
have complained about U.S. Navy survey ships operating within 
their Exclusive Economic Zones. Commanders have consistently 
responded by asserting our rights under the Convention and 
customary international law. However, our argument would carry 
much more weight if the United States were a party to the 
Convention. Joining the Convention would give our day-to-day 
maritime operations a firmer, codified legal foundation. It 
would enable and strengthen our military efforts. It will not 
limit them.
    The Convention provides a formal and consistent framework 
for peaceful resolution of maritime disputes. The Convention 
defines the extent of control that nations can legally assert 
at sea and prescribes procedures to peacefully resolve 
differences. It is an important element in preventing 
disagreements from escalating into a confrontation or 
potentially conflict.
    Recent interference with our operations in the western 
Pacific and some rhetoric by Iran about closing the Strait of 
Hormuz underscore the need to be able to use the Convention to 
clearly identify and respond to violations of international law 
that might attempt to constrain our access. As a member of the 
Convention, our ability to press the rule of law and to 
peacefully deter conflict will certainly be enhanced.
    Remaining outside the Convention is just inconsistent with 
our principles, our national security strategy, and our leading 
position in maritime affairs. For example, our forces in the 
U.S. Fifth Fleet in the Arabian Gulf lead a coalition maritime 
force that enforces maritime security in the greater Middle 
East. Out of the 26 nations that serve in this coalition, only 
3, including the United States, are not a party to the 
Convention. This coalition asserts rights on a daily basis 
under the Convention to visit vessels, counter piracy, and 
render assistance to vessels in danger. However, America's 
status as a nonparty to the Convention is sometimes questioned 
by our coalition partners. Acceding to the Convention will 
enhance our position as a leader of that coalition and a leader 
in the world of maritime nations in the Middle East and 
elsewhere.
    In closing, aided by the framework provided by the 
Convention, your Navy will continue to be critical to our 
Nation's security and prosperity.
    I appreciate the committee's longstanding support of the 
men and women of the Navy, and I look forward to continuing to 
work with you as we address these challenges. Thank you, 
Senator.
    [The prepared statement of Admiral Greenert follows:]

             Prepared Statement of ADM Jonathan W. Greenert

    Chairman Kerry, Senator Lugar, and members of the committee, thank 
you for the opportunity to testify in support of the United States 
joining the Law of the Sea Convention (LOSC). I join my predecessors in 
supporting the Convention and I believe it is important to our ability 
to reduce our reliance on customary international law, provide a 
mechanism to resolve disputes, assure our access across the maritime 
domain, and protect our Nation's security and prosperity. I appreciate 
your continued support of our 625,000 Sailors and civilians and look 
forward to working together in pursuing our national security 
objectives.
    As the world's preeminent maritime power, the United States will 
benefit from the support LOSC provides to our operations. Our ability 
to deter aggression, contain conflict, and fight and win our Nation's 
wars depends upon our ability to freely navigate the world's oceans. 
The rules inherent in LOSC support worldwide access for military and 
commercial ships and aircraft without requiring permission of other 
countries, such as in the archipelagic waters of countries like 
Indonesia, or in the Arctic where receding ice is opening new routes 
for transit. The Convention affords our submarines the right to transit 
submerged and aviation-capable ships to transit while conducting flight 
operations through international straits; establishes broad 
navigational rights and freedoms for our ships and aircraft in the 
exclusive economic zones of other nations and on the high seas; and 
reinforces the sovereign status of our vessels. The Convention affords 
navigational rights for ships without regard to cargo or means of 
propulsion, an extremely important right given our extensive use of 
nuclear power.
    LOSC provides a formal and consistent framework for the peaceful 
resolution of maritime disputes. It defines the extent of control 
nations can legally assert at sea and prescribes procedures to counter 
excessive maritime claims. Acceding to LOSC will increase our 
credibility in invoking and enforcing the treaty's provisions and 
maximize our influence in the interpretation and application of the law 
of the sea. Recent interference with our operations in the Western 
Pacific and rhetoric by Iran to close the Strait of Hormuz underscore 
the need to use the Convention to clearly identify and respond to 
violations of international law that seek to constrain access to 
international waters. As a party to the Convention, we will bolster our 
position to press the rule of law and maintain the freedom to conduct 
military activities in these areas.
    Remaining outside LOSC is inconsistent with our principles, our 
national security strategy and our leadership in commerce and trade. 
Virtually every major ally of the United States is a party to LOSC, as 
are all other permanent members of the U.N. Security Council and all 
other Arctic nations. Our absence could provide an excuse for nations 
to selectively choose among Convention provisions or abandon it 
altogether, thereby eroding the navigational freedoms we enjoy today. 
Accession would enhance multilateral operations with our partners and 
demonstrate a clear commitment to the rule of law for the oceans. For 
example, under the Convention, warships are authorized to stop and 
board vessels if they are suspected to be without nationality or 
engaged in piracy. By joining LOSC, we would ``lock in'' these 
authorities as a matter of treaty law and thus strengthen our ability 
to conduct counterpiracy operations across the globe and provides an 
important tool to support counterproliferation efforts, and maritime 
interdiction of terrorists and illegal traffickers tied to terrorism.
    LOSC supports the operations of our military forces. Under the 
Convention we retain the right to define what constitutes our own 
military activities, which are excluded from dispute resolution 
procedures. Moreover, the Convention does not limit our ability to use 
force in self-defense. I would not support LOSC if I thought it limited 
our Nation's military options.
    The Navy's ability to retain access across the maritime domain and 
adjacent airspace, especially the strategic maritime crossroads, would 
be enhanced by accession to LOSC. As the world's preeminent maritime 
power, the United States has much to gain from the legal certainty and 
global order brought by LOSC. As a party to LOSC, we will be in a 
better position to counter the efforts of nations to restrict freedom 
of the seas. The United States should not rely on customs and 
traditions for the legal basis of our military and commercial activity 
when we can instead use this Convention. It is an important element of 
protecting our Nation's security and prosperity.

    The Chairman. Thank you very much, sir. We appreciate it.
    Commandant.

 STATEMENT OF ADM ROBERT J. PAPP, JR., COMMANDANT, U.S. COAST 
  GUARD, U.S. DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, DC

    Admiral Papp. Good morning, Chairman Kerry, Senator Lugar, 
and the distinguished members of the committee.
    It is my privilege to testify before you here today on how 
the United States should accede to the Law of the Sea 
Convention because it will enhance the Coast Guard's operations 
and maritime leadership. Like six previous commandants, I urge 
you to accede to the Convention without further delay.
    Having served on six Coast Guard cutters, commanding four 
of them, I view things through a sailor's eye. My fictional 
hero, Captain Jack Aubrey of Patrick O'Brian's ``Master and 
Commander'' book series always positioned his ship in battle so 
that he could hold the weather gauge. The ship with the weather 
gauge is upwind and has greater ability to maneuver relative to 
other ships and it maintains its position of advantage and is 
able to dictate the terms of engagement. I can think of no 
better analogy to describe the Law of the Sea Convention than 
providing the Coast Guard with the weather gauge to protect 
Americans on the sea, protect America from threats from the 
sea, and to protect the sea itself.
    Since the founding of our Nation, American prosperity has 
depended upon having safe, reliable, and secure maritime trade. 
Today the Convention's provisions set forth the global maritime 
framework, among other things. The Convention's provisions 
contain internationally recognized sovereign maritime 
boundaries. It is this framework that we rely upon every day to 
aid mariners in distress, to protect our fish stocks, to 
intercept illicit traffickers attempting to deliver drugs, 
persons, and other illegal cargos to our shores, and to 
preserve our maritime sovereignty, navigational rights, and 
freedoms. Indeed, our many bilateral and multilateral law 
enforcement agreements that we rely upon to stop drug 
smugglers, interdict human traffickers, and protect our oceans 
are predicated upon the Convention. These agreements, which 
have been described as the fabric of the Law of the Sea, are 
concluded, interpreted, and enforced under the Convention's 
framework.
    The Convention also provides us with the largest Exclusive 
Economic Zone, or EEZ, of any coastal State. Our EEZ contains 
vast fisheries, energy, and other resources. Beyond the EEZ 
lies the Extended Continental Shelf, or ECS. Its seabed, 
particularly off Alaska, is a new frontier that contains 20 to 
30 percent of the world's untapped fossil fuel resources. And 
it is the Convention that contains the mechanisms to seek and 
ensure international recognition of our sovereign ECS rights. 
Joining the Convention will not only put these sovereign rights 
on the strongest legal footing, it will also bolster our 
ability to ensure stewardship of our ECS resources.
    There is no better example of this than the emerging 
Arctic. Our ability to effectively plan and allocate Arctic 
resources depends in part upon the delineation of maritime 
boundaries, sovereign rights, privileges, and navigational 
freedoms. Yet, as we work alongside our partner Arctic nations 
on issues of governance such as cooperative search and rescue 
agreements, oil spill prevention, and response protocols and 
delineation of maritime claims, we remain the only Arctic 
nation that is not a party to the Convention.
    Being a nonparty detracts from our ability to best provide 
for the safety, security, and stewardship of our vast resource-
rich maritime and emerging Arctic domains. The Convention 
contains an established legal framework for the oceans. Unlike 
customary international law which can change, the Convention 
codifies this framework and we follow this framework. We demand 
others do so. Yet, we remain outside of it.
    In sailors' terms, this puts us downwind and it forces us 
to tack up into the wind when we should be leading on maritime 
issues. That is why I am urging you today to seize the weather 
gauge and to accede to the Convention.
    Thank you for this opportunity to testify and I look 
forward to answering your questions.
    [The prepared statement of Admiral Papp follows:]

             Prepared Statement of ADM Robert J. Papp, Jr.

    Good morning, Chairman Kerry, Ranking Member Lugar, distinguished 
members of the committee, I am pleased to have the opportunity to 
discuss how United States accession to the Law of the Sea Convention 
would enhance Coast Guard operations and advance our global leadership. 
Like the six commandants before me, I am firmly convinced that the 
legal certainty and stability accorded by the Convention will 
strengthen Coast Guard efforts in: (1) sustaining mission excellence as 
America's maritime first responder; (2) protecting American prosperity; 
and (3) ensuring America's Arctic future.
    The United States is a maritime and Arctic nation. We have one of 
the world's longest coastlines, measuring more than 95,000 miles, and 
the world's largest Exclusive Economic Zone (EEZ), responsible for over 
$122 billion in revenue annually. The U.S. maritime transportation 
system is comprised of 361 ports and thousands of miles of maritime 
thoroughfares that support 95 percent of U.S. foreign trade. Most of 
that trade is transported on over 7,500 vessels that make more than 
60,000 visits to U.S. ports annually. The need to secure our maritime 
rights and interests, including ocean resources, is paramount. To this 
end, the Coast Guard maintains a persistent maritime presence to 
protect Americans on the sea, to protect America from threats delivered 
by sea, and to protect the sea itself.

  SUSTAINING MISSION EXCELLENCE AS AMERICA'S MARITIME FIRST RESPONDER

    As one of the five armed services of the United States, the Coast 
Guard provides support to the geographic combatant commanders and U.S. 
naval presence around the world to ensure the Nation's national 
security. The ability to navigate freely in international waters, 
engage in innocent and transit passage, and enjoy high seas freedoms 
are critical rights under international law, which the Convention 
codifies. These rights allow our cutters and aircraft to move without 
the permission of or need to provide advance notice to other coastal 
nations. I add my voice to the other armed services in urging that we 
``lock in'' these crucial rights through the Convention to protect them 
from erosion.
    We currently assert navigational rights and freedoms based on 
customary international law, and we will continue to do so if necessary 
to fulfill the responsibilities the Nation entrusts to us. But 
customary international law can evolve over time and is subject to 
change and erosion. By becoming a party to the Convention we will 
secure these favorable rules on the strongest legal footing and better 
position the Coast Guard to exercise these rights to sustain 
operations. For the Coast Guard, one of the Convention's most important 
provisions is the stabilization of territorial sea claims to 12 
nautical miles. Joining the Convention strengthens our position to 
contest and curtail foreign excessive territorial sea claims.
    Although we do not recognize excessive territorial sea claims made 
by some other nations, they nevertheless impact our mobility and can 
interfere with our drug interdiction and other law enforcement 
activities. By limiting territorial sea claims to 12 nautical miles, 
the Convention secures vital boarding rights for the Coast Guard 
outside this zone. Similarly, the Convention secures the important 
rights of approach and visit to determine vessel nationality. Where 
vessel nationality is not properly established, the Convention provides 
the process for concluding that a vessel is stateless and allowing the 
enforcement of U.S. laws. These provisions are particularly important 
to our efforts to interdict and prosecute smugglers using stateless 
vessels for illicit activity, including semi- and fully submersible 
vessels. Last year, the Coast Guard interdicted 40 vessels and six 
semisubmersibles engaged in drug trafficking, assimilating many of 
those vessels to stateless vessels.
    For many of the laws the Coast Guard enforces, especially those 
involving drug trafficking, illegal immigration, and counterterrorism, 
we leverage international partnerships to monitor, interdict, and 
prosecute those who threaten our Nation's security. Our international 
partners are overwhelmingly parties to the Law of the Sea Convention. 
Our status as a nonparty presents an unnecessary obstacle to gaining 
their cooperation. Accession to the Convention would most effectively 
cement a common cooperative framework, language, and operating 
procedures used in securing expeditious boarding, search, enforcement, 
and disposition decisions, thereby enabling on-scene personnel, 
cutters, and maritime patrol aircraft to pursue further mission 
tasking.
    We also must cooperate and engage with our international partners 
to advance global and regional security priorities. Strengthening these 
relationships is crucial for sustaining our international leadership. 
Acceding to the Convention is an important step to achieving these 
goals. Frequently, the Coast Guard works internationally to train other 
nations' navies. These navies more closely resemble the Coast Guard in 
authority and activity, uniquely positioning us to expand important 
maritime partnerships. The Convention serves as our guiding framework 
in helping these navies develop domestic law, protocols, and 
strategies. The Coast Guard needs the Convention to better promote 
United States security interests through capacity-building. Building 
this capacity is an important force multiplier for the Coast Guard that 
further secures stability of the oceans, promotes efficient maritime 
commerce, and aids us in achieving strategic objectives regarding 
safety, security, and environmental protection.

                     PROTECTING AMERICAN PROSPERITY

    Joining the Convention will enhance the Coast Guard's ability to 
protect America's prosperity by facilitating commerce and preserving 
ocean resources. Commercial ships, which are the engines that drive the 
international supply chain, rely on the same navigational rights as our 
cutters to traverse the oceans. Joining the Convention guarantees that 
commercial ships will continue to enjoy these same rights and 
navigation freedoms, assuring that maritime shipping remains the most 
cost-efficient mode of transportation. America needs the Convention to 
secure stability in maritime trade, boost economic confidence, and open 
the door to exploitation of deep seabed resources by U.S. industry.
    Vibrant and safe U.S. ports are also vital to a healthy and 
thriving economy. The safety of U.S. ports, and the vessels that call 
on them, is a function of U.S. port state control. The Coast Guard 
maintains a comprehensive port state control program, including vessel 
inspections, assuring the proficiency of mariners, and monitoring port 
activity to ensure compliance with the highest standards of maritime 
safety, security, and environmental protection. Uniform international 
standards, negotiated and adopted through the International Maritime 
Organization (IMO), are the foundations of this program. These 
standards, accepted by the international community, are the linchpin of 
a transportation system that depends on speed--inconsistent and 
misunderstood standards only lead to expensive delay and mishaps.
    In international maritime shipping, where a ship may be flagged by 
one jurisdiction, owned by a party in another jurisdiction, chartered 
by a party in yet another jurisdiction, sail through the coastal zones 
of several jurisdictions, and call in the ports of many other 
jurisdictions, uniformity of standards is key. The concept of port 
state control recognizes responsibility through the hierarchy of a 
ship's affiliations (including owner, ship classification society, and 
flag state) to comply with these internationally agreed standards, 
which should result in compliance wherever a ship is located, including 
when it sails through waters of the United States but is not calling on 
a U.S. port (and thus not subject to our port state jurisdiction).
    The shipping standards negotiated at the IMO are the fabric of the 
port state control regime that is underpinned by the Convention. It is 
the Convention that sets forth the responsibilities of flag states, 
port states, and coastal states for shipping, and the Convention is the 
agreement that holds nations accountable for adhering to those 
responsibilities. Because of the currently anomalous situation where 
the United States is a party to the substantive IMO standards, but not 
the underlying legal framework of the Convention, our ability to ensure 
comprehensive global accountability demanded by the port state control 
framework is weakened. Acceding to the Convention would strengthen 
Coast Guard negotiation efforts at the IMO, where we lead in the 
continued development of these important international standards. 
Although other countries look to us for leadership, there is growing 
skepticism for certain U.S. negotiating positions because the United 
States is not a party to the Convention. Becoming party to the 
Convention would increase the Coast Guard's credibility as a leader at 
IMO and result in greater effectiveness in ensuring that U.S. interests 
are reflected in the standards that are ultimately adopted. The Coast 
Guard needs the Convention to better promote United States safety, 
security, and environmental interests at the IMO.
    The Convention also maximizes legal certainty for United States 
sovereign rights over ocean resources in the largest EEZ in the world, 
as well as energy and mineral and other resources on our Extended 
Continental Shelf. The Convention provides the mechanism to assure 
international recognition of additional United States sovereign rights 
on an Extended Continental Shelf. Moreover, due to overfished and 
depleted fish populations, effective management of migratory fish 
stocks and fisheries will continue to be a contentious issue for the 
foreseeable future. The Convention is widely accepted as the legal 
framework under which all international fisheries are regulated and 
enforced. The Convention imposes responsibilities on the coastal states 
to manage their fishery resources responsibly and provides a process 
for resolving conflicts between competing users. The Coast Guard 
defends United States sovereign rights by protecting our precious ocean 
resources from poaching, unlawful incursion, and illegal exploitation. 
Joining the Convention places these sovereign rights on a firmer legal 
foundation, bolstering the Coast Guard's continued ability to ensure 
our Nation's sovereign rights are respected.
    In particular, becoming a party to the Convention will give the 
Coast Guard greater leverage in our efforts to eliminate illegal, 
unreported, and unregulated fishing. American fishermen are currently 
abiding by standards contemplated by the Convention and further 
detailed in the related U.N. Fish Stocks Agreement. They are adversely 
affected by foreign fishermen who illegally harvest highly migratory 
fish stocks. In another anomalous situation, the United States is a 
party to the U.N. Fish Stocks Agreement, which is directly related to 
the legal regime of the Law of the Sea Convention, even though we have 
not joined the underlying Convention. As a party to the Convention, we 
would be in a stronger position to persuade other nations to abide by 
the U.N. Fish Stocks Agreement and other modern international standards 
of fisheries management and thus advance our Nation's interests in this 
field.
    The Convention also provides a framework for the United States, as 
a coastal state, to address marine pollution from foreign sources at 
the international level. The Convention's environmental provisions 
support the Coast Guard's strategic goal and statutory mission to 
enforce existing U.S. environmental laws relating to the oceans. Even 
spills far offshore can have devastating impacts to the economic well-
being of Americans whose livelihoods depend on the oceans. The Coast 
Guard is the Nation's first responder for any oil spill on the ocean. 
We need the strongest legal footing possible to confront any crisis on 
the ocean, particularly in the case of transboundary pollution. As 
other nations increase their offshore energy production and exploration 
efforts in areas close to our shores, it is imperative that the Coast 
Guard work cooperatively with those nations to prevent and respond to 
incidents. The Convention provides a primary basis of cooperation, but 
unlike all our neighboring nations, the United States is not a party. 
Joining the Convention will give the Coast Guard a much-needed 
additional tool to reduce the risk of marine pollution from foreign 
nations and vessels from reaching our waters and shores.

                    ENSURING AMERICA'S ARCTIC FUTURE

    As the ice pack in the Arctic recedes, more use will be made of 
those waters, greatly increasing American economic interests in the 
region. Melting ice in the Arctic also raises the significance of 
issues such as rights of navigation and offshore resource exploration 
and extraction and environmental preservation and protection. The Coast 
Guard has robust statutory authority to protect U.S. interests in the 
Arctic. The Coast Guard has been operating in the Arctic since Alaska 
was a territory, and our responsibilities will continue to expand with 
America's interests. As an example, the United States is in the midst 
of implementing a comprehensive maritime search and rescue agreement 
with other Arctic nations, yet the United States is the only Arctic 
nation not a party to the Convention. Additionally, we are negotiating 
a new agreement with our Arctic neighbors on oil pollution preparedness 
and response in the region. The Convention is also the ``umbrella'' for 
those discussions. Our negotiation position would be much stronger if 
the United States were a party to the Convention.
    Arctic nations are using the Convention's provisions in article 76 
to file Extended Continental Shelf submissions with the Commission on 
the Limits of the Continental Shelf to perfect their claims to areas 
over which they have exclusive rights to resources on and beneath the 
Arctic seabed. A United States submission to the Continental Shelf 
Commission could help perfect U.S. claims to major additional seabed 
resources out to 600 miles from the Alaska coast, far beyond the 200 
mile EEZ. This area implicates many of the Coast Guard's missions, 
including protection of the marine environment.
    We must continue to seek out opportunities with our Arctic 
neighbors and the global community to address the critical issues of 
governance, sovereign rights, environmental protection, and security in 
the Arctic. While there are many challenges, the increasingly wet 
Arctic Ocean presents unique opportunities. The Convention provides the 
key legal framework we need to take advantage of these opportunities. 
The Coast Guard needs the Convention to ensure America's Arctic future.

                            WHY ACCEDE NOW?

    The Convention and the subsequent 1994 Agreement on implementing 
Part XI were diplomatic triumphs for the United States. These documents 
preserve and protect our interests by codifying international law that 
is highly favorable to the United States as both a coastal state and 
preeminent maritime power. In order for the Coast Guard to most 
effectively use the Convention's provisions, the United States must 
become party.
    For decades, we have largely acted in accordance with a treaty that 
we have no ability to shape and without the additional benefits that 
come from being a party. We need to lock in the favorable navigational 
rights that our military and shipping interests depend on. We need to 
be a party as the best way to secure international recognition of our 
sovereign rights over our Extended Continental Shelf. We need to be a 
party to influence and lead the further development of the 
international rules governing the oceans. Too much is at stake to rely 
on the inherently changeable nature of customary international law to 
protect our Nation's economic and security interests. Joining the 
Convention will best position us to protect the rights accorded by the 
Convention and to defend against any attempt to erode those rights.

                               CONCLUSION

    The Coast Guard needs a comprehensive legal framework that 
addresses activities on, over, and under the world's oceans to further 
its statutory missions. We also need a solid legal framework that 
customary international law cannot provide as it remains subject to 
change based on state practice--whether at the local, regional, or 
global level. The Convention is this certain framework. The Convention 
was, and still is, a resounding success for U.S. diplomacy. Acceding to 
the Convention will strengthen the Coast Guard's ability to protect 
U.S. maritime interests. The Convention is widely accepted; there are 
currently 162 parties. Of the eight Arctic nations, only the United 
States is not a party to the Convention.
    I can see no downside to the Coast Guard in the United States 
acceding to the Law of the Sea Convention. To the contrary, joining the 
Law of the Sea Convention will immensely enhance the Coast Guard's 
ability to address emerging threats that challenge our Nation and 
safeguard the American people, our environment, and ocean resources 
that benefit all Americans.

    The Chairman. Thank you very much, sir. We appreciate it.
    General Fraser.

   STATEMENT OF GEN. WILLIAM M. FRASER III, COMMANDER, U.S. 
        TRANSPORTATION COMMAND, SCOTT AIR FORCE BASE, IL

    General Fraser. Chairman Kerry, Ranking Member Lugar, and 
distinguished members of this committee, it is indeed my 
distinct privilege to be here with you today representing the 
United States Transportation Command. I appreciate this 
opportunity to testify concerning the Law of the Sea 
Convention, and I join an array of other senior military 
officers, both past and present, which support the Law of the 
Sea Convention.
    The United States Transportation Command is the Department 
of Defense's distribution process owner and global distribution 
synchronizer responsible for planning global deployment and 
distribution operations. USTRANSCOM relies on unfettered global 
mobility, unimpeded flow of cargo by air and sea through 
strategic chokepoints and unchallenged access to the world's 
navigation lanes by our military assets and our commercial 
industry partners to support our forces around the globe. On 
any given day, USTRANSCOM has approximately 30 ships loading, 
unloading, or underway, and we have a mobility aircraft taking 
off and landing every 90 seconds. These assets are operated by 
our military components and our commercial partners. It is 
vital that we maintain freedom of the high seas and 
international overflight routes for our military and our 
commercial operations as these freedoms are essential to our 
Nation's strategic mobility.
    Our military conducts activities and operations across air, 
ocean, and sea-lanes. Unobstructed passage through these lanes 
is paramount for the United States Transportation Command as we 
provide support and sustainment to our warfighters around the 
world. For example, our civilian air carriers and transporters 
transport almost all of our military passengers and much of our 
air cargo over the ocean and sea-lanes. Unhindered overflight 
of these transports is crucial to our mission's success. 
Moreover, the vast majority of our military equipment and 
supplies are transported around the world through ocean and 
sea-lanes by our commercial partners. They conduct these 
movements typically without escort or onboard security teams.
    In today's environment, we assess our navigation and 
overflight rights through customary international law. To 
better secure our global access, joining the Law of the Sea 
Convention would provide a solid legal foundation to our 
military and commercial partners that transport the lifeline of 
supplies and equipment to our warfighters around the globe. 
Specifically, accession to the Law of the Sea Convention 
secures navigation and overflight rights for the vessels and 
aircraft operated by both our military and our commercial 
partners.
    The Law of the Sea Convention protects our military 
mobility by legally binding, favorable transit rights that 
support our ability to operate around the globe anytime and 
anywhere. Our sealift industry partners will be internationally 
protected as they transit the strategic chokepoints from the 
Strait of Gibraltar to the Straits of Malacca and Hormuz. As we 
move forward and look to the future challenges, support of the 
Law of the Sea Convention is essential to our national strategy 
and security.
    Chairman Kerry, Ranking Member Lugar, and all the members 
of this committee, I want to thank you for your continued 
support of United States Transportation Command, and to all of 
our men and women in uniform and especially to their families. 
I am grateful for this opportunity to be here today with my 
distinguished colleagues at this table, and I ask that my 
written statement be submitted for the record. I look forward 
to your questions. Thank you.
    [The prepared statement of General Fraser follows:]

            Prepared Statement of Gen. William M. Fraser III

     Chairman Kerry, Senator Lugar, and distinguished members of the 
committee, it is my privilege as the Commander of the United States 
Transportation Command (USTRANSCOM) to testify today on the Law of the 
Sea Convention. As the Department of Defense's Distribution Process 
Owner and Global Distribution Synchronizer, USTRANSCOM relies on 
unfettered global mobility, unimpeded flow of cargo by air and sea 
through strategic chokepoints, and unchallenged access to the world's 
navigational lanes by our military assets and our commercial industry 
partners to support our forces around the globe. I believe that a 
comprehensive, globally accepted, and stable legal basis for navigating 
and overflying the world's oceans is essential to support our forces 
worldwide and to ensure our national security.
    Joining this Convention would codify several important recognized 
rights of navigation into a binding legal foundation. It supports our 
national security interests by defining the rights of U.S. military and 
civilian vessels as they meet our mission requirements, reaffirms the 
sovereign immunity of our warships and other vessels owned by the 
United States and used for government noncommercial service, and 
preserves our right to conduct military activities and operations in 
exclusive economic zones. As the defense strategy places greater 
demands on our ability to mobilize forces, guaranteed access to 
shipping and overflight lanes becomes increasingly important to support 
our forces overseas.
    Currently, the United States relies upon customary international 
law as the primary legal basis to secure global freedom of access. 
However, as emerging powers around the world grow and modernize, states 
may seek to redefine or reinterpret customary international law in ways 
that directly conflict with our interests, including freedom of 
navigation and overflight, potentially challenging our global mobility 
needs. This Convention represents the best guarantee against erosion of 
essential navigation and overflight freedoms that we take for granted 
through reliance on customary international law. Accession will give 
the United States leverage to counter efforts by other nations seeking 
to reshape current internationally accepted rules we depend on for 
transporting cargo and passengers.
    USTRANSCOM's military and commercial partners operate across every 
portion of the globe in defense of our national interests. Before we 
send them into harm's way, it is important for our sailors and airmen 
to know they have the backing and authority of U.S. accession to the 
Convention on the Law of the Sea rather than depending on customary 
international law which some nations attempt to ignore or challenge. 
This is especially true for strategic chokepoints such as the Bab Al 
Mandeb, the Gulf of Aden, and the Strait of Hormuz. Iran's recent 
challenge to freedom of navigation through the Strait of Hormuz for a 
military exercise is an example of threats to international law and our 
ability to move critical supplies through that region. Acceding to the 
Convention would provide U.S. forces and commercial partners the 
strongest legal footing for countering an Iranian antiaccess attempt to 
close the strait to international shipping.
    Being a member of the Convention will help to simplify this complex 
maritime environment both for our military forces as well as our 
commercial partners who have played a critical role in developing new 
routes for transporting DOD cargo and in enabling access to a vast 
global infrastructure for transport of DOD cargo. More than 90 percent 
of all military supplies and equipment are transported around the world 
by sea, much of it by commercial vessels. This Convention provides 
important legal support for our commercial partners who transport our 
cargo, unescorted by U.S. warships, under the legal regimes of the Law 
of The Sea Convention. Without codification of those rights, our 
commercial partners are at greater risk.
    Likewise, the Convention will provide important legal support to 
our civil air carrier partners who transport nearly all military 
passengers and a significant amount of DOD air cargo over the sea. As 
we continue to improve efficiency in air transportation, unimpeded 
overflight access to the world's oceans and sea-lanes will remain a 
necessary component to conducting our mission.
    The Convention would also support freedom of navigation and 
overflight in emerging areas of strategic importance including the 
South China Sea and the Arctic. The defense strategy requires continued 
and future access to navigational routes throughout Asia, particularly 
in the South China Sea, in order to sustain our forces in that region. 
As the Arctic becomes increasingly important for mobility, the 
interpretation of the navigational provisions will become even more 
critical. We need U.S. leadership as a party to the Convention to 
influence and lead this discussion. In both regions, the Convention 
will help defend our rights to transport cargo and personnel against 
nations attempting to assert extended territorial claims.
    The United States has a rich history as a maritime and aviation 
leader in the international community. We must continue to lead in 
ensuring access rights to shipping lanes and overflight routes. 
Accession to the Law of the Sea Convention allows the United States to 
continue to have a leadership role in developing and influencing the 
Law of the Sea as a leader among sovereign nations. I strongly support 
U.S. accession to the Convention.

    The Chairman. Thank you very much, General.
    Let me just say that all written testimonies will be placed 
in the record in full as if delivered in full, and we look 
forward to having them part of the record.
    General Jacoby.

   STATEMENT OF GEN CHARLES H. JACOBY, JR., COMMANDER, U.S. 
         NORTHERN COMMAND, PETERSON AIR FORCE BASE, CO

    General Jacoby. Chairman Kerry, Senator Lugar, 
distinguished members of the committee, thank you for the 
opportunity to appear today.
    As Commander of U.S. Northern Command, I am assigned 
responsibility for military defense of our continental United 
States homeland and nearby waters. As Commander of North 
American Aerospace Defense Command, I am assigned 
responsibility for maritime and aerospace warning and for 
aerospace control to the Governments of the United States and 
Canada.
    Based on my command responsibilities, principally in the 
Arctic, my experience, and our changing operating environment, 
I believe there is a compelling reason for the United States to 
accede to the Law of the Sea Convention for the safety and 
security of our homeland. In the maritime environment, our 
military defensive operations are best served by a clear, 
stable, rules-based, cooperative international framework that 
helps our friends and allies work with us, helping us be the 
security partner of choice.
    Now, Arctic cooperative security is one of the five lines 
of operation delineated in U.S. Northern Command's theater 
campaign plan. U.S. accession to the Convention, joining all 
the other seven Arctic nations, would be helpful in supporting 
peaceful opening of the Arctic, which is my mission, and in 
dealing with non-Arctic States that have shown an interest in 
engaging in the Arctic and in resolving sovereignty, natural 
resource, infrastructure, communication, navigation, military 
presence, and public safety issues in the Arctic as human 
activity increases.
    For our maritime warning mission, accession to the 
Convention will help us establish the global operational 
relationships that are critical to information-sharing, 
recognition of patterns of activity, and quick identification 
of safety, security, and defense issues.
    We are grateful for everything the members of the committee 
have done to ensure our ability to defend our citizens here at 
home. I am honored to be here, and I look forward to your 
questions.
    [The prepared statement of General Jacoby follows:]

            Prepared Statement of GEN Charles H. Jacoby, Jr.

    Chairman Kerry, Senator Lugar, distinguished members of the 
committee, I appreciate this opportunity to provide my position on the 
Law of the Sea Convention. As a combatant commander with mission 
responsibilities for homeland defense and civil support in the maritime 
approaches to the homeland with an increasingly accessible Arctic 
Ocean, I fully support our Nation's accession to the Convention. From 
an Arctic perspective, our accession to the Convention is important to 
encouraging cooperative relationships among Arctic states and securing 
Continental Shelf limits and natural resources in the Arctic as human 
activity increases. From a global perspective, with the overwhelming 
majority of countries being party to the Convention, it is the 
internationally recognized legal framework that will formalize our 
Nation's standing and leadership where our vital interests are at 
stake, secure U.S. rights over extensive marine resources, promote 
freedom of navigation and overflight, and support our national security 
interests in the maritime domain.
    Acceding to the Convention will reinforce our leadership role in 
shaping international maritime policy and overseeing peaceful economic 
activity on and under our world's seas and oceans. Greater access to 
the Arctic Ocean highlighted by Shell's exploratory drilling this 
summer and the increasing trend in commercial shipping through the 
Bering Strait are new circumstances that highlight the benefits the 
United States can access through the Convention for continued economic 
progress, freedom of maneuver, conservation of offshore resources, and 
protection of the sensitive maritime environment. Joining the 
Convention would help our Nation in each of these respects.
    Cooperative partnerships are essential for our national security. 
As human activity in the Arctic region increases, a cooperative and 
peaceful opening of Arctic waters is in the interest of the global 
community and in particular the Arctic nations. Accordingly, Arctic 
Cooperative Security is one of the five lines of operation delineated 
in U.S. Northern Command's Theater Campaign Plan. However, the United 
States is the only Arctic nation that has not acceded to the 
Convention, which could impede international cooperation and eventually 
limit the development of cooperative partnerships with the other 
members of the Arctic Council, Canada, Denmark, Finland, Iceland, 
Norway, Sweden, and Russia. Future defense and civil support scenarios 
in the Arctic maritime domain will require closely coordinated, 
multinational operations in this expansive and resource rich region. 
Therefore, U.S. accession to the Convention will set the conditions for 
partnership and cooperation, resulting in more efficient and effective 
multinational command and control and operations in the maritime 
domain.
    I support the current and past administrations' position, as well 
as that of my primary interagency partner in the maritime domain, the 
U.S. Coast Guard, to become a Party to the Convention. Joining the 
Convention will protect and advance a broad range of significant 
economic and national security interests, and ultimately contribute to 
the peaceful opening of the Arctic in a manner that strengthens the 
United States and international cooperation.
    We are grateful for everything the members of this committee have 
done to ensure our ability to defend the homeland. We appreciate your 
support of our Soldiers, Sailors, Airmen, Marines, Coast Guardsmen, and 
of their families for their efforts to defend our Nation at home and 
abroad. With your help, North America will be even safer tomorrow than 
it is today.

    The Chairman. Thank you, sir. Thank you, General.
    Admiral Locklear.

   STATEMENT OF ADM SAMUEL J. LOCKLEAR III, COMMANDER, U.S. 
              PACIFIC COMMAND, CAMP H.M. SMITH, HI

    Admiral Locklear. Chairman Kerry, Senator Lugar, and 
members of the committee, thank you for this opportunity to 
appear before you to discuss the subject of strategic 
importance and how it relates to the Asia-Pacific region.
    As the Commander of United States Pacific Command, I join 
my colleagues and my other combatant commanders in recommending 
that the United States accede to the Law of the Sea Convention. 
After careful reflection, I am fully confident that our 
accession to the Convention will advance U.S. national security 
interests in the Pacific Command area of responsibility.
    As you know, this region is predominantly maritime. It 
covers half the planet. It is home to three dozen nations, over 
3.6 billion people, the world's largest economies, a 
significant part of our national economy, the world's largest 
militaries, as well as some of the most important sea and air 
lines of communication. As the United States military executes 
our rebalance to the Pacific, acceding to the Convention is 
essential to locking in a stable, legal framework for the 
maritime domain that is favorable to our national interests and 
preserves our access to this critical region. And as a Pacific 
power, the United States must continue to lead the effort to 
maintain security in the region which has defended freedom, 
enabled prosperity, and protected peace there in that area for 
more than six decades.
    Joining the Convention will reinforce United States 
international leadership in the maritime domain. The Convention 
specifically codifies the rights, the freedoms, and the uses of 
the sea that are critical for our forces to transit through and 
operate in the waters of the Asia-Pacific region.
    As the populations and the economies of the Asia-Pacific 
region continue to grow, competing claims in the maritime 
domain by some coastal states are becoming more numerous and 
contentious. Some of these claims, if left unchallenged, will 
put us at risk for our operational rights and our freedoms in 
key areas of the Asia-Pacific. Nowhere is this more prevalent 
than in the South China Sea where claimants have asserted broad 
territorial and sovereignty rights over land features, sea 
space, and resources in the area. The Convention is an 
important component of a rules-based approach that encourages 
peaceful resolution of these maritime disputes. Moreover, the 
Convention codifies an effective balance of coastal state and 
maritime state rights, a stable legal framework that we help to 
negotiate that is favorable to our interests and that we should 
leverage as a check on states that attempt to assert excessive 
maritime claims.
    Currently the United States is forced to rely on customary 
international law as the basis for asserting our rights and 
freedoms in the maritime domain and because we are not a party 
of the Convention, our challenges are less credible than they 
might otherwise be. By joining the Convention, we place 
ourselves in a much stronger position to demand adherence to 
the rules contained in it; rules that we have been protecting 
from the outside since the 1980s and before.
    Thank you for the opportunity to testify on this important 
Convention as it relates to this critical region. I look 
forward to your questions. Thank you.
    [The prepared statement of Admiral Locklear follows:]

            Prepared Statement of ADM Samuel J. Locklear III

    Mr. Chairman and members of the committee, thank you for the 
opportunity to testify before the committee today on this subject of 
strategic importance.
    As the Commander of U.S. Pacific Command (PACOM), I join Secretary 
Clinton, Secretary Panetta, Chairman Dempsey, my fellow Combatant 
Commanders, and numerous other current and former leaders within the 
Department of Defense and United States Government in recommending that 
the United States accede to the Law of the Sea Convention. After 
careful reflection, I am fully confident that our accession to this 
Convention would advance U.S. national security interests in the PACOM 
area of responsibility (AOR). Specifically, the Convention sets forth 
and locks in a rules-based order that protects military activities 
which are vital to our operations in defense of the Nation, as well as 
our allies and partners.
    As you know, the United States is refocusing on the Pacific after 
more than 10 years of war. As noted by Secretary Panetta, ``We continue 
to face a challenging and complex global security environment, with 
multiple transnational threats including violent extremism, the 
destabilizing behavior of nations like Iran and North Korea, military 
modernization across the Asia-Pacific, and turmoil in the Middle East 
and North Africa.'' All of the foregoing challenges must be viewed 
against the backdrop of the world's increasing dependence on trade and 
commerce to and from the Asia-Pacific region.
    It is critical for the United States to maintain its leadership 
role in the Pacific in order to best protect our vital security 
interests. As the Secretary of Defense stated in his testimony, a key 
component of our strategy is to reenergize and strengthen our network 
of defense and security partnerships throughout the Asia Pacific 
region. An area of universal interest among our allies and partners is 
protection of the rights and freedoms that underpin all nations' access 
to and uses of the world's oceans. Joining the Convention will ensure 
seamless integration of international legal authorities between our 
forces and those of our partners and will place the United States in 
the best possible position to continue to lead international efforts in 
the maritime domain.
    Most important to me as the Commander of U.S. Pacific Command are 
the protections contained in the Convention for our navigational rights 
and freedoms, over-flight rights and freedoms, military activities, and 
our rights to transit international straits and choke points without 
impediment. With more than half the world's ocean area within my AOR, 
forces assigned to me rely on these basic rights, freedoms, and uses 
daily to accomplish their mission. All of the foregoing rights and 
freedoms are specifically protected by the Convention.
    As we look into the future, our status as a nonparty will 
increasingly disadvantage the United States. Presently, the United 
States is forced to rely on customary international law as the basis 
for asserting our rights and freedoms in the maritime domain. In 
situations where coastal states assert maritime claims that exceed the 
rights afforded to them by the Convention, USPACOM challenges such 
claims through a variety of means including the U.S. Freedom of 
Navigation program, military-to-military communications, and diplomatic 
protests issued through the State Department. When challenging such 
excessive claims through military-to-military or diplomatic exchanges, 
the United States typically cites customary international law and the 
relevant provisions of the Convention. Unfortunately, because we are 
not a party to the Convention, our challenges are less credible than 
they would otherwise be. Other States are less persuaded to accept our 
demand that they comply with the rules set forth in the Convention, 
given that we have not joined the Convention ourselves.
    In addition, as you know, customary international law depends in 
part on State practice and is subject to change over time. This is less 
so in the case of treaty or convention-based international law, which 
comes from written and agreed-upon terms and conditions that are 
contained in such treaties or conventions. Ironically, by not being a 
party to the Convention and relying on customary international law, our 
rights within the maritime domain are less well defined than the rights 
enjoyed by virtually all of the other nations within the PACOM AOR, and 
around the world with over 160 nations as parties. Moreover, by 
remaining outside the Convention, we leave ourselves potentially in a 
situation where other nations feel they can ignore the Convention's 
provisions when dealing with the United States, in favor of what they 
may view as less clear and more subjective obligations that may exist 
in customary international law.
    As the Asia Pacific region continues to rise, competing claims and 
counter claims in the maritime domain are becoming more prominent. 
Nowhere is this more prevalent than in the South China Sea. Numerous 
claimants have asserted broad territorial and sovereignty rights over 
land features, sea space, and resources in the area. The United States 
has consistently encouraged all parties to resolve their disputes 
peacefully through a rules-based approach. The Convention is an 
important component of this rules-based approach and encourages the 
peaceful resolution of maritime disputes. Here again though, the 
effectiveness of the U.S. message is somewhat less credible than it 
might otherwise be, due to the fact that we are not a party to the 
Convention.
    Some States in the USPACOM AOR have adopted deliberate strategies 
vis-a-vis the United States to try to manipulate international law to 
achieve desired ends. Such strategies are infinitely more achievable 
when working within the customary international law realm, versus the 
realm of treaty-based law. By joining the Convention, we greatly reduce 
this interpretive maneuver space of others and we place ourselves in a 
much stronger position to demand adherence by others to the rules 
contained in the Convention--rules that we have been following, 
protecting, and promoting from the outside for many decades.
    Additionally, while Convention or treaty-based international law is 
less subject to change and interpretation, it is not immune from 
change. Parties can collectively agree to change the rule-set in a 
treaty or adopt particular interpretations of its provisions, in 
accordance with the terms of the treaty. Given that over 160 nations 
are currently parties to the Convention, if the rule-set were to 
change, we might no longer be able to argue that the existing, 
favorable set of rules under the Convention reflects customary 
international law. We would be forced to either accept the new rule-set 
or act as a persistent objector, either of which would come with its 
own risks. Moreover, our continued status as a nonparty allows states 
an enhanced ability to co-opt the existing text of the Convention and 
attempt to re-interpret its rules contrary to the original intent that 
we and other maritime powers helped to negotiate. It would be much more 
beneficial for the United States to lead the international community in 
this crucial area of international law from within the Convention, 
rather than from the outside.
    In the past, questions have been raised about whether U.S. 
accession would harm or otherwise undermine our security interests. It 
is important to answer these questions directly and factually. 
Questions include the following:
    Will accession to the Convention force us to surrender U.S. 
jurisdiction over military vessels? The answer is ``No.'' The 
Convention specifically preserves the sovereign immunity of warships 
and exempts them from the exercise of foreign jurisdiction. Given that 
the Convention is clear on this point, exclusive U.S. jurisdiction over 
our warships would be better protected through accession than is 
currently the case.
    Will accession restrict U.S. military operations and activities? 
Here again, the answer is ``No.'' The Convention in no way restricts 
our ability or legal right to conduct military activities in the 
maritime domain. As stated by the Secretary of Defense, ``U.S. 
accession to the Convention preserves our freedom of navigation and 
over-flight rights as bedrock treaty law--the firmest possible legal 
foundation for these activities.''
    Will accession subject the U.S. military to the jurisdiction of 
international courts? Again, the answer is ``No.'' The Convention 
specifically permits nations to exempt from international dispute 
resolution, ``disputes concerning military activities, including 
military activities by government vessels and aircraft.'' State Parties 
individually determine what constitute ``military activities.'' Current 
and former leadership within the U.S. Government have given repeated 
assurances that the United States would take full advantage of this 
clause in its accession documents to exempt U.S. military activities 
and protect them from the jurisdiction of international courts and 
tribunals. In fact, this is specifically outlined in this Committee's 
Draft Resolution of Advice and Consent of 2007 and continues to be 
supported by the current administration.
    Will accession hamper our ability to conduct maritime interdiction 
operations, outside the piracy realm? The answer here is ``No,'' as 
well. The United States conducts a wide range of maritime interdiction 
and related operations with our allies and partners, virtually all of 
whom are parties to the Convention. We rely on a broad range of legal 
authorities to conduct such operations, including the Convention, U.N. 
Security Council Resolutions, other treaties, port state control 
measures, flag state authorities, and if necessary, the inherent right 
of self-defense. Accession would strengthen our ability to conduct such 
operations by eliminating any question of our right to avail ourselves 
of the legal authorities contained in the Convention and by ensuring 
that we share the same international legal authorities as our partners 
and allies.
    In conclusion, the United States is currently in a situation where 
we operate outside of a treaty that we were largely responsible for 
negotiating through which we obtained all our stated objectives, and 
that has been joined over 160 other nations, including virtually all of 
our allies and key partners. We conduct our actions consistent with 
many of its terms, which we regard as customary international law, but 
we do not obtain the benefits of the Convention available only to 
parties. Now more than ever, the United States must be a leader in 
preserving the rights, freedoms, and uses of the oceans that enable us 
to protect our vital security interests in the maritime domain around 
the globe. The diminishing group of countries outside the Convention 
includes land-locked nations such as Uzbekistan, Tajikistan, 
Afghanistan, and Bhutan, as well as rogue nations such as North Korea 
and Iran. To best protect our vital national security interests in the 
years to come, now is the time for the United States to lock in a 
stable legal framework for the maritime domain, and send a clear 
message to other nations in the PACOM AOR that the maritime freedoms 
codified in the Convention are worth preserving and the Convention's 
rule of law is worth upholding.

    The Chairman. Thank you very much, Admiral. Thank you to 
all of you for your testimony.
    Let me begin. I want to try to clear up something and pick 
up on a theme that Senator Lugar opened up in his opening 
comments.
    Some in our very diverse media platforms that we have 
today, whether it is an editorial or a blog or whatever, have 
tried to suggest, oh, you know, these guys from the military 
are just coming there because the administration has told them 
to come there and they are going to say what they have to say, 
but we can sort of discount it. So I want to get right at that 
right up front if I can.
    Are each of you--I believe when you are confirmed, you 
agree before the Senate that you will live up to sort of 
individual advice and do what is in your conscience and so 
forth. But are you appearing today--any of you--under any kind 
of sort of order or coercion, or are you here because you 
believe in this treaty and you are expressing your personal 
view to the Senate as the best advice that you can give to the 
Senate to perform our function?
    Do you want to begin, Admiral Winnefeld?
    Admiral Winnefeld. I would invite my colleagues to speak up 
as well, but nobody twisted my arm in any way to be here today. 
I am here because I believe we should ratify the treaty. Yes, 
sir.
    The Chairman. And the reasons you have given for the treaty 
are reasons you believe in?
    Admiral Winnefeld. Yes, sir.
    The Chairman. Can we just run through the list in the order 
that you testified or however you want to do it.
    Admiral Greenert. Yes, sir, Senator. I am here to give you 
my best professional and military advice on the treaty, and I 
support the treaty fully.
    Admiral Papp. Yes, sir. I fully believe in this. As I said 
in my opening comments, as a practitioner, as a person that has 
been out there operating on the seas for nearly four decades, I 
believe in this, and more than anything else, I believe in it 
because we have young lieutenants that are commanding patrol 
boats. We have boatswain mates who are making law enforcement 
boardings. And they need the clarity and the continuity and the 
predictability that this Convention provides in terms of making 
determinations on a daily basis on jurisdictional issues and 
other things.
    General Fraser. Chairman, I am here because I want to be. I 
want to be especially because of not only the extensive career 
that I have had and been on the receiving end of certainly the 
support that an operation like TRANSCOM has provided but also 
because of my study of this Convention and engaging our 
commercial partners in the need for us to be able to deploy, 
sustain, and then return home our warfighters whether they are 
supporting humanitarian operations or responding to another 
type of crisis. I will provide you my honest assessment.
    General Jacoby. Chairman Kerry, I am here to support the 
Law of the Sea based on my professional responsibilities, my 
experiences as a commander in every theater, and I am fully 
committed to this approach. Thank you.
    Admiral Locklear. Senator Kerry, the men and women of 
Pacific Command--they live this issue every day. They are 
confronted with the aspects of ambiguities of not being a part 
of this treaty. I am here because I support this treaty. I 
support the framework it gives the military commanders, and 
those that work under me, our ability to make decisions that 
will be in the best interest of this Nation, that will be in 
the best interest of ensuring that we can follow the rule of 
law and not have miscalculations that lead us in directions 
that we would not want to go as a nation. So I am here to 
support this treaty, and I both professionally and personally 
support it.
    The Chairman. Well, I thank each of you. I had no doubt, 
but I thought it was important to have those statements on the 
record and I appreciate your candid answers.
    Admiral Winnefeld, you made a statement in the beginning of 
your testimony in which you talked about the misplacing of this 
notion about giving up our sovereignty in any way. In fact, you 
said it is the opposite. We would be growing our sovereignty.
    Preliminary studies indicate that the Extended Continental 
Shelf--it is not fully defined yet, and part of the reason for 
joining this treaty, as I understand it, is to have that 
clarity about our Extended Continental Shelf. But right now, 
the estimates are that the Continental Shelf that we would have 
exclusive rights to could conceivably be as high as l million 
square kilometers, an area about twice the size of California, 
nearly half of the Louisiana Purchase. So what we are looking 
at here, are we not, is the opportunity for us to, in fact, 
gain exclusivity and gain clarity with respect to the 
exploitative rights over this vast area of additional land mass 
to the United States? Is that accurate?
    Admiral Winnefeld. Yes, sir.
    The Chairman. And can you sort of explain? Some people say, 
well, what the heck. You know, we got the strongest Navy in the 
world. We are paying a lot of money for it. Nobody is going to 
stand up to us. We will just go out and do what we want to do 
and need to do, and if somebody gets in our way, we will 
enforce it. What is wrong with that?
    Admiral Winnefeld. Well, there are a couple things. 
Specifically related to the Continental Shelf, notwithstanding 
the potential economic benefits, which I think would be covered 
in a different setting for the committee, we would have much 
more control over, as you point out, the Extended Continental 
Shelf. I think as of today, theoretically, absent a clear 
delineation of that shelf, somebody could come in and 
potentially prospect for resources at the 201 mile point away 
from our coastline which, if the Extended Continental Shelf is 
defined the way we think it ought to be defined under the 
Convention, they would not be able to do. And now there comes 
into question with Admiral Papp and how he would have to 
enforce that under existing customary law or whether he would 
have the full force of the Convention behind him.
    The Chairman. Well, what is wrong with the approach of 
people who say we will go just in and kick them out? What the 
heck?
    Admiral Winnefeld. Well, if the President tells us to do 
that, we certainly would be ready and willing and able to do 
it, but I think we would rather apply a legal approach and a 
stepped forum before we got to the potential use of force.
    The Chairman. Admiral Papp, can you speak to this question 
of sort of added sovereignty?
    Admiral Papp. Absolutely, sir. And while most of us and the 
theme of this is looking at national defense, I would suggest 
that national security--only part of that is defense. There is 
also economic security, environmental security, and energy 
security, and others that come into the whole equation of 
national security. And when we are talking about the Extended 
Continental Shelf and making determinations on where it might 
be, we need that clarity.
    And I have a slightly more nuanced view perhaps than my 
colleagues because the Coast Guard is the one of the five armed 
services that has the responsibility for law enforcement of 
U.S. laws on our waters and on the high seas. So we look at it 
from a law enforcement perspective. Use of force is one of our 
last resorts and abiding through the rule of law. And so we 
have to think on a daily basis how we conduct our law 
enforcement operations and we need the predictability and 
stability of what those determinations are based upon which the 
Convention gives us.
    The Chairman. Senator Lugar.
    Senator Lugar. Gentlemen, you have discussed two areas that 
I want to touch upon in these questions. One of them was the 
growing complexity of the Arctic situation. This may, in part, 
be because of the melting of ice flows or the ambitions of 
other countries to create sea-lanes to have commerce in the 
Arctic well beyond that which we have had before. It does raise 
the points which you have made that it is not really clear just 
in terms of law enforcement, in other words simply how and by 
whom indiscretions of various people are addressed or rescue 
missions for people who get caught in a situation are carried 
out.
    I am hopeful that one or more of you are doing some 
scholarly work that is going to be of help to each of us to 
explain what the circumstances are for a sea which either 
expands or constricts or so forth quite apart from what the 
claims may be in terms of sovereignty of all of the boundaries.
    But I want to dwell specifically on the Pacific because we 
had an interesting visit last week. Some of us visited with the 
President of the Philippines. It is a very good time in terms 
of our relations with the Philippines because of their growing 
economy. President Aquino is a straightforward, honest 
President of the Philippines. And furthermore, the Philippines, 
having rejected our fleet from Subic and various other places 
in recent years, now is very concerned about the definition of 
where the rights are for the Chinese. The Philippines would 
join Vietnam, Indonesia, and other countries in wondering 
precisely who is going to enforce what for a variety of 
reasons, in part because of these Law of the Sea questions, 
which have come into the orbit of our diplomacy in a way that 
we have not seen in the last decade.
    Let me just ask any one of you, How are we going to work to 
define who owns or governs or commands what in the South China 
Sea? In that large area between China and the Philippines in 
which there are extraordinary resources and certainly very 
little definition of who does what and for the moment, a great 
deal of reliance upon the United States fleet to bring some 
definition to this. If we do not have Law of the Sea the 
question is, How do we define it? What are we prepared to do 
and what are the American people prepared to do? It is one 
thing to talk about enforcing this and, in essence, going to 
war over it, but at least in the old days, a declaration of war 
was required and people really wanted to know if it was worth 
the sacrifice of individual human beings.
    Can anyone give me some idea of where we are headed in the 
Pacific and the South China Sea particularly?
    Admiral Locklear. Yes, sir, I can. In the South China Sea, 
you have, I think, a great example of how the Law of the Sea 
should play out if done correctly. Because of globalization, 
the things that move in the oceans that move through the South 
China Sea--half the energy supplies in the world move through 
there daily. A third of our economy moves through there daily, 
you know, all the things we talked about. So there are 
competing claims from the various coastal states in there. We 
have a tendency to want to talk about China, but there are a 
number of countries that have excessive claims, and they are in 
two areas. One is in territorial disputes and the other is in 
maritime disputes.
    So what the Law of the Sea would give us--it gives a 
framework on territorial disputes which the United States takes 
no position on territorial disputes between the Philippines and 
the Chinese or any other excessive territorial claim. But the 
Law of the Sea would give a framework for them to be able to 
have that dialogue in a peaceful way. Our perspective is that 
we do not want coercion. We want things done peacefully. We 
want them done in a framework that allows that to happen. And 
my understanding is that there are vehicles in the Law of the 
Sea, if applied properly that would allow them that vehicle and 
their desires of that in the ASEAN nations in particular.
    The other side is excessive maritime claims, which are 
clearly laid out in the Law of the Sea of what can be there. 
And these are critical to us so that we can maintain our 
unimpeded access to those areas for the future that allows us 
to provide, if you want to call it, a security deterrent, that 
allows us to--we have seven allies in the world; five of them 
are in this region. And ensuring that our allies' perspectives 
are looked at properly through a rule of law that allows us to 
continue to operate freely with them is important. So this is 
why the Law of the Sea Convention is important to me.
    Senator Lugar. Yes, sir.
    Admiral Papp. Senator, there is one other nuance. I have 
been watching this. Admiral Locklear has the responsibility out 
there, but the Coast Guard has responsibilities in the Pacific 
as well. And one of the things we have seen China doing as an 
indication that they are operating under the rule of law, they 
are, in fact, many times now keeping their maritime patrol 
vessels, more or less their coast guard vessels, which are less 
provocative rather than sending large navy ships out there, 
once again portraying themselves as following the rule of law 
and acting within the Convention. We have no means of disputing 
that unless we are parties to the Convention because I am 
involved with the Chinese in the North Pacific Coast Guard 
Forum and whenever we address issues like this, their first 
response is but you are not a party to the Convention, and it 
puts us in a difficult situation to deal with and it makes our 
work much harder.
    Admiral Greenert. Senator, if I may make a comment. This is 
one of the things I would like to pursue--and the South China 
Sea is just one part of the ocean. I organize, train, equip, 
and deliver the ships to Admiral Locklear and others. And we 
are looking forward to what I call a dependable, if you will, 
or predictive behavior by the elements in these maritime 
crossroads such as the South China Sea. If each interaction 
ends up a debate or a confrontation, it becomes unpredictable, 
and then you get unprepared, if you will, and then you get this 
in situ debate which is OK if everybody is agreed upon what the 
customary international law is. But it evolves and it becomes 
domestically derived in some locations. That is kind of what we 
have right now in the South China Sea.
    So we say to ourselves, how do we preclude this? Well, we 
should talk and not have belligerent behavior. So we pursue 
things like the Military Maritime Consultative Agreement talks 
with China for an example, and there are others. I host heads 
of navies every 2 years in the International Sea Power 
Symposium. Having something like the Law of the Sea Convention 
as a book that we all have agreed to and we sit down and say, 
OK, let us talk about the protocols that we are all kind of 
going to agree to or what is the basis of the disagreement 
would be very helpful.
    Senator Lugar. I appreciate that. Each of you knows that we 
got briefings here about the so-called pivot of our national 
defense toward the South China Sea, toward the Pacific. So that 
is why it is very crucial both in terms of what we are talking 
about today as well as our overall national defense and foreign 
policy.
    Thank you very much.
    The Chairman. Thank you, Senator Lugar.
    Senator Cardin.
    Senator Cardin. Thank you very much, Mr. Chairman.
    And let me thank all of you for your leadership and your 
service to our country.
    You have all indicated that you support the ratification of 
the Law of the Sea Treaty. We have been, at least, in 
discussions of this for almost 20 years. So this has been an 
issue that has been around the United States Senate for a long 
time.
    I would like to get from you an assessment as to whether 
this is just something that would be nice to get out of the way 
and done or whether this is an important issue as it relates to 
our national security.
    Admiral Winnefeld. I can start off, sir. I think it is an 
important issue related to our national security. Some have 
pointed out that there are no operations that we have been 
unable to conduct because we have not become a party to the 
Convention. And that, in fact, is true. But as we look to the 
future, which is what this is really about, and we see some of 
the erosions of customary international law that have been 
referred to by Admiral Locklear and Admiral Greenert and 
Admiral Papp, that is what we are really concerned about. And 
we would rather not wait until that becomes a crisis for us. We 
would rather get the treaty ratified now so we have got that 
fundamental basis in international treaty law for us to do what 
we need to do and to counter those who might be taking us on in 
a maritime environment. So we believe it is an issue for 
national security mostly in the future.
    Senator Cardin. Is there any disagreement on that or any 
further clarification?
    Admiral Greenert. If I may, Senator, the Arctic, as 
mentioned earlier by Senator Lugar, is a new area. I do not 
know what is customary up there, and we are going to be 
defining our behavior 
and our protocols up there. Therefore, I would say this is an 
opportunity.
    Senator Cardin. In regards to the Arctic--and that is an 
area that is emerging as to the issues. The issues that are 
currently being thought of were not 10 years ago. So it is an 
emerging area of great interest to the United States. As I 
understand it, we are the only country that borders the Arctic 
that is not a member of the--has not ratified the Law of the 
Sea. Explain a little bit more as to how that disadvantages us 
as these discussions are taking place?
    General Jacoby. Senator, I am the Commander of Northern 
Command. It is in my area of responsibility. The Arctic is a 
fast-changing environment. It is harsh. There are few assets 
available. Working together is really at a premium. It is the 
opening of a new frontier, danger and uncertainty and also 
opportunity. So the idea that the strongest, the fastest, the 
most aggressive party can define the customary international 
law is not the approach that any of the eight Arctic nations 
desire to take. It would empower me, as I provide leadership on 
behalf of the United States in the Arctic, to start with that 
rules-based framework, the firmness of treaty law, in order to 
start sorting through the uncertainty that we face up there. 
And as I said, there is a large premium on working together in 
the Arctic right now.
    Senator Cardin. Thank you for that.
    I want to get back to China for one moment because I think 
back a decade ago when we were looking at China and say, gee, 
we certainly should be able to manage our trade issues with 
China. It was not going to be a major problem for America. And 
now we see how this has developed. The maritime interest of 
China seems to be expanding. They seem to be more bold than 
they have been in the past, some of which we believe are not 
appropriate under international law.
    Can you tell us how ratification of the Law of the Sea 
would put us in a stronger position vis-a-vis China as it 
relates to its maritime ambitions?
    Admiral Winnefeld. I can start and then turn it over to 
Admiral Locklear.
    One of the things, as we have talked about, is the concern 
about erosion of law. And one of the areas where China has been 
assertive is in writing national laws that would restrict 
maritime activity in their Exclusive Economic Zone. And some of 
that maritime activity is very important to us from a military 
sense, and perhaps in a classified briefing later in the year 
we can go over that. But without being a party to the 
Convention, we really do not have a leg to stand on if we try 
to invoke the Convention's clear rights in terms of our ability 
to operate in that Exclusive Economic Zone. So that is again a 
potential future source of friction. It is already a source of 
friction but it could get worse, and we would like to see the 
fundamental underpinning of accession to the treaty to back up 
our rights in the EEZ to do what we need to do from a military 
basis.
    Over to Sam.
    Admiral Locklear. I fully agree. It provides a solid, 
fixed, and a favorable legal framework for us, first, to 
protect U.S. navigation and overflight rights, as well as the 
sovereignty of our ships and aircraft. So that is the first 
thing it does.
    You know, us being part of the Convention, it aligns our 
international legal authorities with those of our allies and 
our partners and our friends who are in that region, which is 
important. I think it would strengthen our standing to support 
our allies who are dealing with some of these issues 
particularly in the South China Sea. And they are trying to 
find a mechanism to align their maritime claims with 
international law, and so it would improve our overall support 
and our standing as we try to get them to resolve in an ever-
increasingly complex environment. We have to look forward I 
think here, not in the rear view mirror.
    The complexity of the maritime environment, because of the 
demand for resources, because of the amount of goods--10 years 
ago, the amount of things that float on the ocean across the 
sea lines--in that 10 years, it quadrupled because of the 
globalization of the economy. So we need to make sure that we 
are able to work through these disputes from a solid, fixed, 
favorable legal framework rather than resulting to every one of 
these issues being a standoff that could potentially lead, I 
think, us down a path that we do not want to go.
    Senator Cardin. As I understand it, in the 1990s when this
treaty was first brought to the Senate, there were concerns. 
Those concerns were shared by some of our allies. Modifications 
were made and our allies went ahead and ratified the treaty. 
The Senate has not followed suit.
    From your testimony here today, am I correct to say that 
you believe today it is more important to ratify the treaty 
than it was a decade ago, that circumstances on the sea 
continue to present additional challenges that the Law of the 
Sea would help America in promoting its national interests and 
its national security? Is that a fair assessment, that it is 
even more important today than 10 years ago because of the 
emerging issues?
    Admiral Winnefeld. Absolutely. A decade ago, there were not 
as many nations who were asserting their claims into the 
maritime environment in the way they are as there are today, 
and those excessive claims continue to grow. So I would say 
definitely compared to 10 years ago, it is more important today 
than it was.
    Senator Cardin. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cardin.
    Before I recognize Senator Corker, let me just quickly--on 
your question about the Arctic, I just wanted to comment.
    I believe the Russians are sending their fifth mission into 
the Arctic to do plotting this summer, and the Chinese have 
been up there in a very significant way. Is that not accurate?
    General Jacoby. Yes, Senator, that is.
    The Chairman. Again, this will be part of our classified 
briefing for all the Members, but it is quite significant what 
is happening there without recourse in any legal way. Is that 
correct?
    General Jacoby. That is correct, Senator.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman.
    And thank each of you. And I do believe that each of you 
are here espousing your own views. I also know that sometimes 
we can have silos where one part of our Government wants 
something to happen and other parts may be jeopardized. And 
that is our role here is to balance all of those off. But we 
thank you very much for being here and certainly for your 
service.
    Admiral Locklear, my friend and colleague, Senator Lugar, 
asked you about China and the Philippines. It looks to me like 
that it is just the opposite of what we just said, that those 
two countries are signatory to the Law of the Sea Treaty. There 
is a dispute and there is no resolution. It looks to me like 
that the Law of the Sea Treaty is not working as it should be 
with two countries having a dispute and both being signatory. I 
would like for you to explain why the Law of the Sea Treaty has 
not already resolved the conflict there and what is it about it 
that is failing.
    Admiral Locklear. Yes, sir. I think your perspective is 
correct. It has failed them to some degree, but I think it has 
not been tried in some of these areas that are now emerging. 
And I believe that there is opportunity. And I get from all of 
our----
    Senator Corker. What do you mean it has not been tried? I 
mean, we have a conflict there. They are in dispute, and it 
looks to me like China has basically said we are sorry. We are 
not going to adhere to the treaty document. So how is it 
working?
    Admiral Locklear. Well, at this stage, my understanding is 
that the Chinese want to solve this in a bilateral relationship 
with the Philippines.
    Senator Corker. So the treaty is not working if they are 
doing it in a bilateral way. Is that correct? I mean, is there 
not a group----
    Admiral Locklear. The treaty provides mechanisms should the 
Partner States choose to use it or the signatory States choose 
to use it. So our perspective in our dialogue with our allies 
and our partners, as well as the Chinese, is that we want them 
to resolve this using standard rules and to use those 
mechanisms that are outlined in the Convention rather than a 
bilateral way where you may end up having a coercive 
perspective from one party or the other that drives a decision 
in a direction that we would not want it to go.
    Senator Corker. Yes, but it sounds like China is saying we 
do not care what you think. We do not care that we are members 
of the treaty. We want to resolve it in a bilateral way. So, I 
would just say, to me it points to failure. We have a real-live 
example of a failure of this treaty.
    Admiral Winnefeld, let me ask you this. You kept saying 
that this in no way affects our sovereignty. But then you kept 
saying that if we are not a member, key decisions are being 
made that affect our sovereign rights. How can both be true?
    Admiral Winnefeld. I would say, first of all, I want to add 
a little bit to what Sam Locklear said. One of the things that 
helps us in the South China Sea is that when we have the 
Association of Southeast Asian Nations--ASEAN--nations aligned 
together pushing against China, China tends to listen, and when 
they can cut out somebody from the herd and go bilateral, then 
they will tend to not go under treaty mechanisms.
    So if we are a party to the Law of the Sea and we can put 
our political power, our diplomatic power behind that, it would 
tend to buttress the ASEAN nations into potentially supporting 
the Philippines and what have you. So the Law of the Sea is not 
a magic formula to resolve a dispute between China and the 
Philippines. Nobody is claiming that, but I think it would 
allow us to have a little more credibility in entering into 
that environment.
    And then in terms of sovereignty piece, what we would like 
is we will be able, as a party to the Convention, to have 
direct influence over how the Convention is applied. We will be 
able to more fundamentally and with more credibility apply what 
is now customary international law that is embedded in the 
Convention.
    Senator Corker. But specific--I understand all those 
things. We are a member of the club and therefore we can 
influence the rules of the club.
    But if key decisions are being made right now because we 
are not a party to the treaty that affect our sovereignty, how 
can you say that the treaty does not affect our sovereignty? It 
sounds like----
    Admiral Winnefeld. Because, Senator, we would be in the 
mechanisms of the treaty and able to counter those decisions.
    Senator Corker. Well, wait a minute. You cannot say on one 
hand that the treaty in no way affects our sovereignty and then 
say that decisions are being made that affect our sovereignty. 
You cannot say that and it be true.
    Admiral Winnefeld. What I am saying is by not being a party 
to the Convention, we lose the opportunity to preserve our 
sovereignty. So if we lose the opportunity----
    Senator Corker. By virtue of you saying that, you are 
saying the treaty then has pieces of it that affect our 
sovereignty.
    Admiral Winnefeld. It positively affects our sovereignty 
and avoids negative impact on our sovereignty. So, for example, 
the Extended Continental Shelf piece--we will not be able to 
assert that right unless we accede to the treaty. Nobody will 
pay attention to it. So theoretically somebody could come in to 
201 miles off of our coast and explore for natural resources, 
and we do not have the power of the treaty behind us to say, 
sorry, you cannot do that.
    Senator Corker. You know, Admiral Papp, can you give me one 
example where us not being a party to this treaty has ever 
impacted your ability to board a ship or enforce U.S. law? One 
live example.
    Admiral Papp. Oh, absolutely, sir. We have countries within 
South and Central America that have excessive territorial sea 
claims, and oftentimes when you have these questions about 
jurisdiction, we may have intelligence or we may have a target 
which we believe is smuggling drugs or people and we cannot 
gain cooperation from these countries that are outside the 
Convention. We are outside the Convention. They have 
jurisdictional claims. We do not have the mechanism for 
disputing this. And on a routine basis, not only do we lose 
cases, but oftentimes we lose time--our cutters and crews--
while we go through protracted negotiations on jurisdictional 
disputes between countries for, in particular, drug 
interdiction.
    But I would add. You know, we are focused on some of the 
countries that are challenging us around the world on a day-to-
day basis, and I think to buttress what Admiral Winnefeld is 
saying, even with our closest friends, we have disputes that 
only can be resolved within the Convention. Our border between 
Canada and Alaska is under dispute and we cannot negotiate with 
all the tools in our tool bag with Canada unless we are members 
of the Convention. We have waters in northern New England 
between Maine and Alaska where we have jurisdictional disputes 
in terms of transit that has prevented an LNG port to be 
developed in Passamaquoddy, ME, because Canada will not allow 
us to have free and unimpeded passage because--and I think they 
are on very loose footing here--we cannot negotiate because we 
are not members of the Convention.
    So it is not just with countries that challenge us. It is 
also with our friends as well. And those can be played against 
us because we have not signed onto the Convention.
    Senator Corker. I find it hard to believe we could not 
reach a bilateral agreement with Canada. It sounds a little 
far-fetched, but I would love to talk to you more about it.
    One last question. I get the impression that we feel like 
that if we were a party to the Law of the Sea Treaty that it 
would cause us to have some savings as it relates to dealing 
with maritime issues throughout our Navy. Is that correct, 
Admiral?
    Admiral Winnefeld. I do not know that there is any 
influence on the----
    Senator Corker. Well, we are talking about the cost. We 
have a lot of cost because we are not part of the treaty. We 
have to do things in a very different way. I mean, it seems to 
me that I have heard that throughout the testimony here today.
    Admiral Winnefeld. I do not think any of us have expressed, 
Senator, that it would be more costly for us if we did not 
accede to the treaty in terms of financial terms. We are not 
going to have any different size of Navy if we do or do not 
accede to the treaty. It just gives us another tool in the 
toolbox to do business as a navy and as a nation.
    Senator Corker. Well, listen, I respect each of you. I will 
say that today's testimony--and I thank you very much for your 
public service. It to me has fogged things up more than it 
began. I very much appreciate it. I look forward to many one-
on-one meetings as we hash this out. And I thank you very much 
for your service to our country.
    The Chairman. Senator Webb.
    Senator Webb. Thank you, Mr. Chairman.
    Let me begin by just offering an observation on the 
exchange that just took place. Without getting to the issue of 
sovereignty--and there are sovereignty issues involved clearly 
in what we are attempting to do in places like the South China 
Sea--I would just say, as an observation that treaties in and 
of their nature compel certain actions by our country. That is 
why we come together and undertake this process very carefully 
before we ratify a treaty. And they also cause an agreement 
among our governmental people to abide by certain standards 
that are in a treaty. That is what a treaty is about. That does 
mean that in a treaty, at least in my opinion, we are going to 
be giving up any of our sovereignty rights. Just let me start 
with that.
    Before I get into my question, I would like to join the 
chairman in recognizing Senator John Warner for his presence 
here today. He has been working on this issue for a very long 
time from the time that he was in the Department of the Navy 
and I was a 25-year-old marine on his staff. That was a long 
time ago and it was a pleasure to follow Senator Warner as 
Secretary of the Navy and also to be able to serve with him 
here in the Senate as my senior partner. I have tremendous 
regard for all of his service and the work that he has done on 
this area.
    I believe that the indisputable starting point in this 
discussion really is that the international rules of the road 
for security and also for commercial exploration have never 
been more complex. This affects the issues of freedom of 
navigation, as you have discussed several times this morning. 
Those are basically tactical questions. It also affects issues 
of sovereignty. Those are strategic questions. And following 
issues of sovereignty, in and of itself, it unavoidably 
involves commerce and how our Nation interacts in a lot of 
areas that right now are not clear in terms of who has those 
rights. That is apparent in the Arctic, as has been discussed. 
It is also clear in such areas as the Senkaku Islands where 
after a number of years of quiet dispute in 2010, Japan and 
China had a blowup over sovereignty that could have involved 
our security treaty with Japan if it had gone further.
    It is clearly apparent in the South China Sea. From our 
office, we initially offered a Senate resolution condemning the 
Chinese actions a couple of years ago involving the use of 
military force in the Philippines and off of the coast of 
Vietnam. We had a unanimous vote by the Senate that had two 
very important pieces in it, I think, in terms of the 
expression of the Senate. One was deploring the use of force by 
naval and maritime security vessels from China, and the other 
was calling on all parties to refrain from threatening the use 
of force and to continue efforts to facilitate multilateral 
peaceful processes as we address these issues.
    And that to me is the most important component of what we 
are talking about today. We need to find the right forum to 
address disputes where claims can be resolved with the 
agreement of multiple claimants. And this is a key point when 
we are discussing the activities of China particularly to this 
point. Not only China. You go to the Spratlys, there are five 
claimants. You go to the Paracels, you have two. There are a 
lot of these that are potentially going to affect sovereignty 
rights and eventually commercial competition.
    ASEAN has been mentioned. ASEAN is an evolving entity. It 
is a very important entity: 10 countries, 650 million people 
with widely varying governmental systems among them. They have 
been struggling for 10 years now to find rules of navigation in 
sovereignty to try to calm down the process in this part of the 
world. They have issued a proclamation in 2002 trying to lay 
down rules of the road. They issued another one recently.
    We have not been totally successful with China. We all know 
that. But we have been attempting to develop a number of 
different ways to encourage China to come into the solutions 
process on a multilateral basis.
    From our office, we have done the same thing with respect 
to the Mekong Delta where China does not recognize downstream 
water rights from the Mekong River with all the damming that it 
has done upstream. That makes it very difficult to bring China 
into a multilateral solutions process, and there is no place 
that it truer than when we look at the sovereignty rights and 
the future of the activities in commercial endeavors in the 
South China Sea.
    For that reason, I think this is a format that will greatly 
assist us in the future, and I know that there are questions on 
the other side. I am sure all of you have seen the editorial in 
the Wall Street Journal yesterday that was written by former 
Secretary of Defense Rumsfeld where he said the treaty remains 
a sweeping power grab that could prove to be the largest 
mechanism for worldwide redistribution of wealth in human 
history. I know that is not necessarily in any of your 
portfolios, but I would like to hear from you.
    What is the downside? What is the downside of this treaty? 
Is there, in your view, a downside, Admiral?
    Admiral Winnefeld. On the security side, I am not aware of 
any downsides that we can point to. In fact, the upsides are 
really why we are here today. As I mentioned, it very much 
improves the 1958 Geneva Conventions. It codifies in treaty 
law, not customary law, the things that we need to do day in 
and day out as a navy and as a force. So on the security side, 
I know of no downside. I have explored the commercial side, and 
it is complex. But it seems to me as though this treaty was 
negotiated and modified in 1994 to our advantage, but I would 
leave the economic experts to discuss. But I see no downside on 
the security side.
    Admiral Greenert. Senator, if I were to think of a 
downside, it would be misinterpreting the advantages of what 
this will do for us. It is not going to solve everybody's 
problems, and you laid out some very clear issues that we have 
been dealing with for years and years from Senkaku, et cetera. 
I think feeling that the Law of the Sea Convention will solve 
unto itself, because it establishes law, is wrong. Now we need 
to roll up our sleeves and go use it as the instrument to now 
sit down with nations because we have a consistent instrument 
that we can use.
    Senator Webb. Admiral Locklear.
    Admiral Locklear. Yes, sir. I see no downside from a 
security perspective. I see a downside on the status quo, 
though. One is it leaves us relying on customary international 
law, which I think is going to morph in a way that we cannot 
predict. It leaves us outside the full international legal 
framework that governs these rights and obligations and the 
actions of our allies, partners, and friends. It weakens our 
standing to object to inappropriate actions of other States 
that violate the Convention. I mean, 160 countries have signed 
up for this thing. They do not all follow it to the letter of 
the law, but we are not in there to be able to object to that. 
And I think it weakens our ability to shape potential changes 
to the Convention that we may want to see in the future.
    Admiral Papp. Senator, I find it interesting. You used the 
rules of the road in the beginning of your statement there. In 
fact, to me that is one of the greatest analogies here. The 
rules of the road for centuries were determined by customary 
international law. The challenge was, particularly as we went 
from sail to steam and vessels approached each other much more 
quickly, everybody had their own version of customary 
international law, and consequently collisions occurred. All 
countries agreed at a certain point to collision avoidance 
regs, or COLREGS, which standardized things across the entire 
world for mariners at sea. There is stability. There is 
continuity. There is predictability in those rules which 
sailors depend upon. And I think that is a perfect analogy for 
us. If we continue under customary international law, it 
changes and everybody has a different view of it. We have 
negotiated ourselves in a position where this is most favorable 
to us. It is almost like having a lottery ticket--a winning 
lottery ticket--that you do not cash in and you cannot use the 
proceeds.
    Senator Webb. Well, I would respectfully submit that the 
series of exchanges that we have had with China where they have 
insisted on only bilateral solutions is perhaps the strongest 
argument for us proceeding forward in this sort of way where we 
can continue to encourage multilateral solutions.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Webb. That last 
point is a critical one. I am sorry Senator Corker is not still 
here to hear you say it, but I think we should probably chat 
with him about it.
    But everyone, I think, has agreed--I mean, one of the 
reasons we have our presence, where we do in the Pacific, is 
because we are viewed by most nations out there as being the 
indispensable nation. And clearly China would love to just use 
its power to bilaterally leverage some other country. But if 
the United States is at the table or if ASEAN is at the table 
and there is a unity, there is a whole different equation the 
Chinese have to take into account.
    So the virtue of it, in fact, advantages the Chinese for us 
to be out. And Secretary Clinton and others have told me 
personally that they have been ribbed and kind of--what is the 
word--you know, sort of made fun of in a jocular kind of way at 
various meetings when these subjects come up because we are not 
a member. And they sort of look at them and say, well, you are 
not a member. You do not have any standing to bring this up. So 
people need to weigh that as we go forward here.
    Senator Risch.
    Senator Risch. Thank you, Mr. Chairman.
    Admiral Papp, you know, we sit here every day and it is not 
very often our intelligence is insulted, but for you to come 
here and tell us that we cannot resolve a border dispute with 
Canada because we are not a member of this Law of the Sea 
Treaty really does that. And I am sorry that you chose to go 
down that route because I think those kinds of representations 
really undermine the statements and the logical arguments made 
by others who want to see this treaty authorized.
    I was surprised, as all of you testified, that the South 
China Sea was not mentioned until we got to Admiral Locklear. I 
was going to go down the same route that Senator Corker did in 
that regard, and I guess I will touch on it at least some.
    I would say that most people in America do not realize what 
a mess that the South China Sea is in, and the description that 
we have had here today has been very antiseptic. I have met 
with representatives of the governments, and it is not just the 
Philippines. It is other governments that are having the same 
kind of difficulties, and they are begging for help. Not one of 
them asked that we subscribe to the Law of the Sea Treaty. They 
wanted you guys to do something about it. They wanted me to 
urge the President to have you do something about it, which I 
am not inclined to do, by the way.
    But Senator Corker made the point that this treaty was 
negotiated 30 years ago this coming December 12. It was adopted 
by the United Nations a couple of decades ago, and every one of 
the players in the mess in the South China Sea is a subscriber 
to this treaty. Yet, this treaty is just a piece of paper and 
is just flowery speeches like we have had here today until the 
gate opens and the rodeo starts. And the gate has opened and 
the rodeo has started, and this thing has not helped one bit to 
resolve the tension, the disputes, and the defugalties that are 
going on in the South China Sea. They are shooting at each 
other there. There have been munitions expended, and this thing 
has not done one thing to help as Senator Corker has pointed 
out.
    Can any one of you point to me one thing that this treaty 
has done on a specific basis, people, places, and timing? Tell 
me one thing that this treaty has done to resolve the disputes 
and the tensions that have taken place in the South China Sea. 
And I do not want to talk about the future. I do not want to 
talk about what a wonderful document it is. I want to know what 
one country did to use the provisions of this treaty to help 
itself in the mess that they are in the South China Sea. Who 
wants to try that?
    Admiral Winnefeld. We pointed out, Senator, already that 
the treaty is not a magical document that is going to cure the 
ills of the South China Sea. It is yet another tool. And I 
think that the nations there will feel more empowered to use 
whatever mechanisms are in or to insist that the mechanisms in 
the Law of the Sea Convention be used if we are a party----
    Senator Risch. But, Admiral, they have not.
    Admiral Winnefeld [continuing]. If we apply our political 
backing and our political power and our influence to do that. 
And it might not work. And if that is the case, there are other 
mechanisms.
    Why should we leap right away to the use of force or 
something along that order when we have the opportunity to 
bring our influence to bear in the region? And the nations in 
that region will be a lot more comfortable if we are bringing 
our influence to bear with treaty law behind us than if we are 
on the outside looking in with no credibility to be able to--
having not acceded to the treaty--to make statements about the 
treaty.
    Senator Risch. You know, I am not suggesting that you 
should jump in with force. I am not suggesting that at all. 
What I am suggesting is this has been an abject failure for the 
members who have signed this and who have been members for 
years and years and years. They are coming to us asking for 
help.
    Can anybody answer my question? Give me one example of a 
tension or a difficulty that was resolved as a result of this 
treaty by the members who operate in the South China Sea. Give 
me one example. Can anybody do that?
    [No response.]
    Senator Risch. I will take that as an answer.
    Thank you, Mr. Chairman. I am done.
    The Chairman. Well, let me give you an answer because it is 
important to know that the Philippines and Vietnam have both 
specifically asked us to join the Law of the Sea in order to be 
able to help them leverage a peaceful outcome to the disputes 
of the South China Sea because they cannot do it on their own 
because of China's power. And China, until we are in the Law of 
the Sea, does not listen to us either because we are not party 
to it.
    So I will make sure those documents and those facts are 
made available to the Senator.
    But you know, China wants a different outcome. China does 
not want to submit to the Law of the Sea right now, and it is 
going to take a different equation within the Law of the Sea 
for China to feel compelled to listen. But those nations are at 
a huge disadvantage. And if you look at the map at what China 
is claiming, it is clear why. So clearly, the Law of the Sea on 
its own is not going to resolve it.
    Senator Coons.
    Senator Risch. Well----
    The Chairman. Yes. Sorry. Go ahead.
    Senator Risch. Well, Mr. Chairman, you know, with all due 
respect, I do not understand that. You have these countries 
that have signed this agreement that is supposed to resolve 
these kinds of disputes. Whether we are in, or not in, should 
not make any difference whatsoever. There are 160-some 
countries that are in here. Supposedly this document is 
supposed to do something to create a mechanism by which they 
resolve this dispute, and it simply has not happened.
    The Chairman. Senator, it does. It provides a forum with a 
set of rules, but if a party to any dispute--this is true 
anywhere in any country anytime. Here in the United States, if 
you have got two parties, you know, whether it is a sports 
figure negotiating with the franchise owner and they go to 
arbitration ultimately because they cannot come to agreement 
because one party does not want to agree. Or how about the 
United States Senate where we had a super committee where we 
could get no agreement, so we are going to have a sequester? 
There is a great example. So, I mean, there are plenty of 
examples where people cannot agree, and you need a structure to 
be able to get it to agree.
    Senator Risch. And it has not worked.
    The Chairman. It has not worked with respect to the South 
China Sea. But the question is, Would the presence of the 
United States at the table, in conjunction with those other 
nations, be a precursor and lay the predicate to other options 
if you had to come to them? And the answer is according to, I 
think most experts, they would say absolutely. If you are going 
to go to war, you want to go to war with China over the South 
China Sea, you better lay the predicate, and the predicate 
better be that you have exhausted every opportunity peacefully 
before you ask the American people to do that.
    Senator Risch. I would certainly hope the United States 
does not give any consideration in going to war with China over 
the South China Sea. But this document was supposed to, long 
ago, have resolved this amongst the players in the South China 
Sea and not one person has been able to give me a specific 
example as to one of these tensions or one of these disputes 
that has been resolved.
    The Chairman. With respect to the South China Sea, and I 
think it is for very obvious reasons. But we will have plenty 
of testimony that will show you the ways in which on an 
everyday basis countless decisions are made which create rules 
of the road--Admiral Papp has testified to that--which lay out 
the rules of the road which have assisted and avoided conflict, 
and there are dozens of examples where conflict is avoided or 
various thorny issues have been resolved by virtue of people 
being at the table.
    You know, we have had arms control agreements between the 
United States and the former Soviet Union and we did not always 
have a resolution as a result of it. But ultimately we found a 
forum or a mechanism to try to move forward.
    I guess it is a fundamental belief about whether you think 
it is better to have some structure within which you can work 
these things through or you want to do it on an absolutely ad 
hoc basis. But I do not think anything should diminish the 
veracity and the impact of the evidence that says from our 
commanders who are dealing with young officers and sailors and 
forces in various ways on a daily basis who are put in harm's 
way trying to do a board and search or trying to stop a drug 
interdiction or whatever it is--they are advantaged, according 
to the testimony of these commanders, by the presence of this 
agreement. You may not agree, but these are the commanders who 
are telling us on a daily basis that those advantages are 
there.
    With respect to the South China Sea, I would rather have 
the United States be at that table, and I will bet you if we 
are at the table within the confines of this, we can help 
resolve some of those issues.
    Senator Coons.
    Senator Coons. Thank you, Chairman Kerry, for holding 
another hearing on the Law of the Sea. And I am grateful to the 
panel for their testimony to us today.
    As I expressed at our previous hearing, I am concerned that 
the debate over this treaty is locked in a framework that is 
decades out of date. All major questions about this treaty have 
been answered thoroughly, not once, but twice, by both 
Democratic and Republican administrations, and we are now in 
the process of thoroughly vetting them a third time.
    In our last hearing, after listening to and asking 
questions of General Dempsey, Secretary Panetta, and Secretary 
Clinton, it was apparent to me that the real risk we face is 
letting others draw boundaries, set rules, and advance their 
economic interests without the United States having a seat at 
the table, all the while putting our national security 
interests at some risk by failing to ratify this treaty.
    Based on what I have heard and read today and over the last 
few weeks, as well as the 30 years of commentary before that, 
there seem to be two schools of thought on this treaty's impact 
on our national security.
    First, there are those who argue--and I would put many of 
today's witnesses in this camp--that the Law of the Sea is a 
treaty that contains vital provisions about navigation that 
would help our Armed Forces carry out their global mission. It 
also, as we will hear, includes benefits for American business.
    There are others who believe that the Law of the Sea 
Convention is an agreement with only minimally important 
provisions on navigation which has little impact on our Armed 
Forces, and so we should focus our time on this International 
Seabed Authority, and picking apart the functioning of a group 
of international bookkeepers. I disagree. And in my view there 
are real benefits to the United States in terms of navigational 
rights I would like to focus on.
    As many distinguished witnesses have testified to the 
strategic value of this treaty, I would like to focus narrowly 
on the question of sort of exactly how in the real world 
freedom of navigation operations are carried out and what 
potential benefit there might be as a result of accession to 
this. And since 9 out of 15 of the nations with excessive 
maritime claims in 2011 were challenged by our Armed Forces 
through PACOM, in PACOM's area of responsibility, I am going to 
focus my questions today on Admirals Greenert and Locklear with 
my apologies to the other fine witnesses who have also joined 
us today.
    Now, Admiral Greenert, if I could start, just to reiterate 
what was covered in the last hearing for the sake of a starting 
point, is it correct that in navigational disputes, the United 
States currently asserts customary international law as defined 
by the Law of the Sea?
    Admiral Greenert. That is correct.
    Senator Coons. And so when another nation, whether ally or 
competitor, claims customary international law does allow their 
claim in excess to those allowed by the Law of the Sea, is it 
correct the United States then performs a so-called freedom of 
navigation operation to reassert the real customary 
international law?
    Admiral Greenert. Well, when accosted, our commanders are 
directed to say we are operating in international waters. So in 
effect, you could say, ``Yes.'' In situ, we do a freedom of 
navigation operation. But in addition, we do regularly 
scheduled freedom of navigation operations. Admiral Locklear 
manages those in the Pacific. They are well documented, 
transparent about the whole thing saying where we are going to 
go and why we are going to do it.
    Senator Coons. If the United States did not contest an 
excessive claim through either routine or special freedom of 
navigation operations, are we at some risk that that would set 
a new precedent and that our competitors, allies, or others 
would suggest somehow the United States agreed that customary 
international law might allow their excessive claims?
    Admiral Greenert. I believe that is so. We are looked at 
very much as the ones that sort of set the standard not only in 
the Pacific but in the Arabian Gulf, the north Arabian Sea. I 
have seen it again and again. If we say that inland seas start 
at 75 miles, in other words, if our behavior is that, then 
others are going to assume we believe that, and that it is as 
we attest to.
    Senator Coons. And Admiral Locklear, if I might. In a 
freedom of navigation operation, generally speaking--I am not 
asking about tactics, techniques, or procedures, but just 
generally speaking--is it correct that an aircraft or maritime 
vessel is placed into the contested area in order to prove 
customary international law is still in force and we are 
demonstrating real customary international law is in force 
because no one successfully intercepts, turns back, or fires on 
that aircraft or vessel?
    Admiral Locklear. That is correct.
    Senator Coons. So it sounds to me like this is a process 
that is not without cost and risk. Secretary Panetta said 
clearly at the last hearing we never give up our right to self-
defense. And so when we insert men and women, aircraft, vessels 
into these situations, I presume there is some risk associated 
with that.
    Admiral Locklear. That is correct.
    Senator Coons. So when we have successfully reasserted 
customary international law and leave a contested area, do 
these other nations sometimes then reassert their excessive 
claim?
    Admiral Locklear. They do.
    Senator Coons. And we then have to conduct another freedom 
of navigation operation. This is a back and forth, routinely 
contested thing that is just part of your mission week in, week 
out, year in and year out.
    Admiral Locklear. That is correct. We actually have a plan 
that we recognize where the contested areas are, and then we 
plan and get approval for freedom of navigation operations that 
do the same thing, do what you just said. They show that we are 
not abiding by that claim.
    Senator Coons. And, Admiral Greenert, the annual report 
that the Pentagon provides to Congress on freedom of navigation 
shows the number of countries with excessive claims that the 
United States Armed Forces have actively engaged in challenging 
has actually tripled since 2006. The number of countries making 
these excessive claims and the number of incidents that have 
required a freedom of navigation operation have tripled since 
2006. Would accession to the Convention eliminate the need 
altogether for freedom of navigation exercises?
    Admiral Greenert. I do not think it would eliminate 
altogether the need for it. Periodically we would--in order to 
establish what is codified in the Law of the Sea Convention, we 
would continue that. It is right and proper. We believe in it. 
But it would certainly reduce the need to, the requirement to 
do that because we feel compelled to do that for reasons you 
said. Our behavior helps our coalition allies and potential 
allies to see what the standards are. We are the standard 
bearer.
    Senator Coons. So, Admiral, if I hear you right, would 
access to the Convention provide an alternative, nonlethal, 
less risky, less asset-consuming tool to assert navigation 
rights for the United States?
    Admiral Greenert. Yes, Senator, it would.
    Senator Coons. And so my conclusion is that freedom of 
navigation operations, which are provocative to nations, some 
of which are our allies, some of which are our opponents, have 
steadily increased in number, in seriousness, in cost and 
complexity over recent years. And based on that testimony, it 
seems to me, Mr. Chairman, in conclusion, that what you and 
Senator Lugar have said for a long time is correct, that to 
avoid setting new precedents in customary international law, 
the United States has to continue to carry out increasingly 
large numbers of freedom of navigation operations, each of 
which is inherently life-threatening for our service members 
and consumes our limited assets and is also provocative to the 
nations whose claims we are contesting, whether hostile, 
friendly, or allied. And the entire dangerous, risky, and 
provocative process could be avoided in some circumstances by 
ratifying this treaty and being able to contest excessive 
claims in the ways it allows us to do. So this treaty makes a 
real difference for the average men and women who serve us on 
the high seas, in the air around the world, and in my view, 
contributes meaningfully to the national security of the United 
States.
    Thank you for your testimony today.
    The Chairman. Thank you very much, Senator Coons. 
Appreciate it.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman. I appreciate the 
opportunity to be here.
    Let me, first of all, say all six of you--I know all about 
you. You are great guys and you have served your country, and I 
have the greatest respect for you. I do not envy you a bit.
    You are put in a position--I know a little bit about chain 
of command because I was in a very lowly position, but I was in 
the United States Army. And my chain of command started with my 
master sergeant and on up to the lieutenants and the rest of 
them. Yours is the President of the United States. He is the 
Commander in Chief. So you are going to naturally reflect 
anything that comes from--you have to. You are military. And I 
understand that. I have been there.
    What I would like to do is suggest that maybe after your 
retirement, you might change your mind. I am looking right now 
at 24 stars--I just had a few stripes--24 stars, and that is 
very, very impressive. And I have a letter here that is signed 
by 33 stars, but these guys have already retired.
    On this letter--and I want to ask that this be made a part 
of the record--it says--I cannot read the whole letter. There 
is not time. ``But we wish respectfully to challenge the 
perception that military personnel uniformly support this 
accord by expressing our strongly held belief that Law of the 
Sea ratification would prove inimical both to the national 
security interests and sovereignty of the United States.'' It 
goes back and gives the history of this thing. And they have 
very, very strong language. It is signed by nine of the top-
level people who are in retirement.
    Now, I asked that it be a part of the record.
    The Chairman. Without objection.
    Senator Inhofe. And I also want to make as a part of the 
record the Reserve Officers Association. This is a letter that 
we have here. It is actually a resolution. At the very end of 
the resolution, it says: ``In conclusion, the Reserve Officers 
Association does not endorse ratification of the Law of the Sea 
Treaty. It actively advocates against it. Historically the 
United States has claimed that its right to territory was 
manifest. To agree to the Law of the Sea Treaty acknowledges 
that the United Nations has authority over the United States 
maritime territorial claims. The Reserve Offices Association's 
concern is that the Law of the Sea Treaty will become''--and it 
goes on and on. So I ask also that this be made a part of the 
record. These are all retired people, and I think that is 
significant.
    Senator Inhofe. Now, I am going to have to quickly go 
through this. I assume that you all agree--and it can just be a 
yes-or-no answer because there is not time for more than a yes-
or-no answer--that the not signing of this is not going to 
compromise in any way our ability to use force or to navigate. 
Is that true? Is that yes or no? Do you agree with that, 
starting with you, General Jacoby?
    General Jacoby. Yes, Senator, I agree with that.
    Senator Inhofe. All right. Do you agree?
    Admiral Papp. Yes, sir.
    Admiral Winnefeld. At the moment, it will not but in the 
future it could.
    Senator Inhofe. OK.
    Admiral Greenert. I agree.
    Senator Inhofe. OK, you all agree.
    At the last hearing, here is a guy who is your boss. He is 
Chairman of the Joint Chiefs of Staff, General Dempsey. At the 
last hearing, he was asked a question as to whether or not this 
would have an effect. He said--whether failure to ratify the 
Law of the Sea Treaty would compromise our ability to project 
force around the world and his answer that the United States 
would continue to assert our ability to navigate and our 
ability to project force and it would not be deteriorated if we 
do not ratify this treaty. So I will not ask you whether you 
agree or disagree with your boss, but I agree with him.
    When I talk to people in what I call the real world--that 
is outside of Washington--in Oklahoma and I say what do you 
think about a treaty that cedes our right and allows another 
entity to tax the United States for the first time or to sue in 
a court not in the United States, they find that this is a real 
sovereignty issue. We have talked about sovereignty up here, 
but we have not really gotten specific.
    I do not think anyone is going to question the fact that 
this does give the Seabed Authority the right, the privilege, 
the authority to tax us. And it comes through royalties. Right 
now, the royalties on the area of the Extended Continental 
Shelf range between 12\1/2\ percent and 18\3/4\ percent. And 
the reason that is a range is because the oil companies who 
would drill--they would say anything in excess of that range we 
would not be interested in doing. So we have to do it at that 
range.
    This authority, according to the U.S. Interagency Extended 
Continental Shelf Task Force, talks about the resources out 
there are worth billions, if not trillions. Now, if you just 
merely take a trillion dollars and you apply this to it, at the 
end of 12 years, it would get up to 7 percent of these 
royalties that would otherwise go to the United States. Now, 
that amount would be around $70 billion.
    I will not ask you the question I asked the last panel 
because I do not want to put you in that situation. But by 
doing this and having the authority to tax us in that amount--
one of the questions I am going to ask at the end of this, does 
anyone know of any time in the history of this country that we 
have given, ceded our authority, taxing authority, to allow 
someone else to tax us.
    And the second thing would be on the--which I think Senator 
Lee is going to--he certainly is in a much better position to 
talk about the fact that they would be able to sue us.
    I would only want to read something to make sure it is in 
the record. When you talk about the people who are champing at 
the bit waiting for us to become a party of this treaty so they 
can sue the United States of America, one person that I would 
quote so it gets into the record would be the international 
tribunal--well, I do not have it right here.
    But Andrew L. Strauss who--the forum was the Global Warming 
Emissions. He said the article proposed various forums for 
initiating lawsuits against the United States, including the 
Law of the Sea Treaty's compulsory dispute resolution, which I 
am sure that Senator Lee will be talking about, mechanisms. And 
he said, as the United States has not adhered to the 
Convention, however, a suit could not be brought unless we 
adhered to the Convention.
    In the book that was written ``Climate Change Damage and 
International Law,'' law professor Roda Verheyen said--she 
posed a comprehensive hypothetical case that could be brought 
against the United States for its alleged responsibility in 
melting glaciers, causing glacier outburst and floods.
    The reason I am interested in this is we in the Senate and 
the House have refused to adhere to this and pass something 
that would put a limitation on anthropogenic gases and here we 
would be ceding that authority to someone else.
    And the last thing I want to mention, Mr. Chairman, if you 
would allow me to do this--they keep talking about a seat at 
the table. I think my good friend to my right, Senator DeMint, 
is going to ask what table you are talking about because we 
already have a table out there and it is called the 
International Maritime Organization. They have had this since 
World War II. It says accomplished by passing and adopting 
implementing standards, maritime safety and security, 
efficiency of navigation, and prevention or control of 
pollution from ships, IMO is the source of approximately 60 
legal instruments that guide the regulatory development of its 
Member States and improve the area of the sea.
    So those questions I would ask are you really do not think 
that our sovereignty is impaired by ceding these authorities to 
some international group for suing the United States or taxing 
the United States. And then also, can you tell me of incidents 
where the IMO has not answered these problems that we have been 
talking about to your satisfaction?
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Inhofe. You put 
a lot on the table. Do you want to respond, Admiral?
    Admiral Winnefeld. There is an awful lot. First of all, it 
is great to see you again, Senator. I always enjoy our 
conversations.
    There is an awful lot in that question.
    Senator Inhofe. Up till now. [Laughter.]
    Admiral Winnefeld. Even now, sir. Even now, with respect.
    There is an awful lot in your question, and I think that we 
would have to have, I think, a detailed one-on-one discussion 
because I am not sure that I would, for example, agree that it 
is a tax as opposed to a royalty.
    I would also suggest--and again, I am not the economic 
expert or the industry person who might testify to this. But I 
think a lot of these guys are not investing in these areas 
because they are worried that they do not have the underpinning 
of treaty law to protect them. And so it is money that is not 
there because they are not drawing the natural resources from 
the Extended Continental Shelf that perhaps we as a nation 
would like to see them draw.
    Senator Inhofe. If we did, of course, we would be able to 
get royalties in the range that I discussed, and of course, 7 
percent would represent more than 50 percent of the royalties 
we would otherwise be entitled to.
    Admiral Winnefeld. Depending on the range.
    Senator Inhofe. That is right.
    Admiral Winnefeld. If we took 18 and three-quarters and 
took 7 off of that, we would be down to certainly 11 and three-
quarters, which at the moment that money does not exist. I 
mean, we could have a detailed discussion there.
    Another example would be the Reserve Officers Association 
letter, which I read for the first time this morning, which I 
found--after I read it, I felt like these guys ought to go get 
better advice because there are a number of statements in there 
that I think are incorrect or misleading. For example, they 
talk about territorial seas, that the 1958 Geneva Convention 
established territorial seas. That is just not true.
    It talks about, sort of cleverly, that that Convention 
defined international straits, but what it did not do, but what 
the Law of the Sea does, is to define what transit passage is 
through those areas. That is not in the Geneva Convention and 
it is in the Law of the Sea Convention.
    Very importantly to me--and I would want to go into a 
classified session to discuss this--is that the Law of the Sea 
Convention defines a stateless vessel. That is incredibly 
important to us in the counterterrorism world and the 
counterproliferation world.
    So there are some inaccuracies in that letter that I would 
love to sit down and walk through, even though they are a great 
bunch of guys who obviously mean the best for our country.
    So, again, as I said, I always enjoy our conversations and 
I look forward to the potential to have one on this very 
important subject, sir.
    The Chairman. Thank you very much, Admiral.
    Yes, Admiral Papp.
    Admiral Papp. And, Senator, I lead the U.S. delegation to 
the International Maritime Organization. I went to my first 
general Assembly this fall, and in every discussion, bilateral 
and multilateral, every conversation starts off with the other 
country questioning and wondering why the United States is not 
asserting leadership by joining the Convention because every 
negotiation that is done, whether it has to do with piracy, 
whether it has to do with marine casualty, overseas, everything 
is formed on the basis of the treaty, and with us being an 
outsider, oftentimes just because of who we are, because of the 
United States, we can influence it and we can still get things 
done, but it makes it more difficult for us to get these things 
done.
    We are looking at this and how are we are going to operate 
in the future, what tools are we going to have to use in the 
future. And customary international law, countries' 
influences--they ebb and flow. They rise, they fall. This is 
something that assures because it is the basic underpinning of 
all these treaties, all these agreements that we come to at 
IMO.
    Senator Inhofe. My question was where has this not worked 
in the past. It has been working since World War II.
    Admiral Papp. Well, I can give you one right now, sir, and 
it is dealing with the Arctic. I personally requested a meeting 
with all the other Arctic representatives there so that we can 
continue our negotiations in terms of coming up with the 
details of the search and rescue agreements for the Arctic, for 
pollution response in the Arctic----
    Senator Inhofe. They did not meet with you? Is this what 
you are asserting here?
    Admiral Papp. They did meet with me, sir, because we are 
the United States. We still have influence.
    Senator Inhofe. Exactly.
    Admiral Papp. But will that influence continue forever?
    The shifting politics, shifting strengths of countries.
    What I can tell you is that each and every one of those 
countries looks to the United States for leadership and setting 
an example under the rule of law and being in a leadership 
position. And we are not quite in that leadership position 
given the current stance that we have.
    Senator Inhofe. Do you think in the future if we do give 
this opportunity for them to take funds, royalties or 
otherwise, which I would have to say, Admiral, that is a tax 
because that is money, to be redistributed by some organization 
that we do not even have a voice in--do you think that is in 
our best national security interest?
    Admiral Papp. Well, sir, I think it is all speculative at 
this point because nobody is willing to drill on the Extended 
Continental Shelf because they do not have the legal assurances 
that are given by the Convention. And if we are a member of the 
Convention, we do have a seat at the table. Somebody asked what 
table do we have a seat at. The International Seabed Authority 
where we would have the one permanent seat and veto power.
    Senator Inhofe. The same veto power that other countries 
like Sudan might have. We have veto power. First of all, you 
are talking about two entities. One is an advisory and the 
other is making a decision. And you are saying that we have a 
different veto power than the other countries have?
    Admiral Winnefeld. If any country has the veto power, then 
that would nullify the ability to distribute any of those 
funds.
    Senator Inhofe. That is right.
    Admiral Winnefeld. So the deal would be that if the group 
does not come up with what seems to be a fair and equitable 
distribution of those funds, then we would veto it.
    Senator Inhofe. On distributing the funds, yes. But the 
funds would already be there. The tax, the royalty would 
already be in effect. They would have the control over those 
funds that came from our efforts that otherwise would be coming 
to the United States. So that does not affect that. They would 
have that authority. It is just that you are saying that we 
could direct which countries they go to, but they would not be 
coming to ours.
    Admiral Winnefeld. Some of them could be coming to ours, 
but you are correct. Whatever the----
    Senator Inhofe. For the record, I want you to send me a 
scenario by which any of that would come to the United States.
    The Chairman. Well, I am going to intervene here just for a
second.
    Senator Inhofe. Yes. You are the chairman.
    The Chairman. Well, no, no, but I have given you well more 
than double the amount of time of any other Senator because I 
really want any opponent to be able to have an opportunity to 
grill people.
    Senator Inhofe. And I appreciate it.
    The Chairman. I think that is really important, and I want 
to get all these issues out on the table.
    But I do think it is important, as we do that, that we try 
to establish what is fact and what is not. There is no power 
and no right of taxation in this document. And we will have an 
understanding and a declaration that makes it clear in the 
resolution of ratification that the United States of America 
will never accede to any other country's tax, that there is no 
tax in here, and it will be properly defined.
    Senator Inhofe. Mr. Chairman, we are saying that they will 
have a percentage of the royalties that we would otherwise----
    The Chairman. A royalty. A royalty is not a tax.
    Senator Inhofe. Is not a tax?
    The Chairman. That is correct. A royalty is a bargain. It 
is an agreement. A royalty is not a tax. No government 
authority has issued a tax in any kind of way that constitutes 
taxation. It is a royalty where the companies who are at the 
table during the negotiation--Ronald Reagan set that in place. 
And in fact, we will have testimony from John Negroponte and 
others who have been part of these negotiations over a long 
period of time as to exactly what was agreed on and how. There 
is a royalty scheme.
    Why is there a royalty scheme? Because three-quarters of 
the planet Earth is ocean. Three-quarters of the planet. And a 
whole bunch of countries are landlocked. And if the ones with 
the border on the ocean have the right to extend their shelf 
way out into the ocean, you could have very few nations 
claiming all the resources of the Earth to the exclusion of 
everybody else. So what was agreed on is really quite minimal. 
It is far less than the oil companies pay to drill off the 
coast of Louisiana. Far less. And it is scaled according to how 
much mining and how much resources you take out of the ocean.
    Now, Lockheed Martin and a whole bunch of other companies 
decided, wow, you know what?--97 percent of something is a heck 
of a lot better than 0 percent of nothing. And they want 97 
percent. They want their 93 percent. And so they have agreed 
there will be a scale of some amount that will go to the 
landlocked nations in compensation for the rights of other 
countries to exploit the seabed of the Earth.
    We have over a million acres of land out there that we can 
claim for America, more than any other nation on the face of 
the planet because we have Guam, because of the Marianas, 
because of Hawaii, because of the Aleutians and so forth. We 
have the most extensive--and I will bring a map in of it one 
day. It is extraordinary. To sit here and think that we are not 
going to take advantage of that and stake our claim and have 
our claims legitimate so our companies can go out would be just 
astonishing. The companies want this. They are ready to pay the 
royalty because they want the profits that come from the other 
93 percent.
    Senator Inhofe. They establish the royalties. I just have 
to say--and I am afraid you will cut me off before I respond to 
your statement----
    The Chairman. No, I will not. I have never cut you off, 
Senator.
    Senator Inhofe [continuing]. About a tax. Money that would 
be coming to the United States, that by virtue of this treaty, 
would not come to the United States--I call that a tax. Most 
people outside of Washington would call that a tax.
    The Chairman. Well, Senator, you are entitled to--we will, 
as I said, make it crystal clear in the ratification document.
    And I think the companies will be quite upset that you are 
protecting them from earning the profit that they would like to 
earn. It is sort of remarkable to me, but so be it.
    I also think it is important here to deal with facts. 
General Dempsey, indeed, said we would not reduce our force.
    Senator Inhofe. Force power.
    The Chairman. Force power. Of course, the United States of 
America is not going to reduce its force power. But every one 
of these gentlemen at this table, who have the responsibility 
of sending people into combat conceivably at some point in 
time, have said they would rather have a tool at their disposal 
to try to resolve things peacefully first. And what General 
Dempsey said, if you quote him completely, which you did not 
do--he went on to say that the failure to ratify puts ourselves 
at risk of confrontation with others who are interpreting 
customary international law to their benefit. So the risk of 
confrontation goes up. So our force capacity will not go down, 
but the risk of having it used in a confrontation you do not 
want goes up. And that is what every one of these leaders have 
said is not advisable.
    Senator Inhofe. No, I understand and we talked about that. 
So you would agree then that not going into this treaty would 
not in any way compromise our ability to project force or to 
navigate. You would agree with that.
    The Chairman. Not necessarily navigate but project force I 
would agree. We will project force, but it is not necessarily 
going to affect those rights. If you want to have the 
confrontation without having a tool to resolve it properly, 
that is a choice every Senator will face when we get to it.
    But I have taken up Senators' time, but I just want to 
also--
I think it is important--and Admiral, maybe you want to comment 
on this. The Reserve Officers' letter--and I respect them 
completely and they are entitled and we will welcome those 
kinds of comments here. But once again, we have to deal with 
facts.
    A lot of people are working off of the 1982 treaty, and for 
them and for some people, things have not moved since then. But 
the negotiation has and the status of the treaty has changed 
since then. And so we are dealing with a very different set of 
facts here. And, Admiral Winnefeld, I think you would agree 
that there is an assertion that has been made here that every 
provision of the Convention is already codified in previous 
treaties to which we are a party, and I think that is a 
misunderstanding. It reflects a confusion about what was in 
customary law as opposed to the older treaties.
    For example, the 1958 Convention, Senator, did not specify 
any limit on the territorial sea, and some countries were 
taking advantage of that loophole to extend their territorial 
seas. Article 3 of the 1982 Convention explicitly set a 12-mile 
limit according to U.S. policy. The 1958 Convention did not 
include a codification of the right of transit passage through 
straits used for international navigation that had developed in 
customary international law. And there are other examples of 
that.
    So I would just very quickly ask you, Admiral Winnefeld, is 
that correct.
    Senator DeMint. Mr. Chairman, I do not mean to be rude and 
do not want to interrupt, but we have a vote at 12:30.
    The Chairman. Fair enough.
    Senator DeMint. A number have been waiting a long time----
    The Chairman. Let us come back to this. We will come back 
to this at the appropriate time. We are certainly going to 
leave the record open, and we are going to building a longer 
record anyway. So we will draw this out so people understand 
the distinction between the 1982 and where we are now, what is 
in customary and what the relationship is to the treaty.
    Senator Udall, thanks so much for your patience.
    Senator Udall. Thank you, Senator Kerry. And let me just 
thank you again for approaching this treaty in a very, very 
thorough way and having these fine servicemembers before us 
that are giving us their personal opinions.
    I think there was some suggestion here that your opinions--
I know Senator Kerry asked you at the beginning, are you here 
giving us the best of your experience and the best of your 
personal opinions, and I think everyone said yes. And so I 
think we should put to rest this issue of the idea that the 
Commander in Chief has ordered you to testify in a certain way. 
Is that the case, that these are your personal opinions here 
and based on your experience? Yes? I see everybody nodding.
    Admiral Greenert. That is correct.
    Admiral Winnefeld. That is correct, Senator.
    Senator Udall. Let the record reflect. OK. Thank you.
    There was also a suggestion that on the letter with the 
retired officers--and you all are active military--that somehow 
there is a split. Do you any of you all have a sense? I mean, I 
know Senator Warner was here earlier. He was a captain in the 
Marines. He is in support. Do you any of you have a sense of 
how it comes down in terms of retired military versus active 
military on this or the various associations or anything? And 
if you do not know it off the top of your head, you can get us 
the information. But please.
    Admiral Greenert. All of the colleagues that I have spoken 
to--Chiefs of Naval Operations--the conversation centered 
around maritime security. That is what I am conveyed to take 
care of. And there has not been a split. And those retired who 
were not Chiefs of Naval Operations--the issue has been 
consistent in that the elements in the Law of the Sea 
Convention that enhance maritime security, which the entire 
Convention that I see does, there has not been a split. There 
have been some who are retired that I have spoken to who said, 
well, I am not so sure, and it involved a lot of the details of 
the economics and the ability to control. That has been my 
experience, Senator.
    Senator Udall. Do any of you--would any of the others like 
to comment on that?
    Admiral Winnefeld. I am aware of a 2007 letter written by 
the Military Officers Association that is supportive of the 
treaty. So that is why I was sort of surprised to see this 
morning the other letter which again had some inaccuracies. But 
I give them credit for the courage and the strength of their 
convictions, but I think they just had some things inaccurately 
stated.
    Senator Udall. The Navy and the Coast Guard's ability to 
conduct maritime interdiction is an important tool to stop drug 
trafficking and conduct counterproliferation operations. And 
while some have asserted that the Law of the Sea Treaty puts 
shackles on our maritime forces, I agree with the assessment of 
the Navy JAG that article 110 pertaining to the right of visit 
actually strengthens our ability to conduct maritime 
interdictions.
    Can you go into details about how our Armed Forces will be 
enabled to conduct their mission by article 110 and why it is 
important that the Navy and the Coast Guard have the backing of 
an international treaty to conduct operations they can already 
conduct via force if needed?
    Admiral Papp. Well, sir, being in the service that is 
involved in maritime interdictions on almost a daily basis, I 
can tell you that prior to the Convention, we tried to work out 
bilateral or multilateral agreements with other countries that 
enable us to operate close to their waters, sometimes even in 
their territorial seas because we are able to come to these 
agreements, whether we use ship riders or other things. It 
helps us to interdict drugs, migrants, and perhaps other things 
far offshore in the transit zone, sometimes in the departure 
zone.
    Prior to the Convention and the 1994 revision, we had about 
a dozen countries that we were able to get into agreements 
with. After the 1994 Convention, which had language in there 
talking about cooperation between countries particularly as it 
relates to interdicting drugs and because we comply with the 
Convention, even though we have not acceded to it, we have 
built that up to about 45 countries that we have agreements 
with around the world.
    However, administrations change. Other people are elected 
in. These constructs that we have come to are on a foundation 
of shifting sand, and we cannot always rely upon each country 
to live up to its agreement because things will change. We have 
some countries that have excessive territorial sea claims that 
we have to respect.
    But having the assurance of the underpinning of a solid 
foundation of the Convention would help us in negotiating those 
things into the future and give us greater predictability.
    Senator Udall. Thank you very much.
    Admiral Greenert. The elements that describe freedom of 
navigation, for example, Exclusive Economic Zones, territorial 
seas, and all that, transit passage, archipelagic passage--that 
all enhances our ability to conduct maritime intercept 
operations because it clarifies where we can operate.
    But also what section 110 does is it provides clarity on 
unauthorized broadcasting, drug trafficking, piracy, and 
unflagged nations as the Vice Chairman mentioned earlier. But 
it also says that powers confirmed by other treaties, in other 
words, United Nations resolutions and all that, that is very 
clearly laid out and gives us those mandates that enhance our 
ability to, especially in a coalition operations, bring it all 
together to do maritime intercept.
    Senator Udall. Any of the other panelists have a comment on 
that?
    [No response.]
    Senator Udall. Thank you very much for your answers and 
thank you for your service.
    The Chairman. Thanks so much, Senator Udall.
    And, Senator DeMint, thanks for your patience. Appreciate 
it.
    Senator DeMint. Thank you, Mr. Chairman.
    And I want to thank all of the folks here today. You and 
the men and women who serve with you make us proud to be 
Americans.
    And I appreciate your being here to advocate for the 
treaty. I mean, there are 10 pages in this treaty dealing with 
navigation that would have a lot of theoretical benefits to our 
military, to particularly our Navy. I do not refute that at 
all, although some of the things I have heard today would make 
me even concerned about that part of it.
    As has been pointed out, where it has really been tested in 
the South China Sea with China violating the rules, with 
numerous countries affected, there has been no enforcement 
based on the treaty, and numerous countries that are part of 
this treaty.
    And the implication I have heard from some of you today 
maybe worries me more than anything else, is that by joining, 
we, in effect, become the enforcers of this around the world. 
And I know that is not what you said, but that we add our 
weight. But I am afraid that these other countries are part of 
this treaty. It is not being enforced, and if we become part of 
it--they want us to become part of it for numerous reasons, but 
one is to help enforce it. That worries me.
    But I would like to take just a second to explain why I 
oppose the treaty as a whole, not necessarily the pages you are 
talking about, and instead of ask a question, yield to Senator 
Lee because I know he has studied this a lot and I would like 
to give him a chance to ask questions before we run out of 
time.
    But you have explained that the up side of this treaty is 
that it might give you an additional tool to deal with issues 
out in the future. And I respect that. But the down-side risks 
for us seem much greater than that potential benefit that we 
might have that is clearly theoretical, not working now. The 
hope is if we get involved, our weight might make it work. But 
the 300 pages is primarily a document, I would say, at least in 
large part with environmental issues, and that may affect us 
much more than any navigation part of this.
    In fact, all the research I have done--there is not a table 
in Jamaica where the naval powers around the world, except for 
us, are meeting at a table making decisions about navigation. 
That is not happening. That is not what they are dealing with 
now. Perhaps our joining the Convention could change that, but 
that is not what the Convention is doing now.
    But the language in this treaty that worries us is 
particularly that that deals with environmental issues and the 
ability of this Convention to enforce that with signatories of 
the treaty. And it is clear that the United States is the 
largest economic power. We are the largest producer, the 
largest consumer. We also have the largest military in the 
world. And if you put all that together, we are by far the 
largest emitters of carbon, and that is an issue around the 
world.
    This is not a theoretical issue. Europe is already going to 
charge us taxes for our commercial planes to land there because 
of emissions. And it is clear from this that the United States 
is going to be subject to complaints and suits from all over 
the world dealing with climate change, issues like cap and 
trade. There will be suits for us to pay for pollution credits 
where we sail our ships and where we fly our military aircraft. 
And the arbitration or the dispute resolution part of this is 
out of our control. We appoint two. The complainant appoints 
two, and the United Nations Secretary General will be the 
deciding vote.
    And so while a lot of us who are against this treaty are 
mocked, in effect, for not having the good sense to understand 
what is in it, I am afraid that you are looking at a section of 
this that might benefit our military long-term, but the other 
issues that are in the other 300 pages are very serious and 
subject the United States to a high cost. We will pay more for 
being in this Convention, just like we do the United Nations, 
than any other nation. The royalties that come from it will 
largely come from us. That is why other countries want in it. 
We will probably be paying for pollution credits very quickly, 
and we will pay for countless lawsuits that are going come 
against us that are not theoretical but I think very real.
    So we have concerns not necessarily disagreements of what 
you are talking about. And again, I appreciate your advocacy of 
trying to bring us and the rest of the world into the rule of 
law. This treaty is not doing it now. I do not think it is 
going to do it when we join it.
    But I will yield to Senator Lee.
    Senator Lee. Am I recognized?
    The Chairman. Yes, absolutely.
    Senator Lee. Thank you.
    Thank you all for being with us today. It is an impressive 
site to have 24 stars here in front of us with only six 
officials, and I am honored by your service to our country.
    I too have some concerns with this proposed treaty, 
concerns that relate ultimately to sovereignty concerns. The 
discussion we had a few minutes ago regarding the difference 
between a tax and a royalty is, I think, a legitimate one. 
There is a legitimate point to be made there.
    My concerns would not, however, be resolved merely if we 
could conclude that what we are talking about under article 82 
is a royalty rather than a tax. The reason that developers will 
pay a royalty to the United States Government in the American 
submerged lands offshore has to do with the fact that there is 
a recognition there of a sovereign interest vested in the 
United States of America. That is why the royalty gets paid 
when it is on Federal lands, whether it is onshore or offshore. 
The idea of paying a royalty to any international body tends to 
imbue that international body with a degree of sovereignty. 
That by itself raises significant concerns in my mind.
    Now, of course, the primary reason why the six of you are 
before this committee today is to talk about our maritime 
interests, our navigational rights as a country. And I 
understand that. But I do have to ask the question. I am happy 
to ask it to any or all of you who are willing to answer this 
question. Why is it necessary? Let us assume for purposes of 
this discussion that you may be right, that it could be a good 
thing to protect our navigational, our maritime rights through 
some kind of a treaty. Why is it necessary to join that 
together with a separate part of the same treaty that also 
deals with exploitation of the seabed extending beyond our 
Outer Continental Shelf?
    General Jacoby, you are closest to me. Why do you not take 
a stab at that?
    General Jacoby. I would be happy to, Senator.
    In my area of operations, my concern about the Law of the 
Sea Treaty, my support is generated by the opening of the 
Arctic. It is one of those things where you have got to be in 
favor of what is going to happen. For whatever reason, human 
activity is increasing at a fast pace. Since 2008, double the 
number of vessels heading through the Bering Strait. This 
summer right now Shell Oil is bringing two platforms to work in 
the Beaufort Sea. And this is increasing. Economic activity 
inevitably is followed with security and perhaps later safety 
and defense concerns. And so we have to pace that and make sure 
that we stay ahead of that.
    Senator Lee. Would that necessarily include then--I mean, 
to the extent that there are some benefits of joining those two 
things, is there any reason why it would have to include a 
royalty paid to an international sovereign body, which I assume 
you would agree, by the way, this would be unprecedented? I 
mean, it is really the first time we would, as a country, be 
vesting an international body with real incidents of sovereign 
authority.
    General Jacoby. Senator, I am going to stick with the 
operational aspects of that, if I may. This increasing 
competitiveness that is generated by increased human activity 
and economic activity really opens up a whole new world of 
friction points. So for an operational commander, it is where 
are you going to pick your fights and what tools are in your 
tool bag. Harsh environment, few assets, little infrastructure, 
economic activity outpacing that ability.
    So having this framework, this starting point with all the 
other Arctic nations but not just the nations, in my case the 
chiefs of defense, the chiefs of security, the folks 
responsible for safety, that allows us to build shared 
situational awareness, common interests, common framework so 
that we are going to avoid--my job--avoid these frictions the 
best that I can as this pace of activity----
    Senator Lee. So is the common framework that you are 
referring to--would that be established by the International 
Seabed Authority? Is that the table, the metaphorical table 
that we keep talking about?
    General Jacoby. I am going to stick with just the 
operational aspects of it. I think the seabed questions and the 
Continental Shelf questions, of course, are the things that are 
the uncertainty that is accompanying increased economic 
activity. The Law of the Sea does allow us a starting point of 
certainty in our discussions and in our coordination and 
cooperation as we try to resolve what is really an opportunity 
to have a boon in an activity in the Arctic. And so for me it 
is just allowing us to get ahead of this. It is about the 
future, and it is about how can we contribute to the peaceful 
opening of the Arctic, reduce potential friction points, and 
this is a good, solid framework which all the Arctic countries 
and the chiefs of defense start with when we begin those 
discussions.
    Senator Lee. OK.
    Admiral Papp, I heard you mention a few minutes ago that we 
have had some difficulty negotiating with Canada on an issue 
that you described. You said that Canada was standing on what 
you regarded as, I think, weak footing or words to that effect. 
You also indicated that although it was on a weak footing, the 
objections that Canada was raising were based on the fact that 
the United States has not yet ratified this treaty. Do you want 
to explain to us why that is the case and why ratification of 
the treaty would necessarily resolve that?
    Admiral Papp. Yes, sir. And getting back to Senator Risch's 
comment, if I insulted anybody's intelligence, we will be happy 
to have staffs come up and brief specifics of the cases that I 
cited.
    The one that I will give you is because I have been 
personally involved as the Atlantic Area Commander, my previous 
job. Part of the Coast Guard's responsibility is the permitting 
process. We are a law enforcement and regulatory agency. So 
when people for commerce purposes seek to build oil facilities, 
gas facilities, et cetera, New England has a need for more LNG 
facilities--there was a proposal to put one up in northern 
Maine. Canada objected because of--and claiming that it was 
internal waters and that they would have control over the 
weather. There were transits through that area.
    There is also a dispute as to our border between western 
Canada and the eastern edge of Alaska.
    More importantly and more significantly, a large issue is 
the Northwest Passage, whether that is internal waters to 
Canada or whether it is archipelagic where there should be a 
transit----
    Senator Lee. Are these all issues that--and I apologize for 
interrupting, but we have got very little time here before we 
have got to go to vote. Are these all issues that are not 
adequately addressed by customary international law that would 
be resolved by the treaty, were it ratified?
    Admiral Papp. If we were operating only under customary 
international law, perhaps. But Canada is a signatory to the 
Convention. They fall back on the fact that they are a 
signatory to the Convention and we are not. So we are not a 
party and do not have any standing to dispute their claims.
    Senator Lee. And so they would regard that aspect of 
customary international law as nonbinding to them and they are 
excused now from that aspect of customary international law?
    Admiral Papp. Well, sir, as I said earlier, in regards to 
the collision regulations, collision avoidance regulations, 
when we operated under customary international law, customary 
international law is in the eyes of the beholder. Everybody has 
slightly different variations of customary international law.
    Senator Lee. And that was an example, was it not, of how 
countries were able to come together and establish 
international regulatory standards without vesting sovereign 
authority in an international body?
    Admiral Papp. I would say that is correct, yes, sir.
    Senator Lee. And also one in which we were able to 
establish those international standards, those international 
norms, which have helped facilitate maritime traffic without 
subjecting the United States to lawsuits to be decided by a 
tribunal that would be weighted in many instances by what would 
likely be the tie-breaking arbitrator being chosen by the 
Secretary General of the United States.
    Admiral Papp. I cannot really comment on that, sir, and I 
would be delighted to bring my lawyers up to discuss that. I am 
looking at it from an operational commander's point of view 
where I like to have all the tools possible in order to 
negotiate agreements on the broad range of things that Coast 
Guard does in terms of assuring safe, secure, and 
environmentally sound commerce into our country, out of our 
country, through our waters, and concluding agreements in the 
Arctic which we are constrained because we are not a party to 
the Convention.
    Senator Lee. OK. Thank you all very much for your 
testimony.
    Just in closing, to wrap up, I just want to comment that I 
respect your judgment greatly, and if there is a need to codify 
certain aspects of currently existing, extant, customary 
international law, either in a treaty or in the U.S. Code or in 
some combination of the two, I am more than open to discussing 
that idea. I have, nonetheless, grave concerns, concerns that 
have not been resolved in any hearing to this point or in any 
reading of the treaty that I have undertaken so far that what 
we are doing is not just that, but we are going far beyond that 
and creating an international body that would be imbued with 
many of the incidents of sovereignty and doing so in a way that 
is completely unprecedented in U.S. history.
    Thank you very much.
    The Chairman. Senator Lee, I appreciate your questions and 
those of Senator DeMint. Obviously, part of what we would love 
to try to do here is be able to address your concerns and your 
fears about this.
    There really are some significant mistaken interpretations, 
and I do mean mistaken. For instance, Senator DeMint and I will 
sit down and talk about this one on one, but there is no 
ability to have an environmental lawsuit that would have any 
standing--I mean, somebody can bring a suit that they want 
tried, but it is not going to go anywhere. It cannot go 
anywhere because the specific language of the treaty says that 
no one is accountable to any environmental standard that you 
have not signed up for internationally. The United States of 
America has not signed up to any international environmental 
agreement. So literally--and I know the Senator is a good 
lawyer and he understands standing--there would be zero 
standing under the direct, overt language of this treaty. There 
is no ability to bring an environmental suit against us. No. 1.
    No. 2, with respect to this concern about the Seabed 
Authority, the United States of America is the only country 
that has a permanent seat on it. Kudos to Ronald Reagan and the 
folks who negotiated this. And we will hear from some of the 
negotiators this afternoon. The others are rotating on a 4-year 
basis. So Sudan may be there today. Who knows where they will 
be in the future? But the bottom line is that Sudan is on a lot 
of bodies that we currently work with, and it has not impeded 
our ability to assert our values or our interests.
    Moreover, if we do not accede to this treaty, our major 
mining companies and other exploitative, undersea entities, 
gas, oil, et cetera, whatever, will not drill, will not 
exploit. In fact, it is very interesting. Lockheed Martin has 
asked the British Government and joined into a British 
consortium in order to be able to access someplace because the 
United States of America will not stand up for it and represent 
it through this process to legalize its claims. So here we are 
sending our companies to other countries to have them stand up 
for their interests. Lockheed Martin will not drill and put 
millions of dollars into an undersea exploitation unless they 
know they have legality to their claim.
    That is for the Extended Shelf. The Extended Shelf we have 
available to us here is bigger than any other country in the 
world. Now, are we going to sit here and say it is smart for 
the United States not to help our companies have legal 
assurance so they can go out there and exploit those resources?
    There is going to be a competition for resources. I mean, 
look at what China is doing now in Africa. Look at what they 
are doing in Afghanistan. We are fighting and putting people on 
the line, and they are there trying to exploit copper. I mean, 
we got to start thinking about our long-term economic strategic 
interests here, and if we do not sign up, we have a chance 
other countries can take us to the cleaners and you will see 
this in the classified briefing, the degree to which other 
countries are staking claims and we are just sitting here.
    Now, we have a permanent seat. We have a veto to boot. 
Nothing can happen through the Seabed Authority that we do not 
agree to. So no money is going to be sent to some--I have heard 
people say we are going to send money to dictators through 
this. No; we are not. It cannot happen because we, if we are on 
it, can prevent it. If you want it to happen, it can happen 
through all the exploitation that is going to take place 
without us on it, and then they may decide to go do those 
things. So, in fact, there is a reverse argument. There is a 
much greater interest for us to be here to protect against 
those kinds of distributions.
    The final thing I would just call to the attention of the 
Senator, article 82, which sets up this entity and the 
distribution. You know, for the first 5 years of production at 
a site, you do not pay any royalty at all. Nothing. And then 
for the 6th year, you pay about 1 percent of the value of 
production at the site. One percent of the total value of 
production at the site. That rate increases by 1 percent for 
each subsequent year until the 12th year. Only at the 12th year 
do you get to a 7-percent. If we are lucky enough to hit mining 
or oil, gas where that lasts for the 12 years, you may get 7 
percent, much less than we pay on any of those oil rigs down in 
the gulf.
    And finally, if you are a net importer of the minerals that 
you are producing out there, you do not pay anything at all. 
Zero royalty. If you are the importer because you are using it, 
this negotiation had the judgment to say that is your use that 
is your deal. It is if you are exporting it and selling it, 
then you have to pay the party.
    And finally, the payments are not made to the Seabed 
Authority. They are distinctly isolated and they go through the 
Seabed Authority. And that language is very specific, and it is 
only in an agreement by the parties at the table as to how they 
would be distributed to where. We are not at that table. So 
whatever is exploited in the world now is going to be 
distributed without the input of the United States. We are far 
better off sitting there and influencing that distribution and 
vetoing it if it is against our interests than we are watching 
it go by.
    So I think we ought to have this conversation.
    Senator Lee. If I could just respond very briefly to a 
couple of those points.
    The Chairman. Yes, please, absolutely.
    Senator Lee. First of all, I appreciate your insight, Mr. 
Chairman. This is an issue that you have lived with and worked 
with for many years, and I do appreciate your insights. I would 
observe, however, a couple of points.
    First, the International Seabed Authority is governed----
    The Chairman. Well, let me just ask how much time we have 
on the vote. I am not trying to cut you off. We have 5 minutes. 
We have time. We have time.
    Senator Lee. In that case, I will try to finish up in 1 
minute.
    The International Seabed Authority is governed ultimately 
by the Assembly. The Assembly is that 160-plus member entity 
which is the supreme organ, the supreme lawmaking body, of the 
Authority.
    The chairman is absolutely right to point out that the 
Council, this smaller body on which the United States does have 
a seat and has what can, I think, fairly be described in some 
limited context as veto authority because in some areas it 
requires consensus. The Council does have the authority to 
propose the rules and regulations governing the article 82 
distribution, but ultimately the distribution itself, the 
determination of how those rules are implemented and the 
allocation itself is made by the Assembly and not by the 
Council.
    As to the lawsuit, I understand your point about a lawsuit, 
but let us take into account the fact that let us suppose we, 
the United States, get hauled into an arbitration pursuant to 
Annex 8 and we find ourselves, having chosen two of our 
arbitrators, our opponent having chosen two, and the fifth 
having been chosen by the Secretary General of the United 
Nations. You could easily count to three among the arbitrators 
who might interpret the laws to which we have acceded, the 
environmental provisions to which we have agreed to be bound, 
differently that a U.S. court might, differently that you and I 
might, and that does present us with some risk.
    The Chairman. Actually it does not, Senator, for this 
reason. If we were to agree to an international agreement with 
respect to the environment and we agreed to a dispute 
resolution process within that treaty, that treaty would govern 
and you could specifically, in fact, preclude--and I am 
confident we would--in the negotiation any jurisdiction of Law 
of the Sea over that particular issue. So in fact, we would be 
well protected if we were to get there.
    I wish this really were a threat that the United States was 
about to enter into an agreement on international climate 
change, but I think it is a long way away given where we are. 
But I am willing, certainly, to provide for that. And we could 
do something in the resolution of ratification that addresses 
that concern, and I am perfectly happy to work with the Senator 
to do that.
    Senator Lee. Thank you.
    The Chairman. Thank you very much.
    Gentlemen, I think everybody here has said it. We are 
enormously grateful to you for not just being here today but 
for your service, for your careers, for what you represent, and 
really it is, I think, important to have had these 24 stars 
here. We are grateful for your testimony and most importantly 
for what you do every single day. We thank you on behalf of the 
country. Thanks for being here today.
    And again, Happy Birthday to the United States Army. Thank 
you.
    We stand adjourned.
    [Whereupon, at 12:45 p.m., the hearing was adjourned.]
                              ----------                              


        Letters and additional Material Submitted for the Record


      Responses of ADM Jonathan W. Greenert to Questions Submitted
                        by Senator John F. Kerry

    Question. If we had a larger Navy would you still be a proponent of 
the Convention? Why?

    Answer. Yes. The Convention supports the legal basis for global 
access and mobility of U.S. military forces. However, this access is 
not a substitute for a capable fleet that can prevent wars and prevail 
in war when prevention fails. We need both a robust fleet and the 
benefits of the Convention to ensure our national economic and security 
interests are met in the maritime domain.

    Question. How would being a party to the Convention further U.S. 
national security?

    Answer. It is by joining the Convention that we can best secure our 
navigational freedoms and global access for military and commercial 
ships, aircraft, and undersea fiber optic cables. As it currently 
stands, we are forced to assert our rights to freedom of navigation 
through customary international law, which can change, to our 
detriment. Treaty law remains the firmest legal foundation upon which 
to base our global presence, on, above, and below the seas.
    Additionally, our new defense strategy emphasizes the strategically 
vital area extending from the Western Pacific and East Asia into the 
Indian Ocean region and South Asia. Several countries in the region 
border on and use critically important trade and supply routes. 
Further, some have proposed restrictions on access for military vessels 
in the Indian Ocean, Persian Gulf, and the South China Sea. The United 
States has continually expressed that it is in our vital interest to 
preserve the freedom of the seas and our respect for international law, 
freedom of navigation, and peaceful resolution of disputes. We continue 
to demonstrate our commitment to those interests by our continuing 
presence and engagement in these critical maritime regions. By not 
acceding to the Convention, we forgo the best and strongest legal 
footing for our actions.
    U.S. accession to the Convention would help strengthen worldwide 
transit passage rights under international law and help to further 
isolate Iran as one of the few remaining nonparties to the Convention. 
For our friends and adversaries alike, it is difficult to understand 
how we argue that other nations must abide by international rules when 
we have not joined the treaty that codifies those rules.

    Question. How would being a party to the Convention help U.S. naval 
forces in their efforts to resist attempts to impose illegitimate 
restrictions on freedom of navigation by other countries? Would you 
provide examples of such restrictions?

    Answer. The Convention provides a formal and consistent framework 
for peaceful resolution of maritime disputes. It defines the extent of 
control that countries can legally assert at sea and prescribes 
procedures to peacefully resolve differences. When we confront another 
country over their illegitimate restrictions it would be beneficial to 
be able to point to a legally binding document as our reference rather 
than the nebulous concept of customary international law. Joining the 
Convention is an important element in preventing disagreements from 
escalating into confrontations or conflicts.
    Recent interference with our operations in the western Pacific and 
Indian Ocean, as well as rhetoric by Iran about closing the Strait of 
Hormuz, underscore the need to be able to use the Convention to 
identify and respond to violations of international law that might 
attempt to constrain our access.

    Question. It has been suggested that by acceding to the treaty we 
are turning the keys of our Navy over to an international organization. 
Would joining the treaty cause us to turn over any authority to an 
international organization regarding our rules of engagement or give 
any international organization control or veto power over our military 
operations?

    Answer. No. Becoming a party to the treaty would not cause the 
United States to turn over any authority to an international 
organization regarding our rules of engagement nor would we be 
relinquishing any control or power over our military operations.
                                 ______
                                 

      Responses of ADM Robert J. Papp, Jr. to Questions Submitted 
                        by Senator John F. Kerry

    Question. If you had more ships in the Coast Guard, would you still 
support ratification of the Convention?

    Answer. Yes. The crucial navigation rights and freedoms that would 
be ``locked-in'' by the United States becoming party to the Law of the 
Sea Convention are important for Coast Guard mission execution 
regardless of how many cutters the Coast Guard operates.

    Question. How would the Convention impact your efforts to work with 
your foreign counterparts, including during the conduct of interdiction 
operations?

    Answer. The Coast Guard's international partnerships are vital to 
Coast Guard mission execution. The Convention would greatly enhance 
these international partnerships, including strengthening our efforts 
to:

   Monitor, interdict, and prosecute those who threaten our 
        Nation's security;
   Advance global and regional security priorities;
   Lead, develop, and negotiate global shipping standards at 
        the International Maritime Organization for safe, secure, and 
        clean ships;
   Combat illegal, unreported, and unregulated fishing; and,
   Prevent environmental damage and natural resource 
        degradation associated with maritime activities.

    In particular, bilateral agreements are important for successful 
and efficient interdiction operations. The Convention provides the 
cooperative framework, language, and operating procedures to negotiate 
these bilateral agreements and thus would facilitate our negotiation 
process. Under the status quo, the negotiation process often slows down 
due to nonparty status.
                                 ______
                                 

     Responses of ADM James Winnefeld, Jr., to Questions Submitted
                        by Senator John F. Kerry

    Question. Some claim that the United States does not need to be a 
party to the Convention--that because most of the rest of the world has 
come to view the 1982 Convention as ``customary international law,'' 
the vital international norms that provide access to the seas and the 
airways above them are indefinitely protected.

   (a) Are you comfortable with relying indefinitely on 
        customary international law?

    Answer. Relying on customary international law is not in the United 
States best long-term interest. Treaty law remains the firmest legal 
foundation upon which to base our operational posture.

   (b) Does reliance on customary international law leave the 
        United States vulnerable to the other countries that might push 
        alternative interpretations of the treaty text? Could such 
        interpretations leave the U.S. military in a more tenuous 
        position?

    Answer. Unlike treaty law, customary international law can change 
subject to State practice at the local, regional or global level. As 
States seek to interpret treaty provisions in a manner that restricts 
freedom of navigation, U.S. reliance on customary international law 
becomes far more vulnerable and needlessly places our forces in a more 
tenuous position when conducting military activities.

   (c) Please provide some examples of provisions in the 
        Convention that you'd like to see locked in?

    Answer. The provisions on transit passage and archipelagic sea-
lanes passage--which were created pursuant to the Convention's 
negotiations--are vital to the global mobility of our forces. 
Additionally, provisions related to the limits of territorial seas and 
innocent passage, the right to exercise the full range of high-seas 
freedoms of navigation and overflight in the Exclusive Economic Zone, 
and the right of warships and other government vessels to visit 
suspected stateless vessels are key provisions that help ensure our 
global force posture.

    Question. Would acceding to the Convention provide you with another 
tool--a force multiplier--that would aid the U.S. military in its 
mission?

   (a) How will the Convention support our operations?
   (b) Will the U.S. military still conduct freedom of 
        navigation exercises?

    Answer. Yes. U.S. accession would comprise another important tool 
in our operators' toolkit. Having every available instrument of 
national power at our disposal is essential to address a range of 
challenges in an increasingly complex and diverse global security 
environment.
    (a) Becoming a party to the Convention supports operations by 
protecting our navigational freedoms and global access for military and 
commercial ships, aircraft, and undersea fiber optic cables. It would 
also enhance our credibility and leadership in maritime affairs, 
reinforce our commitment to the rule of law, and provide an effective 
tool to counter interpretations of the Convention that seek to limit 
military operations.
    (b) Yes. U.S. military forces will continue to use operational 
assertions to challenge excessive maritime claims under the U.S. 
Freedom of Navigation Program. Becoming a party to the Convention would 
strengthen the legitimacy of our operational assertions.

    Question. If we accede to the Convention will our military 
operations be in any way restricted?

    Answer. No. For nearly 30 years, we have conducted all U.S. 
military operations and activities in strict conformity with the 
Convention's navigational provisions; U.S. accession will not change 
the manner in which we operate. It will have no effect on our rules of 
engagement or our exercise of self-defense.

    Question. Article 298 of the Convention expressly allows States to 
exclude ``disputes concerning military activities'' from dispute 
resolution. If we join this treaty, we will invoke that exception.

   Based on the treaty text and on how it is already being 
        implemented, do you have any concern whatsoever over whether 
        the United States will be able to exclude disputes concerning 
        military activities from the Convention's dispute resolution 
        mechanism, and that the United States will be able to decide 
        for itself whether an activity is a ``military'' one for the 
        purposes of the Convention?

    Answer. No. I am confident that if the United States accedes to the 
Convention, we would invoke this exception and exclude U.S. military 
activities from any form of dispute resolution mechanisms or 
procedures. I am equally confident that the United States will be able 
to decide for itself what constitutes a military activity for purposes 
of the Convention. Many other State Parties to the Convention, 
including the other four permanent members of the U.N. Security 
Council, have submitted declarations exempting their military 
activities from dispute resolution. Each State Party retains the right 
to determine what activities constitute ``military activities.''
                                 ______
                                 

     Responses of Gen. William Fraser III, to Questions Submitted 
                        by Senator John F. Kerry

    Question. In your role as the Commander of U.S. Transportation 
Command, and also as an aviator, would you address how the treaty aids 
the unimpeded flow of sealift and airlift through strategic 
chokepoints?

    Answer. Unimpeded movement of our strategic sealift vessels and 
airlift aircraft through the world's strategic chokepoints remains 
essential to global mobility. Currently, the U.S. relies upon customary 
international law as the primary legal basis to secure global freedom 
of access. However, some countries may seek to redefine or reinterpret 
customary international law in ways that directly conflict with our 
interests. The Law of the Sea Convention provides legal support against 
erosion of essential navigation and overflight freedoms. Accession will 
give the U.S. leverage against countries seeking to reshape current 
internationally accepted rules we depend upon to transport our cargo 
and passengers.

    Question. Does the Convention support your efforts to maintain 
global mobility and partner with private industry to ensure the 
delivery of troops, equipment, and supplies to and from the fight?

    Answer. Yes, it does. The Law of the Sea Convention supports our 
national security interests by defining the rights of U.S. military and 
civilian vessels as they meet our mission requirements, reaffirms the 
sovereign immunity of our vessels owned by the U.S. as well as those 
used for government noncommercial service, and preserves our right to 
conduct military activities and operations in Exclusive Economic Zones. 
The Convention will help to simplify the complex maritime environment 
for our military forces and our commercial partners who play a critical 
role in developing new routes for transporting DOD cargo and in 
enabling access to a vast global infrastructure used for the transport 
of DOD cargo. This Convention provides important legal support for our 
commercial partners who transport our cargo, unescorted by U.S. 
warships, under the legal regimes of the Law of The Sea Convention. It 
also supports our civil air carrier partners who transport nearly all 
our military passengers and a significant amount of DOD air cargo.

    Question. What are the impacts to USTRANSCOM should the United 
States fail to ratify the Convention?

    Answer. There are no immediate impacts to U.S. military ships and 
commercial partners carrying DOD cargo. Over time, however, customary 
international law may be interpreted in different ways, particularly by 
emerging powers such as China, which may attempt to exert influence in 
areas traditionally accepted as international passageways. Ratifying 
the Convention will help to counter those interpretations and ensure 
our rights to navigate through coastal areas, international straits and 
Archipelagic Sea Lanes. The Law of the Sea Convention codifies, among 
other things, the Rights of Innocent Passage, Transit Passage and 
Archipelagic Sea Lanes Passage, reducing the risk of such challenges by 
Convention signatories. The Convention also supports the right of 
passage through and operations within foreign Exclusive Economic Zones, 
which some nations currently attempt to treat as areas of coastal state 
sovereignty.

    Question. Please explain how the Law of the Sea Convention enhances 
USTRANSCOM's ability to traverse through the Arctic region.

    Answer. Currently, little surface transit takes place through the 
Arctic, but we do exercise Arctic overflight while enroute to the 
CENTCOM AOR. As Arctic ice melts and the region increases in importance 
as a navigable area both on the sea and for overflight, it will become 
increasingly important for USTRANSCOM to traverse the region freely as 
more nations claim and secure extended Continental Shelf rights. As 
Arctic transit becomes practicable, the Law of the Sea Convention will 
define the regional international straits and determine the rights of 
vessels transiting those straits. Becoming a Party would guarantee that 
right by treaty law, vice reliance upon evolving interpretations of 
customary international law.

    Question. How does the Law of the Sea Convention support commercial 
partners who are carrying cargo for U.S. forces?

    Answer. More than 90 percent of all U.S. military supplies and 
equipment are transported by sea in DOD and U.S.-flagged charter and 
liner ships. The Law of the Sea Convention provides a legal basis for 
the sovereign immune status of DOD vessels and U.S.-flag long-term 
charters, and also provides important legal protection for U.S.-flag 
liner shipping used for the transport of DOD cargo. Liner shipping, 
U.S.-flagged vessels conducting commercial business while carrying DOD 
cargo, would be afforded the same protections as any flagged ship under 
the Convention even though they do not enjoy sovereign immune status.
                                 ______
                                 

       Response of GEN Charles Jacoby, Jr., to Question Submitted
                        by Senator John F. Kerry

    Question. Would a rule-based international framework such as Law of 
the Sea Convention aid you in your efforts to maintain stability and 
secure U.S. interests in the Arctic?

    Answer. Yes. Use of diplomacy and the framework provided by the Law 
of the Sea Convention would facilitate military cooperation in the 
Arctic and would enhance my leadership position for building military 
partnerships in the region as a combatant commander. A rule-based 
framework aligns with my responsibility to support the peaceful opening 
of the Arctic in a manner that strengthens international cooperation. 
The Convention provides a crucial roadmap for resolving friction that 
may arise as the Arctic opens, allowing conflict to be resolved 
diplomatically, without coercion.
                                 ______
                                 

 Response of GEN William Fraser III, GEN Charles Jacoby, Jr., and ADM 
   Samuel Locklear III to Question Submitted by Senator John F. Kerry

    Question. As a combatant commander, if you had all of the material 
resources you could possibly ask for at your disposal, would you still 
support the Convention?

    Answer. Yes. The Law of the Sea Convention provides an 
internationally recognized legal framework to support our freedom of 
navigation and overflight rights. It gives the United States a stronger 
diplomatic and legal position to assert our rights where the 
alternative might be to rely on my capabilities as a combatant 
commander to ensure access and mobility in the maritime domain.
                                 ______
                                 

        Responses of ADM Samuel Locklear to Questions Submitted 
                        by Senator John F. Kerry

    Question. As a combatant commander, if you had all of the material 
resources you could possible ask for at your disposal, would you still 
support the Convention?

    Answer. Yes. As a combatant commander, regardless of the level of 
available resources, I would still support the Convention.

    Question. How has the Convention helped to resolve disputes in the 
South China Sea? Please provide specific examples.

    Answer. The Convention provides a legal framework for nations to 
resolve maritime and boundary disputes, including many of the disputes 
in the South China Sea. Generally, Article 279 of the Convention states 
that Parties ``shall settle any dispute concerning the interpretation 
or application of this Convention by peaceful means. . . .'' The 
Convention recognizes several methods of dispute resolution, and does 
not mandate a particular method. Specifically, Article 280 states that 
Parties may ``agree at any time to settle a dispute between them 
concerning the interpretation or application of this Convention by any 
peaceful means of their own choice.'' These means include 
``negotiation'' (Article 283), ``conciliation,'' (Article 284), 
``arbitration'' (Article 287), or decision by the International 
Tribunal for the Law of the Sea (Article 287) or the International 
Court of Justice (Article 287).
    An example of how the Convention helped to resolve a dispute in the 
South China Sea is the maritime boundary between Vietnam and the 
People's Republic of China in the Gulf of Tonkin (Beibu Gulf in Chinese 
and Bac Bo Gulf in Vietnamese). Both Vietnam and China are parties to 
the Convention: Vietnam signed it in December 1982, and ratified it in 
July 1994; China signed it in December 1982, and ratified it in June 
1996. The process of dispute resolution in the Gulf of Tonkin between 
the two nations had three stages: (i) brief negotiations in 1974, (ii) 
negotiations between October 1977 and June 1978, (iii) and negotiations 
between 1992 and 2000. In 1993, the two nations reached a general 
agreement on the basic principles to be applied to settle the dispute, 
including ``applying the International Law of the Sea.'' On December 
25, 2000, the two nations signed an Agreement on the Delimitation of 
the Territorial Seas, Exclusive Economic Zones, and Continental 
Shelves. Article 1, Section 1 of the Agreement acknowledged, ``The 
Parties have determined the demarcation line for the territorial seas, 
exclusive economic zones and continental shelves of the two countries 
in the Beibu Gulf in accordance with the 1982 United Nations Convention 
on the Law of the Sea, generally accepted principles of international 
law and international practice, based on the full consideration of all 
relevant circumstances of the Beibu Gulf and on the equitable 
principle, and through friendly consultation.'' (Emphasis added.)
    An example of how the Convention has helped to resolve a dispute 
elsewhere in the Asia-Pacific region, similar to some of the disputes 
in the South China Sea, includes the March 2012 case between Bangladesh 
and Burma before the International Tribunal for the Law of the Sea 
concerning their maritime boundary. That case demonstrates that, if the 
Parties to a particular dispute have the political will to utilize the 
Convention's methods of dispute resolution, the Convention provides an 
effective legal framework for resolving maritime and boundary disputes.

    Question. In your dealings with military officials in the region, 
does our non-party status to this Convention have an impact on your 
mission?

    Answer. Yes. In the Asia-Pacific region, the United States has 
national interests in security and stability, freedom of navigation and 
open access to the maritime domain, respect for international law, and 
unimpeded commerce and economic development. We can best protect our 
national security and our leadership role in the Pacific by acceding to 
the Convention. As the Secretary of Defense stated in his May 23 
testimony, a key component of our strategy is to reenergize and 
strengthen our network of defense and security partnerships throughout 
the Asia-Pacific region. An area of universal interests among our 
allies and partners is protection of the rights, freedoms, and uses of 
the sea that underpin all nations' access to the world's oceans. 
Joining the Convention will enhance seamless integration of 
international legal authorities between our forces and those of our 
partners and will place the United States in the best position to lead 
international efforts in the maritime domain.
    As we look into the future, our status as a non-Party will 
increasingly disadvantage the United States. Presently, the United 
States is forced to rely on customary international law as the basis 
for asserting our rights and freedoms in the maritime domain. In 
situations when coastal States assert maritime claims that exceed the 
rights afforded to them by the Convention, U.S. Pacific Command 
challenges such claims through a variety of means including Freedom of 
Navigation operations, military-to-military communications, and 
diplomatic protests through the State Department. When challenging such 
excessive claims through military-to-military or diplomatic exchanges, 
the United States typically cites customary international law and the 
relevant provisions of the Convention. Unfortunately, because we are 
not a party to the Convention, our challenges are less credible than 
they would otherwise be. Other States are less persuaded to accept our 
demand that they comply with the rules set forth in the Convention, 
given that we have not joined the Convention.

    Question. How does not being a party to the Convention hamper you 
when you push back against spurious territorial claims and restrictions 
on U.S. military activity?

    Answer. The United States, as well as our allies and partners, face 
various attempts from particular coastal States to limit military 
activities in large areas of the ocean. The Convention provides a 
stable legal framework of rights, freedoms, and uses of the sea, as 
well as a robust negotiating history, upon which U.S. Pacific Command 
could rely to challenge such coastal States. As a non-party to the 
Convention, however, we are not able to effectively, credibly rely on 
the Convention as a source of law to protect our interests and 
challenge excessive maritime claims of coastal States.
                                 ______
                                 

      Response of ADM James Winnefeld, Jr., to Question Submitted
                    by Senator Robert P. Casey, Jr.

    Question. The United States has declined membership in the United 
Nations Convention on the Law of the Sea for three decades. Why should 
joining the Convention on the Law of the Sea be a priority for the 
United States at this time? From the perspective of the U.S. military, 
what are the expected advantages of membership in the Convention on the 
Law of the Sea? What are the possible drawbacks?

    Answer. Joining the Convention now is a priority because the global 
environment has changed since the Convention's negotiation and entry 
into force. From the perspective of the U.S. Armed Forces, joining the 
Convention is essential to protecting navigational freedoms and U.S. 
national security interests while positioning our forces for the future 
as we confront an increasingly complex security environment. Through 
internal legislation and their own efforts to interpret the Convention, 
rising powers seek to erode the favorable navigational provisions that 
are essential to the global mobility of U.S. forces. As a preeminent 
maritime power, we must operate inside of the Convention to influence 
and lead in manner that prevents this erosion and locks in vital 
navigational provisions. As we rebalance toward the Asia-Pacific 
region, our status as a Party to the Convention will position the U.S. 
Armed Forces to exercise more influence and leadership as tensions and 
disputes arise in the maritime domain. As the Arctic becomes available 
for increased navigation and use, the U.S. Armed Forces will be better 
postured to promote and protect U.S. national security interests and 
effectively interact with the other seven Arctic Council nations who 
are parties to the Convention. From my perspective, there are no 
drawbacks to joining the Convention.
                                 ______
                                 

       Response of ADM Jonathan W. Greenert to Question Submitted
                    by Senator Robert P. Casey, Jr.

    Question. Some observers have argued that U.S. membership in the 
United Nations Convention on the Law of the Sea will restrict the U.S. 
Navy's ability to navigate the seas and conduct maritime operations 
freely.

   What is the possible negative impact, if any, of U.S. 
        accession to the Convention on the Law of the Sea on the 
        freedom of U.S. Navy operations?
   Are there specific provisions within the Convention that 
        protect U.S. freedom to conduct maritime military operations?

    Answer. U.S. Navy operations have been conducted consistent with 
the navigational provisions of the Convention for the past 30 years 
specifically because those provisions reinforce our sovereign and 
security interests. Accession to the Convention will have no negative 
impact on the freedom of U.S. Navy operations. The Convention's 
provisions protect U.S. freedom to conduct maritime military 
operations. Specifically, Articles 58 and 87 preserve the right to 
exercise high-seas freedoms in foreign exclusive economic zones, 
Article 17 provides the right to exercise innocent passage through 
foreign territorial seas without discrimination based on cargo or means 
of propulsion, Article 38 provides the right of navigation and 
overflight through international straits in the normal mode of 
operation, and Article 95 provides warships on the high seas with 
complete immunity from the jurisdiction of foreign nations. The 
Convention's navigational provisions were designed to ensure continued 
protection of sovereign rights and enable naval forces to engage in 
unimpeded free navigation of the high seas to defend Member States' 
security and economic interests in the maritime domain.
                                 ______
                                 

         Response of ADM Samuel Locklear to Question Submitted 
                    by Senator Robert P. Casey, Jr.

    Question. The United States has significant national security and 
economic interests in the Asia-Pacific maritime region. The Department 
of Defense's announcement of plans to shift additional forces to the 
Pacific indicates that this region is an increasingly high priority for 
the U.S. military.

   Has the United States status as a nonmember of the United 
        Nations Convention of the Law of the Sea hampered our ability 
        to protect and promote our interests in this critical maritime 
        region up to this point? If so, how?
   How will accession to the Convention improve our ability to 
        pursue these interests?

    Answer. Not being a party to the U.N. Convention on the Law of the 
Sea (UNCLOS) is used against the U.S. when we challenge--diplomatically 
or operationally--excessive maritime claims of nations in the Asia-
Pacific region. Most States in that area are parties to the Convention 
and cite its language as legal authority for their claims. Some of 
these countries state the U.S. invocation of the UNCLOS language is 
disingenuous as a non-party since the U.S.'s legal foundation is based 
in customary international law as opposed to treaty law. The United 
States asserts the Convention embodies customary international law, 
which is binding on all nations regardless of their status with respect 
to the Convention. However, customary international law is created by 
state practice over time. States' claims and actions create and alter 
customary international law. It is not necessarily static. However, the 
Convention binds the parties to the language of the Convention and that 
language only changes through a formal amendment process. By acceding 
to the Convention, the United States will be in a better position to 
interpret and control that language.

       Letters Submitted for the Record by Senator John F. Kerry











      Letters Submitted for the Record by Senator James M. Inhofe



















                     THE LAW OF THE SEA CONVENTION 
                          (TREATY DOC. 103-39)

                              ----------                              


                     THURSDAY, JUNE 14, 2012 (p.m.)

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:36 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. John F. Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Shaheen, Coons, Lugar, Corker, 
Risch, Inhofe, DeMint, Isakson, Barrasso, and Lee.

            OPENING STATEMENT OF HON. JOHN F. KERRY,
                U.S. SENATOR FROM MASSACHUSETTS

    The Chairman. The hearing will come to order.
    Thank you all for being here. I am sorry we are late.
    Let me begin. At the outset, let me say to people that I 
apologize that we are back in the smaller hearing room here. We 
tried a month ago to reserve Hart 219 for this afternoon, and 
we simply were not able. Somebody else had it for this time.
    So we are here, and I know there are a bunch of people 
outside who would have liked to have come in. And I am sorry 
that we are not able to accommodate that, but it is not for any 
other reason. We are going to try and have our hearings there 
because we know there is interest, and it is just easier for 
everybody. But that is why we are back in here this afternoon.
    This is our third hearing on the Law of the Sea. We are 
going to have some more after this, no doubt. And I am 
particularly looking forward to this afternoon because what I 
like about it is that we have folks with different points of 
view on the same panel and an opportunity to really dig in, 
which I hope we will do. And I think that will be useful to 
everybody here.
    Senator Inhofe, along with a number of other colleagues, 
requested that I invite four witnesses to testify, and so we 
did. We invited all four. Two of them, Secretary Rumsfeld and 
Steven Groves, agreed to join us today, along with two other 
distinguished witnesses. And I am really happy that all of you 
could take the time to be here with us.
    Donald Rumsfeld, everybody knows, is currently president of 
the Rumsfeld Foundation; has held various very senior positions 
in previous administrations, most recently serving as Secretary 
of Defense under President George W. Bush.
    He is joined by John Negroponte, a veteran also of multiple 
administrations. Most recently, Mr. Negroponte served as our 
first Director of National Intelligence and then as Deputy 
Secretary of State in the George W. Bush administration. And he 
is currently vice chairman at McLarty Associates.
    We are also pleased to have John Bellinger. From 2001 to 
2005, he served in the White House as the associate counsel to 
President George W. Bush, and then as the Legal Adviser to the 
National Security Council. And from 2005 to 2009, he was the 
Legal Adviser to the State Department. He is now a partner at 
the law firm Arnold & Porter.
    And finally, rounding out the panel is Steven Groves, the 
Bernard and Barbara Lomas Fellow at the Heritage Foundation, 
and Mr. Groves was previously senior counsel to the Senate 
Permanent Subcommittee on Investigations.
    So welcome to all of you.
    Now this morning, we heard a panel from some of our most 
senior operational commanders, along with the Vice Chairman of 
the Joint Chiefs and the top officers in the Navy and the Coast 
Guard, and they added their voices to that of Chairman of the 
Joint Chiefs and the Secretary of Defense and the Secretary of 
State, calling for ratification of the treaty.
    We have also here heard and we have introduced into the 
record letters from other combatant commanders, all of whom 
strongly support joining the Law of the Sea Convention.
    I think it is my understanding, drawing on the two hearings 
we have had, that even the critics of the Law of the Sea are 
beginning to join the consensus that the navigational bill of 
rights provided for in the treaty and which our military and 
our shippers rely on every day are beneficial to the United 
States.
    As I see it--and just listening, I hope I am not 
mischaracterizing it--I think the bulk of the debate is really 
not focused on the navigational provisions, but rather on other 
aspects of the treaty. And I believe personally--I am not going 
to go into this at length because I don't think that would be 
fair in terms of my chairmanship. But I do think that there are 
a lot of criticisms that are inaccurate, and what I want to try 
to do is separate what is accurate, what is not, so that the 
committee can, hopefully, in the resolution of ratification 
deal with those things that we think we need to deal with.
    But let me give you an example of that. The International 
Seabed Authority has been accused of being, but is not, some 
bloated U.N. bureaucracy. It is totally separate from the 
United Nations and has a staff of less than 40. Nothing in its 
13-year history suggests that it is an organization that is out 
of control or is somehow going to act inconsistent with our 
interests. Or that in joining it, we would not be able to 
effectively use our veto in the ISA Council to advance U.S. 
interests.
    Other criticisms have focused on the royalty provisions, 
other things. But I think we need to dig into facts, and I am 
going to just sort of let that happen.
    The one thing I do want to put out here is it is clear that 
the original provisions of the 1982 Convention were not fully 
consistent with free market principles and would have 
disadvantaged our businesses. If I were looking strictly at the 
four corners in the 1982 Convention, I would have had problems, 
as Ronald Reagan did and others did.
    But those problems, I think in most people's judgment, have 
been addressed in full. Bob Stevens, the CEO of Lockheed 
Martin, recently wrote to me urging that we pass this 
Convention. And this is what he said.
    ``The multibillion dollar investments needed to establish 
an ocean-based resource development business must be predicated 
upon clear legal rights established and protected under the 
treaty-based framework of the Law of the Sea Convention, 
including the International Seabed Authority. Other 
international players recognize this same reality and are 
acting upon it. Countries, including China and Russia, are 
moving forward aggressively within the treaty framework, and 
several of these countries currently hold exploration licenses 
from the International Seabed Authority.
    ``Unfortunately, without ratifying the Convention, the 
United States cannot sponsor claims with or shape the deep 
seabed rules of the ISA. Yet that is the critical path forward 
if the United States intends to expand and ensure access for 
both U.S. commercial and Government interests to new sources of 
strategic mineral resources.''
    I might add that Lockheed is not alone. I recently received 
a letter from Rex Tillerson, the head of ExxonMobil. He 
expressed ExxonMobil's support for ratification and said this.
    ``As an American company engaged in the global market for 
energy development, ExxonMobil is interested in exploring for 
oil and gas resources that may exist under the vast new areas 
that are recognized for sovereignty purposes under the Law of 
the Sea. The exploration and development of offshore resources 
is complicated and costly, and operating in the extended areas 
addressed under the Law of the Sea will be even more so. Before 
undertaking such immense investments, legal certainty in the 
property rights being explored and developed is essential.''
    I think our businesses have overwhelmingly made that point, 
including the Chamber of Commerce, the American Petroleum 
Institute, the telecommunications industry, and the Chamber of 
Shipping of America, who just wrote to me in support of the 
treaty. And I would like to enter each of those letters in the 
record.
    So this is part of the area we will be going forward. In a 
few weeks, we will have many of these people here to testify, 
to talk about the economic realities.
    But today, we have experts who really understand the 
negotiation of the treaty and so forth and have examined it.
    And we look forward to a very healthy dialogue and, 
hopefully, very productive results for the committee.
    Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR,
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you, Mr. Chairman.
    This morning the Foreign Relations Committee heard 
unequivocal testimony from our uniformed military leadership in 
support of the Law of the Sea Convention. At an upcoming 
hearing, the committee will hear from a broad spectrum of 
ocean-related businesses that strongly support this treaty.
    When the Convention was before this committee in 2003 and 
2007, military and business support for the Law of the Sea was 
similarly overwhelming. This underscores that Americans who are 
involved in the oceans professionally on a daily basis--those 
who defend our country's interests on the seas and those who 
invest their money and create jobs related to ocean 
enterprises--want this Convention ratified.
    Unlike some treaties, such as the Kyoto agreement or the 
Comprehensive Test Ban Treaty, where United States 
nonparticipation renders the treaty virtually irrelevant or 
inoperable, the Law of the Sea will continue to form the basis 
of maritime law regardless of whether the United States is a 
party. International decisions related to national claims on 
Continental Shelves beyond 200 miles from our shore, resource 
exploitation in the open ocean, navigation rights, and other 
matters will be made in the context of the treaty whether we 
join it or not.
    Consequently, the United States cannot insulate itself from 
the Convention merely by declining to ratify. It is the 
accepted standard in international maritime law and the 
dominant forum for the evolution of international ocean policy. 
Americans who use the ocean and interact with other nations on 
the ocean have to contend with the Law of the Sea on a daily 
basis.
    They want the United States to participate in the 
structures of Law of the Sea to defend their interests and to 
make sure that other nations respect our rights and our claims. 
Among the questions addressed by Law of the Sea is how should 
resources in the deep seabed or on a nation's Extended 
Continental Shelf beyond the 200-mile limit be exploited?
    The treaty makes it possible for a mining or drilling 
company to stake an unequivocal legal claim on the ocean floor 
and have it recognized under international law. Some have 
argued that the United States accession to the Law of the Sea 
Convention is unnecessary to secure the legal basis for 
companies to fully exploit oil, natural gas, and mineral wealth 
on the ocean floor. But that is not the opinion of the American 
companies that might invest their resources in this activity.
    They are in favor of the treaty, because without the 
certainty of title provided by the Law of the Sea Convention, 
they would not go forward with many projects requiring large 
investments. Their concern is that after doing the expensive 
exploration, research, testing, and construction necessary to 
exploit a site, they have to be certain that another entity 
won't be able to free-ride off their investment or challenge 
their claim in international courts.
    The oil drilling and mining companies prefer to pay a small 
royalty beginning in the 6th year of production in return for 
an international system that gives them undisputed claim to the 
resources produced. This royalty provision of the Convention 
was negotiated with the participation of extraction companies. 
They judged that it is reasonable given the legal certainty it 
secures and the value of what might be produced, especially 
since the first 5 years of production will not be subject to 
any royalty.
    This is why Law of the Sea is endorsed by the United States 
Chamber of Commerce, the American Petroleum Institute, and 
every industry that has a stake in the deep seabed mining and 
drilling. In other words, our resource extractors are telling 
us that if we want them to move forward with large-scale 
development of ocean floor resources that could contribute 
significantly to United States energy and national security and 
create jobs, we need to ratify Law of the Sea.
    I have been especially critical of President Obama and the 
State Department for failing to approve the Keystone XL 
pipeline because it provides clear long-term benefits to job 
creation and energy security. In that case, the President's 
delay is unnecessarily disadvantaging the United States economy 
over concerns that have largely been resolved.
    If the U.S. Senate declines to ratify Law of the Sea, I 
believe we will be doing the same thing. During this Congress 
few topics have been more central to Senate deliberations than 
job creation, energy security, and the needs of our military. 
The Law of the Sea Convention is the rare initiative that would 
contribute to all three objectives.
    I welcome, as you have, Mr. Chairman, our distinguished 
witnesses and look forward to their testimony.
    The Chairman. Senator Lugar, thank you very much.
    So we will proceed. Mr. Secretary Rumsfeld, if you would 
lead off, sir, I would appreciate it. And then Secretary 
Negroponte, Counselor Bellinger, and Mr. Groves.

  STATEMENT OF HON. DONALD RUMSFELD, FORMER U.S. SECRETARY OF 
        DEFENSE, THE RUMSFELD FOUNDATION, WASHINGTON, DC

    Mr. Rumsfeld. Mr. Chairman and members of the committee, 
thank you for your invitation.
    I have submitted some brief prepared remarks, and I will 
try to adjust them down to 5 minutes.
    The Chairman. Without objection, all of the testimonies 
will be placed in the record in full as if read in full.
    Mr. Rumsfeld. It is a pleasure to appear with these experts 
on this subject. I am 30 years away from it, but I am pleased 
to be here.
    It was 30 years ago that President Reagan asked me to meet 
with world leaders to represent the United States in opposition 
to the Law of the Sea Treaty. Our efforts soon found a 
persuasive supporter in British Prime Minister Margaret 
Thatcher. Today, as the U.S. Senate again considers approving 
this agreement, the reasons for their opposition, I believe, 
remain as persuasive.
    When I met with Mrs. Thatcher in 1982, she promptly grasped 
the issues at stake. Her conclusion on the treaty was 
unforgettable. She said what this treaty proposes is nothing 
less than the international nationalization of roughly two-
thirds of the Earth's surface. And then referring to her 
battles dismantling Britain's state-owned mining and utility 
companies, she added, ``And you know how I feel about 
nationalization.''
    The major idea underlying the Law of the Sea Treaty is that 
the riches of the oceans beyond national boundaries are the 
common heritage of mankind and, thus, supposedly owned by all 
people, which means they are unowned.
    This idea of ownership, which is encompassed in the treaty, 
requires that anyone who finds a way to make use of such riches 
by applying their labor or their technology or their risk-
taking are required to pay royalties of unknown amounts, 
potentially billions--possibly even tens of billions--over an 
extended period, an ill-defined period of time, to the new 
International Seabed Authority for distribution to less 
developed countries.
    This, in my view, is a new idea of enormous consequence. It 
establishes a way of looking at industry investment, talent, 
risk, and good fortune that argues in favor of distributing a 
significant portion of the value of the minerals in the deep 
seabeds to developing countries. I suppose it is also 
conceivable that it could become a precedent for the resources 
of outer space.
    The principle that advanced countries, when they make use 
of resources that previously belonged to no one, owe royalties 
to less developed countries is a novel principle that has, in 
my view, no clear limits. I know of no other treaty that 
follows that pattern.
    The idea is fundamental and integral to the Law of the Sea 
Treaty. It is the major reason I believe that treaty should not 
be ratified.
    I don't argue against developed countries providing 
financial and other forms of aid to poor countries. There are 
moral and practical arguments in favor of such aid. But the 
decision to provide such aid is, has been, and probably should 
be a sovereign choice for each nation.
    In the case of our country, it is a choice of our citizens 
and you, their elected representatives. Very simply, I do not 
believe the United States should endorse a treaty that makes it 
a legal obligation for productive countries to pay royalties to 
less productive countries based on rhetoric about ``common 
heritage of mankind.''
    The wealth distribution idea incorporated in the Law of the 
Sea Treaty is especially objectionable because the mechanism 
for the redistribution is poorly designed. It uses a newly 
created multinational Seabed Authority, which is effectively a 
U.N. agency, instead of the U.S. Congress through our foreign 
aid programs, or through the World Bank of which we and others 
are members.
    If the treaty were to be ratified, the United States 
apparently would receive a permanent seat on the Council of the 
Authority. Even so, the Authority would not be effectively 
accountable to the American people any more than any other U.N. 
agency is accountable. And it must be acknowledged that the 
United Nations has a poor record in administering its programs. 
For example, the U.N. Oil for Food Programme was a multibillion 
dollar scandal.
    Some businesses, as the chairman and the ranking member 
have indicated, have expressed support for the treaty in that 
it would provide greater certainty, which I agree could be 
helpful. I was in business for 20 years, and there is no 
question but that they make that argument and it is a valid 
one. And it needs to be considered and weighed.
    The most persuasive argument for the Law of the Sea Treaty, 
in my view, is the U.S. Navy's desire to ``lock in'' some 
navigation rights. It is correct that the treaty would provide 
some benefits, clarifying some principles, and perhaps making 
it easier to resolve certain disputes. But the U.S. Navy has 
done quite well without this treaty for the past 200 years and 
certainly during the 20 or so years since the treaty has been 
in effect, relying often on customary international law to 
assert navigation rights.
    In my view, the Law of the Sea Treaty would not make a 
large enough additional contribution regarding navigation 
rights or business certainty to counterbalance the problems it 
would create. As Members of the Senate carefully read each of 
the 208 pages of this document, the 320 articles, and also the 
1994 Agreement, I think they will appreciate the basis for 
those concerns and uncertainties.
    I respect the concerns raised by the Navy, by the military, 
and by some in the business community. But the fundamental 
objections raised by Mrs. Thatcher in her 1982 objection to 
effectively nationalizing the world's oceans through a new, 
multinational bureaucracy I believe outweigh the advantages and 
make the
treaty, on balance, a net loss for U.S. interests.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Rumsfeld follows:]

               Prepared Statement of Hon. Donald Rumsfeld

    Mr. Chairman and members of the committee, 30 years ago President 
Ronald Reagan asked me to meet with world leaders to represent the 
United States in opposition to the Law of the Sea Treaty. Our efforts 
soon found a persuasive supporter in British Prime Minister Margaret 
Thatcher. Today, as the U.S. Senate again considers approving this 
flawed agreement, the reasons for President Reagan and Mrs. Thatcher's 
opposition remain every bit as persuasive.
    When I met with Mrs. Thatcher in 1982, she promptly grasped the 
issues at stake. Her conclusion on the treaty was unforgettable: ``What 
this treaty proposes is nothing less than the international 
nationalization of roughly two-thirds of the Earth's surface.'' Then, 
referring to her battles dismantling Britain's state-owned mining and 
utility companies, she added, ``And you know how I feel about 
nationalization. Tell Ronnie I'm with him.''
    President Reagan, for his part, had just been elected to office. 
The treaty had been presented to him as a done deal requiring only his 
signature and U.S. Senate consent to its ratification. Then as now, 
most of the world's nations had already approved it. The Nixon, Ford, 
and Carter administrations had all gone along with it. American 
diplomats generally supported the treaty and were shocked when Reagan 
changed America's policy. Puzzled by their reaction, the President was 
said to have responded, ``But isn't that what the election was all 
about?''
    Yet, as the man known as the Gipper might say, here we go again. An 
impressive, if unlikely, coalition is now arrayed in support of U.S. 
ratification of the United Nations Law of the Sea Treaty. As during the 
Reagan years, dozens of diplomats and national security officials, 
including every living former Secretary of State have endorsed the 
Obama administration's goal of ratification. The U.S. Navy wants to 
``lock in'' existing and widely accepted rules of high-seas navigation. 
Business groups say the treaty could help them by creating somewhat 
more certainty.
    Can so many people, organizations, and countries be mistaken? The 
answer, I believe, is ``Yes.'' Various proponents have their particular 
considerations, each valid, but none, in my view, has made a compelling 
case that the treaty would, on balance, benefit America as a whole.
    Though modest ``fixes'' were made in 1994 in a separate agreement 
signed by some, but not all, of the treaty's parties in the hope of 
addressing some of the flaws identified in the Reagan-era version of 
the treaty, its most serious defect is unaltered: the Law of the Sea 
Treaty remains a sweeping power grab that could prove to be the largest 
mechanism for the worldwide redistribution of wealth in human history.
    The treaty proposes to create a new global governance institution 
that would regulate American citizens and businesses, but which would 
not be accountable politically to the American people. Some of the Law 
of the Sea Treaty's proponents pay little attention to constitutional 
concerns about democratic legislative processes and principles of self-
government, but I believe the American people take seriously threats to 
these foundations of our Nation.
    The treaty creates a United Nations-style body called the 
``International Seabed Authority.'' ``The Authority,'' as U.N. 
bureaucrats call it in Orwellian shorthand, would be involved in all 
commercial activity such as mining and oil and gas production in 
international waters. It is to this entity that the United States, 
pursuant to the treaty's article 82, would be required to transfer a 
significant share of all royalties generated by American companies--
royalties that would otherwise go to the U.S. Treasury for the benefit 
of the American people.
    Over time, hundreds of billions of dollars could flow through the 
``Authority'' with little oversight. The United States could not 
control how those revenues are spent. Under the treaty, the Authority 
is empowered to redistribute these so-called ``international 
royalties'' to developing and landlocked nations with no role in 
exploring or extracting those resources. It would constitute a massive 
form of global welfare, courtesy of the American taxpayer. It would be 
as if fishermen who exerted themselves to catch fish on the high seas 
were required, on the principle that those fish belonged to all people 
everywhere, to give a share of their take to countries that had nothing 
to do with their costly, dangerous, and arduous efforts.
    Worse still, these sizable ``royalties'' could go to corrupt 
dictatorships and state sponsors of terrorism. For example, as a treaty 
signatory and a member of the ``Authority's'' executive council, the 
Government of Sudan--which has harbored terrorists and conducted a mass 
extermination campaign against its own people--would have just as much 
say as the United States on issues to be decided by the ``Authority.'' 
Disagreements among treaty signatories are to be decided through 
mandatory dispute resolution processes of uncertain integrity. 
Americans should 
be uncomfortable with unelected and unaccountable tribunals appointed 
by the Secretary General of the United Nations serving as the final 
arbiter of such disagreements.
    Even if one were to agree with the principle of global wealth 
redistribution from the United States to other nations, other U.N. 
bodies have proven notably unskilled at financial management. The U.N. 
Oil-for-Food Programme in Iraq, for instance, resulted in hundreds of 
millions of dollars in corruption and graft that directly benefited 
Saddam Hussein and those nations friendly to Iraq. The Law of the Sea 
Treaty is another grand opportunity for scandal on an even larger 
scale.
    The most persuasive argument for the Law of the Sea Treaty is the 
U.S. Navy's desire to shore up international navigation rights. It is 
true that the treaty might produce some benefits, clarifying some 
principles and perhaps making it easier to resolve certain disputes. 
But our Navy has done quite well without this treaty for the past 200 
years, relying often on centuries-old, well-established customary 
international law to assert navigational rights. Ultimately, it is our 
naval power that protects international freedom of navigation. The Law 
of the Sea Treaty would not make a large enough additional contribution 
to counterbalance the problems it would create.
    In his farewell address to the Nation in 1988, President Reagan, 
advised the country: ``Don't be afraid to see what you see.'' If the 
Members of the U.S. Senate fulfill their responsibilities, actually 
read the Law of the Sea Treaty and consider it carefully, I believe 
they will come to the conclusion, as I have, that the treaty's costs to 
our security and sovereignty would far exceed any benefits for the 
United States.

    The Chairman. Thank you, Mr. Secretary. Appreciate it.
    Secretary Negroponte.

STATEMENT OF HON. JOHN NEGROPONTE, FORMER U.S. DEPUTY SECRETARY 
                    OF STATE, WASHINGTON, DC

    Ambassador Negroponte. Thank you, Mr. Chairman and members 
of the committee, for this opportunity to appear before this 
committee to discuss the Law of the Sea Convention.
    Let me say at the outset and as unequivocally as possible 
that I believe the United States should accede to this treaty. 
As you have heard recently from the Secretaries of State and 
Defense, the Chairman of the JCS, and our maritime service 
chiefs, there are real costs to remaining outside the treaty. 
For the benefit of our country, I hope this is the year that we 
finally become party to the Law of the Sea.
    My involvement with this treaty dates back to 1970 when I 
was a member of the National Security Council staff. I was 
given the assignment of helping coordinate the preparation of 
President Nixon's first directive on the Law of the Sea, and I 
have worked on this issue on and off in the ensuing years, 
although I would not claim to be an expert.
    In the Reagan administration, I served as an Assistant 
Secretary of State for Oceans and International Environmental 
and Scientific Affairs at the State Department, and then as 
President Reagan's Deputy National Security Adviser. And then 
in the George W. Bush administration, as Director of National 
Intelligence and, finally, as Deputy Secretary of State.
    These experiences have only strengthened my support for the 
treaty. And as you will recall, Senator, I was the lead 
administration witness in the last administration when we 
appeared before the committee in 2007.
    The United States has consistently sought to balance the 
interests of countries in controlling activities off their 
coasts and the interests of all countries in protecting freedom 
of navigation. The United States joined a group of Law of the 
Sea treaties in 1958 by which it is still bound. But those 
treaties left open some important issues.
    For example, they did not set forth the maximum breadth of 
the territorial sea, an issue of critical importance to freedom 
of navigation. And they did not elaborate a procedure for 
providing legal certainty as regards the Continental Shelf.
    Under President Nixon, the United States proposed the 
concept of a treaty that would address these concerns, and it 
was President Nixon, by the way, who first introduced the 
notion of a U.S. policy supporting this concept of the common 
heritage of mankind. I think what we have been debating in the 
ensuing years is exactly how you define that in ways with which 
we can live.
    Formal negotiations were launched a little over 3 years 
later, and the Convention was finalized in 1982. The United 
States supported the 1982 Convention, with the exception of the 
deep seabed provisions. And in 1983, President Reagan issued a 
statement explaining that because of certain concerns with 
these provisions, the United States would not sign the 
Convention.
    He affirmed, however--and I think this is the very 
important--that the United States would voluntarily follow the 
bulk of the treaty. Negotiations began during the George 
Herbert Walker Bush administration to rewrite the deep seabed 
mining provisions. An implementing agreement was signed in 
1994, which dealt with each of the problems identified by 
President Reagan.
    The Clinton administration submitted the Convention and the 
1994 Agreement to the Senate in July 1994, and President George 
W. Bush urged approval of the Convention, both in 2004 and in 
2007, arguing that, ``Joining will serve the national security 
interests of the United States and secure U.S. sovereign rights 
over extensive marine areas including the valuable natural 
resources they contain.''
    Why is it important for the United States to join the 
Convention now? To begin, the United States would gain legal 
protection for its sovereignty, sovereign rights and 
jurisdiction in offshore zones, the freedom of maneuver and 
action for its military forces, and protection for economic and 
marine research interests at sea.
    U.S. firms would be able to obtain essential 
internationally recognized and exclusive rights to explore and 
exploit deposits of strategic minerals on the ocean floor 
beyond national jurisdiction and secure recognized title to the 
recovered resources. The Convention, as revised by the 1994 
Agreement on Implementation, provides the commercial regime 
needed for private industry, and it fully satisfies the 
criteria articulated in 1982 by President Reagan.
    Allow me to cite a few specific practical reasons of how 
remaining outside the Convention damages U.S. national 
interests. These are not academic or philosophical points, but 
real world examples of how we are undercutting our national 
interests by failing to join.
    First, the Convention is now open for amendment and could 
be changed in ways that adversely impact the navigational 
rights and high seas freedoms on which our military depends for 
global mobility. If we join now, our rights are protected in 
two ways.
    First, it will allow us to shape the interpretation, 
application, and development of specific amendments to the 
nonseabed parts of the Convention. If we delay joining until 
after an amendment is adopted, we could choose only to accept 
or reject another party's amended version.
    In addition, once the United States takes its permanent 
seat at the International Seabed Authority, it will have a veto 
over any amendments related to the seabed parts of the 
Convention.
    Second, as tensions flair in critical regions like the 
Persian Gulf and South China Sea, it is important that the 
United States provide its men and women in uniform with every 
means available to protect the navigational rights enshrined in 
the treaty. Right now, the United States has two ways to defend 
its maritime interests. We can initiate a diplomatic process to 
lodge a complaint with a state that denies us free passage, or 
we can assert our right to passage by putting our vessel in 
harm's way.
    The freedom of navigation program is an important tool in 
our military's arsenal, but it does carry a risk of escalation. 
Law of the Sea is an additional tool we can use, and it is one 
the Navy and the Coast Guard have asked us repeatedly to 
provide them.
    Third, by not joining the treaty the United States is 
limited in its leadership ability to resolve maritime disputes 
between its allies, such as Japan and Korea, and in 
strategically important
regions, such as the Gulf of Aden or the South China Sea.
    Fourth, by remaining on the outside, we have created self-
imposed obstacles to securing the most widespread possible 
cooperation in our counterproliferation and counternarcotics 
operations at sea. The United States refusal to join the 
Convention undermines the confidence of other countries, and 
they do bring this up, in our willingness to abide by the 
accepted rules of the road when conducting interdiction 
activities.
    Fifth, and critically important, our failure to join the 
Convention to date is negatively impacting our businesses. At 
least one U.S. company, Lockheed Martin, as has been mentioned, 
is prepared to harvest critical rare earth minerals on the deep 
seabed--and I personally spoke to representatives of Lockheed 
about this--minerals that are used in our weapon systems, cell 
phones, and automobiles.
    But as a nonparty to the treaty, the United States cannot 
sponsor Lockheed to go out and get these minerals from the 
seabed. While the United States watches, 17 countries have 
approved exploration claims for deep seabed mining.
    Five new applications will be considered this summer at the 
annual session of the International Seabed Authority. The 
United Kingdom and Belgium are joining China, India, Germany, 
France, Japan, South Korea, and seven other nations in 
commercial exploration of strategic minerals while the United 
States watches from ashore.
    Similarly, our energy companies are less likely to invest 
the billions of dollars necessary to exploit oil and gas 
reserves in the Arctic and elsewhere because of the legal 
uncertainty surrounding the outer limit of the United States 
Continental Shelf. The only way to give the companies the 
clear, internationally recognized title that they need before 
investing this type of money is to join the treaty and work 
through its Continental Shelf process.
    Last, Mr. Chairman, one other point I would like to make 
with respect to the diplomatic aspect of this question and one 
which I think is important as a person who was a diplomatic 
practitioner for more than 40 years. And that was the 
unprecedented nature, I felt, of the concession by the rest of 
the international community in its willingness to reopen this 
Convention because of the objections that the United States 
raised when President Reagan said he would not sign the treaty.
    And after learning of our objections, they came to us and 
invited us and said we are prepared to reopen this part 11 of 
the Law of the Sea Treaty to try and meet your objections so 
that you will feel more comfortable coming onboard. We did 
that. We held these talks.
    Twelve years later, we reached agreement on the revised 
part 11. And I think, as a matter of diplomatic practice and in 
terms of credibility in relationships with the countries with 
which we deal, the idea that they accommodated our concerns and 
reopened the treaty and modified that chapter and for us again 
to reject this Convention now that those concerns have been 
met, I would say would be tantamount to a diplomatic slap in 
the face, if not more.
    Mr. Chairman, I am confident that the committee will agree 
to--that United States accession to the treaty is the best way 
to secure essential navigational and economic rights related to 
the ocean.
    Thank you.
    [The prepared statement of Ambassador Negroponte follows:]

            Prepared Statement of Ambassador John Negroponte

    Mr. Chairman, thank you for the opportunity to appear before this 
committee to discuss the 1982 U.N. Convention on the Law of the Sea.
    Let me say at the beginning of my testimony and as unequivocally as 
possible that I believe the United States should accede to this treaty. 
As you have heard recently from the Secretaries of State and Defense, 
and the Chairman of the Joint Chiefs of Staff as well as our maritime 
service chiefs, there is strong consensus that it is in our national 
interests to do so, and, as I will elaborate in my remarks, there are 
real costs of remaining outside the Convention.
    For the benefit of our country, I hope this is the year we finally 
become party to the Law of the Sea.
    There is broad and bipartisan consensus from our Nation's military, 
political, and business leadership to join the treaty because, as the 
world's greatest maritime power with a host of maritime interests, 
merely treating the Convention as customary law is not good enough.
    As the committee has heard hours of previous testimony, I hope not 
to repeat general points here about why the United States should sign 
on to the treaty which I wholeheartedly support, but rather I will cite 
specific practical reasons of how remaining outside the Convention 
damages U.S. national interests. These are not academic or 
philosophical points, but real world examples of how we are undermining 
our national interests by not officially joining.
    First, the Convention is now open for amendment and could be 
changed in ways counter to our interests in navigational freedoms or 
access to seabed resources. If we join now, however, our rights are 
protected in two ways: first, by the Convention's requirement that 
amendments to the nonseabed parts of the Convention only apply to those 
countries that ratify them. Even countries that join the Convention 
after it is amended must deal with those that have not ratified an 
amendment according to the terms of the unamended Convention. If we 
delay until after an amendment is adopted, we could only choose the 
amended version. Regarding amendments to the seabed parts of the 
Convention, once the United States takes its permanent seat at the 
International Seabed Authority it will have a veto over any amendments 
related to that part.
    Second, the United States cannot currently participate in the 
Commission on the Limits of the Continental Shelf (CLCS) which oversees 
ocean delineation on the outer limits of the Extended Continental Shelf 
(Outer Continental Shelf). Even though it is collecting scientific 
evidence to support eventual claims off its Atlantic, Gulf, and Alaskan 
coasts, the United States, without becoming party to the Convention, 
has no standing in the CLCS.
    This not only precludes it from making a submission claiming the 
sovereign rights over the resources of potentially more than 1 million 
square kilometers of the OCS, it also denies the United States any 
right to review or contest other claims that appear to be overly 
expansive. This is becoming especially urgent with each passing year as 
the Commission is reviewing an influx of claims.
    Third, and especially acute as it relates to current tensions in 
the Persian Gulf or naval mobility in the Pacific, the United States 
today forfeits legal authority to other states, some of them less than 
friendly to U.S. interests, that seek to restrict rights enshrined in 
the Law of the Sea central to American national security strategy, such 
as the freedom of navigation.
    Relatedly, the United States also puts its sailors in unneeded 
jeopardy when carrying out the Freedom of Navigation (FON) program to 
contest Law of the Sea abuses.
    Fourth, the United States is limited in its leadership ability to 
act within the Convention to help mitigate maritime disputes between 
strategic allies, such as Japan and Korea, and in strategically 
important regions, such as the Gulf of Aden or the South China Sea.
    Fifth, the United States is frustrated in expanding the 
Proliferation Security Initiative (PSI) and gaining greater cooperation 
in counterpiracy, counternarcotics, and counterterrorism operations at 
sea. Although our allies are supportive of our efforts on these fronts, 
they understandably indicate that U.S. refusal to join the Convention 
has eroded their confidence that the United States will abide by 
international law when conducting interdiction activities.
    Sixth, U.S. firms and citizens cannot take advantage of the 
arbitration processes established within the Convention to defend their 
rights against foreign encroachment or abuse.
    Seventh, the United States is unable to nominate a candidate for 
election to the Law of the Sea Tribunal and thus is deprived of the 
opportunity to shape directly the interpretation and application of the 
Convention.
    Eighth, American energy and deep seabed companies are at a 
disadvantage in making investments in the OCS due to the legal 
uncertainty over the outer limit of the U.S. Continental Shelf, nor can 
they obtain international recognition, and, as a result, financing for 
mine sites or title to recovered minerals on the deep seabed beyond 
national jurisdiction. As a result, our once-lead in ocean technologies 
has atrophied and we have now fallen behind other countries in critical 
areas such as deep seabed mining.
    Potential U.S. developers of deep seabed minerals are falling 
farther and farther behind international competitors for deep seabed 
minerals. While lack of international recognition of U.S. claims to 
areas beyond national jurisdiction is keeping the sole U.S. claimant on 
shore, 17 countries have 12 approved mine site claims and five new 
applications will be considered this summer at the annual session of 
the International Seabed Authority. The U.K. and Belgium are joining 
Germany, France, Japan, South Korea, India, China, and seven other 
nations in commercial exploration of seabed critical and strategic 
minerals while the United States watches from shore.
    Ninth, and as referenced before, the United States is unable to 
fill its permanent seat on the International Seabed Authority and 
therefore is unable to influence this body's work overseeing minerals 
development in the deep seabed beyond national jurisdiction.
    Last, and really a point of clarification rather than a specific 
cost, let me be clear as the first Director of National Intelligence 
that joining the Convention in no way hinders our intelligence 
gathering to include not impairing in anyway our submarine activities.
    I would now like to focus specifically on the Arctic, a region of 
particular interest to me, and how not being a state party to the 
treaty is undermining our interests in this increasingly important 
region of the world.
    In 2008, I led a U.S. delegation to Ilulissat, Greenland, for an 
international conference of Arctic Foreign Ministers to discuss 
emerging regional issues. The United States is the only Arctic nation 
not to have joined the treaty and our nonparty status diminished our 
voice in this forum.
    Furthermore, the United States is in a weaker legal position in the 
opening of the Arctic to police new shipping along the Alaskan coast 
such as greater regulatory authority afforded under article 234 and to 
apply internationally developed rules and standards to foreign 
shipping, to contest disputed boundary claims and to press our own 
under article 76, and to challenge Canada's assertion that the 
Northwest Passage falls within its internal waters.
    Why is it imperative for the United States to join the Convention 
now?
    For starters, the United States would gain legal protection for its 
sovereignty, sovereign rights and jurisdiction in offshore zones, the 
freedom of maneuver and action for its military forces, protection for 
economic, environmental, and marine research interests at sea while 
seizing an extraordinary opportunity to restore the mantle of 
international leadership on, over and under nearly three-quarters of 
the earth.
    U.S. firms would be able to obtain essential internationally 
recognized exclusive rights to explore and exploit deposits of critical 
and strategic minerals on the ocean floor beyond national jurisdiction 
and secure recognized title to the recovered resources. The Convention, 
as revised by the 1994 Agreement on Implementation, provides the 
commercial regime needed for private industry in full compliance with 
the criteria articulated in 1982 by President Reagan when he laid out 
his conditions for a convention he would sign.
    More difficult to measure than the tangible benefits gained from 
U.S. accession is the diplomatic blight on America's reputation for 
rejecting a carefully negotiated accord that enjoys overwhelming 
international consensus and a treaty that was adjusted in unprecedented 
fashion to specifically meet the demands put forth by President Reagan. 
Remaining outside the Convention undermines U.S. credibility and limits 
our ability to achieve critical national security objectives.
    The treaty was negotiated over decades during which American 
delegations scored important victories. To the dismay of the rest of 
the world that negotiated the Convention with the United States in good 
faith, after many years the Senate has yet to have an up-or-down vote. 
In my opinion, this is a constitutional abdication of congressional 
leadership.
    Through inaction, the United States is forfeiting concrete 
interests while simultaneously undermining something more intangible, 
the legitimacy of U.S. leadership and its international reputation.
    The United States should join the Law of the Sea Convention because 
it remains committed to the rule of law and its historic role as an 
architect and defender of a world order that benefits all nations, 
including and especially the United States of America.
    Thank you, and I look forward to responding to your questions and 
expanding on any of the points in my testimony.

    The Chairman. Thank you, Mr. Secretary.
    Mr. Bellinger.

STATEMENT OF HON. JOHN B. BELLINGER III, FORMER LEGAL ADVISER, 
   U.S. DEPARTMENT OF STATE, PARTNER, ARNOLD & PORTER, LLP, 
                         WASHINGTON, DC

    Mr. Bellinger. Thank you, Mr. Chairman and Ranking Member 
Lugar.
    I don't go back quite as far with the treaty as either 
Secretary Rumsfeld or Secretary Negroponte, although I have 
spent a lot of time with both of them inside the White House. 
As you mentioned, I served for all 8 years in the Bush 
administration, first as the Legal Adviser for the National 
Security Council in the White House for the first term and then 
as the Legal Adviser for the State Department in the second 
term.
    What I can do is explain why during those 8 years the Bush 
administration decided to support the Law of the Sea Convention 
because I started from the beginning there. And I do, let me 
say, 
appreciate very much the concerns that have been raised about 
the Convention, including by Senators on this committee, 
because the Bush administration carefully looked at almost all 
of these same issues before we ultimately decided to support 
the treaty.
    And let me say President Bush did not decide to support the 
treaty out of a blind commitment to multilateralism. I don't 
think anyone has ever accused the Bush administration of an 
overabundance of enthusiasm for international organizations or 
multilateral treaties.
    When we came into office in 2001, we decided not to support 
several of the treaties that had been supported by the Clinton 
administration, including the Comprehensive Test Ban Treaty and 
the Kyoto Protocol. Bush administration officials were 
similarly skeptical about the Law of the Sea Treaty. We 
remembered President Reagan's concerns.
    But after a year-long interagency review, we concluded that 
the Convention strongly advanced U.S. national security, 
economic, and environmental interests. And in the 
administration's first treaty priority list in February 2002, 
we told this committee that there was ``an urgent need for 
Senate approval of the Convention.''
    We reviewed the serious concerns that President Reagan had 
raised about the Convention in 1982. We concluded that these 
concerns had been satisfactorily addressed by the amendments to 
the Convention in 1994. The other Western countries that 
President Reagan and Secretary Rumsfeld had successfully 
persuaded not to sign the treaty, including Britain, Germany, 
and Japan, had all joined the treaty after the treaty was 
amended.
    So between 2003 and 2009, senior Bush administration 
political appointees from the Departments of Defense, State, 
Commerce, Interior, Homeland Security testified and sent 
letters to this committee and other committees strongly 
endorsing the Convention. Defense Department appointees twice 
testified in favor of the treaty. President Bush himself issued 
statements in 2007 and 2009, urging the Senate to approve the 
Convention.
    Let me end by addressing some of the concerns that have 
been raised because we did address some of those same concerns. 
First, reliance on customary international law alone does not 
give the United States important rights that are available only 
to parties of the Convention. Most important, U.S. companies 
would not have the legal certainty that they need before they 
are willing to invest billions in development in the Arctic or 
the deep seabed.
    By not joining the Convention, the U.S. Government is 
preventing U.S. oil, gas, and mining companies from making 
investments that could produce enormous wealth and jobs for the 
U.S. economy. Moreover, the United States would not be able to 
take its permanent seat on the Council of the International 
Seabed, which is currently making decisions that affect U.S. 
interests.
    Second, the United States would only be required to pay 
royalties to the Deep Seabed Authority if it were actually 
developing resources on the U.S. Extended Continental Shelf. 
Moreover, U.S. oil and gas companies and the U.S. Treasury 
would be able to keep 100 percent of the value of the 
production at any site for the first 5 years and then between 
99 and 93 percent of the value for the remaining years.
    This would be an enormous net benefit, not a loss, for the 
U.S. Treasury. If these fees would actually cause the economic 
problems that are claimed by critics, then certainly other 
major industrial countries would not have agreed to pay them.
    Third, the seabed authority only has limited authority to 
address mining activities on the deep seabed beyond the 
jurisdiction of any country. It has no authority to regulate 
activities in the world's oceans or on the U.S. Extended 
Continental Shelf.
    If critics are seriously concerned about the potential 
actions of the ISA, then the most effective way to restrict its 
activities would be for the United States to become party to 
the Convention and take its permanent seat and effective veto 
power on the ISA Council.
    Finally, joining the Convention does not, in my view, 
subject the United States to significant new environmental 
litigation risks. In fact, the litigation risk to the United 
States and U.S. companies would be much greater if U.S. 
companies were to try to exploit the resources on the U.S. 
Extended Continental Shelf or on the deep seabed contrary to 
the terms of the Convention.
    Mr. Chairman, through determined diplomacy, including by 
Secretary Rumsfeld, the United States has been able to achieve 
all of its important objectives in the original 1982 Law of the 
Sea Convention and the 1994 amendments. After careful review, 
the Bush administration concluded that the amended Convention 
strongly serves U.S. military, economic, and environmental 
interests. And we concluded that important U.S. objectives, 
especially our goals to exploit the valuable resources on our 
Extended Continental Shelf in the Arctic and on the deep seabed 
and to participate in the Convention's decisionmaking bodies 
could not be achieved through other means.
    For these reasons, President Bush decided to support the 
Law of the Sea Convention, and he urged the Senate to approve 
it rapidly.
    Mr. Chairman and members of the committee, thank you for 
this opportunity to appear today.
    [The prepared statement of Mr. Bellinger follows:]

              Prepared Statement of John B. Bellinger III

    Mr. Chairman, Ranking Member Lugar, thank you for inviting me to 
appear before the committee today to discuss the Convention on the Law 
of the Sea. My last appearance before this committee was at this 
committee's last hearing on the Law of the Sea Convention in September 
2007, when I appeared together with then-Deputy Secretary of State John 
Negroponte and then-Deputy Secretary of Defense Gordon England to 
support the Convention on behalf of the Bush administration.
    I am now a partner in the international and national security law 
practices at Arnold & Porter LLP and an Adjunct Senior Fellow in 
International and National Security Law at the Council on Foreign 
Relations. Although I am advising several clients on legal issues 
relating to the Law of the Sea Convention, I am appearing today in my 
personal capacity and not on behalf of any client.
    I served for 8 years as a senior legal official in the 
administration of President George W. Bush, and I was actively involved 
in the administration's consideration of the Convention for all 8 
years. During the first term, I served in the White House as Senior 
Associate Counsel to the President and Legal Adviser to the National 
Security Council from 2001-2005. I was in the White House Situation 
Room on September 11. Although I spent the vast majority of my time in 
this position focused on military, intelligence, and counterterrorism 
issues, I was also responsible for coordinating the Bush 
administration's treaty priorities and for reviewing all treaties 
transmitted to the Senate by the President.
    In the second term, I served as the Legal Adviser for the 
Department of State from 2005-2009 under Secretary of State Condoleezza 
Rice, after a confirmation hearing before this committee in March 2005 
and confirmation by the full Senate in April 2005. As Legal Adviser, I 
was the most senior international lawyer in the administration and was 
responsible, among other duties, for the negotiation and legal 
interpretation of treaties and for securing Senate approval and 
Presidential ratification of treaties supported by the administration. 
I also represented the United States before international tribunals.
    Today, I would like to explain why the Bush administration decided, 
after a careful review, to support the Law of the Sea Convention. I 
will also address some of the concerns that have been raised by critics 
of the Convention.
    Let me emphasize at the outset that I very much appreciate many of 
the concerns that have been raised about the Convention, including by 
Senators on this committee. I watched this committee's hearing on May 
23 and listened to the concerns that were raised. During the Bush 
administration, we carefully examined many of these same issues before 
allowing administration witnesses to testify in favor of the treaty 
before this committee in 2003 and 2007. Although some of the criticisms 
of the Convention are inaccurate or based on outdated information, 
other criticisms raise legitimate concerns that the Bush administration 
reviewed before we decided to support the Convention.
    When the Bush administration came into office in January 2001, we 
began a careful review of all of the treaties that had been submitted 
to the Senate by the Clinton administration to determine which treaties 
the Bush administration would support and would not support. The Bush 
administration did not support all of the treaties that had been 
supported by the prior administration. For example, the Bush 
administration did not support the Comprehensive Nuclear Test Ban 
Treaty, which had been strongly supported by the Clinton 
administration. We did not support the Kyoto Protocol, which had been 
signed by the Clinton administration. Many Bush administration 
officials were similarly skeptical of the Law of the Sea Convention 
because it was a multilateral treaty, and President Reagan had refused 
to sign it. However, after a year-long interagency review, the Bush 
administration concluded that the Convention was in the U.S. national 
interest and decided strongly to endorse the treaty. In February 2002, 
the administration submitted its first Treaty Priority List to this 
committee and listed the Law of the Sea Convention as a treaty for 
which there was an ``urgent need for Senate approval.''
    Let me emphasize that the Bush administration did not decide to 
support the Law of the Sea Convention out of a blind commitment to 
multilateral treaties or international organizations. No one has ever 
accused the Bush administration of an overabundance of enthusiasm for 
the United Nations or multilateralism. Indeed, the Bush administration 
was especially skeptical of the United Nations and many U.N. bodies, 
such as the Human Rights Council. And the Bush administration was 
especially committed to defending U.S. sovereignty and international 
freedom of action, particularly after September 11.
    The Bush administration decided to support the Law of the Sea 
Convention and to provide senior administration officials to testify in 
favor of the Convention only after weighing the Convention's benefits 
against its risks. We ultimately concluded that, on balance, the treaty 
was clearly in the U.S. national security, economic, and environmental 
interests.
    First and foremost, the Bush administration concluded that the 
Convention was beneficial to the United States military, especially 
during a time of armed conflict, because it provided clear treaty-based 
navigational rights for our Navy, Coast Guard, and aircraft. This was 
especially important for the Bush administration as we asked our 
military to take on numerous new missions after the 9/11 attacks during 
the Global War on Terrorism; several countries had challenged U.S. 
military activities in their territorial waters, and the administration 
concluded that it was vital to have a treaty-based legal right to 
support our freedom of movement and activities. We also concluded that 
joining the Convention would support our Proliferation Security 
Initiative.
    Second, the administration concluded that the Convention was in the 
U.S. commercial and economic interests because it codified U.S. rights 
to exploit the vast and valuable resources in the U.S. Exclusive 
Economic Zone--the largest in the world--and on its substantial 
Extended Continental Shelf (ECS), to lay and service submarine 
telecommunications cables, and to engage in mining in the deep seabed 
outside the sovereign jurisdiction of the United States. Later, as the 
melting Arctic ice opened up new commercial opportunities on the U.S. 
Extended Continental Shelf off of Alaska, the administration concluded 
that codifying U.S. rights in the Arctic and participating on the 
Continental Shelf Commission created by the Convention was even more 
important than before.
    Third, the administration concluded that joining the Convention 
supported important U.S. environmental interests in the health of the 
world's oceans and the living resources in them.
    The Bush administration reviewed the specific concerns that 
President Reagan had raised about the Convention, which focused on Part 
XI of the Convention, regarding deep seabed mining. We concluded that 
all of these concerns had been satisfactorily addressed by the 
amendments made to the Convention in 1994. For example, the provisions 
in the original Part XI requiring transfer of technology to less 
developed countries or mandating limits on deep seabed mining based on 
nonmarket factors had been eliminated. Moreover, the United States had 
been given a permanent seat on the Council of the International Seabed 
Authority and the power to veto all decisions of the International 
Seabed Authority relating to budgetary or financial matters. During our 
review, we noted that, in his January 1982 statement on ``U.S. Policy 
and the Law of the Sea,'' President Reagan had stated that the ``The 
United States remains committed to the multilateral treaty process for 
reaching agreement on the law of the sea.'' President Reagan had said 
that if U.S. concerns were addressed, ``my administration will support 
ratification.''
    We also noted that after 1994, all of the major industrialized 
countries--including the United Kingdom, Japan, Italy and Germany--had 
decided to join the Convention. These were the countries that had 
followed President Reagan's lead and had refused to sign the 1982 
Convention because they shared U.S. concerns about the Convention's 
deep seabed mining provisions, but then concluded that the 1994 
amendments had fixed the original problems with the treaty. China and 
Russia--two members of the U.N. Security Council that also jealously 
protect their sovereignty and freedom of action--had also joined the 
Convention in 1996 and 1997, respectively.
    As a result of its reviews of the Convention, the Bush 
administration did identify several concerns. The administration 
concluded, however, that these concerns could be adequately addressed 
through declarations and understandings that could be included with the 
Senate's Resolution of Advice and Consent to Ratification.
    A broad array of senior Bush administration political appointees 
from a variety of agencies testified in favor of the Convention, and 
wrote letters supporting the Convention, between 2003 and 2009. In 
October 2003, Assistant Secretary of State John Turner, Legal Adviser 
William H. Taft IV, and Deputy Assistant Secretary of Defense Mark 
Esper testified before this committee in favor of the treaty. Dr. 
Esper, who had previously served as chief of staff at the Heritage 
Foundation, testified on behalf of the Department of Defense that the 
administration had ``undertaken a review of the Law of the Sea 
Convention to ensure that it continues to meet U.S. needs in the 
current national security environment.'' Dr. Esper testified that the 
review ``did not reveal particular problems affecting current U.S. 
operations.'' He stated that the administration ``supports accession to 
the Convention because the Convention supports navigational rights 
critical to military operations.''
    Ambassador Taft testified on behalf of the Bush administration in 
favor of the Convention on several additional occasions before other 
Senate committees. Ambassador Taft had broad experience in defense 
matters, having served previously as General Counsel of the Department 
of Defense and later as Deputy Secretary of Defense and Acting 
Secretary of Defense during the Reagan administration, and as 
Ambassador to NATO in the administration of President George H.W. Bush.
    In addition, in June 2004, the Senate Select Committee on 
Intelligence held a closed hearing on the intelligence implications of 
U.S. accession to the Convention. The Director of Naval Intelligence, 
the Assistant Director of Central Intelligence for Collection, and 
Ambassador Taft all expressed support for the Convention and stated 
that the Convention would not affect the conduct of U.S. intelligence 
activities.
    In March 2004, this committee unanimously reported the Convention 
with a recommendation that the full Senate vote on it promptly. The 
full Senate, however, did not vote on the treaty in 2004.
    In 2007, the Bush administration stepped up its efforts to urge the 
Senate to approve the Convention. On February 8, 2007, then-Assistant 
to the President for National Security Affairs, Stephen Hadley, wrote 
to this committee to urge the Senate to approve the Convention ``as 
early as possible in the 110th Congress.'' Mr. Hadley stated that ``As 
the President believes, and many members of this administration and 
others have stated, the Convention protects and advances the national 
security, economic, and environmental interests of the United States.'' 
On May 15, 2007, President Bush himself issued a statement on 
``Advancing U.S. Interests in the World's Oceans,'' in which he said 
``I urge the Senate to act favorably on U.S. accession to the United 
Nations Convention on the Law of the Sea Convention during this session 
of Congress.''
    In September 2007, senior administration witnesses again testified 
before this committee in favor of the Convention. This time, Deputy 
Secretary of State John Negroponte and Deputy Secretary of Defense (and 
former Secretary of the Navy) Gordon England testified. Secretary 
Negroponte had previously served as the Deputy National Security 
Adviser during the Reagan administration. I joined Deputy Secretary 
Negroponte, and Deputy Secretary England was joined by Admiral Patrick 
Walsh, the Vice Chief of Naval Operations, and Admiral Bruce MacDonald, 
the Judge Advocate General of the Navy.
    Shortly before the hearing, on September 17, 2007, then-Governor of 
Alaska Sarah Palin wrote to the committee to ``put my administration on 
record in support of the Convention as the predicate for asserting 
sovereign rights that will be of benefit to Alaska and the Nation.'' 
Governor Palin noted that Senate ``ratification has been thwarted by a 
small group of Senators who are concerned about the perceived loss of 
U.S. sovereignty. I believe that quite the contrary is true.''
    Also before this committee's 2007 hearing, the Chairman of the 
Senate Intelligence Committee, Jay Rockefeller, and Vice Chairman 
Christopher Bond wrote a letter to this committee stating that ``we 
concur in the assessment of the Intelligence Community, the Department 
of Defense, and the Department of State that the Law of the Sea 
Convention neither regulates intelligence activities nor subjects 
disputes over intelligence activities to settlement procedures under 
the Convention. It is therefore our judgment that accession to the 
Convention will not adversely affect U.S. intelligence collection or 
other intelligence activities.''
    After the September 2007 hearing, Secretary of Homeland Security 
Michael Chertoff, Secretary of the Interior Dirk Kempthorne, and 
Secretary of Commerce Carlos Gutierrez all submitted letters to the 
committee strongly endorsing the Convention.
    In December 2007, this committee again favorably reported the 
treaty to the full Senate, but the full Senate again did not act on the 
treaty before the end of the 110th Congress.
    The Bush administration, however, continued to support Senate 
approval of
the treaty. On January 9, 2009, President Bush signed National Security 
Presidential Directive 66, relating to ``Arctic Region Policy.'' In 
this directive, President Bush again called on the Senate promptly to 
act favorably on the Law of the Sea Convention.
    I would now like to address some of the concerns that have been 
raised by critics of the Law of the Sea Convention.
    Reliance on Customary International Law. Some have suggested that 
it is not necessary for the United States to join the Convention in 
order to enjoy its benefits because the main provisions of the treaty 
are now accepted as ``customary international law.'' According to this 
argument, the United States can enjoy international freedom of 
navigation and exploit the resources on the U.S. Extended Continental 
Shelf and on the deep seabed, without having to assume any obligations 
ourselves under the treaty, because these provisions have become 
accepted as customary international law.
    Reliance on customary international law to protect U.S. interests 
is insufficient for many reasons:
    First, asserting customary international law does not give the 
United States important rights that are available only to parties to 
the Convention. For example, the U.S. may not take our permanent seat 
on the Council of the International Seabed Authority, or have a U.S. 
national elected to the Continental Shelf Commission, unless we are 
party to the Convention. These bodies are currently making important 
decisions that affect our interests without our participation. For 
example, the Continental Shelf Commission is reviewing the claims of 
Russia and other Arctic coastal states to their Continental Shelves in 
the Arctic, and we have no say in its decisions. Similarly, the Council 
of the ISA is adopting rules relating to deep seabed mining without 
U.S. input. And the U.S. may not sponsor U.S. companies, such as 
Lockheed, to engage in mining on the deep seabed.
    Second, it is not at all clear that all of the substantive 
provisions of the Convention are, in fact, recognized as customary 
international law. It could be extremely difficult for the U.S. to 
establish that there was general agreement by countries around the 
world that a country has a legal right to exploit the resources on its 
Extended Continental Shelf or on the deep seabed, without joining the 
Convention. Similarly, contrary to the claims of some, the U.S. does 
not have a clear right to its Extended Continental Shelf under the 1958 
Convention on the Continental Shelf; the lack of clarity in the 1958 
Convention is a principal reason why President Nixon endorsed the 
concept of a new Law of the Sea Convention.
    Third, U.S. companies have been unwilling to begin costly 
exploration and extraction activities in reliance on theoretical and 
untested legal arguments that have not been accepted by other countries 
and that are flatly contrary to the terms of Law of the Sea Convention. 
Companies instead want the clear legal certainty provided by the 
Convention before making investments that could run into the billions 
of dollars. Critics of the Convention who are concerned about the 
possibility of international litigation should be much more concerned 
about the possibility of lawsuits against the United States or U.S. 
companies if the United States were to engage in resource extraction on 
the U.S. Extended Continental Shelf or on the deep seabed contrary to 
the terms of the Convention, than about possible environmental claims 
against the United States if the U.S. were to join the Convention. 
Moreover, a U.S. company that initiates deep seabed mining outside the 
Convention risks having a foreign company sponsored by a country that 
is party to the Convention jump on its claim after it has proven to be 
profitable. No U.S. company would want to take that legal risk.
    Fourth, relying on customary international law does not guarantee 
that even the benefits we do currently enjoy are secure over the long 
term. Customary international law is not the most solid basis upon 
which to protect and assert U.S. navigational and economic rights. It 
is not universally accepted and may change over time based on State 
practice. We therefore cannot assume that customary law will always 
continue to mirror the Convention, and we need to lock in the 
Convention's rights as a matter of treaty law. Indeed, it is surprising 
that opponents of the Convention who are usually critical of the 
haziness and unpredictability of ``customary international law'' should 
urge the U.S. military and U.S. businesses to rely on it to protect 
their essential interests.
    U.N. ``Taxes''/Royalty Payments. Some have objected that the U.S. 
would be obligated to pay fees to the International Seabed Authority--
which some have inaccurately called ``U.N. taxes''--if the U.S. were to 
join the Convention and allow resource development on its Extended 
Continental Shelf. Some have suggested that these fees could result in 
the loss of billions of dollars to the U.S. Treasury. The Bush 
administration carefully considered these concerns and concluded that 
the licensing and fee structure established by the Convention was 
acceptable.
    First, the fees are minimal in comparison to the enormous economic 
value that would be received, and the jobs that would be created, by 
the United States if its industry were to engage in oil, gas, and 
mineral development on the U.S. Extended Continental Shelf in the 
Arctic. The U.S. would be required to make no payments for the first 5 
years of production at any site, and then to pay a fee of 1 percent per 
year starting in year 6, up to a maximum of 7 percent in year 12. 
Assuming the U.S. Government imposed, for example, a royalty fee of 
approximately 18 percent on the value of production on the U.S. 
Extended Continental Shelf, that would be 18 percent more than the U.S. 
would gain if we stayed outside the Convention. In other words, joining 
the Convention would attract substantial investment, and produce 
substantial revenues for the Treasury, that would not otherwise be 
produced. So, even when the Convention payment is at its highest rate 
of 7 percent, the U.S. Treasury would still be 11 percent better off 
with respect to each production site than it would be if the U.S. does 
not join the Convention. This would be an enormous benefit--not a 
loss--to the U.S. budget.
    Second, these fees would only have to be paid by the United States 
if there is actually production on the U.S. Extended Continental Shelf.
    Third, these fees were negotiated by U.S. negotiators in 
consultation with experts from the U.S. oil and gas industry, who 
deemed them to be acceptable.
    Fourth, all of the Western industrialized countries, including our 
major allies, as well as Russia and China, have concluded that these 
fees are acceptable and have joined the treaty. If these fees would 
actually cause the economic woes claimed by critics, then certainly 
these other countries would not have been willing to agree to pay them. 
Instead, most of these countries are already busily surveying and 
staking claims to their Extended Continental Shelves so that their oil, 
gas, and mining companies can exploit these resources. For example, 
Norway--which already has a sovereign wealth fund worth $700 billion, 
all of which has been derived from Arctic oil and gas profits--is 
preparing to make a claim to the oil and gas on its Extended 
Continental Shelf in the Arctic. Russia, Canada, and Denmark are all 
preparing to make similar claims in the Arctic using the provisions of 
the Convention, and they have agreed to pay royalties if they exploit 
the resources on their Extended Continental Shelves.
    Finally, royalty fees would not be paid to the United Nations. They 
would be paid through the International Seabed Authority, and back to 
the Parties to the Convention under a distribution formula developed by 
the Seabed Authority's Council, where the U.S. would have a permanent 
seat and a decisive voice on how fees would be spent.
    International Seabed Authority. Some have objected to the creation 
of, or to having the U.S. join, the International Seabed Authority 
created by the Convention. Critics claim that the ISA is a large U.N. 
bureaucracy that is hostile to American interests, that includes 
undemocratic governments, that would regulate U.S. activities over or 
under the world's oceans, and that would distribute money to rogue 
regimes. These claims are inaccurate or exaggerated.
    First, the ISA is not part of the United Nations. It is an 
independent body that is not part of the U.N. Moreover, the ISA is very 
small. It has fewer than 50 employees.
    Second, the ISA has already been in operation for 18 years. The 
United States cannot prevent its coming into existence or its 
operations by not joining the Convention.
    Third, the U.S. is guaranteed a permanent seat on the Council of 
the ISA, with veto power over financial and substantive decisions of 
the ISA, but only if the U.S. joins the Convention. If critics are 
concerned about the potential actions of the ISA (including the 
potential distribution of fees to rogue states), the most effective way 
to restrict its activities would be for the U.S. to become party to the 
Convention and to exercise its veto rights over Council decisions. 
Indeed, if Russia, China, and other countries begin to pay fees to the 
ISA, the U.S. would be able to affect how these fees are distributed if 
it takes its guaranteed seat on the ISA Council.
    Fourth, the ISA has authority only to regulate mining activities on 
the deep seabed beyond the jurisdiction of any country. It has no 
authority to regulate activities on the deep seabed unrelated to 
mining, or with respect to resource development on the Continental 
Shelf of the U.S. or other countries. Nor does the ISA have authority 
over activities of the United States or other countries in the world's 
oceans.
    Finally, while the United States participates in numerous 
international organizations in which undemocratic countries are also 
members and even hold leadership positions, the International Seabed 
Authority is the only international organization where the U.S. alone 
is given a permanent seat and veto authority over its activities.
    Environmental Obligations/Environmental Disputes. Some have argued 
that the Convention might obligate the U.S. to comply with 
international environmental agreements (such as the Kyoto Protocol) to 
which the U.S. is not a party, or subject the U.S. to mandatory dispute 
resolution for marine pollution (such as atmospheric pollution or 
pollution from land-based sources). I share the concerns of some 
critics of the Convention about the goals of some groups to embroil the 
U.S. in international litigation. As the State Department Legal Adviser 
during the Bush administration, I witnessed first-hand the efforts of 
many groups hostile to U.S. counterterrorism actions to wage 
``lawfare'' against the United States. In my view, however, joining the 
Law of the Sea Convention does not subject the United States to 
significant new legal risks, especially when compared to the benefits 
of joining the Convention.
    The terms of the Convention do not require Parties to comply with 
other international environmental treaties. With respect to land-based 
sources and pollution through the atmosphere, Part XII, Section 5 of 
the Convention requires Parties at most to adopt laws and regulations 
to prevent, reduce and control marine pollution, but in doing so, 
parties are required only to ``tak[e] into account internationally 
agreed rules, standards and recommended practices and procedures.'' 
This does not impose an obligation to comply with Kyoto or any other 
environmental treaty or standard, including treaties to which the U.S. 
is not a party.
    In addition, the U.S. would not be subject to dispute resolution 
for allegedly violating the Kyoto protocol or any other environmental 
treaty, including agreements governing pollution from land-based 
sources. The Convention's dispute settlement system applies only to 
disputes ``concerning the interpretation or application'' of the 
Convention itself, not to the alleged violation of other treaties. 
Articles 297 and 298 of the Convention further exclude certain 
potentially sensitive disputes from dispute settlement.
    Finally, as I have noted previously, those who are rightly 
concerned about international litigation against the United States 
should be much more concerned about subjecting the United States and 
U.S. businesses to international claims if the United States were to 
try to claim the resources on its Extended Continental Shelf or on the 
deep seabed without becoming party to the Law of the Sea Convention. In 
my view, the risk of environmental litigation against the United States 
if it joins the Convention is low. The risk of international litigation 
against the United States if it were unilaterally to claim the 
resources on its Extended Continental Shelf or on the deep seabed, 
without becoming party to the Convention, is much higher.
    In closing, I want to focus on the bigger picture. In deciding 
whether to accede to the Law of the Sea Convention, as with any treaty, 
the question for the President and the Senate is whether the treaty, on 
balance, is in the national interest of the United States. Do the 
advantages of the treaty outweigh its disadvantages? Can the 
disadvantages or risks be mitigated? Can the United States achieve its 
objectives in other ways?
    No treaty the United States has ever joined has been 100 percent 
perfect from our point of view. And yet the U.S. Senate has approved 
and the United States has become party to thousands of treaties, 
including hundreds of multilateral treaties, over its history, which 
have benefited the United States greatly. Many of these treaties have 
required the United States to give up theoretical rights that we might 
otherwise have tried to assert, in order to persuade other countries to 
do the same. Many of these treaties have dispute resolution mechanisms 
in which the dispute bodies can rule, and even have ruled, against the 
United States, but they have also ruled in favor of the United States. 
This is all in the nature of treaties. Over the course of our history, 
numerous Presidents and Senators have concluded that entering into 
treaties with other countries is not a sign of weakness, but rather the 
most effective way for the United States to get other countries to do 
what we want them to do.
    Through dogged diplomacy and the insistence of President Reagan, 
the United States has been able to achieve all of its important 
objectives in the original 1982 Convention and the 1994 amendments. The 
Bush administration concluded that the Convention, as amended, strongly 
serves U.S. military, economic and commercial, and environmental 
interests. We concluded that the concerns we did identify with the 
Convention could be addressed in our instrument of ratification. And we 
concluded that important U.S. objectives--especially our goals to 
develop the valuable resources on our Extended Continental Shelf in the 
Arctic and on the deep seabed and to participate in the Convention's 
decisionmaking bodies--could not be achieved through other means, for 
example, through reliance on customary international law alone. For 
these reasons, President Bush decided to support the Law of the Sea 
Convention and urged the Senate to approve it rapidly.
    Mr. Chairman and members of the committee, thank you for this 
opportunity to appear before you today.

    The Chairman. Thank you very much, Secretary Bellinger.
    Mr. Groves.

 STATEMENT OF STEVEN GROVES, BERNARD AND BARBARA LOMAS FELLOW, 
            THE HERITAGE FOUNDATION, WASHINGTON, DC

    Mr. Groves. Thank you, Mr. Chairman, for inviting me to 
testify this afternoon regarding U.S. accession to the United 
Nations Convention on the Law of the Sea.
    At a recent hearing, a prominent treaty proponent stated 
that opposition to UNCLOS is based on mythology and ideology. 
At the outset, allow me to ensure you that my concerns and the 
concerns of many others are not based in mythology or on strict 
adherence to ideology without regard for facts or evidence.
    To the extent that treaty skeptics base their opposition on 
ideology, it is an ideology that places the protection of 
American sovereignty over the advancement of narrow commercial 
interests and over a misplaced desire to please the 
international community. Joining UNCLOS would affect our 
sovereignty and national interests in several ways.
    It would expose the United States to adverse judgments from 
international tribunals from which there are no appeals. It 
would obligate the United States to make an open-ended 
commitment to transfer an incalculable amount of royalty 
revenue to an international organization for redistribution to 
the developing world. And it would require the United States to 
seek permission to mine the deep seabed from a council of 
foreign countries that includes Sudan.
    Ceding American sovereignty should not be done lightly 
since it was achieved and has been preserved through great 
sacrifice. When the Founding Fathers wrested sovereignty away 
from Great Britain and declared our independence, they stated 
their reasons for doing so. Among those reasons were the 
imposition of taxes from afar and for transporting us beyond 
the seas to be tried for pretended offenses.
    More than 230 years later, the Senate is considering a 
treaty that would siphon off royalty revenue that belongs to 
the American people, but instead will be remitted to Kingston, 
Jamaica, to be spent in other countries. The treaty would also 
transport the United States to tribunals in Germany and the 
Netherlands to answer for pretended offenses.
    The Founders had a deep respect for the law of nations and 
for the opinions of mankind, but I doubt that they could fathom 
that the United States would subject itself to such an 
arrangement.
    But opposition to UNCLOS is, of course, based on more than 
ideology. Our skepticism is based on the available evidence, 
longstanding U.S. law and policy, customary international law, 
U.S. experiences in other international organizations, U.S. 
experiences in international tribunals, the provisions of the 
Convention itself, and, of course, the facts.
    First, in regard to navigational rights and freedoms, we 
know the following facts. For more than 230 years, the U.S. 
Navy has successfully protected our maritime interests, 
regardless of the fact that the United States has not joined 
the Convention.
    The Navy has never been successfully denied access to any 
international strait, archipelagic water, or territorial sea. 
Indeed, at the hearing on May 23, General Dempsey, the Chairman 
of the Joint Chiefs of Staff, admitted that failure to join 
UNCLOS would not compromise our ability to project force around 
the world.
    In regard to developing the resources of the Extended 
Continental Shelf, we know the following facts. The United 
States currently exercises full jurisdiction and control over 
its Extended Continental Shelf and has successfully demarcated 
its limits in the Gulf of Mexico and the Arctic Ocean through 
treaties with Mexico and Russia.
    Since August 2001, the United States has leased blocks of 
the Extended Continental Shelf in the Gulf of Mexico for 
development to United States companies, such as Chevron, as 
well as companies from Brazil, Denmark, France, Italy, Norway, 
and the United Kingdom.
    Regarding the transfer of royalties to the International 
Seabed Authority under article 82, we know the following facts. 
This committee cannot know the amount of royalty revenue that 
the U.S. Treasury will forgo because no study has been 
conducted to determine the value of the hydrocarbon resources 
of the vast U.S. Extended Continental Shelf.
    As such, if the United States accedes to the Convention, it 
will be making an open-ended commitment to transfer an 
incalculable sum of royalty revenue to the authority for 
redistribution to developing and landlocked countries.
    Regarding the Convention's mandatory dispute resolution 
provisions, we know the following facts. That acceding to 
UNCLOS would expose the United States to baseless international 
lawsuits. That environmental activists, legal academics, and at 
least one member of the Convention have contemplated initiating 
climate change litigation against the United States. And that 
adverse judgments issued by UNCLOS tribunals are final, not 
subject to appeal, and are enforceable in the United States.
    Finally, in regard to U.S. rights to mine the deep seabed, 
we know the following facts. That pursuant to U.S. law, 
longstanding U.S. policy, and customary international law, U.S. 
persons and corporations have the right to explore and exploit 
the deep seabed, regardless of whether or not the United States 
is a party to UNCLOS.
    These are the facts. And collectively, they indicate that 
there are real costs and foreseeable risks that the United 
States will undertake if it joins the Convention.
    Now, proponents of accession claim that there are no costs 
whatsoever, that the United States will only enjoy benefits 
from membership, and that if only the United States would join 
the Convention, everything would work out just fine. In light 
of the facts, I believe that it is the proponents' claims that 
are based in mythology and on blind faith.
    Thank you again, Mr. Chairman, for inviting me to testify 
today, and I look forward to any questions that you have.
    [The prepared statement of Mr. Groves follows:]

                  Prepared statement of Steven Groves

    Mr. Chairman and members of the committee, thank you for inviting 
me to testify before you today regarding the United Nations Convention 
on the Law of the Sea (UNCLOS).
    UNCLOS, like any complex treaty or piece of legislation, should be 
thoroughly examined by the Committee to determine its costs as well as 
its benefits. At bottom, the disagreement between those who favor U.S. 
accession to the Convention and those who oppose boils down to a 
disagreement regarding whether the benefits of membership are 
outweighed by the costs.
    By its nature, no treaty comes without costs. As with comprehensive 
legislation, there are often provisions of a treaty that are 
uncontroversial and attractive in themselves. Likewise, there are other 
provisions that are controversial and divisive. This rule generally 
holds true for all treaties, including those involving arms control, 
human rights, the environment, international courts, and others. UNCLOS 
is no exception.
    However, unlike most other treaties, the terms of UNCLOS prevent 
the United States from exempting itself from its more controversial 
provisions. Specifically, pursuant to article 309, UNCLOS forbids 
states parties from submitting reservations or exceptions that would 
otherwise allow the United States to disregard provisions that do not 
comport with the U.S. Constitution or longstanding U.S. law and policy.
    My testimony today focuses on the costs associated with U.S. 
accession to UNCLOS and whether the benefits of accession are such that 
the costs are outweighed. The costs of accession are not imaginary. Nor 
is opposition to U.S. accession based on purist ideology, but rather on 
the available evidence, current U.S. law and policy, customary 
international law, U.S. experience in other international 
organizations, the U.S. record in international tribunals, and of 
course the provisions of the convention itself.
    In summary:

   If the U.S. accedes to UNCLOS, it will be required by 
        article 82 to transfer royalties generated from hydrocarbon 
        production of the U.S. ``Extended Continental Shelf'' (ECS) to 
        the International Seabed Authority for redistribution to 
        developing and landlocked countries. Since the value of the 
        hydrocarbon resources lying beneath the U.S. ECS may be worth 
        trillions of dollars, the amount of royalties that the U.S. 
        Treasury would be required to transfer to the Authority would 
        be substantial. In any event, U.S. accession would amount to an 
        open-ended commitment to forgo an incalculable amount of 
        royalty revenue for no appreciable benefit.
   U.S. accession to UNCLOS is not necessary to develop or 
        secure title to the hydrocarbon resources of the ECS. Under 
        international law and longstanding U.S. policy and practice, 
        the U.S. has established full jurisdiction and control over its 
        ECS and is in the process of delimiting its ECS boundaries on a 
        worldwide basis. The successful delimitation of areas of U.S. 
        ECS and subsequent leasing of those areas in the Gulf of Mexico 
        to U.S. and foreign oil exploration companies demonstrate that 
        the United States does not need to achieve universal 
        international recognition of its ECS to provide ``certainty'' 
        to oil exploration companies.
   Proponents of U.S. accession to UNCLOS contend that by 
        failing to join the Convention the United States is forbidden 
        from mining the deep seabed--the ocean floor lying beyond the 
        ECS and designated as ``the Area.'' However, no legal barriers 
        prevent U.S. access, exploration, and exploitation of the 
        resources of the deep seabed. The United States has long held 
        that U.S. corporations and citizens have the right to develop 
        the resources of the deep seabed and may do so whether or not 
        the United States accedes to UNCLOS.
   U.S. accession to UNCLOS would expose the U.S. to lawsuits 
        regarding virtually any maritime activity, such as alleged 
        pollution of the marine environment from a land-based source or 
        through the atmosphere. Regardless of the lack of merits of 
        such a case, the U.S. would be forced to defend itself against 
        every such lawsuit at great expense to U.S. taxpayers. Any 
        adverse judgment rendered by an UNCLOS tribunal would be final, 
        could not be appealed, and would be enforceable in U.S. 
        territory.
   Finally, it is not essential or even necessary for the 
        United States to accede to UNCLOS to protect and preserve its 
        navigational rights and freedoms. The navigational and maritime 
        boundary provisions of the Convention either codify customary 
        international law that existed well before the Convention was 
        adopted in 1982 or ``refine and elaborate'' navigational rights 
        and regimes that are now widely accepted as binding 
        international law.

                 ARTICLE 82 AND THE COSTS OF COMPLIANCE

    Proponents of U.S. accession to UNCLOS extol the supposed benefits 
of joining the Convention but are reluctant to discuss its very real 
costs.
    One area where the U.S. can expect to experience significant 
costs--with no appreciable benefit--is in its compliance with article 
82 of the Convention: ``Payments and contributions with respect to the 
exploitation of the Continental Shelf beyond 200 nautical miles.''
    If the U.S. accedes to UNCLOS, it will be required pursuant to 
article 82 to transfer royalties generated on the U.S. Continental 
Shelf beyond 200 nautical miles (nm)--an area known as the ``Extended 
Continental Shelf'' (ECS)--to the International Seabed Authority. These 
royalties will likely total tens or even hundreds of billions of 
dollars over time. Instead of benefiting the American people, the 
royalties will be distributed by the Authority to developing and 
landlocked nations, including some that are corrupt, undemocratic, or 
even state sponsors of terrorism such as Cuba and Sudan.
    Article 82 of UNCLOS requires member states to ``share'' a portion 
of their royalty revenue for all oil, gas, or other mineral resources 
extracted from the ECS:

          The coastal State shall make payments or contributions in 
        kind in respect of the exploitation of the nonliving resources 
        of the Continental Shelf beyond 200 nautical miles from the 
        baselines from which the breadth of the territorial sea is 
        measured.

    These payments are to be made to the Authority on an annual basis 
by the states parties, and are based on the value of production at the 
particular site--in most cases, an offshore drilling platform 
extracting oil or natural gas from the ECS. According to a recent study 
conducted for the Authority, such payments are considered 
``international royalties.''
    The potential size of the U.S. ECS worldwide is significant. The 
value of the hydrocarbon deposits lying beneath the U.S. ECS is 
difficult to estimate, but it is likely substantial. According to the 
U.S. Extended Continental Shelf Task Force, ``Given the size of the 
U.S. Continental Shelf, the resources we might find there may be worth 
many billions if not trillions of dollars.''
    Member states begin to pay these ``international royalties'' during 
the 6th year of production at the drilling site. Starting with the 6th 
year of production, UNCLOS members must pay 1 percent of the value of 
the total production at that site to the Authority. Thereafter, the 
royalty rate increases in increments of 1 percentage point per year 
until the 12th year of production, when it reaches 7 percent. The rate 
remains at 7 percent until production ceases at the site.
    As such, if the United States accedes to UNCLOS it would be 
obligated to transfer to the Authority a considerable portion of the 
royalties generated on the U.S. ECS that would otherwise be deposited 
in the U.S. Treasury for the benefit of the American people. For 
example, the royalty rate of the majority of blocks currently under an 
active lease on the U.S. ECS is 12.5 percent. Beginning in the 12th 
year of production on such an ECS block the U.S. would be required to 
transfer 7 percent--more than half--of its royalty revenue to the 
Authority and do so each year until production ends on that lease. The 
remaining 5.5 percent of the royalty would be retained by the Treasury.
    Given that resources of the U.S. ECS ``may be worth many billions 
if not trillions of dollars,'' this would amount to a substantial sum 
over time.




    But there is the rub. There has been no comprehensive study to 
determine the value of the oil and natural gas that lies beneath the 
U.S. ECS. The total area of the U.S. ECS is reportedly twice the size 
of California and stretches from the U.S. east coast to the South 
Pacific and up to the Arctic Ocean. How can this committee be expected 
to conduct a proper assessment of the financial impact of U.S. 
accession to UNCLOS if the value of the natural resources on the U.S. 
ECS is unknown? If the value of U.S. hydrocarbons on the ECS is unknown 
then so too is the amount of royalty revenue that the United States 
will ultimately forgo if it accedes to the Convention.
    As such, by acceding to UNCLOS the United States will be making an 
open-ended international commitment to transfer an indefinite sum of 
royalty revenue (indefinite, but likely in the tens if not hundreds of 
billions of dollars) to the Authority for redistribution to developing 
and landlocked nations.

     DETERMINING THE EXTENT OF THE U.S. EXTENDED CONTINENTAL SHELF

    Some proponents of U.S. accession to UNCLOS claim that U.S. oil 
companies cannot achieve the ``certainty'' they require to develop the 
hydrocarbon resources on the ECS unless the United States accedes to 
the Convention and receives the approval of the Commission on the 
Limits of the Continental Shelf--an international committee of 
geologists and hydrographers located at U.N. headquarters in New York 
City. For example, in 2007, former Deputy Secretary of State John 
Negroponte stated, ``In the absence of such international recognition 
and legal certainty, U.S. companies are unlikely to secure the 
necessary financing and insurance to exploit energy resources on the 
extended shelf.''
    However, pursuant to longstanding law and policy the United States 
already enjoys and exercises full jurisdiction and control over its 
ECS. In addition to the 1945 Truman Proclamation, in which President 
Harry S Truman declared that the United States ``regards the natural 
resources of the subsoil and seabed of the Continental Shelf beneath 
the high seas but contiguous to the coasts of the United States as 
appertaining to the United States, subject to its jurisdiction and 
control,'' in 1953 Congress passed the Outer Continental Shelf Lands 
Act, which defined the outer Continental Shelf as ``all submerged lands 
lying seaward and outside of the area of lands beneath navigable waters 
. . . and of which the subsoil and seabed appertain to the United 
States and are subject to its jurisdiction and control.''
    After the adoption of UNCLOS in 1982, the U.S. affirmed its 
jurisdiction over its entire Continental Shelf, including the ECS. 
Specifically, in November 1987 a U.S. Government interagency group 
issued a policy statement declaring its intent to delimit the U.S. ECS 
in conformity with article 76 of UNCLOS (which provides a formula for 
measuring the extent of a coastal state's ECS). That statement read, in 
pertinent part, ``The United States has exercised and shall continue to 
exercise jurisdiction over its Continental Shelf in accordance with and 
to the full extent permitted by international law as reflected in 
Article 76, paragraphs (1), (2) and (3).''
    Indeed, the United States has already demarcated areas of its ECS 
in the Gulf of Mexico, the Bering Sea, and the Arctic Ocean via 
bilateral treaties with Mexico and Russia. In the Gulf, for example, 
the U.S. and Mexico have negotiated a series of treaties to delimit 
their maritime and Continental Shelf boundaries, including areas of 
abutting ECS:

   In November 1970, the U.S. and Mexico signed a treaty to 
        maintain the Rio Grande and Colorado River as the agreed 
        international boundary between the two nations. As part of the 
        treaty, the two nations demarcated their maritime boundaries in 
        the Gulf of Mexico and the Pacific Ocean out to 12 nm.
   In May 1978, building on the 1970 treaty, the two nations 
        signed a treaty delimiting their maritime boundaries in the 
        Gulf and in the Pacific out to 200 nm. The treaty demarcated 
        boundary lines in the Gulf where their respective 200 nm 
        Exclusive Economic Zones (EEZ) abutted, leaving a ``doughnut 
        hole'' of approximately 5,092 square nm (now known as the 
        ``western gap'') where their 200 nm boundary lines did not 
        meet. A second doughnut hole was created in the eastern Gulf 
        where the EEZ of the U.S., Mexico, and Cuba fail to intersect 
        (the ``eastern gap'').
   In June 2000, the U.S. and Mexico signed a treaty dividing 
        the area of ECS within the western gap. Of the 5,092 square nm 
        of ECS in the western gap, 1,913 (38 percent) went to the 
        United States and 3,179 (62 percent) went to Mexico. The treaty 
        established a drilling moratorium over a narrow strip along the 
        boundary within the western gap due to the possibility that 
        transboundary hydrocarbon reservoirs are located along the 
        boundary.
   In February 2012, the U.S. and Mexico signed a treaty 
        regarding the exploitation of transboundary reservoirs located 
        along the Continental Shelf boundary shared by the two nations 
        in the Gulf, including along the ECS boundary within the 
        western gap. The treaty has not yet been transmitted to the 
        U.S. Senate for its advice and consent.

    Collectively, these treaties between the United States and Mexico, 
particularly the June 2000 ECS delimitation treaty, demarcated an area 
of U.S. ECS--the 1,913 square nm of submerged Continental Shelf in the 
northern portion of the western gap. There is no evidence that the 
``international community'' does not, or will not, recognize the ECS in 
the northern portion of the western gap and its resources as being 
subject to the jurisdiction and control of the United States.




    The United States exercises jurisdiction and control over its ECS 
as evidenced by the fact that the Department of the Interior has made 
the western gap in the Gulf of Mexico available for hydrocarbon 
development since August 2001. Specifically, the Bureau of Ocean Energy 
Management (BOEM) offered the northern portion of the western gap for 
lease almost immediately after the 2000 U.S.-Mexico ECS delimitation 
treaty was ratified. That treaty entered into force on January 17, 
2001. Seven months later, on August 22, BOEM offered the area of U.S. 
ECS in the western gap in Lease Sale 180. In that lease sale, three 
U.S. companies (Texaco, Hess, and Burlington Resources Offshore) and 
one foreign company (Petrobras) submitted bids totaling more than $2 
million for seven lease blocks in the western gap.
    BOEM has offered western gap ECS blocks in 19 lease sales between 
2001 and 2010. Seven U.S. companies (Burlington, Chevron, Devon Energy, 
Hess, Mariner Energy, NARCA Corporation, and Texaco) submitted bids to 
lease ECS blocks in the western gap. Five foreign companies--BP, Eni 
Petroleum (Italy), Maersk Oil (Denmark), Petrobras, and Total 
(France)--also bid on western gap ECS blocks during those sales. BOEM 
collected more than $47 million in bonus bids in connection with lease 
sales on those ECS blocks. Of the approximate 320 blocks located in 
whole or in part on the western gap ECS, 65 (approximately 20 percent) 
are currently held under active leases by nine U.S. and foreign oil 
exploration companies.




    The successful delimitation and subsequent leasing of ECS areas in 
the Gulf of Mexico demonstrate that the United States does not need to 
achieve universal international recognition of its ECS. The United 
States identified and demarcated areas of ECS in the western gap in 
cooperation with the only other relevant nation, Mexico, and that area 
was subsequently offered for development to U.S. and foreign oil and 
gas companies. All of this was achieved without U.S. accession to 
UNCLOS or the approval of the Commission on the Limits of the 
Continental Shelf.
    Even though approximately 20 percent of the only area of U.S. ECS 
that has been made available for lease by BOEM is currently under an 
active lease, the U.S. oil and gas industry has supported and will 
likely continue to support U.S. accession to UNCLOS in order to achieve 
even greater ``certainty.'' That is their prerogative, of course, and 
achieving a maximum amount of certainty is a legitimate and desirable 
goal for a capital-intensive commercial enterprise. However, the 
successful delimitation of the ECS in the western gap and the U.S. 
Government's continuing lease sales of ECS blocks would appear to have 
provided the certainty necessary for several major U.S. and foreign oil 
exploration companies to secure leases for the development of the U.S. 
ECS.

                  U.S. RIGHTS TO DEEP SEABED MINERALS

    Proponents of U.S. accession to UNCLOS contend that by failing to 
join the Convention the United States is forbidden from mining the deep 
seabed--the ocean floor lying beyond the ECS and designated as ``the 
Area.'' However, no legal barriers block U.S. access, exploration, and 
exploitation of the resources of the deep seabed. The United States has 
long held that U.S. corporations and citizens have the right to explore 
and exploit the resources of the deep seabed and may do so whether or 
not the United States accedes to UNCLOS.
    The United States made its position on its right to engage in deep 
seabed mining very clear in March 1983 during the final days of the 
Third U.N. Conference on the Law of the Sea. Specifically, in response 
to statements from other U.N. member states that UNCLOS nonparties 
would not have the right to engage in deep seabed mining, the U.S. 
stated the following:

          Some speakers asserted that existing principles of 
        international law, or the Convention, prohibit any State, 
        including a nonparty, from exploring for and exploiting the 
        mineral resources of the deep sea-bed except in accordance with 
        the Convention. The United States does not believe that such 
        assertions have any merit. The deep sea-bed mining regime of 
        the Convention adopted by the Conference is purely contractual 
        in character. The United States and other nonparties do not 
        incur the obligations provided for therein to which they 
        object.
          Article 137 of the Convention [forbidding claims of 
        sovereignty over the deep sea-bed or its resources] may not as 
        a matter of law prohibit sea-bed mining activities by 
        nonparties to the Convention; nor may it relieve a party from 
        the duty to respect the exercise of high seas freedoms, 
        including the exploration for and exploitation of deep sea-bed 
        minerals, by nonparties. Mining of the sea-bed is a lawful use 
        of the high seas open to all States . . . . The practice of the 
        United States and the other States principally interested in 
        sea-bed mining makes it clear that sea-bed mining continues to 
        be a lawful use of the high seas within the traditional meaning 
        of the freedom of the high seas.

    The U.S. legal position set forth in 1983 on deep seabed mining 
remains the same today. According to the ``Restatement of the Law, 
Third, of the Foreign Relations Law of the United States,'' the United 
States may engage in deep seabed mining activities even if it does not 
accede to UNCLOS, provided that such activities are conducted without 
claiming sovereignty over any part of the deep seabed and as long as 
the mining activities are conducted with due regard to the rights of 
other nations to engage in mining. As related by the Restatement, 
``like the fish of the high seas the minerals of the deep sea-bed are 
open to anyone to take.''
    The U.S. position is also reflected in the Deep Seabed Hard Mineral 
Resources Act of 1980, which Congress enacted 2 years before the 
adoption of UNCLOS to provide a framework for U.S. corporations to 
conduct deep seabed mining until such time as the United States joins 
an acceptable convention on the law of the sea. The DSHMRA states the 
U.S. position on the legality of deep seabed mining as follows:

        [I]t is the legal opinion of the United States that exploration 
        for and commercial recovery of hard mineral resources of the 
        deep seabed are freedoms of the high seas subject to a duty of 
        reasonable regard to the interests of other states in their 
        exercise of those and other freedoms recognized by general 
        principles of international law.

    In sum, the long-held position of the United States, both 
domestically and internationally, is that U.S. citizens and 
corporations have the right to explore and exploit the deep seabed 
regardless of whether or not the United States is a party to UNCLOS.
              exposure to baseless international lawsuits
          ``The possibility that a small island state, or another 
        injured party, would bring a liability claim against states 
        responsible for climate change no longer is a topic for fiction 
        or a theoretical prospect. There is a rise in plans for 
        litigation worldwide for consequences of global warming.''--
        International law professors Michael Faure and Andre 
        Nollkaemper

    Part XV of UNCLOS addresses the settlement of maritime disputes 
between parties to the Convention. Part XV contemplates that UNCLOS 
states parties, in accordance with the U.N. Charter, will attempt to 
resolve maritime disputes peacefully without resort to the Convention's 
compulsory procedures. When a dispute arises between two UNCLOS 
members, they are obligated to ``proceed expeditiously to an exchange 
of views regarding its settlement by negotiation or other peaceful 
means.'' States parties may also resort to a nonbinding ``conciliation 
procedure'' under Annex V of the Convention.
    But if a maritime dispute cannot be settled in a voluntary manner, 
any UNCLOS state party may compel another state party to defend itself 
in one of four forums: the International Tribunal for the Law of the 
Sea (ITLOS), the International Court of Justice (ICJ), an arbitral 
tribunal organized under Annex VII, or a ``special'' arbitral tribunal 
organized under Annex VIII. Within ITLOS, a special tribunal, the 
Seabed Disputes Chamber (SDC), was established to resolve disputes 
about activities on the seabed floor beyond the limits of national 
jurisdiction, known as ``the Area.''
    Acceding to UNCLOS would expose the U.S. to lawsuits on virtually 
any maritime activity, such as alleged pollution of the marine 
environment from a land-based source or through the atmosphere. 
Regardless of the merits, the U.S. would be forced to defend itself 
against every such lawsuit at great expense to U.S. taxpayers. Any 
judgment rendered by an UNCLOS tribunal would be final, could not be 
appealed, and would be enforceable in U.S. territory.
    Unlike a resolution passed by the U.N. General Assembly or a 
recommendation made by a human rights treaty committee, judgments 
issued by UNCLOS tribunals are legally enforceable upon members of the 
Convention. Article 296 of the Convention, titled ``Finality and 
binding force of decisions,'' states, ``Any decision rendered by a 
court or tribunal having jurisdiction under this section shall be final 
and shall be complied with by all the parties to the dispute.''
    Judgments made by UNCLOS tribunals are enforceable in the same 
manner that a judgment from a U.S. domestic court would be. For 
example, Article 39 of Annex VI states that ``The decisions of the 
[Seabed Disputes] Chamber shall be enforceable in the territories of 
the States Parties in the same manner as judgments or orders of the 
highest court of the State Party in whose territory the enforcement is 
sought.'' In other words, if the United States accedes to the 
Convention, the U.S. Government will be required to enforce and comply 
with SDC judgments in the same manner as it would enforce and comply 
with a judgment of the U.S. Supreme Court. In other words, the U.S. 
court system will serve not as an avenue for appeal from UNCLOS 
tribunals, but rather as an enforcement mechanism for their judgments.
    The domestic enforceability of UNCLOS tribunal judgments was 
confirmed by U.S. Supreme Court Justice John Paul Stevens in the 
landmark 2008 case, Medellin v. Texas. In Medellin, Justice Stevens, 
writing a concurring opinion, cited Article 39 of Annex VI for the 
proposition that UNCLOS members--presumably including the United States 
if it accedes to the Convention--are obligated to comply with the 
judgments of the Convention's tribunals.
    U.S. accession to the Convention would provide an opportunity and 
legal forum for other UNCLOS members to initiate lawsuits against the 
U.S. challenging the adequacy of its efforts to protect the marine 
environment. Although current U.S. law may satisfy many of the general 
environmental obligations set forth in the Convention, the U.S. might 
nevertheless be forced to defend itself in a costly and politically 
embarrassing lawsuit challenging the sufficiency and enforcement of 
U.S. domestic environmental laws and regulations. One such lawsuit--the 
MOX Plant Case (Ireland v. United Kingdom)--has already been litigated 
in UNCLOS tribunals.
    Acceding to UNCLOS would commit the U.S. to controlling its 
pollutants, including alleged ``harmful substances'' such as carbon 
emissions and other greenhouse gases (GHG), in such a way that they do 
not negatively impact the marine environment. The U.S. would also be 
obligated to adopt laws and regulations to prevent the pollution of the 
marine environment from the atmosphere and could be liable under 
international law for failing to enact legislation necessary to prevent 
atmospheric pollution. Moreover, such domestic laws and regulations 
``shall'' take into account ``internationally agreed rules, standards 
and recommended practices and procedures.'' The ``internationally 
agreed rules, standards and recommended practices'' that could be 
invoked by UNCLOS litigants may include instruments such as the U.N. 
Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol.
    A consensus has emerged within the international environmental and 
legal community that the United States is the best target for an 
international climate change lawsuit. One law professor has 
characterized the United States as a likely target because it is a 
developed nation with high per capita and total GHG emissions, adding 
that the ``higher the overall historic and present contribution to 
global emissions by the defending party, arguably the better the chance 
of a successful outcome.''
    Over the past decade, there has been a steady drumbeat to initiate 
an international climate change lawsuit against the United States, and 
UNCLOS tribunals have featured prominently among the potential forums 
identified as a venue for such a case.

   In 2002, the Prime Minister of Tuvalu, a Pacific island 
        nation consisting of a chain of nine coral atolls, stated his 
        intention to initiate a climate change lawsuit against the 
        United States because of its failure to adopt the Kyoto 
        Protocol. That year, at the World Summit for Sustainable 
        Development held in Johannesburg, Tuvalu's Government lobbied 
        other small island nations to join them in such a suit at the 
        International Court of Justice.
   In 2003, the Washington, DC-based Environmental Law 
        Institute published ``The Legal Option: Suing the United States 
        in International Forums for Global Warming Emissions'' by law 
        professor Andrew L. Strauss. According to Strauss, the U.S. 
        rejection of the Kyoto Protocol ``makes the United States the 
        most logical first country target of a global warming lawsuit 
        in an international forum.'' The article proposed various 
        forums for initiating a lawsuit against the United States, 
        including UNCLOS tribunals, but Strauss lamented, ``As the 
        United States has not adhered to the Convention, however, a 
        suit could not be brought directly against it under the 
        Convention.''
   In her 2005 book ``Climate Change Damage and International 
        Law,'' law professor Roda Verheyen posed a hypothetical case 
        that could be brought against the United States for its alleged 
        responsibility in melting glaciers and causing glacial outburst 
        floods in the Himalayas. The claim would include compensation 
        for flood damages as well as additional funds to monitor 
        glacial lakes and prevent future floods. Verheyen based 
        liability for such damages on the U.S.'s alleged violation of 
        its commitments under the UNFCCC and failure to ratify the 
        Kyoto Protocol.
   In December 2005, the Inuit Circumpolar Council, an 
        international nongovernmental organization representing Inuit 
        peoples in Alaska, Canada, Greenland, and Russia, filed a 
        petition against the United States at the Inter-American 
        Commission on Human Rights (IACHR), a human rights body 
        operating within the Organization of American States. The 
        petition requested that the IACHR direct the United States to 
        adopt mandatory measures to limit its emissions and to provide 
        assistance to help the Inuit adapt to the impacts of climate 
        change.
   In 2006, the ``International Journal of Sustainable 
        Development Law & Policy'' published ``Potential Causes of 
        Action for Climate Change Damages in International Fora: The 
        Law of the Sea Convention,'' in which law professor, William C. 
        G. Burns, cited UNCLOS's marine pollution provisions as a basis 
        for a cause of action for rising sea levels and changes in 
        ocean acidity. Burns named the United States as ``the most 
        logical State to bring an action against given its status as 
        the leading producer of anthropogenic greenhouse gas emissions, 
        as well as its failure to ratify Kyoto,'' but noted that the 
        U.S. ``is not currently a Party to the Convention.''
   In a September 2011 speech to the U.N. General Assembly, 
        Johnson Toribiong, President of the Pacific island nation of 
        Palau, called upon the General Assembly to seek an advisory 
        opinion from the International Court of Justice ``on the 
        responsibilities of States under international law to ensure 
        that activities carried out under their jurisdiction or control 
        that emit greenhouse gases do not damage other States.''

    In sum, the United States would be at the top of the list of 
potential defendants in an UNCLOS climate change lawsuit, if the U.S. 
accedes to the Convention. Thus far, the United States has denied 
potential climate change claimants their day in international court by 
refusing to accede to UNCLOS. Clearly, accession to the Convention 
would open the door to these litigants as well as to their advocates in 
the international academic, environmental, and nongovernmental 
organization communities.

                    NAVIGATIONAL RIGHTS AND FREEDOMS

    In 1993, the Department of Defense issued an Ocean Policy Review 
Paper on ``the currency and adequacy of U.S. oceans policy, from the 
strategic standpoint, to support the national defense strategy.'' The 
paper concluded that U.S. national security interests in the oceans 
have been protected even though the U.S. is not party to UNCLOS:

          U.S. security interests in the oceans have been adequately 
        protected to date by current U.S. ocean policy and implementing 
        strategy. U.S. reliance on arguments that customary 
        international law, as articulated in the nondeep seabed mining 
        provisions of the 1982 Law of the Sea Convention, and as 
        supplemented by diplomatic protests and assertion of rights 
        under the Freedom of Navigation Program, have served so far to 
        preserve fundamental freedoms of navigation and overflight with 
        acceptable risk, cost and effort.

    Almost 20 years later, there is no evidence that suggests a change 
in circumstances such that U.S. accession to UNCLOS has become 
essential to the successful execution of the U.S. Navy's global 
mission.
    Throughout its history, the United States has successfully 
protected its maritime interests despite not being an UNCLOS member. 
The reason is simple; Enjoyment of the Convention's navigational 
provisions is not restricted to UNCLOS members. Those provisions 
represent widely accepted customary international law, some of which 
has been recognized as such for centuries. UNCLOS members and 
nonmembers alike are bound by the Convention's navigational provisions.
    The body of international law known as the ``law of the sea'' was 
not invented in 1982 when UNCLOS was adopted, but rather ``has its 
origins in the customary practice of nations spanning several 
centuries.'' It developed as customary international law, which is 
``that body of rules that nations consider binding in their relations 
with one another. It derives from the practice of nations in the 
international arena and from their international agreements.'' Although 
not a party to UNCLOS, the United States is bound by and acts in 
accordance with the customary international law of the sea and 
considers the UNCLOS navigational provisions as reflecting 
international law.
    Most of the UNCLOS navigational provisions have long been 
recognized as customary international law. The Convention's articles on 
navigation on the high seas (Articles 86-115, generally) and passage 
through territorial waters (Articles 2-32, generally) were copied 
almost verbatim from the Convention on the High Seas and the Convention 
on the Territorial Sea and the Contiguous Zone, both of which were 
adopted in 1958. The United States is party to both Conventions, which 
are considered to be codifications of widely accepted customary 
international law.
    Similar to other multilateral conventions, such as the Vienna 
Convention on Diplomatic Relations, UNCLOS is said to ``have codified 
settled customary international law or to have `crystallized' emerging 
customary international law.'' UNCLOS codified customary law relating 
to navigation on the high seas and through territorial waters and 
``crystallized'' emerging customary law, such as the concepts of 
``transit passage'' through international straits and ``archipelagic 
sea-lanes passage.'' As summarized by Defense Department official John 
McNeill in 1994, UNCLOS ``contains a comprehensive codification of 
long-recognized tenets of customary international law which reflect a 
fair balance of traditional ocean uses.'' In short, the Convention's 
navigational provisions have attained such a status that all nations--
UNCLOS members and nonmembers alike--are expected to adhere to them.
    One way to determine the extent to which UNCLOS's navigational 
provisions have achieved the status of binding international law is to 
study the behavior of nations. Behavior in conformity with the 
Convention--known as ``state practice''--is additional evidence that 
its navigational provisions reflect international law. Indications that 
a state is acting in conformity with international law may be found in 
states' ``legislation, the decisions of their courts, and the 
statements of their official government and diplomatic 
representatives.'' A nation's inaction regarding a particular 
navigational provision may also be viewed as state practice because it 
can be deemed to be acquiescence.
    The consistent practice of states--maritime states, coastal states, 
UNCLOS members, and nonmembers--indicates that the UNCLOS navigational 
provisions are almost universally accepted law. The ``Restatement of 
the Law, Third, of the Foreign Relations Law of the United States'' 
notes:

        [B]y express or tacit agreement accompanied by consistent 
        practice, the United States, and states generally, have 
        accepted the substantive provisions of the Convention, other 
        than those addressing deep sea-bed mining, as statements of 
        customary law binding upon them apart from the Convention.

    This has long been the U.S. position. Since the Reagan 
administration, the official U.S. policy has been that the UNCLOS 
provisions on the traditional uses of the oceans, including the 
provisions on navigation and overflight, confirm international law and 
practice. Specifically, in March 1983, President Ronald Reagan 
announced the U.S. oceans policy in light of his decision not to sign 
UNCLOS. Reagan announced that ``the United States is prepared to accept 
and act in accordance with the balance of interests relating to 
traditional uses of the oceans--such as navigation and overflight'' and 
``will recognize the rights of other states in the waters off their 
coasts, as reflected in the Convention, so long as the rights and 
freedoms of the United States and others under international law are 
recognized by such coastal states.''
    Reagan's 1983 oceans policy statement confirmed what was already 
widely recognized: that the navigational provisions of UNCLOS generally 
reflect customary international law and as such must be respected by 
all nations.
    Yet proponents of U.S. accession to UNCLOS maintain that the United 
States cannot fully benefit from these navigational rights unless it is 
a party to the Convention, which ``provides'' and ``preserves'' these 
rights. This is simply incorrect. The United States enjoys the same 
navigational rights as UNCLOS parties enjoy.
    At the December 1982 final plenary meeting of the Third United 
Nations Conference on the Law of the Sea, some nations took the 
opposite position, contending that any nation that chose not to join 
the Convention would forgo all of these rights. On March 8, 1983, the 
United States, exercising its right to reply, expressly rejected that 
position:

          Some speakers discussed the legal question of the rights and 
        duties of States which do not become party to the Convention 
        adopted by the Conference. Some of these speakers alleged that 
        such States must either accept the provisions of the Convention 
        as a ``package deal'' or forgo all of the rights referred to in 
        the Convention. This supposed election is without foundation or 
        precedent in international law. It is a basic principle of law 
        that parties may not, by agreement among themselves, impair the 
        rights of third parties or their obligations to third parties. 
        Neither the Conference nor the States indicating an intention 
        to become parties to the Convention have been granted global 
        legislative power . . . .
          The United States will continue to exercise its rights and 
        fulfill its duties in a manner consistent with international 
        law, including those aspects of the Convention which either 
        codify customary international law or refine and elaborate 
        concepts which represent an accommodation of the interests of 
        all States and form part of international law.

    In sum, it is not essential or even necessary for the United States 
to accede to UNCLOS to benefit from the certainty and stability 
provided by its navigational provisions. Those provisions either codify 
customary international law that existed well before the Convention was 
adopted in 1982 or ``refine and elaborate'' navigational rights that 
are now almost universally accepted as binding international law.
    One prominent proponent of U.S. accession to UNCLOS recently stated 
that opposition to the Convention was not based on ``facts'' or 
``evidence'' but rather on ``ideology and mythology.'' The facts and 
evidence, however, are as follows:

   The U.S. already has full jurisdiction and control over its 
        entire Continental Shelf--including its ``Extended'' 
        Continental Shelf. Through Presidential proclamations, acts of 
        Congress, and bilateral treaties with neighboring countries, 
        the United States has successfully demarcated the limits of its 
        maritime boundaries and key areas of its ECS;
   The U.S. has clear title to all hydrocarbon resources lying 
        under the ECS and currently enjoys the rights to any and all 
        royalty revenue generated from the exploitation of such 
        resources;
   The U.S. has demonstrably exercised jurisdiction and control 
        over its ECS, as evidenced by the fact that it has been leasing 
        blocks for development to U.S. and foreign oil exploration 
        companies since August 2001;
   The ``western gap'' in the Gulf of Mexico is the only area 
        of ECS that has been offered for development by the United 
        States, and 20 percent of that area is currently under lease. 
        U.S. companies such as Chevron and companies from Brazil, 
        Denmark, France, Italy, Norway, and the United Kingdom hold 
        active leases on the western gap ECS;
   No comprehensive study has been conducted to determine the 
        value of the hydrocarbon resources that lie beneath the vast 
        U.S. ECS that is likely twice the size of California;
   The U.S. Extended Continental Shelf Task Force estimates 
        that the U.S. ECS resources ``may be worth many billions if not 
        trillions of dollars'';
   If the U.S. accedes to UNCLOS it will be making an open-
        ended commitment to transfer an incalculable sum of royalty 
        revenue from the U.S. Treasury to the International Seabed 
        Authority for redistribution to developing and landlocked 
        nations;
   The policy and law of the United States, both domestically 
        (i.e., the Deep Seabed Hard Mineral Resources Act) and 
        internationally, is that U.S. citizens and corporations have 
        the right to explore and exploit the deep seabed regardless of 
        whether or not the United States is a party to UNCLOS;
   Acceding to UNCLOS would expose the United States to 
        international lawsuits, including baseless environmental cases 
        and suits based on alleged U.S. contributions to global climate 
        change;
   Certain UNCLOS states parties, environmental activists, and 
        international legal academics are actively exploring the 
        potential of using international litigation against the United 
        States in an UNCLOS tribunal to advance their climate change 
        agenda;
   An adverse judgment in a climate change lawsuit initiated 
        under UNCLOS would be final, not subject to appeal, and 
        enforceable in the United States. Such a judgment would impose 
        massive regulatory burdens on U.S. companies, which would pass 
        the costs on to American consumers;
   For more than 200 years before UNCLOS was adopted in 1982 
        and for 30 years since then, the U.S. Navy has successfully 
        protected U.S. maritime interests regardless of the fact that 
        the U.S. has not joined the Convention;
   The U.S. Navy has never been successfully denied access to 
        any international strait or archipelagic water and regularly 
        exercises its freedom of navigation and overflight rights on 
        the high seas and ``innocent passage'' through territorial 
        waters;
   The U.S. Navy's ``Commander's Handbook on the Law of Naval 
        Operations'' is the preeminent operational manual regarding 
        navigational rights and is considered the gold standard by 
        maritime nations worldwide, many of which have adopted it for 
        use by their own navies; and,
   The United States is a member of the International Maritime 
        Organization and a founding member of the Arctic Council--
        organizations in which it actually means something to have a 
        ``seat at the table.''

    All of these facts collectively represent compelling evidence that 
the United States need not accede to UNCLOS in order to advance its 
maritime and national security interests. Indeed, the evidence suggests 
that there are real costs involved in accession that outweigh the 
supposed benefits, which are dubious and insubstantial.
    UNCLOS is a controversial and fatally flawed treaty. Accession to 
the Convention would result in a dangerous loss of American 
sovereignty. It would require the U.S. Treasury to transfer billions of 
dollars to an unaccountable international organization in Jamaica, 
which in turn is empowered to redistribute those American dollars to 
countries with interests that are inimical to the United States. The 
Convention's mandatory dispute mechanisms will result ultimately in 
troublesome and costly lawsuits and adverse judgments if the United 
States is deemed to have ``violated'' the Convention--most likely when 
the United States has acted in its own best interests.
    The U.S. Navy's support for the navigational rights enshrined in 
UNCLOS is far outweighed by the Convention's nonnavigational 
provisions. The practices of the Navy and the navies of other major 
maritime powers created the very customary international law upon which 
the navigational provisions of UNCLOS are based. The Navy enjoys those 
same navigational rights and freedoms despite nonaccession to the 
treaty. The Navy's insistence that a failure to join UNCLOS will hinder 
its ability to conduct its global mission successfully is belied by the 
facts and demonstrably disproved by history.

    The Chairman. Thank you very much, Mr. Groves.
    I really appreciate it, and that is a good, articulate 
summary of the position. I think it helps us really join the 
discussion here, which I am thrilled to be able to tell you I 
am very happy is between Republicans. [Laughter.]
    So I am going to look to you guys to thrash it through. It 
is sort of interesting to me that this treaty----
    Mr. Rumsfeld. Mr. Chairman, in defense of John Negroponte, 
he is a career diplomat.
    The Chairman. Career diplomat, with no party affiliation. 
[Laughter.]
    John, is that true?
    Mr. Rumsfeld. I wouldn't want him tarnished.
    The Chairman. Don't tarnish him. Fine. Mr. Secretary, thank 
you for saving him from perdition.
    Let me just say to all of you that it is sort of 
interesting to me that this Democratic chairman is working very 
hard to get something done which President Nixon conceived of, 
President Reagan fixed and supported and pushed, President 
George Herbert Walker Bush refined, and President George W. 
Bush, with whom I had many disagreements, obviously----
    [Laughter.]
    The Chairman [continuing]. Saw fit to send to the Senate. 
And I don't think that is inconsequential. I don't think it is 
inconsequential that today five former Republican Secretaries 
of State, beginning with Henry Kissinger, all said we have got 
to do this. So let us explore it.
    I want to explore it. And I am going to ask you guys to 
sort of engage in a lot of this dialogue, if I can.
    But Mr. Groves, let me just sort of follow through a little 
bit, if I can. You, in your testimony, your written testimony, 
say that there is no legal barrier. I think you repeated it 
just at the end of your testimony now. There is no legal 
barrier to prevent U.S. access, exploration, and exploitation 
of the resources of the deep seabed. So we can go out there and 
we can go ahead and dig.
    And the United States, as part of your position, has long 
held that U.S. corporations and citizens have the right to go 
out and develop the resources of the deep seabed, whether or 
not the United States accedes to UNCLOS. Is that a fair 
statement? You believe that?
    Mr. Groves. Yes, Mr. Chairman.
    The Chairman. OK. Now, if that is true, is it your general 
point that under international law, there is no legal right, 
except by a treaty, to exclude another nation from mining in 
the deep seabed because it is out on the high seas?
    Mr. Groves. Correct. Correct. Another country couldn't 
unreasonably interfere----
    The Chairman. They can't interfere with us?
    Mr. Groves. Correct.
    The Chairman. OK. But that works both ways, doesn't it?
    Mr. Groves. Yes, we can't unreasonably interfere with other 
countries' claims as well.
    The Chairman. So if the United States, without joining the 
treaty, decides to do some deep seabed mining, under 
international law, we couldn't prevent the Chinese or the 
Russians from piggybacking half a mile away from our mining 
claim or 200 yards away, could we?
    Mr. Groves. No. As long as it didn't unreasonably interfere 
with our own claim.
    The Chairman. Well, what would be the legal--where would be 
the legal recourse for that?
    Mr. Groves. You mean if they did----
    The Chairman. What is to back up our claim? We don't have a 
claim. We are out in the deep sea without any legal instrument 
because we are not a party to the treaty. Where would our claim 
be?
    Mr. Groves. The only claims that exist right now on the 
U.S. side are those held by Lockheed Martin. Those are actually 
legacy claims----
    The Chairman. No, no, no. I am talking broader here.
    What would be--by what mechanism would--particularly, let 
us say Russia and China, which are signatories to this treaty, 
get the legal claim 100 yards from where we are, and we are not 
party to it. If you can find a company that is dumb enough and 
go drill without being party to the treaty, but let us presume, 
for the purposes of your argument, you say go to it. Go dig.
    What is the mechanism by which they are going to assert any 
right?
    Mr. Groves. Well, if the Russian--in your hypothetical, Mr. 
Chairman----
    The Chairman. Well, it is not a hypothetical. It is real 
under your regimen. Under your regimen, it is real. You are 
saying don't join the treaty. Go out and dig. That is your 
theory, and you just agreed.
    Mr. Groves. No, but your hypothetical was that there is a 
Chinese or Russian claim within a couple of hundred yards of an 
existing United States claim.
    The Chairman. Or let us say it is right on the same spot. 
But the Law of the Sea folks have acceded to that because they 
are the members, and we are not. And they say, ``Screw you, 
U.S. These guys are part of it, and we are giving them the 
claim.''
    Mr. Groves. Well, two things would happen, Mr. Chairman. If 
Russia or China or any other country interferes with a claim 
that has been made under the auspices of U.S. law, particularly 
the Deep Seabed Hard Mineral Resources Act, then this would be 
a bilateral problem between the United States and whichever 
other country was doing that.
    They would be infringing on our claim. And so, the relief--
--
    The Chairman. We don't have a claim. There is no claim. 
What are you doing? Claiming into the thin air? Claiming to 
God? Who are you claiming to?
    Mr. Groves. No, there is a U.S. statute and regulatory 
framework called the Deep Seabed Hard Mineral Resources Act 
that allows U.S. companies to apply for licenses from the 
Administrator of NOAA to make a claim in the deep seabed, and 
countries can move under those statutes and those regulations 
to make claims and engage in deep seabed mining.
    So there is a claim.
    The Chairman. Now, Mr. Bellinger and Secretary Negroponte, 
isn't that precisely what brought--the kind of thing that 
brought the Bush administration to say that the only way as a 
lawyer you could conceivably say to Lockheed Martin or another 
company go drill is to know that you have certainty with 
respect to the claim. And you wouldn't have certainty, would 
you not, under the structure that Mr. Groves has described?
    Mr. Bellinger. Thanks, Mr. Chairman.
    As you know, a cardinal feature of the Bush administration 
was, in fact, to preserve our freedom of action and our 
sovereignty. So we were not quick to sign up to obligations 
that would tie us down.
    But in looking at the best way for U.S. business, 
particularly as new technologies became available that would 
allow us to mine in the deep seabed or with the melting Arctic 
ice to exploit oil/gas resources in the Arctic, that the best 
way to allow companies to do that was to have the legal 
certainty that was provided under the Convention.
    We did look at customary international law, which, in fact, 
the Navy does rely on successfully for their naval activities. 
Although we thought again that the Convention would be better. 
But we saw that the only way that U.S. business could, in fact, 
engage in deep seabed mining or oil and gas exploitation in the 
Arctic was through the treaty.
    The Chairman. Well, I mean, isn't it accurate that if 161 
nations have signed up for the treaty and that is the agreed-
upon international mechanism for legitimizing claims under the 
ocean, would the United States be advantaged or disadvantaged 
in just staking its claim outside of that regimen relative to 
somebody who had a legitimized claim under it?
    Mr. Bellinger. The companies told us and they continue to 
tell you that that would be very risky, and these are companies 
who would want to invest literally billions of dollars out in 
the deep seabed or the Extended Continental Shelf. They would 
not want to invest that kind of money based on a risky claim. 
They would prefer the certainty that the treaty provides.
    The Chairman. I would like to ask both of you, if you 
would, I thought that Mr. Groves did an excellent job of kind 
of laying out the case, so to speak. But I think we need to 
examine that now, and I want to try and do that.
    He suggested that there would be an invitation to adverse 
judgments. There are three big reasons. Adverse judgments. 
Second, the transfer of an unbelievable amount of royalty. And 
third, that we would have to request permission to mine from 
Sudan.
    Can you, both of you, speak to those, if you would, and 
give us a sense of what the committee ought to think about 
that? Just--go ahead.
    Ambassador Negroponte. I mean, maybe we can share these, 
John. On the question of royalties, I think one of the really 
important points that I am not sure we have mentioned this 
afternoon is that if you look at the original part 11 that was 
negotiated and concluded in 1982, the fees were very high and 
very costly. And that was one of the things, I think, that 
threw people off.
    In the amended version now of part 11 in the annex there, 
it says that those fees and that fee structure does not apply, 
and it leaves it to subsequent determination by a council of 
which if we acceded to the treaty, we would be a member and if 
we ratified this amendment to the treaty. We would be a member 
of that council, and the procedure for making decisions on that 
kind of issue would be by consensus.
    So we would be in a very advantageous position to protect 
our interests. So I think as far as distribution of fees, 
decisionmaking process, and these new arrangements, I think our 
interests would be very well protected.
    The other point was already made about how from year zero 
to year five, there would be no royalties in the case of oil 
and then up to 7 percent beyond that. But again, that is in the 
case of actually----
    The Chairman. Well, I think it is important to recognize 
that--I think this is important because the companies will tell 
you this. One of the reasons everybody got happy about this is 
that it is 
1 percent for the first 5 years. It is an additional percent 
for the next year, an additional percent each year up. So you 
are really looking at 6 percent, 7 percent, 8 percent, up until 
you get to 12 years.
    So the top amount is 7 percent. So you are going up very 
slowly. The top amount is 7 percent. But many of those 
companies believe that with modern technology, they have an 
ability to exploit well within that period, and they are not 
looking at these enormous amounts of royalties.
    I mean, that is----
    Ambassador Negroponte. Right.
    The Chairman. But would you come back for a moment to the 
adverse judgments? There is a fear here that----
    Ambassador Negroponte. I will defer to John on that.
    Mr. Bellinger. Sure. I think it is much more likely that 
there would be an adverse judgment or certainly litigation 
against a U.S. company that tried to engage in deep seabed 
mining or mining on the U.S. Extended Continental Shelf outside 
the treaty. I think anybody could see that.
    To rely on a speculative legal argument accepted by no 
country in the world, that is flatly contrary to the terms of a 
Convention that has existed for 30 years, for ExxonMobil or 
Lockheed to spend billions of dollars relying on an academic 
theory suggested by a think tank, I think that is something 
that would create great legal risk for it. It is not surprising 
to me that their CEOs have written to say their preference is 
to rely on the terms of the treaty.
    With respect to other litigation, environmental litigation, 
I think the risk is relatively low. We have not seen other 
countries, and as you point out, there are lots of major 
industrial countries, including Japan and the U.K. and others, 
who are potential targets for environmental litigation. They 
have not been sued for climate change.
    And so, let me--the last thing I will say is I suffered 
under lawfare, along with Secretary Rumsfeld, as the legal 
adviser for the Bush administration. There were lots of 
unfounded claims relating to terrorism against us. So I have 
seen these.
    But I think in respect to environmental litigation, I just 
don't see that joining the treaty is going to open us up to 
significant new claims.
    The Chairman. I resisted saying that, well, you should have 
suffered, but----
    [Laughter.]
    Mr. Bellinger. Mr. Chairman, if I could just----
    The Chairman. Only joking. Only joking.
    If I can come back for a minute, just one thing, and then I 
am going to turn to Senator Lugar. Isn't it a fact, though, 
that no environmental suit would be allowed unless we were a 
party to an international agreement?
    Mr. Bellinger. That is exactly the point, Mr. Chairman.
    The Chairman. OK. Senator Lugar.
    Senator Lugar. Mr. Chairman, I am prepared to come after 
Senator Risch.
    The Chairman. Oh, Senator Risch, he has a conflict. So I am 
happy to recognize him.
    Senator Risch. Thank you, Mr. Chairman.
    I will try to be brief. First of all, I would like to place 
in the record, without objection, a letter addressed to the 
chairman and ranking member and the committee, dated June 14, 
2012, and it is on Heritage Action stationery. It is by 
numerous former Government officials, including, obviously, Mr. 
Rumsfeld, John Bolton, Edwin Meese, many, many others, who 
reach a very, very different conclusion than two of the 
witnesses here today. I ask it be placed in the record.
    The Chairman. Absolutely. Without objection, that will be 
made part of the record.
    Senator Risch. I have got--there are so many parts to this. 
I am going to focus on just one, and it is going to pick up 
right where you left off, Mr. Bellinger. I have your testimony 
in front of me, and this caught my eye. So I am going to focus 
on it.
    And on the fourth paragraph on page 10, you state, ``Some 
have argued that the Convention might obligate the United 
States to comply with international environmental agreements, 
such as Kyoto Protocol, to which the United States is not a 
party.'' You stated that.
    I am one of those people, except you understated it. I 
don't believe that it might. I believe it will.
    The first sentence of the next paragraph, you state 
conclusory, ``The terms of the Convention do not require 
parties to comply with other international environmental 
treaties.'' That was your conclusion. Then you quote a real 
small portion of one sentence to reach that conclusion.
    I know you are familiar with this, but I wish you would 
take the treaty in front of you there and open with me to 
article 212, subsection 1. It is on page 175. Have you got that 
in front of you? Pardon?
    Mr. Bellinger. I have it here.
    Senator Risch. OK. Great. The very first part of the 
sentence says, ``States shall adopt laws and regulations to 
prevent, reduce, and control pollution.'' Nothing wrong with 
that. The United States has already done that. There is no 
sideboards on it. It doesn't say exactly what we have to do, as 
long as we enact some kind of laws. Don't have any difficulty 
with that.
    But then, when you turn to article 222 and if you will go 
down to the middle of the first paragraph, if you read what we 
just read. I am sorry. Article 222, page 180.
    Mr. Bellinger. Page what?
    Senator Risch. Page 180. It is about the middle of the 
page, and the treaty goes on to state that the signatories 
``shall''--again, the word ``shall.'' ``Shall adopt laws and 
regulations and take other measures necessary to implement 
applicable international rules and standards established 
through competent international organizations or diplomatic 
conference to prevent, reduce, and control pollution.''
    That is going to be the law of the land if we accede to 
this treaty. How long do you think it is going to take a 
Federal judge to find Kyoto or any one of the other conventions 
that they have as being a competent international organization, 
which has set standards and rules which by this language we 
have acceded to?
    I mean, you are going to find a gaggle of judges tripping 
over each other to force the EPA and other organizations in the 
United States to say you shall, just as the Congress or the 
U.S. Senate has said, you shall adopt these rules and 
regulations. That doesn't trouble you at all?
    Mr. Bellinger. Well, Senator, I really do appreciate your 
concerns because these were exactly some of the issues that we 
looked at in the Bush administration. You will recall in our 
first year, one of the treaties that we rejected was, in fact, 
the Kyoto Protocol. So the Bush administration was very 
concerned about that.
    Senator Risch. And that is good, but we want to focus on 
this language, which is black and white----
    Mr. Bellinger. I just want to emphasize that we were 
approaching this from a perspective that I think is sympathetic 
to your position.
    With respect to 212, and then I will go on to 222, it says 
we shall adopt laws and regulations to prevent, reduce, and 
control pollution, but then only taking into account 
internationally agreed rules.
    Senator Risch. Sure.
    Mr. Bellinger. So we don't have to enact Kyoto.
    Senator Risch. Nothing wrong with that.
    Mr. Bellinger. 222 says that we shall enforce those laws 
that have been adopted in accordance with article 212, 
paragraph 1. So it says we have to enforce our own laws.
    Senator Risch. Nothing wrong with that. But after what you 
just read, the next word is ``and.'' ``And with other 
provisions of this Convention and shall adopt laws and 
regulations and take other measures necessary to implement,'' 
et cetera.
    Mr. Bellinger. And the key word there, Senator, is 
``applicable.'' Applicable international rules and standards.
    If we haven't signed it, it is not applicable to us.
    Senator Risch. Well, Mr. Bellinger, I would greatly 
disagree with that reading of it. It doesn't say that at all. 
If it did say that, you would say that in plain English.
    What they mean by ``applicable,'' by the word 
``applicable,'' is applicable rules to the situation at hand.
    Mr. Bellinger. Well, I can--I understand your reading the 
plain text of it. It is very difficult to read, as all of us 
have pointed out, language like this. And I agree with you. 
That is why it took us in the Bush administration a 
considerable amount of time to work our way through these.
    All I can tell you, Senator, is you raise a legitimate 
concern. But the longstanding view of the Bush administration 
and of the, I understand, the new administration is to say 
applicable international rule means it has to apply to you. 
Treaties that have been negotiated by other people to which we 
are not party don't apply to us.
    And Secretary Rumsfeld I think would probably agree there 
were lots of international human rights rules that people said 
we ought to abide by that we were not party to, and we would 
say those are not applicable to us because we have not become 
party to them.
    Senator Risch. And you are willing to take the chance that 
that torture--that tortured interpretation will be accepted by 
a United States District Court in the United States?
    Mr. Bellinger. Again, sir, I am with you on this in that 
you raise concerns. I have seen lots of lawfare brought by 
groups, by other countries, by people who were upset with the 
United States. I think it is fair to raise that as a concern. 
That is the view of the U.S. Government about the meaning of 
those terms, and I think then, on balance, even if this is a 
fair concern, you have to take into account the cost versus the 
benefit.
    And with respect to U.S. companies, there is a false choice 
to suggest that U.S. companies, if we don't join the treaty, 
can still go ahead and mine. And so, we are basically denying 
them the opportunity, even if you have a fair point on 
environmental litigation, the benefits of the treaty to U.S. 
businesses and to the U.S. Treasury and to the U.S. Navy 
outweigh what may well be a fair concern to raise.
    Senator Risch. Appreciate your judgment in that regard, and 
thank you, Mr. Bellinger.
    And thank you, Mr. Chairman, for your----
    The Chairman. Senator, as you are taking off or going home, 
whatever it is, article 297. I would direct you to take a 
moment to read that in your travels.
    Senator Risch. I have read 297.
    The Chairman. Paragraph C, which is pretty clear that the 
only way in which anything regarding the environment would 
apply to us is where it is applicable to us because we have 
signed up to it or we are part of it, and I think that is 
exactly what Mr. Bellinger is saying.
    So, in fact, within the four corners of this agreement is a 
dispensation against any state, the United States or anybody 
else, who hasn't signed up to the international law. So there 
is no standing. There is no exposure.
    Senator Risch. I don't read it that way. But thank you, Mr. 
Chairman.
    The Chairman. Well that is the language. It is hard not to 
read the language that way because that is what it says.
    Senator Risch. I couldn't agree with you more that the 
language is black and white.
    The Chairman. If you only take one section, you can read it 
your way. But if you apply the entire law, it is different.
    Mr. Bellinger. And Senator Risch, and I know you need to 
leave, I want to simply say from--I don't want that to be an 
argument between us. I think it is a completely fair point 
reading that language and a fair question to ask. And there is 
an argument on the other side.
    I have given you what is the view, I think, of both the 
Bush administration, which looked at these things very 
seriously and was very concerned about environmental litigation 
and ultimately felt that that was the better interpretation of 
that provision. And even counterbalancing those risks, still 
overall the benefits of the treaty would still counterbalance 
against the risks that you have raised.
    So I understand and support those concerns.
    Senator Risch. Appreciate it.
    The Chairman. Thanks, Senator Risch.
    Senator Coons.
    Senator Coons. Thank you, Chairman Kerry.
    And thank you for an opportunity to join you again in our 
second hearing today on the Law of the Sea.
    This morning, as others have noted, we had six four-star 
officers testify that ratifying the Law of the Sea Convention 
would substantially improve the flexibility and capability of 
the United States and their ability to fulfill their respective 
missions. Now they are not alone in doing so. Since 1994, their 
predecessors have almost unanimously made the same claim.
    Now that means that those who oppose this treaty need to 
convincingly explain why the preponderance of admirals and 
generals who have claimed the treaty is of value are wrong. 
Opponents have made a strong effort to do so for almost 20 
years, but leaders of our military continue to maintain their 
claim that not ratifying makes the jobs of the men and women 
who serve under them harder and more dangerous.
    I want to be clear. I am grateful Secretary Rumsfeld, Mr. 
Groves have come to testify about something on which they feel 
strongly. The questions they raise about the treaty, especially 
questions on the impact of sovereignty, are well worth 
considering and answering, and I believe they have been 
answered.
    I hope we can answer them again today. And I hope we can do 
it in a way that makes it clear to everyone this treaty is not 
a threat to the American way of life, but at least in these 
areas around navigation we have discussed earlier today are a 
real benefit to the men and women who serve us in our Armed 
Forces.
    Ambassador Negroponte, if I might? This morning, I had an 
exchange with Admiral Greenert, the Chief of Naval Operations, 
in charge of giving his best advice to the President, and to 
Admiral Locklear, Commander of Pacific Command. And we 
discussed what freedom of navigation operations mean, how they 
work, and what opponents of the treaty would have us entirely 
rely on, and what that instead means for the men and women who 
serve.
    We have talked a lot about strategy. But I think it is 
important to remember that, at the end of the day, there are 
sons and daughters, mothers and fathers, who serve, and we put 
them at times, I think, needlessly in harm's way because of our 
refusal to ratify.
    You said in your testimony, and I quote, that the ``United 
States puts its sailors in unneeded jeopardy when carrying out 
freedom of navigation programs to contest Law of the Sea 
abuses.'' Could you elaborate on how men and women in uniform 
actually out there in contested areas in the seas or in the air 
are put in unneeded jeopardy?
    Ambassador Negroponte. Well, and I repeated that earlier 
this afternoon before you arrived, Senator, as well.
    I think that there is an element----
    Senator Coons. Well, forgive my late arrival.
    Ambassador Negroponte [continuing]. Of risk involved in 
this, and I am trying to think of specific examples. And I 
think I would go back quite a ways here because I recall a time 
at which I was working in the Bureau of Oceans, Environment, 
and Science, and we had this challenge program, where we 
identify maritime claims that we think are not supported by 
international law and where we feel our navigational interests 
are affected.
    And if I remember correctly--and John will correct me if I 
am wrong, or perhaps Secretary Rumsfeld--the Gulf of Libya was 
one of those because the Libyans had a rather restrictive 
interpretation of freedom of the seas in that gulf there. And 
so, we would deliberately sail into what they considered waters 
over which they had greater jurisdiction than we recognized. 
And that always, especially when you are dealing with a regime 
that was not exactly predictable, entailed a certain amount of 
risk for those forces that were undertaking those exercises.
    So I don't think that you can say that the Law of the Sea 
is a substitute for the exercise of our navigational rights. We 
are always going to exercise them. But I think it does reduce 
the level of risk.
    Senator Coons. Well, thank you, Ambassador.
    One of the things I would welcome your expounding on a 
little bit further, that some have seized upon comments made in 
a previous panel by General Dempsey and some of the folks 
testified today who suggested the Law of the Sea Treaty, this 
Convention, if ratified, would not, in any way, help with force 
projection, that a failure to ratify doesn't put our Nation at 
greater risk.
    But to be clearer, how would supporting this Law of the Sea 
Treaty provide additional tools that would help our military 
more safely conduct their missions?
    Ambassador Negroponte. Well, I think another area, and 
speaking as former Director of National Intelligence, I think 
the fact that you have an internationally recognized freedoms 
of navigation between the 12-mile outer limit of the 
territorial sea and the 200-mile resource zone, and the fact 
that this Convention now--not if it is modified someday by 
somebody--but now recognizes the right of freedom of 
navigation, that inherently protects certain intelligence 
equities that we have as well.
    Senator Coons. Mr. Groves, if I might, in your testimony, 
you reference a Department of Defense issued ocean policy 
review paper--I think it is from 1993--which states the freedom 
of navigation program has served to preserve fundamental 
freedoms of navigation and overflight with acceptable risk, 
cost, and effort.
    And I just have to question your assertion that 20 years 
later, there is no evidence that suggest a change in 
circumstances, such that U.S. accession to the Convention has 
become essential to the successful execution of the Navy's 
global mission. Over the past 5 years, as I mentioned in a 
previous panel this morning, the actual number of countries 
which the United States has challenged under this freedom of 
navigation program has tripled.
    It can't be without risk, without cost, and without effort. 
I suppose perhaps we might differ about whether it is 
acceptable. Do you see any change in the past 20 years that 
might cause you to reconsider whether the freedom of navigation 
program would have an additional valuable tool if we were to 
accede to the treaty?
    Mr. Groves. Thank you for the question, Senator.
    You know, our Navy has had challenges throughout its 
history. We managed a couple of world wars. We made it through 
the cold war, the bulk of which or a great deal of which 
happened after the Convention on the Law of the Sea was signed. 
We have had bumping incidents with the Soviets. We have had EP-
3 incidents with China.
    The challenges are always going to be there. The question 
is whether joining the Convention is of such significance that 
these challenges will either somehow go away or that we have 
additional tools to address them. And my view is that due to 
the other costs that are involved with the treaty, what I 
believe to be a marginal effect of joining the Convention is 
greatly outweighed.
    That said, the Navy will continue to project force and will 
continue to engage in freedom of navigation operations.
    And as you heard from General Dempsey, our ability to 
project force isn't based on the treaty. Thank God. It is based 
on continuing to have a strong navy.
    And so, it is just our view or my view that when you do the 
cost-benefit analysis, whatever marginal benefit the Navy may 
experience by joining the Convention is outweighed by the other 
provisions that have those very real costs and risks.
    Senator Coons. So if I hear you right, not to put words in 
your mouth. But if I hear you right----
    Mr. Groves. You can put words in my mouth. That is fine.
    Senator Coons. You would agree, as we heard unanimously, 
uniformly, from the generals, the admirals who testified this 
morning--and General Dempsey and others who have consistently 
testified--that there would be a benefit to the freedom of 
navigation operations. There would be a benefit to our Armed 
Forces in having another tool and having the opportunity to 
pursue binding arbitration, for example, with allies, with whom 
we do sometimes have to engage in these costly, risky 
exercises.
    You just view the overall costs of the treaty as exceeding 
that real benefit, as being greater than that benefit?
    Mr. Groves. I want to agree with our men and women in 
uniform that there would be an actual benefit. But when I have 
studied it, what has come clear to me is that nothing changes 
operationally. We still do diplomatic protests and demarches in 
the exact same way. I have read them when we protest a country 
for an excessive maritime claim.
    If we are going to do a freedom of navigation operation, we 
would steam through in the same way, giving the same notice. So 
what I have searched for, and what I have met with people over 
at the Department of Defense for hours in an attempt to find 
out, is what would exactly change operationally? Give me a 
reason to believe that there is a tangible and real benefit for 
the Navy here.
    I haven't been satisfied on that front. And so, when you 
weigh that against the other costs, I come down on the side of 
skepticism.
    Senator Coons. Well, Mr. Groves, I appreciate your 
testimony. I would like to thank the whole panel for your 
testimony today.
    Part of what got me interested in this, as I mentioned at 
our previous hearing, was a personal meeting with the former 
Chief of Naval Operations, who, analyzing that same fact 
pattern, came out in exactly the opposite place and saying that 
there would be operations that would not need to be conducted, 
that could instead be resolved through the mechanisms of this 
treaty, and that that would reduce risk and cost and exposure 
on duty and allow us to focus those very valuable resources on 
areas where we genuinely needed to continue on these freedom of 
navigation operations.
    So thank you, Mr. Chairman. And thank you for the 
opportunity.
    The Chairman. Thank you very much, Senator.
    Before I recognize Senator Lugar--are you taking off?--let 
me just remind, I do think, Mr. Groves, I would just call your 
attention to this fact because I went through their testimony 
very carefully.
    In the six four-stars who testified today, I really wanted 
to see what they were specifically saying and see if I could 
pin it down the way you did, too. And I came up with 16 
advantages that they specifically define in their testimony, 
and I commend it to my colleagues, 16 positive differentials 
that come by virtue of signing onto this.
    One of them was very clearly articulated in detail by 
Commandant of the Coast Guard Papp, who talked about the 
advantage in terms of their interdictions of narcotics, their 
boarding and search in the Caribbean and elsewhere. There are a 
whole series of very specific rules of the road, in a sense, 
that relieve pressure cooker.
    And here is what--you need to have the full statement of 
General Dempsey. General Dempsey did say we wouldn't lose our 
force, but he didn't say that there aren't additional risks, et 
cetera. We are not going to lose our force because, hopefully, 
the U.S. Congress and whoever is President is always going to 
remain committed to have the strongest force possible, and we 
will be able to protect our interests.
    That is not the issue here, though. The issue is what 
General Dempsey said in the rest of his statement, and I just 
read it to you very quickly. He said, ``The failure to ratify 
puts ourselves at risk of confrontation with others who are 
interpreting customary international law to their benefit and 
the risk of confrontation goes up.''
    And what all of the commanders said today, and I think this 
is a very important subtext to their testimony, was that the 
world is changing very rapidly. Other nations are pressing for 
resources in ways they have not ever been before. China, all 
over the world, we know that. Resource-oriented policy beyond 
anybody else.
    And given that pressure for resources and that we are going 
to become a planet of going from 7 billion to 9 billion in the 
next 30, 40 years, that is only going to increase. What they 
are saying, all of them, is that this provides an orderly 
process for how to manage your way through that increased 
pressure and tension, and that is part of what increases the 
urgency.
    The second thing they cited, and I think it is very 
important for every member to realize this--and this is why I 
said we will have a classified briefing--our intel community 
will make it very clear that there are actors right now who are 
behaving in ways that challenge us, where the Law of the Sea 
would, in fact, have an ability to be able to address those 
concerns. And that will be raised in the course of our 
classified briefing.
    So I do want to make sure the record is clear about both 
what General Dempsey has said, what the four-stars said today, 
and sort of where we are. You will have a chance to address 
this if you want.
    But let me get to Senator Lugar, and then we will come back 
and finish up because I know there are a couple of colleagues 
under pressure.
    Senator Lugar. Well, thank you, Mr. Chairman.
    I found the testimony very important just in terms of the 
historical record of the evolution of this issue before 
previous administrations and the Congress. Specifically, I 
would mention testimony today that indicated that the Bush 
administration made Law of the Sea a primary treaty objective, 
beginning in 2002.
    Now I remember that period because I had the privilege of 
serving again as chairman of the Foreign Relations Committee as 
Republicans got a majority, and we took seriously that list of 
treaties and, as a matter of fact, were able to ratify a good 
number. They came off the shelf and we had good debate. Law of 
the Sea was among those, as we took that up in 2003 and, 
ultimately, in 2004 the committee voted unanimously in favor of 
the treaty.
    Unfortunately, Senator Bill Frist, who was the Republican 
majority leader, decided there were other priorities. And as a 
result, we did not have floor debate, and that opportunity 
passed.
    Republicans lost the majority. Senator Biden became 
chairman of the committee. He took it up again in 2007. Once 
again, the Bush administration testified very strongly in 
support of the treaty. On that occasion, as I recall, the 
treaty received four negative votes in committee, but it went 
to the floor with a pretty good majority. And Senator Harry 
Reid, now the Democratic majority leader, did not find it 
convenient to take up the treaty.
    The question that was raised by Secretary Rumsfeld and in a 
way by both you, Mr. Bellinger, and Ambassador Negroponte, is 
an interesting philosophical one that I made note of. On the 
one hand, and this really is not only President Reagan's 
viewpoint, the statute was quoted by Secretary Rumsfeld.
    Essentially, the question is, Is there such a thing as the 
internationalization of the seas? Is this something that 
belongs to all mankind? Suppose maybe someone might stretch 
this some day and argue that the atmosphere belongs to all 
mankind.
    On the other hand, I received a letter, which maybe other 
members of the committee have, from Mr. Bob Stevens over at 
Lockheed Martin. I quote this part. It says, ``The multibillion 
dollar investments needed to establish an ocean-based resource 
development business must be predicated on clear legal rights 
established and protected under the treaty-based framework of 
the Law of the Sea Convention, including the International 
Seabed Authority.''
    So, on the one hand, you could take a position that the 
ocean, whether it is close to our shorelines, 200 miles or not, 
is nobody's business. In essence, there is no idea of 
internationalization. Nobody owns it. It is just simply a 
question of whether you want to go out and drill or not and 
take your chances.
    But what Mr. Stevens is saying is that as a practical 
matter in terms of American businesses, very few such drillings 
are going to occur that involve hundreds of millions of 
dollars, if not more, without some legal basis, some assurance, 
some treaty, as a matter of fact, that protects their ability 
to do so. We can talk about all of those mineral resources 
being out there until we are blue in the face, but the facts 
are that there is very little drilling for them without people 
feeling very precarious about it. And American businesses among 
them are saying if we are serious about energy resources, 
energy independence, and our own security, then we need this 
framework.
    It is a legitimate argument as to whether anybody owns 
anything here. All I am saying is the treaty provides a 
practical means by which we might proceed in this world and 
particularly in this country, given the resources and the 
investments that we have.
    I come back to this with questions to those of you who have 
been testifying about this. I think it is a central issue in 
this. I would say, Secretary Rumsfeld, you have been I think 
fairly even-handed in discussing philosophically the question. 
But how do you come down on the question of Mr. Stevens' 
letter?
    Why would Lockheed Martin proceed without there being at 
least the assurances provided by Law of the Sea?
    Mr. Rumsfeld. Well, I don't know if they would proceed. But 
it seems to me that a businessman makes a cost and a benefit 
and risk analysis. They want as much certainty as they can get. 
And there is no question, but it is perfectly logical for 
businesses in this instance to prefer certainty.
    On the other hand, businesses all the time enter into 
uncertain investments. And, at some point, they decide that the 
risk is realistic for the investment and they go right ahead 
because there is nothing preventing them from doing that.
    Second, I haven't thought about this, but having been in 
business, seems to me the easiest thing in the world if 
somebody really wanted to do it, the American companies have 
the technology. They are skillful. They have resources. And 
they can always do a joint venture with another company that is 
a member of the Law of the Sea. I don't know why they couldn't. 
Maybe they can't.
    Maybe they wouldn't get a license if it was a joint 
venture. But I don't know the answer to that question. But 
there is nothing that I have seen that legally in any way 
prevents them, other than their assessment, as the chairman 
said, of what the risk is. And that is fair.
    Senator Lugar. Well, of course, that is a good statement. 
But the point is that companies are not taking the risk. We 
keep asking American investors to find more energy and to at 
least deliver us from the reliance we have had on Middle 
Eastern oil, for example, or other situations.
    And businesses could take that risk.
    It is an interesting equation that perhaps you tie up with 
somebody who is a Law of the Sea Treaty person. But this then 
really does legitimize in a way the Law of the Sea. You are 
using the Law of the Sea once again to make possible the lack 
of risk for an American business and sharing whatever profits 
there may be. Already objection has come that the sharing of 
royalties is not in our interest even though that has been 
downsized over the course of time.
    But how did the Bush administration come in 2002 to the 
thought that this should be the prime treaty? Why was there a 
change of view at that point?
    Mr. Bellinger. I guess that would go to me. My job, one of 
my responsibilities as NSC legal adviser--although after 9/11 
we were mostly focused on other things, like terrorism--was, in 
fact, to look at all of the treaties that we had inherited from 
the Clinton administration that were before the committee here 
and decide which ones were our priorities.
    And we took a really good scrub at it. Any administration 
does. They are not confident in the priorities of the last 
administration, and we knocked a number of things off the list.
    The Law of the Sea Treaty we were particularly skeptical 
of. There were lots of people in our administration, and we had 
a lot of internal differences about whether this really was the 
right thing. And it took us close to a year, until February 
2002, to move it to the top of the list.
    I wouldn't say it was the administration's top treaty 
priority. We didn't rank them 1 to 100. But we said that this 
was a treaty that was a priority that the Senate should act on.
    And just to summarize, there were the military advantages, 
particularly after 9/11, when we were asking our military to do 
more with less, and it was easier to rely on a legal right. And 
I think Secretary Rumsfeld acknowledges that part. But the 
economic and business advantages were things that just could 
not be gotten in other ways.
    If there was another way to do it, I think it would not 
have been--that would not have been a good argument. But we 
couldn't see another way for American companies, particularly 
as the Arctic opened up and enormous advantages were there for 
us, and we were watching Canada, Russia, Denmark, Norway, all 
making billions of dollars.
    Norway has a sovereign wealth petroleum fund of $700 
billion that it has gotten for its people from oil and gas up 
in the Arctic. And so, we see what they have been doing up 
there and said for our companies to be able to do this, we need 
to become party to the treaty.
    So that was an additional benefit. And then there were 
environmental benefits as well for the health of the world's 
oceans.
    Senator Lugar. Thank you very much.
    The Chairman. Thank you, Senator Lugar.
    Senator Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    I won't go into what I did this morning when we had the 
generals there. I say to you, Secretary Rumsfeld, I commented 
from my experience in the military that we have a chain of 
command, and it is kind of interesting all of these people, and 
this morning we had actually 24 stars before us. And yet I 
submitted a letter of 33 stars who are retired.
    It seems like once they retire, things kind of change. And 
I always suspected that was a little bit had to do with the 
chain of command. Of course, President Obama is the--and before 
him, of course, President Bush was commander in chief.
    The Chairman. Can I just say to you, Senator--no, I will 
give you your time. I am not going to invade your time. But you 
are impugning the integrity of their testimony this morning.
    Senator Inhofe. No. No, I am not.
    The Chairman. Each of them said they were there personally. 
It was their personal belief. No one twisted their arm, and no 
one requested them otherwise. And to suggest otherwise----
    Senator Inhofe. OK.
    The Chairman [continuing]. Is not to believe----
    Senator Inhofe. Not suggesting otherwise. I know the chain 
of command. That is all.
    I would ask you, Secretary Rumsfeld, how does it serve our 
national security interests to send nonappropriated, 
essentially entitlement spending to an international 
organization from payments that would go to countries but would 
come from us? Is there any way you can see somehow that 
enhances our national security?
    Mr. Rumsfeld. No, Senator. I think what the admirals and 
generals testified to was narrowly their interests that relate 
to the Department of Defense.
    Senator Inhofe. OK.
    Mr. Rumsfeld. And they clearly did not get into anything 
that is broader----
    Senator Inhofe. Yes. In fact, I wasn't surprised that they 
wouldn't want to get into that.
    Mr. Rumsfeld. Right.
    Senator Inhofe. But I would like to ask you, Mr. Groves, I 
presented the case on two of these hearings now that I am still 
waiting to see if anyone really disagrees with it, and that is 
under our royalties currently, the royalty percentage ranges 
between 12.5 and 18.75 percent. That varies because of the 
point at which a company is not willing to go in and risk its 
capital to go after. That is the main reason we have a range 
instead of a specific amount.
    The 7 percent, granted, it wouldn't happen for 12 years. 
But at that point, it would. And while you said in your 
testimony, Mr. Groves, that there is no way to try to predict 
exactly what that would be, the U.S. Interagency Extended 
Continental Shelf Task Force said it would be billions, if not 
trillions.
    So I felt that maybe a trillion dollars as an example would 
not be unrealistic. Would you like to comment in terms of that, 
the amount of money that we could be talking about here?
    Mr. Rumsfeld. It sounds to me like we may have mixed the 
royalties that relate to the 200-miles area, as opposed to the 
deep seas.
    Senator Inhofe. No, I am talking about the Extended 
Continental Shelf.
    Mr. Rumsfeld. Right.
    Senator Inhofe. Yes, because I----
    Mr. Rumsfeld. As I understand it, the other hasn't even 
been set, has it?
    Senator Inhofe. But the reason I am asking the question is 
many are saying here, and they have said at both of these 
hearings, that without this we can't get in and develop the 
Extended Continental Shelf. That is a question I would like to 
have you address.
    Mr. Groves. Right. The major take-away you should have here 
is that we don't know how much money is really at stake.
    Senator Inhofe. That is right.
    Mr. Groves. I mean, there has been no study about the value 
of the hydrocarbon resources that are on the U.S. ECS, which is 
vast. It is twice the size of California. Starts on the east 
coast, goes to the west, up to Alaska, and down in the South 
Pacific.
    And yet we can sit here today and have no idea how much oil 
and natural gas is out there, and yet pledge to sign on to a 
treaty that would commit us to paying between a 1-percent and a 
7-percent royalty on those hydrocarbons forevermore. So that 
doesn't sound to me like a very fiscally responsible thing to 
do when we don't even have the first clue about how much is out 
there.
    Now the ECS Task Force has put the only number out there 
that I have ever found, which, as they said, could be trillions 
of dollars. Trillions, with a ``T'' and plural. So we know, at 
least from a gross estimation, that we are talking about a 
significant amount of money.
    But until that study is done, until we have even the 
slightest idea of how much money we could be giving up for this 
treaty, I don't think it is very responsible or prudent to 
accede to it.
    Senator Inhofe. I would agree with that. A lot of 
discussion has been on the--talking about a place at the table. 
I contended this morning that I am not sure where the table is. 
I mean, we have the IMO, and apparently, it has performed well.
    What I would like to have you do, Mr. Groves, is talk a 
little bit about the differences between the Council and the 
Assembly and how veto works in this respect.
    Mr. Groves. Sure. The International Seabed Authority, or it 
is called ``The Authority,'' is made up of a Secretariat, it is 
made up of a Council of 36 countries, and it is made up of the 
Assembly of 162 countries, and that is called the ``supreme 
organ'' of the Authority.
    Now there are a couple of narrow questions. Narrow, but 
important questions that the Council can make recommendations 
on that the Assembly must consider. One of those is the 
distribution of these article 82 royalties. But what has been--
what is basically the ability to block consensus has been kind 
of transmogrified by proponents of the Convention into this 
blanket veto power that the United States would have over the 
entire operations of the authority, when, in fact, it is a very 
narrow ability.
    And if we have the ability to block consensus on the 
Council, so do the other 35 members, including my favorite 
member, Sudan. But between the two bodies, when you have got a 
council that is making recommendations about the distribution 
of article 82 royalty and you have got an assembly, which is 
the supreme organ making the final decisions about the 
distribution of those royalties, we know in the end who is 
going to win that discussion, regardless of whether there is 
some balance of authority between the two bodies.
    We know that because we've studied other international 
organizations in a multitude of contexts.
    Senator Inhofe. Well, it would seem to me that it is kind 
of not all that significant to be talking about that anyway. 
The big issue is they have the power to extract that money that 
otherwise would be royalties to the United States.
    Mr. Groves. Yes, sure. Before we are talking about this 
supposed veto, we have already committed to make all of those 
article 82 royalty payments to the Authority for 
redistribution. So, for me, I think the horse is already out of 
the pen.
    Senator Inhofe. I noticed during the previous--yes?
    Mr. Rumsfeld. A comment. The word ``veto,'' I think, is a 
little confusing in the sense that it leaves the impression 
like our Constitution where a President can veto something, or 
it leaves the impression that like the United Nations, where we 
and other countries have a veto in the Security Council.
    In this instance, it is much more like our role in NATO, 
where I served as Ambassador I guess 40 years ago, where it is 
operated by consensus. And watching how that works is really 
quite different from our Constitution or even different from 
the U.N. Security Council.
    A second point on the military issue that you raise. Again, 
I am no expert, but I read this about the military activity 
exemption. My impression is there is no definition of the so-
called ``military activity exemption'' and that the structure--
the executive, legislative, and judicial structure that Mr. 
Groves described--would be where the definition of that phase 
would eventually be decided.
    And, if you think about it, a military activity can 
simultaneously be an economic activity and an environmental 
activity. I can remember we had lawsuits against us when I was 
serving as Secretary of Defense the second time because SONAR 
was adversely affecting whales.
    And you can end up with a series of problems where people 
contest this because of the lack of a definition, it would seem 
to me. And frankly, I don't think I am smart enough to know 
what that definition could be without leaving enormous areas of 
ambiguity.
    Senator Inhofe. Yes. I do remember that discussion. And Mr. 
Groves, I noticed you were making some notes and had some 
comments on responses from some of the witnesses. Is there 
anything that you would like to add right now in this time that 
might be helpful to us?
    Mr. Groves. Oh, boy. Such a great open-ended question. 
Well, I think I would just like to debunk the idea that there 
are oil companies that are waiting for us to join this treaty 
in order to engage in exploration of our Extended Continental 
Shelf.
    There is a chart in my testimony--I have got it, the one 
that looks like this--that indicates all of the areas of the 
Extended Continental Shelf in the Gulf of Mexico that the 
United States has already leased out to American and foreign 
oil exploration companies. So the idea that this is going to be 
some great prohibition on this development is something that I 
don't agree with.
    These companies have made the business decision to buy 
multimillion dollar leases from the U.S. Government to go out 
on the Extended Continental Shelf, regardless that we are not a 
party to this treaty and whatever international certainty that 
comes along with it.
    So if there was one thing I would add, I would just add 
that.
    Senator Inhofe. I appreciate that. And Mr. Chairman, I 
appreciate the time. But one last thing, Are there any 
frailties that you can think of in the IMO, something that 
hasn't worked in the past that would be corrected by this?
    Mr. Groves. The IMO is the forum where all of the things 
that the proponents allege are being discussed at the Law of 
the Sea meetings are actually being discussed.
    Senator Inhofe. That is the real table when you say a place 
at the table?
    Mr. Groves. That is correct. That is where they are drawing 
the traffic separation schemes and the archipelagic sea-lanes 
through Indonesia and discussing treaties and other 
environmental obligations. That is where actual multilateral 
decisions are made, in that forum.
    Senator Inhofe. Thank you, Mr. Chairman.
    The Chairman. Before I recognize Senator Isakson, I just 
think it would be helpful for the record. Mr. Bellinger, do you 
have any comment with respect to the argument on the Outer 
Continental Shelf?
    Mr. Bellinger. This is the point on Mexico?
    The Chairman. The argument that Mr. Groves just made with 
respect to the ability to exploit and the royalties issue.
    Mr. Bellinger. Yes, well, I think this is perhaps the most 
important question for the Senate really is the suggestion is 
that if we don't join the Convention, then we still get all the 
benefits. And so, it is a choice between joining a flawed 
Convention or not joining the Convention, and then U.S. 
companies still get to do all those things and they don't have 
to pay anything.
    But that seems to me a false choice, at least based on what 
companies have been saying to us. It is not, do the royalties 
flow to the ISA or to the Treasury? Of course, if I had that 
choice, I would much prefer to have all of the royalties paid 
to the Treasury.
    But the choice seems to be companies will either mine in 
the deep seabed and in the Extended Continental Shelf and are 
willing to pay a small amount of royalties after 5 years or 
allow the U.S. Government to do it, or they won't do it at all. 
So the choice is either lots of royalties for the Treasury and 
lots and lots of money for U.S. companies and some small amount 
that goes to the ISA, or nothing at all. That seems to be the 
choice that is confronting us.
    The Chairman. I see you were taking a deep breath. Were you 
about to--did you want to add to that, sir?
    Ambassador Negroponte. I would say that this argument is 
particularly pertinent with respect to the Arctic, and I 
represented Secretary Rice at one of the Arctic Circle 
conferences with the Russians, the Danes, the Norwegians, and 
the Canadians. And it was clear that this is one area where our 
companies do feel inhibited from exploring and exploiting 
beyond 200, where we may have Continental Shelf that extends as 
far out as 600 miles in the Arctic Ocean.
    So I think it is important that that issue be resolved, I 
believe, for our----
    The Chairman. We will come back to that. I want to come 
back to that when we get into the second round.
    I would just say to Mr. Groves, you are right. They are 
buying some leases, and they are very smart to do so. But there 
is a huge gulf between buying the lease and sitting on it. 
There are a whole bunch of leases down in the gulf that have 
been owned for years, but they don't exploit them. They are not 
buying them and drilling.
    And the differential is the capitalization that it requires 
to exploit, and that is really where the nub of this is. But we 
will come back to that. I want to come back to that if we can.
    Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman.
    And I apologize that I am late, and I apologize to the 
panel that I am late. I really have a compliment and then one 
question that is, I think, significant.
    But I want to thank Secretary Rumsfeld and Ambassador 
Negroponte for their service to the country. I remember 
Secretary Rumsfeld's transformation of our military and how 
well it prepared us for the unseen events of the last decade. I 
saw John Negroponte in Baghdad in the most difficult days of 
our conflict there, and both of you deserve tremendous credit 
for your service to the country.
    My question is to Mr. Bellinger and Mr. Groves. I am not an 
attorney. I love listening to attorneys going back and forth. 
But I have a University of Virginia law school student who is 
an intern for the summer. So I posed to him this question of 
the veto. I said, ``I want you to research this thing and read 
this thing, and I want to talk about the veto for a second 
because some people say we have got a veto, and some people 
says, well, now you see it and now you don't.''
    He did a beautiful paper for me, and I want to read two 
quotes from the treaty, and then I would like both of you to 
comment on it as it relates to this question of do we have a 
veto or do we not?
    One is that the veto is the absence of any--I mean, the 
consensus, as defined by the treaty, is the absence of any 
negative objection or formal objection from the members. Is 
that correct? Which means if there was a proposal before either 
the Council or the Assembly, as long as nobody objected, then 
they had consensus and they could move forward.
    But if one member of the 35-member Council objected, then 
what do you do? And I want to read this sentence. ``If all 
efforts to reach a decision by consensus,'' which is nobody 
objecting, ``have been exhausted, decisions on questions of 
procedure in the Assembly shall be taken by a majority of the 
members present and voting, and decisions on questions of 
substance shall be taken by two-thirds majority of members 
present and voting.''
    That says to me that we may have a veto to stop something 
from move because we can stop consensus, but the veto can be 
overridden by a two-thirds vote of the full Aassembly or by a 
majority vote of those voting in the Council. And I just would 
like both of you to comment on am I right or is my law student 
right, or am I wrong or is my law student wrong?
    The Chairman. Before--can I help your law student a little 
bit?
    Senator Isakson. I am not mentioning his name. I don't want 
to get him in trouble. [Laughter.]
    The Chairman. Well, I don't want to get him in trouble 
either. But he is actually taking that from the 1982 original 
agreement and not from the agreement as amended.
    Senator Isakson. Well, good. That is the kind of 
information I am looking for. So I would like to hear from both 
of you.
    Mr. Bellinger. Well, I have the greatest respect for the 
University of Virginia, where I have my own master's degree 
from. So, and I love University of Virginia law students. But I 
would say that the longstanding position of both 
administrations, in fact, multiple administrations, on this 
very point is that we fixed the problem in the Council voting 
to give the United States the predominant voice.
    One, we are a permanent member of the Council. So we are 
the only country that is a permanent member of the Council. And 
two, the Council has to be the one to make decisions on 
administrative, budget, or financial matters. And on the 
sentence that you just read where ultimately there is not 
agreement and it gets referred back, you did not mention the 
clause that says--and this is in section 3, paragraph 5, 
``Except where the Convention provides for decisions by 
consensus in the Council.''
    And so, the United States is always in the Council. We are 
always the permanent member. Section 3, paragraph 2 says the 
decisionmakings and the organs of the Authority should be by 
consensus. The clause there says that except where the 
Convention provides for decisions by consensus in the Council, 
which refers to administrative, budgetary, or financial 
matters.
    So the United States would have a veto over any decision 
relating to administrative, budgetary, or financial matters, 
which would include the distribution of fees. So that is why we 
believe, the Bush administration, which looked at this, 
believes the United States would have the critical role in 
deciding where any of the fees went.
    And I believe that Mr. Groves conceded that point. But even 
if he didn't, that is our interpretation. And I can see this is 
why you love lawyers.
    Mr. Groves. I am a lawyer, and I don't concede anything, 
John. Actually, I am a recovering lawyer.
    Now there is no doubt what the treaty says in the black 
letter law of the treaty when consensus can't be reached, and I 
would concede that if the United States was a party of the 
treaty and on the Council that it could muddy that up and block 
consensus on some important issues.
    The important part is what the treaty is silent about, 
which is what happens where no consensus can be reached on the 
Council at all. Let us say, hypothetically, because the United 
States is putting its foot down on something regarding 
royalties.
    And from the silence of the treaty, the only rational 
explanation is that the Assembly could act by passing a 
resolution without the recommendations of the Council. You see, 
at the end of the day, article 82 royalty distributions, the 
Council only makes recommendations to the Assembly, and it is 
the Assembly that makes the final decision.
    And the reason why we know this to be true is that further 
on in the article in the 1994 Agreement, it says that the 
Council's decisions on financial matters shall be based on the 
recommendations of the Finance Committee. So if the Council has 
to be basing their recommendations on the recommendations of 
the Finance Committee, then it goes all the way down the line.
    At one point or another, someone is going to make a 
decision. We see this in international organizations all the 
time. And from my view, especially with the silence of the 
treaty, it is going to be the supreme organ of the Authority, 
the 162-member Assembly, that makes that decision.
    Senator Isakson. Mr. Chairman. Mr. Chairman, you were 
commenting about the 1994 Agreement, and I think that you are 
talking about the title or part 11, which was the subsequent 
amendments the United States proposed. Is that correct?
    The Chairman. That, but also I think in 1994--on page 272, 
section 3, decisionmaking, it actually gave us protection. I 
will read it to you. ``Decisions of the Assembly''--and this 
goes to Mr. Groves' deep concern about the Assembly and what 
the Assembly might do. The achievements, what we achieved in 
1994 through the implementing agreement, which is very 
important, made clear that the Assembly is not permitted to 
take action on any matter within the competence of the Council 
unless the Council has first recommended that the Assembly do 
so. So the Council controls the agenda.
    Now let me read right out of it. ``Decisions of the 
Assembly on any matter for which the Council also has 
competence,'' and that is laid out, and that is the 
distribution revenue and a whole bunch of other things. So the 
competence is in the Council. ``Any decision for which the 
Council has competence or on any administrative, budgetary, or 
financial matter shall be based on the recommendations of the 
Council. If the Assembly does not accept the recommendation of 
the Council on any matter, it shall return the matter to the 
Council for further consideration. The Council shall reconsider 
the matter in the light of the views expressed by the 
Assembly.''
    In other words, it is a round robin. Council has the final 
say. Council has the original say, has to go back to the 
Council. There are serious limitations on it. And the Assembly 
effectively does not have this fearful power to come in and do 
something that you might be concerned about.
    Now I might also add if you don't like what it is doing--I 
mean, we can come back to this. But let us say you get your 
businesses out there, and suddenly, the royalties are being 
produced. And all of a sudden, it is a bonanza, and you get a 
trillion dollars. And we can come back to that in a minute.
    Article 317, page 208, ``A state party may, by written 
notification addressed to the Secretary General of the United 
Nations denounce this Convention and may indicate its reasons. 
The denunciation shall take effect one year after the date of 
receipt of the notification.''
    In other words, you can just get out of it. You are not 
bound to trillions of dollars. You are not locked in for a 
lifetime. Just leave. If you don't like what it is doing and it 
is acting against our interests, you get out of it.
    So, I mean, this is really not as complicated as it is 
being made, but we ought to continue to go at it.
    Mr. Groves. If I may just comment briefly, Mr. Chairman?
    The Chairman. Yes.
    Mr. Groves. First, on the Council issue. Yes, the language 
says that any of these administrative, budgetary, and financial 
matters shall be based on the recommendations of the Council. 
But just three paragraphs later, it says decisions by the 
Assembly of the Council having financial or budgetary 
implications shall be based on the recommendations of the 
Finance Committee.
    So if it is----
    The Chairman. That is correct. We are a member of the 
Finance Committee.
    Mr. Groves. But we can't block consensus on the Finance 
Committee.
    The Chairman. I believe we can. You want to speak to that?
    Mr. Bellinger. We are also a permanent member of the 
Finance Committee, and we can block or control the Finance 
Committee. These were really the great changes that the United 
States made.
    The Chairman. It is also stated----
    Mr. Bellinger. Let me just add one thing, if I could, 
Senator? Two things, really, for Senator Isakson. It is really 
quite useful.
    A paper was done by one of our negotiators, which I would 
encourage your staff to look at--Bernie Oxman, back in 1994--
that described how all of President Reagan's concerns were 
fixed by U.S. negotiators and how they ended up giving the U.S. 
enormous influence over every one of these issues, including 
the permanent seat on the Council and the effective veto. And I 
will ask that that could be put into the record.
    Mr. Bellinger. One of the most interesting things about 
that, for both of you, is that Russia was so concerned that the 
United States was given so much influence in the Council that 
they refused to sign on and actually abstained from the vote 
over the 1994 amendments because they felt that they 
discriminated in favor of the United States.
    Mr. Rumsfeld. Mr. Chairman, may I make a comment on this?
    The Chairman. Absolutely. Yes, sir, Mr. Secretary.
    Mr. Rumsfeld. As a law school dropout, I am glad I wasn't 
asked to comment. But I have a question about the 1994 
amendments. They have been mentioned repeatedly, and I don't 
have any idea what their standing is, given the fact that a 
number of countries have not signed onto them.
    Second, one of the big issues for President Reagan was 
technology transfer, and that was addressed in the amendment. 
And as I recall, it went from mandatory technology transfer to 
a recommendation that technology transfer occur from the 
developed countries to the developing countries. I forget the 
precise language, but it is something like that.
    It seems to be that it is entirely possible, and I would be 
happy to hear the experts on the subject, that in applying for 
licenses, the decisions with respect to licenses could be 
dependent on the degree of accommodation a company is willing 
to make with respect to technology transfer.
    So when we say that the Reagan concerns were fixed, they 
were addressed for sure and in some instances fixed. But I 
think in some instances, we punted.
    The Chairman. I would let the experts speak to that, the 
people who were there during that time. I think that is 
important.
    Mr. Bellinger. I will take a stab at that. Again, these 
issues are addressed at length in Professor Oxman's article, 
which describes all of the 1994 changes. The tech transfer 
requirements, of course, were dropped. The production 
limitations were dropped. The barriers to access to deep seabed 
mining were dropped.
    And the idea that the authority could actually decide who 
could get mining rights and who couldn't, which was really one 
of our concerns that we would have this group of countries that 
would look at U.S. mining companies and say, ``Well, we don't 
really like you'' was also dropped. And U.S. companies were 
actually grandfathered in so they would not have to make some 
of the same showings that other companies around the world 
would have to show. That was one of the reasons for the Soviet 
protest.
    Mr. Groves. It is another reason why Lockheed has little 
objection to the treaty.
    Mr. Bellinger. And in addition, there would not be an 
evaluation of the technical qualifications of applicants. It 
would be based on a first-come, first-served basis as long as 
people met basic financial qualifications.
    Senator Isakson. Mr. Chairman.
    The Chairman. Yes, sir.
    Senator Isakson. I stirred up far too much of a hornet's 
nest.
    The Chairman. On the contrary, I think, actually, you have 
helped clarify significantly some very important areas. And if 
I could just take 30 seconds to add so that it is in the 
record, I really want it to be in the record in this part.
    Page 279, section 9, subsection 8, says, ``Decisions in the 
Finance Committee on questions of procedure shall be taken by a 
majority of members present and voting. Decisions on questions 
of substance shall be taken by consensus.''
    I can't think of an agreement, I can't think of an 
international treaty in which the United States of America has 
the only permanent seat and the ability to block anything and 
protect our interests and, if we don't like it, can get out of 
it. So I think it is important to have that in its proper 
context.
    Senator Isakson. I will just take 1 minute. This is a very 
critical question, which is why I asked it, and I appreciate my 
UVA law student doing such a good job. He got everybody 
engaged.
    But everybody has to remember they are communicating with a 
University of Georgia Business School graduate when they are 
talking to me, and I would like to ask Mr. Groves and Mr. 
Bellinger, if you wouldn't mind, to try to give me a one-pager 
that addresses this issue of consensus and veto and majority of 
the members present voting to override or two-thirds to 
override. If you could do that and how it applies, 
understanding the 1994 amendments that may have taken place.
    And one other question, Mr. Chairman, and don't respond to 
this because I know it will drag it out. But I was reading 
paragraph 4 as you were reading it. But paragraph 5 is still in 
this book, and I need to know if the 1994 treaty extracted 
paragraph 5, which refers to the majority of those voting, 
present voting, and refers to the two-thirds majority.
    We won't get into that debate now, but I would like to know 
that.
    The Chairman. Fair enough.
    Senator Isakson. I apologize.
    The Chairman. No, I think it is a terrific request, Senator 
Isakson. I think it is very important, and we will look for 
that full explanation. I think it would be very helpful to the 
committee, indeed.
    Mr. Groves. To the extent that anything in Law of the Sea 
can be distilled to one page, we will do our best. [Laughter.]
    The Chairman. Thank you.
    Senator Lee. Thanks for your patience.
    Senator Lee. Thank you, Mr. Chairman.
    And thanks to all of you for your service today to this 
committee and for your service to our country.
    Mr. Bellinger, I wanted to start just by asking a basic, 
fundamental question about something this treaty does. By 
creating a royalty obligation as to the exploitation of 
minerals from the seabed outside of the 200 nautical mile 
range, aren't we creating a construct that recognizes ownership 
or at least a degree of sovereignty in an international 
organization? Isn't that what the word ``royalty'' implies?
    If somebody can charge a royalty for the exploitation of 
minerals on any property, doesn't that imply that they own that 
land or at least that they possess the sovereign, the incidence 
of sovereignty with respect to that land?
    Mr. Bellinger. I wouldn't say so. I think I would just see 
that as a fee that the United States has agreed to, to mine in 
that area.
    Senator Lee. So if you own land, and ExxonMobil wants to 
develop oil on that land, and I say I am going to charge you a 
royalty for exploiting this resource on Mr. Bellinger's land, 
wouldn't I be implying that I have some sort of ownership or 
sovereign right with respect to that land?
    Mr. Bellinger. Well, again, not necessarily. I think that 
it is something that was agreed to in the treaty without a 
broad philosophical construct of the significance of what it 
meant for a royalty provision. I mean, as you know--because I 
know you have a long legal pedigree--that property rights and 
bundles of sticks can get to be very complicated as far as what 
is actually a property right, and it can be used in different 
contexts and different things.
    And it is the same with respect to treaties. So simply that 
we agree to pay something here does not mean that we are 
conceding that the international community owns the Extended 
Continental Shelf.
    Senator Lee. OK. But we are creating an interest, a 
financial interest of one sort or another. One that could be 
construed as a property interest.
    I appreciated your acknowledgment with regard to Senator 
Risch's comments on article 222, that as I believe you 
acknowledged there was at least an ambiguity there as to the 
meaning of the word ``applicable'' and the phrase ``implement 
applicable international rules.''
    If there is at least an ambiguity there, wouldn't that 
suggest that an international arbitration panel, perhaps one 
convened pursuant to annex 8 under the treaty, could also 
conclude that there is an ambiguity there, and they could 
decide that issue one way or the other?
    Mr. Bellinger. I guess I would say on that, Senator, I 
would think not. I mean, I think it is a good question for 
someone who is reading that provision. But I can tell you as 
someone who spent a lot of time reading treaties, particularly 
ones that were allegedly--I mean, honestly, this was my job for 
4 years as legal adviser, to defend against other countries who 
claimed that certain things were applicable to the United 
States.
    And applicable means that we are legally bound by it, not--
--
    Senator Lee. If we get a good arbitration panel, if we get 
at least three who are well trained, who are doing it right, 
doing it the way that we would like it to be done, your 
position would be that they are going to reach the right 
conclusion?
    Mr. Bellinger. I certainly think it is pretty clear that 
``applicable'' international obligation means something that is 
we are legally bound by.
    Senator Lee. OK. Thank you.
    Secretary Rumsfeld, I recently had a retired Navy commander 
in my office. He made the following statement regarding this 
treaty. He said we should not in any way restrict the ability 
of the U.S. Navy to serve its primary purpose--protecting the 
Constitution of the United States of America against all 
enemies, foreign and domestic.
    Ratifying the U.N. Convention on the Law of the Sea will 
expose the U.S. Navy to unnecessary, counterproductive, and 
extraconstitutional bureaucratic and regulatory oversight. Do 
you tend to sympathize with that statement?
    Mr. Rumsfeld. Well, I have to confess I can't look around 
all those corners, but we have seen an explosion of litigation 
in the world. I don't know how many lawsuits have been filed.
    But every time anyone in the U.S. Government turns around, 
they get lawyered up. There is something like 10,000 lawyers in 
the Department of Defense today. And I don't doubt for a minute 
that that could happen.
    It seems to me that the--I watched some of the military 
panel this morning. And they are wonderful people, and they are 
talented. As they said things, I did not hear a lot of 
instances as to why we believe that with this, the Chinese or 
the Iranians, for example, will alter their behavior notably. I 
just didn't.
    The Law of the Sea has been around. They haven't solved 
some of the problems in the South China Sea. China and the 
neighboring countries are members. And in terms of dispute 
resolution, I haven't seen it.
    In direct answer to your question, it seems to me that 
anything that they said that they believe this treaty could or 
should do that would benefit us--and there is no doubt in my 
mind but there is certainly some things that it would with 
respect to the military--the question is what is their weight 
against some other aspects of it, the disadvantages?
    It seems to me then the United States of America ought to 
pursue those on a bilateral or a multilateral basis if they are 
as important as they say. And I don't doubt for a minute that 
the very credible military officers were making points that 
were valid that could be pursued bilaterally or multilaterally.
    Senator Lee. And at the end of the day, Mr. Secretary, any 
legal rights, legal protections that we have, to the extent 
they have to be enforced, would have to be enforced through our 
own military might, would they not?
    Mr. Rumsfeld. Regardless of whether you are in the treaty 
or not.
    Senator Lee. In the treaty or not. OK.
    Mr. Groves, would you agree with that assertion? In the 
treaty or not, legal rights, legal protections that we have, 
whether we draw them exclusively from customary international 
law, as we would were we not to ratify this treaty, or if we 
were also to draw additional rights or perhaps same set of 
rights from the treaty. Don't those have to be enforced, to the 
extent they have to be enforced, by our military?
    Mr. Groves. I would agree with that, and I think that the 
members of this morning's panel would agree with that. They 
have said, in no uncertain terms, that when push comes to 
shove, we are going to assert our rights. We are going to 
assert our power. We are going to project our power.
    And we hope that they will do so whether or not they are in 
any treaty or not to protect American national security 
interests. Their only argument is that somehow being inside the 
treaty will enhance their abilities to do so. I just haven't 
seen where that enhancement lies.
    Their diplomatic protests would be the same. The same 
language. Their operational assertions would be the same. None 
of those things would change. But somehow they are making a 
claim that I just haven't found the substantiation for yet that 
it enhances their ability to perform their mission.
    Senator Lee. Thank you. Let me follow up with an additional 
question I wanted to ask of you, Mr. Groves.
    Let us suppose that we get into an international 
arbitration, pursuant to, say, annex 8. We choose two 
arbitrators. Our opponents choose two arbitrators. We can't 
agree on the fifth arbitrator. So the fifth is chosen by the 
U.N. Secretary General.
    At the end of the day, three of the five arbitrators rule 
against us. They rule against us on a theory that we think is 
legally deficit. We think is wrong. It is against us. We don't 
like it.
    Is that judgment--notwithstanding our objections to it, 
notwithstanding the errors that we see in it--is it enforceable 
in U.S. courts?
    Mr. Groves. It is enforceable on U.S. territory because 
that is what the treaty says it is. And we have got at least 
one Supreme Court Justice who says so in dicta in the Medellin 
case. He discussed how decisions made by UNCLOS tribunals would 
be enforceable in U.S. territory.
    Senator Lee. Referring to Justice Stevens' opinion in 
Medellin. Is there anything about our rescission from the 
treaty, from the Convention, which couldn't become effective 
until a year after we have provided notice anyway? But is there 
anything about our withdrawal from the treaty, from the 
Convention, that would affect the validity and the impact of 
such a judgment after the fact?
    Mr. Groves. Under international law, no. And we are 
actually dealing with that issue right now in the Avena case, 
regarding the Mexican death penalty cases that was litigated 
through our system as Medellin v. Texas.
    We withdrew, the Bush administration withdrew from the 
optional protocol to the Vienna Convention on Consular 
Relations after they got a really bad judgment from them. But 
the judgment of the International Court of Justice in that case 
is still pending. It still has legal force and effect because 
we were under its jurisdiction when they made the judgment, 
regardless of our subsequent withdrawal.
    Senator Lee. Almost 30 years ago.
    Mr. Groves. The Avena case was during the Bush 
administration. You might be thinking of the Nicaragua case 
during the Reagan administration.
    Senator Lee. Indeed. Thank you very much. I see my time has 
expired.
    The Chairman. Thanks, Senator. I appreciate it.
    Senator Lee, you might be interested to know that the U.S. 
Senate has already approved a treaty that has the exact same 
procedure in it, and that is the--we gave our advice and 
consent to it in 1996. And not only does it subject the United 
States to arbitration, but in fact, it subjects us to 
arbitration under the Law of the Sea Convention.
    Senator Lee. May the Senate not err twice.
    The Chairman. Ratified. It seems to be working pretty well 
without problems. That, incidentally, was passed out under 
Chairman Jesse Helms. So----
    Yes, Mr. Negroponte.
    Ambassador Negroponte. Senator, I just had one point that I 
wanted to make with respect to how adhering to the treaty might 
be helpful in some circumstances with respect to our naval 
activities and operations and Coast Guard. And clearly, when 
you boil it down to a polar choice between the use of force and 
the application of law, well, the application of American 
military force is likely to win every time. I don't question 
that.
    But let us take the Proliferation Security Initiative, for 
example. There are instances where countries, friendly 
countries, have either had reservations and may even in some 
instances have declined to cooperate with us on a particular 
PSI mission because we are not party to the Law of the Sea. So 
that is an example of where I think the cooperative atmosphere 
on an issue of real security importance to the United States 
could improve if we accede to the treaty.
    The case of China and their exaggerated claims to the South 
China Sea, they are out of sync and out of line with the Law of 
the Sea because of the way they draw their baselines and their 
historical interpretation of their jurisdiction over those 
seas. And the best arguments are that they are not applying the 
principles that are embodied in the Law of the Sea.
    Well, we are disadvantaged in making that argument to them 
and along with other countries in Southeast Asia because we are 
not parties to the Convention. So, I mean, I can think of a 
number of instances where the application----
    And then the last one I guess I would cite is the passage, 
free passage through straits. I think we got--I mean, that was 
a really major accomplishment in the Law of the Sea Treaty. 
Think of the complications we might have if we developed an 
antagonistic relationship with a particular country that 
decided it wanted to make it difficult for the free navigation 
through straits for either surface or other kinds of vessels.
    So those are three examples I can think of where the 
treaty--and I don't think it is wrong for Mr. Groves to use the 
word ``enhance.'' But diplomacy has its limitations, but it can 
still be positive. ``Enhance'' is a positive word.
    Senator Lee. Thank you.
    The Chairman. Well, let me wrap this up a little bit, if I 
can, because we are under certain time constraint here.
    First of all, you all have been terrific, and I mean 
everybody. I think it has been very, very helpful to have this 
kind of back and forth.
    I would just say to Senator Lee and some of the others and 
Mr. Groves that you are operating on the principle that the 
United States has already established full jurisdiction and 
control over the Extended Continental Shelf. And I see you 
nodding to say that. And you point to the 1945 proclamation by 
Harry Truman regarding the Outer Continental Shelf Lands Act.
    The problem is that nowhere in that proclamation or 
anywhere else has President Truman or anyone else set out the 
longitude and latitude markers of the outer edge of our 
Continental Shelf. And the only way we can achieve certainty 
with respect to those demarcations is through an international 
agreement of some kind.
    Now we are not going to go on at length about that. I do 
want to pursue this, and we may well have some of you back or 
all of you back at some point in time here to--when we get this 
paper and we get people's answers and we get the answer on the 
record.
    I am concerned, Secretary Rumsfeld, about a recommendation 
for United States businesses to have to joint venture with 
another country to exploit our resources or what might be our 
resources. That really concerns me. I mean, if you want to talk 
about American sovereignty and American interests, I don't want 
to share it with another country.
    And under this treaty, if you import what you exploit, you 
don't have to pay any royalty. Royalty free if you are 
importing it to your country.
    So that is an extraordinary offering, and it comes to the 
real nub of this choice that we face, which I think Mr. 
Bellinger put his finger on, which is this is not a choice 
between sort of a flawed treaty and what the impact might be, 
and do you take some benefits in exchange for that? Or if you 
don't do it, you go out and get the same benefits.
    I think one of you suggested we ought to be doing these 
programs of distribution to these countries through our aid 
program. I don't know if you have been following the budget 
lately, but we ain't growing our aid programs. We are shrinking 
them.
    Our influence in the Middle East significantly reduced by 
our inability to be able to effect things, our ability to do 
counterterrorism, our ability to bring 60 percent of the 
populations of some Arab countries out of destitute poverty 
because of the absence of anything remotely resembling a 
Marshall Plan or anything like it in modern context is 
palpable.
    Sixty percent of these populations under the age of 25; 50 
percent under the age of 21; 40 percent under the age of 18. 
Some countries have 4 and 5 percent of their population at 4 
years old. And the question is, What are we all going to do 
about that?
    The idea that there may be some resources coming from 
something like this that goes to some of these countries may be 
a saving grace. And Senator Lugar has raised this question 
about sort of do you maybe get a trillion dollars or whatever 
you might get out of it. If you are seeing an untoward 
distribution of that, you do have this ability to get out of 
it, as I have said.
    But the bottom line is this, if we don't do it, there are 
no royalties, and there is no guarantee that anybody is going 
to drill. And the only reason I can say that to you is that the 
CEOs and legal departments of these companies are telling us 
that.
    Now you can choose not to believe Fortune 500 CEOs and 
their stock value interests and all the rest of it. It would be 
the first time I have known the Republican Party not to put 
some credibility in what they are saying.
    But you know, that is the choice here. It seems to me we 
have to keep this framed properly. So we will have additional 
hearings, and we will continue to explore this.
    You all have been enormously helpful in fleshing out a 
number of these considerations. The record is getting stronger 
as a result in terms of people's ability to make judgments, and 
that is what we want to do.
    So I am very grateful to all of you for coming. And to both 
the Secretaries, we are really pleased to see you continuing to 
dig in and to contribute, and we are delighted to have you here 
today. Thank you all very, very much.
    We stand adjourned.
    The record will stay open for a week, as it will from this 
morning's hearing, and we will be building the record in a 
written fashion also.
    Thank you.
    [Whereupon, at 4:55 p.m., the hearing was adjourned.]

        Letters and Additional Material Submitted for the Record


               Letters Submitted by Senator John F. Kerry

























Letter From Heritage Submitted for the Record by Senator James E. Risch







             Paper by Bernie Oxman Submitted for the Record
                     by Hon. John B. Bellinger III

























 THE LAW OF THE SEA CONVENTION (TREATY DOC. 103-39): PERSPECTIVES FROM 
                         BUSINESS AND INDUSTRY

                              ----------                              


                        THURSDAY, JUNE 28, 2012

                                       U.S. Senate,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:33 a.m., in 
room SH-216, Hart Senate Office Building, Hon. John F. Kerry 
(chairman of the committee) presiding.
    Present: Senators Kerry, Casey, Webb, Shaheen, Coons, 
Lugar, Corker, and Isakson.

            OPENING STATEMENT OF HON. JOHN F. KERRY,
                U.S. SENATOR FROM MASSACHUSETTS

    The Chairman. Hearing will come to order.
    Thank you very much for being here this morning. Needless 
to say, Capitol Hill is filled with a little bit of 
anticipation about the Supreme Court decision shortly, and we 
are going to prove that we can continue to do the Nation's 
business, notwithstanding that anticipation.
    I am delighted to have this very significant panel of 
business leaders here this morning to further help us evaluate 
and think about the Law of the Sea Treaty. And I want to just 
say a couple of words at the beginning to put in perspective 
sort of what really brought this about, why we are here.
    I have been accused of many different reasons. I just read 
something the other day in the papers about why this treaty is 
sort of here and what it represents, et cetera. And I think 
everybody has kind of got it wrong so far.
    I was actually out to dinner with Tom Donohue maybe a year 
and a half ago or so, and we were talking about a number of 
things on the agenda, but particularly energy policy. And at 
the very end of the dinner, Tom turned to me, and he said, ``By 
the way, when are you going to get this Law of the Sea Treaty 
done?''
    And I was completely taken aback. It was the last thing I 
expected to hear about at the dinner, and I said, ``Why are you 
bringing that up? Why is that a concern?'' He said, ``Are you 
kidding? I have got a bunch of members who are desperate to get 
this thing done so they can go out and explore and mine, do 
what is necessary to produce energy for America.''
    And so, that is what really flagged it for me, and I came 
back and talked to my staff. And I promised Tom that I would, 
in fact, look into it and give it a good faith effort. And that 
is what really brought us here because I met with various 
representatives of those industries and became convinced that 
American competitiveness and American jobs were at stake.
    We are not here because of any political agenda. We are not 
here because the administration decided this was the moment. 
This is really coming from America's business community, and I 
think people will hear that very powerfully here this morning. 
I think there is an urgency to it, and that is what we will 
examine today.
    We have heard already from our Nation's top military 
leaders. The Secretary of Defense, the first sitting Secretary 
of Defense testified in favor of it. We have heard from the 
Secretary of State and from every past Secretary of State, 
Republican and Democrat alike, who have together signed an op-
ed that they wrote, which has been reproduced in national 
newspapers, regarding this treaty. We have heard from treaty 
experts and opponents, and we will hear from more still. We are 
not finished on that score.
    Our military leaders have consistently supported the 
accession to this treaty for more than two decades now, and 
some have argued that we should prefer to rely on customary 
international law to protect our navigational freedom. But most 
of the national security community completely disagrees with 
that and does not believe that we should leave our national 
security to an unwritten set of rules, subject to change by 
other countries and subject to change at any point in time.
    That capacity to have things subject to change also 
provides uncertainty to the business community. And as we hear 
again and again up here, nothing is more damaging to long-term 
business plans and investments, capital formation, job creation 
than a lack of certainty about what the rules of the road are.
    So, today, we shift away our focus from the military to our 
energy and economic security, and we are going to hear directly 
from top business and industry leaders who, combined, represent 
millions of businesses and jobs. Our companies want this treaty 
quite simply, bottom line, because it affects their bottom 
lines.
    Joining the Law of the Sea will provide benefits to U.S. 
business and industry that are not available through any other 
means. Just a quick few examples.
    Telecommunications industry. As we will hear shortly, we 
have vast undersea cable networks, and they provide a backbone 
for the world's voice and data networks. When there is a 
problem, if a country were to seek to block a company from 
laying a cable or impeding the repair of damaged cables, the 
Law of the Sea provides redress.
    A party to the treaty can bring suit on behalf of its 
companies within the context of the Law of the Sea agreement. 
But since the United States is on the outside of that agreement 
today, we cannot take advantage of this legal roadmap. Our 
companies have to piggyback on efforts by governments that are 
party to the Convention.
    So instead of standing up for our companies when they need 
our help, our failure to join the treaty actually forces them 
to look elsewhere--greater expense, greater uncertainty, lack 
of protection of American sovereignty. The status quo is simply 
not acceptable.
    Lowell McAdam of Verizon, CEO of Verizon, who I am very 
pleased is here today, will go into some of the detail 
regarding that. And all you have to do is listen to AT&T, the 
telecommunications industry, Verizon, others, all of whom urge 
accession to this treaty.
    On energy security, people come to the same conclusion. The 
United States is blessed with hundreds of thousands of square 
miles of Extended Continental Shelf. We can double the size of 
the United States, in effect, from what is undersea and 
available to us for exclusive jurisdiction, and that will be 
critical to our energy security for years to come.
    The only way to maximize the legal certainty and establish 
clear title over the extended shelf is through recognition by 
the Continental Shelf Commission. As a nonparty to the treaty, 
we are shut out from this process. We are shutting ourselves 
out.
    This makes a critical difference to our energy companies, 
as we will hear. They want and need certainty to invest the 
billions of dollars required to develop energy in the extended 
shelf, especially in the Arctic where the Chinese and the 
Russians are already laying claims. Instead of doing what we 
can do to encourage environmentally sound energy exploration in 
those areas, our failure to join the Law of the Sea is 
deterring it.
    We are pleased to have Jack Gerard here today to speak on 
behalf of the American Petroleum Institute and explain exactly 
why what I have just said is the case. Mr. Gerard is not alone. 
You can listen to Rex Tillerson, the respected head of 
ExxonMobil, who recently wrote to Senator Lugar and myself 
urging ratification of the treaty.
    Or listen to Marvin Odum, the head of Shell Oil Company, 
which employs over 22,000 people in this country and strongly 
supports joining the Law of the Sea. Marvin was, unfortunately, 
unable to join us today, but he has submitted testimony for the 
record. And his full testimony will be placed in the record as 
if read here in full.
    [The prepared statement of Mr. Odum follows:]

   Prepared Statement of Marvin E. Odum, President, Shell Oil Company

    As President of Shell Oil Company, I am pleased to have an 
opportunity to provide the Senate Foreign Relations Committee with 
Shell's views on United States accession to the Law of the Sea 
Convention and provide information, specific to the United States, 
about potential benefits of additional oil and gas production under the 
Convention.
    Shell Oil Company is the U.S.-based subsidiary of Royal Dutch 
Shell, headquartered in Houston, Texas. Shell employs approximately 
22,000 people in the United States.
    Shell's support for the Law of the Sea Convention is based on three 
points.
    First, enormous oil and gas resources are estimated to lie in the 
U.S. ``Extended Continental Shelf,'' an area that begins at 200 miles 
from shore and runs out to the outer edge of the continental margin of 
the United States. The U.S. Extended Continental Shelf off the coast of 
Alaska has been estimated by the U.S. Government to be at least 1 
million square kilometers, or twice the size of California. The U.S. 
Geological Survey estimates that the area north of the Arctic Circle 
contains nearly a hundred billion barrels of oil and trillions of cubic 
feet of natural gas, a vast untapped resource.
    Second, the Convention establishes a process through which Parties 
to the treaty can establish internationally-recognized claims over the 
resources in their extended continental shelf. Without this high degree 
of legal certainty, any future claims to oil and gas resources of the 
extended shelf would be vulnerable to legal challenge or subject to 
dispute. The resulting uncertainty would discourage the type of private 
sector investment needed to develop the resources.
    Third, the royalty rates set forth in the Convention are workable 
and acceptable to our company.

             IMPORTANCE OF THE ENERGY RESOURCES GUARANTEED
                    BY THE LAW OF THE SEA CONVENTION

    Under the Law of the Sea Convention, all coastal states have rights 
to the resources, such as fish, oil, natural gas, and minerals, in or 
under the oceans within 200 miles of their coasts. This is the area 
known in the Convention as the Exclusive Economic Zone, or EEZ.
    The Convention also provides for exclusive rights to resources on 
the seabed and subsoil beyond the EEZ, if a coastal state is a party to 
the Convention and demonstrates to the Commission on the Limits of the 
Continental Shelf established by the Convention that the area meets the 
geological criteria of an extended continental shelf. The Extended 
Continental Shelf of the U.S. likely extends more than 600 miles into 
the Arctic Ocean off the coast of Alaska, encompassing a vast portion 
of the Arctic Circle.
    The U.S. Geological Survey (USGS) estimates that the area north of 
the Arctic Circle contains nearly a hundred billion barrels of oil and 
trillions of cubic feet of natural gas. The USGS estimates that this 
constitutes one-quarter of the world's undiscovered reserves, as well 
as extensive deposits of valuable minerals. Conservative estimates from 
the Bureau of Ocean and Energy Management place roughly 27 billion 
barrels of oil and over 120 trillion cubic feet of gas in Alaska's 
offshore without factoring in the massive U.S. Extended Continental 
Shelf.
    Shell has decades of experience in Arctic oil and gas development. 
This summer we plan to execute an exploration program on leases off the 
coast of Alaska. With an investment of more than $4 billion and a 
program that meets and exceeds regulatory requirements, we are 
confident that this is the first step to developing world-class 
resources there. To be clear, these existing leases are within the EEZ 
of the U.S., and production would come on line in the early to mid-
2020s. But this work would tap a fraction of the resources within the 
geological formations off the coast of Alaska. Estimates from all 
experts say that the area beyond 200 miles into the U.S. Extended 
Continental Shelf is resource-rich.
    Although development in these extended shelf areas of the Arctic 
has not yet occurred, other countries bordering the Arctic Ocean--
Russia, Canada, Norway, and Denmark--have ratified the Convention and 
are proceeding under its process at the Continental Shelf Commission to 
delineate their Extended Continental Shelves in the Arctic and secure 
their right to vast additional oil and gas resources. Although the 
United States is undertaking Continental Shelf mapping activities, any 
U.S. claims to oil and gas resources in the extended shelf would not 
have the international recognition that is afforded to Convention 
members. Moreover, until the United States ratifies the Convention, it 
has no opportunity to sit on the Commission and participate in 
decisions--including the review of other countries' claims--that affect 
its interests, including in the Arctic.
    The benefits of developing Alaska's offshore oil and gas resources 
are many. Offshore leasing and development--whether in the U.S. EEZ or 
the Extended Continental Shelf--encourages economic activity in the 
United States, leads to more domestic supply and an improved balance of 
trade, and increases government revenue.

             THE NEED FOR LEGAL CERTAINTY FOR INVESTMENTS 
                   IN THE EXTENDED CONTINENTAL SHELF

    More than 160 countries are currently Parties to the Convention, 
including all of the major maritime powers and all of the major 
industrial countries, and they can benefit from the legal certainty 
over resource development that the Convention provides. If the United 
States were to become a party to the Convention, it could participate 
in the internationally recognized process for claiming its Extended 
Continental Shelf and its rights over oil and gas, which would provide 
legal certainty for accessing and developing these energy resources. 
Without this clear claim, our company would not find investment 
conditions favorable.
    Legal certainty, as would be facilitated under the Convention, is 
essential. Companies make multibillion dollar investment decisions 
based in part on confidence that the investment will not be undermined 
by legal challenge. Considering that substantial investments will be 
required for safe and responsible exploration and development on the 
Extended Continental Shelf in the Arctic, we do not envision pursuing 
activities in these areas unless the claims of Arctic nations, 
including the United States, have been approved by the Continental 
Shelf Commission. Until this legal risk and uncertainty is minimized, 
the oil and gas resources of the Extended Continental Shelf in the 
Arctic may be considered to be stranded.

      THE ROYALTY RATES OF THE CONVENTION ARE ACCEPTABLE TO SHELL

    Under the Convention member nations can secure exclusive rights to 
extract resources in their Extended Continental Shelf--areas not 
previously subject to clear jurisdiction. The Convention also requires 
member nations extracting oil and gas resources from their Extended 
Continental Shelves to make payments to the International Seabed 
Authority based on the value of production. If the United States 
ratified the Convention, Shell expects that the U.S. Government would 
collect the fees it would be obligated to pay to the Authority from 
those companies that produce oil and gas in the extended shelf, along 
with royalties it collects for the U.S. Treasury.
    The royalty rates the United States would pay to the Authority were 
negotiated with input from industry. The royalties set in the 
Convention would begin at 1 percent of the value of production in the 
6th year of production at a production site, rising 1 percent per year 
to a maximum of 7 percent in the 12th year and following years. While 
the overall royalty rate (that going to the U.S. Treasury and that 
going to the Authority) would be part of the economic calculations we 
make in determining whether or not to proceed with investment, Shell 
finds the Convention's royalty rates to be reasonable and acceptable.
    Thank you for the opportunity to express our support for Senate 
approval of the Law of the Sea Convention. We welcome and encourage any 
actions the Senate may make to reduce investment risk, increase legal 
certainty, and facilitate oil and gas development.

    The Chairman. A short excerpt. This is Marvin Odum. ``If 
the United States were to become a party to the Convention, it 
could participate in the internationally recognized process for 
claiming its Extended Continental Shelf and its rights over oil 
and gas, which would provide legal certainty for accessing and 
developing those energy resources. Without this clear claim, 
our company would not find investment conditions favorable.''
    So, finally, we turn to manufacturing. As many of you know, 
rare earth minerals are critical to a large part of modern 
manufacturing. Rare earth minerals are an essential component 
of our communication systems, of our defense control systems, 
missile defense control technology, and other weapons systems.
    It includes--the breadth or sort of the scope of rare earth 
mineral use is in electronics. It is in computers, cell phones, 
and all of the advanced weapons systems, some of which I have 
named.
    Today, my friends, China controls about 97 percent of the 
production market for these minerals. Can anybody in their 
right mind suggest that the United States is safer and our 
companies are advantaged sitting in a situation where you can't 
invest because you can't be safe and you can't be legally 
protected, and we are sitting on the outside? We cannot secure 
international recognition for deep sea mining claims that our 
companies want in order to invest billions of dollars unless we 
are part of this treaty.
    So, on rare earth minerals, on oil and gas, on whatever 
unknown minerals and/or products may be findable under the 
ocean, we have a choice. We can either join the major 
industrial nations that have already joined up and are already 
using this to their advantage and secure the benefits of the 
sea for Law of the Sea, as well as the sea, for our businesses 
and industries, or we can remain on the outside, deprive our 
companies of the legal investment and operational security they 
seek, cede American competitive advantage, and watch while 
other countries take the spoils.
    I think the choice is clear. Today, we have people who can 
speak with much more authority than I can because it is their 
livelihood. It is their life endeavor, and I think we need to 
listen to them.
    Thomas Donohue, president and CEO of the U.S. Chamber of 
Commerce, representing broadly many of these industries. Jack 
Gerard, president and CEO of the American Petroleum Institute, 
of which all of our major producers are partners. Jay Timmons, 
president and CEO of the National Association of Manufacturers. 
And Lowell McAdam, chairman and CEO of Verizon.
    So, gentlemen, welcome today. Thank you for being with us.
    Senator Lugar.

          OPENING STATEMENT OF HON. RICHARD G. LUGAR, 
                   U.S. SENATOR FROM INDIANA

    Senator Lugar. Thank you, Mr. Chairman.
    I join you in welcoming our distinguished panel of industry 
leaders. I appreciate especially their efforts on behalf of the 
Law of the Sea and their willingness to explain how the 
Convention will help them create private sector jobs and 
contribute to the growth of the U.S. economy.
    Every major ocean industry--including shipping, fishing, 
telecommunications, oil and natural gas, drilling contractors, 
shipbuilders--support United States accession to the Law of the 
Sea Treaty. This is not a recent development. Ocean industry 
support for the Convention has been virtually unanimous going 
back to 2003 when the Foreign Relations Committee first took it 
up and initiated a process that resulted in a unanimous 
committee vote to report Law of the Sea favorably to the whole 
Senate on that occasion.
    A few years later at a Foreign Relations Committee hearing 
on October 4, 2007, a business panel testified in favor of the 
Convention. Only Senator Menendez and I were present for that 
powerful, unequivocal testimony. But then, as now, every major 
ocean industry backed the Convention and appealed for 
ratification.
    With good reason, Americans are intensely interested in job 
creation and the pace of United States economic activity. In my 
State of Indiana, this is the paramount issue among voters. 
There are innumerable threats to the United States economy, 
including the phenomenon over which we have minimal control, 
such as the European debt situation.
    Moreover, because of our own national debt, we have few 
stimulus options to combat a future economic downturn. These 
factors increase the importance of a jobs creating impact, of 
technological innovation, and our own natural resources. As we 
will hear today, U.S. ratification of Law of the Sea would 
support job creating investment and open new resources to our 
industries at a critical time for our economy.
    The Law of the Sea already forms the basis of maritime law 
regardless of whether the United States is a party. 
International decisions related to resource exploitation, 
navigation rights, and other matters will be made in the 
context of the Convention whether we join or not. And we will 
not even be able to participate in the amendment process to 
this treaty, which is far more likely to impose new 
requirements on our Navy and ocean industries if the United 
States is absent.
    Because of these factors, the people who actually deal with 
oceans on a daily basis and invest their money in job creating 
activities on the oceans want this Convention ratified. They do 
not want to be at a competitive disadvantage to foreign 
industries.
    By not joining the Law of the Sea, we also are diminishing 
the potential scope of our domestic energy production. Some 
have argued that United States accession to the Law of the Sea 
Convention is unnecessary to secure the legal basis for 
companies to fully exploit oil, natural gas, and mineral wealth 
on the ocean floor, but that is not the opinion of American 
companies that might invest their resources in this activity.
    They tell us that without the certainty of title provided 
by Law of the Sea Convention, they would not go forward with 
many projects requiring large investments. Their concern is 
that after doing the expensive exploration, research, testing, 
and construction necessary to exploit a site, they have to be 
certain that another entity won't be able to free-ride on their 
investment or challenge their claim in international courts.
    The drilling and mining companies prefer to pay a small 
royalty beginning in the sixth year of production in return for 
an international system that gives them undisputed claim for 
the resources produced. This royalty provision of the 
Convention was negotiated with the participation of extraction 
companies.
    They judged that it is reasonable, given the legal 
certainty it secures and the value of what might be produced, 
especially since the first 5 years of production will not be 
subject to any royalty.
    Our resource extractors are telling us that if we want them 
to move forward with scale development of ocean floor resources 
that could contribute significantly to United States energy 
security and create jobs, we need to ratify the Law of the Sea.
    I thank the chairman for this hearing, and we look forward 
to our discussions.
    The Chairman. Thank you, Senator Lugar.
    I am reminded by your testimony, as I don't need to be 
reminded by it. But it flagged it that this is ground that this 
committee has been over before. And Senator Lugar has 
previously led that effort and has had a longtime association 
with and stake in this effort, and I just want to acknowledge 
that and thank him for his laying that groundwork and record 
that we have to date.
    Mr. Donohue, if you would lead off, and Mr. Gerard second, 
Mr. Timmons third, and Mr. McAdam, if you would bat cleanup? 
Thanks.

 STATEMENT OF THOMAS J. DONOHUE, PRESIDENT AND CHIEF EXECUTIVE 
       OFFICER, U.S. CHAMBER OF COMMERCE, WASHINGTON, DC

    Mr. Donohue. Thank you, Mr. Chairman and Ranking Member 
Lugar and all the members of the committee who are here or will 
be here. We appreciate this opportunity to testify today.
    I am pleased to express the U.S. Chamber of Commerce's 
strong support for approval of the Law of the Sea Treaty. This 
morning, I will focus my remarks on why the treaty is in our 
economic interest, our national security interest, and why it 
is essential to America's global leadership.
    On the economic side, the treaty would be a boon to U.S. 
economic growth by providing American companies with the legal 
certainty and stability that they need to hire and invest. It 
would codify the U.S. legal rights to use international 
shipping lanes to lay and service underwater cables and to 
develop vast amounts of oil, natural gas, and minerals off the 
U.S. coast and in the deepwater seabed.
    The treaty would benefit several industries key to economic 
growth, job creation, and U.S. competitiveness. It would 
benefit the energy industry by providing sovereign rights to 
seabed resources 200 miles off our coast. If certain geological 
criteria are met, the zone of sovereignty could extend to 600 
miles, or the so-called Extended Continental Shelf.
    Proper delineation of the Extended Continental Shelf could 
bring an additional 4.1 million square miles of ocean floor 
under U.S. sovereign rights, an area larger than the lower 48 
States. The treaty would also allow the United States to have a 
U.S. expert elected to the international body that determines 
the claims in the Arctic, and there are going to be a lot of 
them.
    Securing international recognition for U.S. rights in these 
areas and defending against the unreasonable claims of other 
nations is vital to the economic prosperity of our Nation. The 
telecommunications industry needs the treaty to codify the 
right to lay and maintain underwater cables in the oceans of 
the world. It also needs them to provide stronger protections 
for cables against damages by other parties.
    A wide range of domestic industries, including aerospace, 
defense, and consumer electronics, need the treaty to enable 
access to new sources of mineral resources, including rare 
earth minerals, as the Senator indicated, which lie in massive 
deposits on or beneath the deep seabed floor.
    Companies need the legal certainty and the stability 
provided by the treaty in order to minimize the investment 
risks and cost to developing these resources in the U.S. 
Extended Continental Shelf and the area beyond that, the deep 
seabed. That is why the treaty's approval is so important to 
sustaining and creating American jobs and protecting American 
interests close to our mainland.
    Now let me say a word about national security. The treaty 
clearly is essential to America's national security.
    The U.S. Chamber has a long and proud history of supporting 
America's national security interests.
    For example, we played an instrumental role in mobilizing 
America's industrial might to fight and win World Wars I and 
II. I put that in there, if I might say, Mr. Chairman, because 
we just celebrated our 100th anniversary, and we took the time 
to read about why the Chamber was founded and what its basic 
principles were, which were to represent the American business 
community and to represent it at the highest level with the 
greatest service our country and its needs.
    We have long supported a robust national defense, and we 
have recently launched a major effort called Hiring Our Heroes 
to employ veterans by matching them with employers all around 
the country. It is in this tradition that we support approval 
of the Law of the Sea as it relates to national security.
    At any given time, hundreds of U.S. flagged ships and ships 
owned by U.S. companies rely on the freedom of navigation 
rights codified in the treaty while crossing the world's 
oceans. In fact, seafaring vessels transport more than 95 
percent of all goods imported to or exported from the United 
States, including essential commodities like oil.
    While we can always rely on the U.S. Navy to ensure lawful 
passage of U.S. flagged and owned ships, the Chamber strongly 
supports the Navy's desire to codify rights to freedom of 
navigation in the treaty rather than rely on the customary 
international law or a strong navy.
    Let me say a word about a seat at the table. The treaty is 
critical to America's global leadership. As the world's 
preeminent maritime power with one of the largest Continental 
Shelves, the United States has more than any other country to 
gain, or to lose, based on how the treaty's terms are 
interpreted, applied, or changed.
    The Law of the Sea Treaty will continue to form the basis 
of maritime law with or without our approval. Our Nation's 
interests are best protected by being an active participant.
    Another side comment. There is a lot of comment and 
suggestion that this organization set up in Jamaica is going to 
run our lives. It clearly is not. But what a mistake we make if 
we don't join the treaty and put our representative there, who 
would have the absolute power to veto any action suggested by 
the organization.
    Now let me say a word about our critics of the treaty, who 
I have a lot of respect for. But I would like to rebut two of 
the chief criticisms that we hear.
    The first is that it erodes American sovereignty. This 
couldn't be further from the truth. This treaty promotes our 
sovereignty by codifying our property rights in the Arctic and 
on our Extended Continental Shelf. It will be ours. People will 
know it is ours, and we have every right to defend it.
    The second is opposition to a small portion of royalties 
from development that would be going to the International 
Seabed Authority. My response to that is simple. The U.S. 
Treasury will lose billions of dollars in royalty revenue by 
not providing companies the legal certainty and stability to 
develop its Extended Continental Shelf.
    It is a simple balance. We get most of the money under that 
system. The treaty provides that certainty, which will 
encourage companies to explore and develop these areas and 
produce potentially billions and billions of dollars in 
royalties going to the Government.
    And finally, like any agreement, this treaty is not 
perfect, but we are better off sitting at the table. Today, the 
benefits far outweigh the costs, and we must protect those 
benefits.
    For all of these reasons, the U.S. Chamber urges the Senate 
to give its advice and consent to the Law of the Sea Treaty. 
The treaty has the enthusiastic backing of every industry it 
impacts, including energy, telecom, shipping, mining, fishing, 
biotech, et cetera. It enjoys the support of every living 
Secretary of State and the Joint Chiefs.
    Senate approval is imperative to expand U.S. territory 
beneath the oceans to protect vital national security 
interests, to develop new commercial interests, and to create 
jobs.
    So I thank you for allowing me to share these obvious 
comments. I am sure the discussion will get more specific, but 
the bottom line is very simple. The benefits are all to accrue 
to this country and to our economy, and we ought to move 
forward on it.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Donohue follows:]

                Prepared Statement of Thomas J. Donohue

    Good morning, Chairman Kerry, Ranking Member Lugar, and members of 
the Committee on Foreign Relations. My name is Thomas J. Donohue and I 
am President and Chief Executive Officer of the U.S. Chamber of 
Commerce. The U.S. Chamber of Commerce is the world's largest business 
federation, representing the interests of more than 3 million 
businesses of all sizes, sectors, and regions, as well as state and 
local chambers and industry associations. I am pleased to appear before 
you today to affirm the Chamber's strong support for U.S. accession to 
the Law of the Sea (LOS) Convention.

                               KEY POINTS

    I want to stress a few critical points to this committee:

   We support joining the Convention because it is in our 
        national interest--both in our national security and our 
        economic interests. The Chamber has a long and proud history of 
        supporting America's national security interests including 
        playing an instrumental role in mobilizing America's industrial 
        might to fight and win World Wars I and II. It is in this 
        tradition that we support approving the Law of the Sea Treaty.
   Becoming a party to the Treaty benefits the U.S. 
        economically by providing American companies the legal 
        certainty and stability they need to hire and invest. Companies 
        will be hesitant to take on the investment risk and cost to 
        explore and develop the resources of the sea--particularly on 
        the Extended Continental Shelf (ECS)--without the legal 
        certainty and stability accession to LOS provides. The benefits 
        of joining cut across many important industries including 
        telecommunications, mining, shipping, and oil and natural gas.
   LOS will continue to form the basis of maritime law with or 
        without our accession. Our national interests are best 
        protected by being an active participant in this process. 
        Joining the Convention will provide the United States a 
        critical voice on maritime issues--from mineral claims in the 
        Arctic to how International Seabed Authority (ISA) funds are 
        distributed.
   Many opponents present a false option to LOS that does not 
        exist: that the United States can enjoy the benefits of LOS 
        without joining it. In reality, only by joining can the U.S. 
        reap the full economic and national security benefits of the 
        Convention. Like any agreement, LOS isn't perfect. But its 
        benefits far outweigh the costs of continuing to stand on the 
        sidelines. The Chamber and the business community do not fear 
        adverse rulings under the Convention so much as we fear being 
        left behind by our global competitors.
   Contrary to some opponents' claims, joining the treaty 
        promotes American sovereignty. LOS strengthens our sovereignty 
        by codifying our property claims in the Arctic and on our ECS. 
        Remaining outside of the Convention undercuts our sovereignty 
        by not allowing us to advance and protect our property claims 
        through the process utilized by every other major global power.
        the chamber's support for the law of the sea convention
    The Chamber has a long history of supporting the Law of the Sea 
Convention before this committee. The Chamber remains steadfast in its 
belief that the Senate should expeditiously approve the Convention 
because of the tremendous benefits it will provide for American 
enterprise. The Convention has the enthusiastic backing of every 
industry it impacts, including energy, telecom, shipping, mining, 
fishing and biotech. Earlier this month, the Chamber and 11 diverse 
trade associations wrote to this committee, submitting a letter 
strongly urging accession to the Convention. This is because the 
Convention is overwhelmingly favorable for U.S. business interests: it 
would codify U.S. legal rights to use international shipping lanes, to 
lay and service submarine cables, and to develop vast amounts of oil, 
natural gas, and minerals off the U.S. coasts and on the deep seabed. 
Our letter emphasized that now that ``new technologies and changed 
conditions have made it cheaper and easier to access the potential 
wealth beneath the oceans, the business community simply cannot afford 
to have the U.S. remain on the sidelines.''
    In addition to a 12-mile territorial sea, the Convention provides 
for a 200-mile Exclusive Economic Zone, over which a coastal state has 
exclusive resource management rights. If certain geological criteria 
are met, the Convention also provides sovereign rights to seabed 
resources on the Continental Shelf beyond 200 nautical miles. The 
United States has the world's second-longest coastline and likely has 
an Extended Continental Shelf in at least six different locations, 
including off of the Eastern seaboard and up to 600 miles off the coast 
of Alaska. In total, the Convention would confer a resource 
jurisdiction larger than that of any other nation in the world--an 
additional 4.1 million square miles of ocean floor, greater than the 
area of the contiguous 48 States. Securing international recognition 
for U.S. rights in these areas--and defending against the outsized 
claims of other nations--is vital to the economic prosperity of our 
Nation.
    The Convention provides stability, predictability, and clear legal 
rights, which are essential for American investment in our oceans, and 
therefore to sustaining and creating American jobs. The oceans, which 
comprise 70 percent of the earth's surface, are integral to global 
commerce. Ships carry virtually all goods passing in international 
trade, and submarine cables--not satellites--relay virtually all modern 
communications. Oceans also promise enormous frontiers of untapped 
resources. Development of hydrocarbon resources on the U.S. ECS in the 
Arctic and elsewhere would create thousands of new jobs for Americans, 
generate billions of dollars in new economic activity, and increase our 
energy security. Similarly, mining on the U.S. ECS and the deep seabed 
presents vast new opportunities to tap into deposits of manganese, 
nickel, cobalt, copper, and vital rare earth minerals.
    Because of our status as a non-party, the United States is not 
represented on the Council of the International Seabed Authority, nor 
are we able to nominate an expert to sit on the Continental Shelf 
Commission, which determines whether seabed qualifies as Continental 
Shelf. Other industrial nations--all members of the G8 included--joined 
the Convention following the 1994 deep seabed mining reforms. Today, 
161 countries and the European Union are party. The U.S. is the only 
notable outlier. The Convention's institutions are now up and running, 
and it is open to amendment. As a party, we would be in a position to 
lead from within and advance and protect our interests. And in 
institutions outside the Convention, such as the International Maritime 
Organization, joining the Convention would increase our credibility and 
authority to cite and interpret Convention provisions in defense of our 
interests.
    Because the Convention's governing bodies are active, the Senate's 
continued inaction on the Law of the Sea has relegated the United 
States to an observer status. Since 1982, the U.S. has voluntarily 
complied with the Convention's rules. The U.S. must now become party to 
the Convention in order to lock in the treaty's favorable rights and 
reassert U.S. leadership in the maritime sphere. Focusing on four key 
U.S. industries--oil and natural gas, shipping, mining and telecom--I 
will elaborate on the reasons why the Senate should approve the Law of 
the Sea Convention in 2012.
    the business case for accession to the law of the sea convention
A . Oil and Natural Gas
    Accession to the Law of the Sea Convention would provide oil and 
natural gas companies with legal certainty as they explore and develop 
the vast energy deposits off the coasts of the United States. As I have 
mentioned, the U.S. benefits from a broad continental margin, 
especially off of Alaska's coast, where the U.S. Continental Shelf 
likely extends more than 600 miles into the Arctic Ocean. The U.S. 
Geological Survey estimates that the Arctic contains one-quarter of the 
world's undiscovered oil and natural gas, including nearly 100 billion 
barrels of oil and trillions of cubic feet of gas. The U.S. ECS seaward 
of Alaska encompasses a large portion of this Arctic Circle area. And, 
while much is yet unknown regarding Alaska's offshore, a Department of 
Interior report estimates that just the area within 200 miles of shore 
holds 27 billion barrels of oil and 132 trillion cubic feet of natural 
gas. The U.S. offshore in the Gulf of Mexico has a similarly impressive 
total endowment which, including quantities already pumped to surface, 
is estimated to contain 45 billion barrels of oil and 232 trillion 
cubic feet of natural gas.
    Clearly, the hydrocarbon potential of these offshore areas is 
enormous. Offshore oil volumes already account for about 30 percent of 
all U.S. production. Successful development will grow the U.S. economy, 
create jobs, and significantly reduce American reliance on foreign oil. 
The U.S. Government should enable such development, not hinder it. But 
that is precisely what the Senate's failure to approve the Law of the 
Sea Convention has done, because the U.S. cannot secure international 
recognition of its Continental Shelf beyond 200 miles without joining 
the Convention.
    Offshore operations are capital-intensive, requiring significant 
financing and insurance. Oil and natural gas companies do not want to 
undertake these massive expenditures if their lease sites may be 
subject to territorial dispute. They operate transnationally, and need 
to know that the title to the petroleum resources will be respected 
worldwide and not just in the United States. Availability of clear 
legal title is crucial to realizing the potential of U.S. offshore 
areas both now and in the future, as drilling technology continues to 
advance and make new projects feasible. As ExxonMobil emphasized in its 
recent letter to this committee, before it undertakes the immense 
investments required to explore and develop resources beyond 200 miles, 
``legal certainty in the property rights being explored and developed 
is essential.''
    Under the Convention, parties can secure international recognition 
of the limits of their Continental Shelves by demonstrating to a body 
of scientific experts, the Continental Shelf Commission, that its 
seabed meets certain geological criteria. Over 40 nations--including 
every other Arctic nation--are already taking actions to stake their 
claims before this Commission. As a non-party, the U.S. is not able to 
stake our own claims, nor have an expert sit on the Commission and 
participate in discussions affecting its interests.
    Opponents of the Convention often cite its imposition of royalties 
on ECS production as an important reason to reject the Convention. 
Under the Convention, parties must make payments to the ISA based on 
the value of resources extracted from sites on their Extended 
Continental Shelves. Production companies would be able to keep the 
entire value of production at each site for the first 5 years, subject 
to any licensing fees imposed by the U.S. Government. Payments to the 
Seabed Authority would begin at 1 percent of the value of production in 
the 6th year of exploitation at a site and rise 1 percent per year to a 
maximum of 7 percent in the 12th year and following years. These 
royalty rates were negotiated by the U.S. Government with extensive 
input from U.S. oil and natural gas interests. As oil and natural gas 
companies have recognized, the royalties are reasonable in view of the 
immense value of the resources that would be made subject to the United 
States exclusive sovereign jurisdiction. The oil and natural gas 
companies--and the U.S. Treasury--would be able to retain much more 
than the U.S. would be required to pay to the Seabed Authority. 
Notwithstanding the required payments to the Seabed Authority, joining 
the Convention would be overwhelmingly beneficial to U.S. economy and 
the U.S. Treasury.
B. Mining
    Mining, like oil and natural gas, represents a field where the U.S. 
will damage its own interests and those of U.S. industry by remaining 
outside the Law of the Sea Convention. Only by joining the Convention 
will the U.S. secure its rights to vast mineral deposits on the U.S. 
ECS, and perhaps even more important, be able to sponsor companies to 
mine the deep seabed in the area beyond any national jurisdiction. 
Beneath the oceans are troves of valuable metals and rare earth 
elements richer than any found on land, including deposits of 
manganese, nickel, cobalt, copper, lead and other metals commonly used 
in modern manufacturing.
    Several recent developments make access to deep seabed mining sites 
an urgent matter. Due to technological progress, our ability to mine 
the deep seabed has improved dramatically, while at the same time 
prices for various metals have increased. Today, deep seabed mining 
presents an attractive business proposition. China, Russia, India, and 
other countries have responded, sponsoring mining ventureswhich have 
licensed their respective sites with the ISA. These countries have 
obviously concluded that the fees are worth paying to secure legal 
title to deep seabed mining sites.
    The importance and relative scarcity of rare earth minerals is 
another factor requiring urgent access to the deep seabed. Rare earth 
minerals have a wide range of critical technology and defense 
applications. China has a virtual monopoly on the land-based supply of 
these elements, a reality that is of great concern for U.S.governmental 
and commercial interests. The U.S. suffers from a competitive and 
strategic disadvantage because, as a non-party to the Convention, it 
cannot sponsor U.S. companies to engage in deep seabed mining.
    Lockheed Martin, the only U.S. company with active claims to deep 
seabed sites under a U.S. law predating the Law of the Sea Convention, 
recently wrote to this committee urging the Senate to approve the 
Convention. Lockheed has invested hundreds of millions of dollars on 
research and development related to deep seabed mining over the past 40 
years. The company's letter made clear that the multibillion dollar 
investments now required to launch an ocean-based resource development 
business will only occur if it can obtain the security of tenure and 
clear legal rights offered under the Convention. With Lockheed and 
potentially other U.S. companies poised to expand their operations and 
create new jobs, Senate accession to this treaty would allow investor 
dollars to stay here.
    Equally important to U.S. companies contemplating deep seabed 
mining activities is U.S. leadership in the ISA. The next several years 
will be formative for the nascent deep seabed mining industry. As I 
mentioned earlier, the Convention's deep seabed mining regime was 
overhauled in 1994, resulting in a system that is uniquely favorable to 
American interests. Those reforms included a permanent U.S. seat on the 
Council of the ISA. But the U.S. has not assumed that seat, and cannot 
guide the development of new rules pertinent to deep seabed mining 
activities while outside the Convention.
C. Shipping
    The U.S. shipping industry depends heavily on the rights enshrined 
in the Law of the Sea Convention. At any given time, hundreds of U.S. 
flag ships and ships owned by U.S. companies rely on the freedom of 
navigation rights codified in the Convention while in transit through 
the world's oceans. Unsurprisingly, U.S. shipping companies have long 
been ardent supporters of accession to the Convention. The Chamber of 
Shipping of America has been a longtime supporter of the Convention and 
has testified and written letters to this committee urging the Senate 
to approve the treaty.
    The Convention guarantees rights of innocent passage through 
territorial seas, transit passage through straits and archipelagoes, 
and freedom of all vessels on the high seas. Seafaring vessels, such as 
container ships, crude oil tankers, and bulk carriers, carry over 95 
percent of all goods imported to, or exported from, the United States. 
Guaranteeing their free movement is both an economic and a national 
security concern, as these ships transport the majority of this 
country's oil and other crucial commodities and goods.
    The Convention's detractors argue that U.S. ships can rely on 
customary international law to ensure their mobility. But customary 
international law is not well-suited to the needs of business. By 
definition, it is hard to find and apply customary law because it does 
not exist in one place. Its rules can and will shift over time. 
Shipping companies benefit from a set of stable, written rules that 
they can easily reference during a dispute. The Law of the Sea 
Convention serves this function by codifying key navigational rights in 
a single, central Authority.
    Furthermore, robust U.S. leadership on maritime issues is just as 
important as a set of treaty-based rules. Without U.S. participation, 
there is a greater likelihood that countries will successfully assert 
divergent views on the application of the Convention's navigational 
rules. As a non-party, the U.S. lacks credibility to enforce the 
consistent application of norms embodied in the Convention. The 
shipping industry--and industry in general--will benefit from a strong, 
treaty-based rule of law guided by the United States.
D. Telecommunications
    The rights codified in the Law of the Sea Convention are likewise 
of paramount importance to the daily operations of U.S. 
telecommunications companies. The Convention was negotiated with 
extensive input from the U.S. telecommunications industry and 
represents a quantum leap forward in law applicable to underwater 
cables. It provides rights to lay, maintain, and repair submarine 
cables outside territorial seas, certain protections to prevent damage 
to cables, and avenues for legal recourse when these various provisions 
are violated.
    Submarine cables represent critical communications infrastructure, 
as they form the backbone of the Internet and global e-commerce. Such 
cables, typically consisting of optical fibers laid along the ocean 
floor in a bundle no larger than a garden hose, carry over 95 percent 
of transoceanic voice and data communication. U.S. telecom companies 
have worked rapidly to meet exploding consumer appetite for data, 
increasing the total circuit capacity of transoceanic cables landing in 
the U.S. by more than 1,000 fold since 1995.
    There is no substitute for these underwater cables in case of 
damage. The earth's satellites can carry no more than 7 percent of U.S. 
international voice and data traffic. But worldwide, nearly 100 cable 
outages occur each year. The vast majority of cable outages are caused 
by bottom trawling fishing, dredging, and ship anchoring. Occasionally, 
cables are taken in an act of piracy, as occurred in 2007 when 
individuals in commercial vessels from Vietnam stole over 100 miles of 
cables on the high seas. Cable outages may disrupt governments, 
financial markets, and business operations and require costly repairs.
    Accession to the Law of the Sea Convention would better protect 
U.S. companies' existing cable systems and foster additional 
investments. Companies would benefit from the legal certainty provided 
by treaty-based rights to lay, maintain, and repair cables, and conduct 
surveys incident to laying cables. Like shipping companies, telecom 
interests emphasize that they cannot merely rely on customary 
international law because of the threat of encroachments by coastal 
states. Russia's attempt to delineate cable routes on its continental 
margin in the Arctic proves that fears of encroachment are not 
theoretical. As a non-party, the U.S. loses more than just credibility 
to lodge diplomatic protests to such actions because, with respect to 
its submarine cable provisions, the Convention permits parties to 
invoke its meaningful dispute resolution procedures. U.S. telecom 
companies have repeatedly emphasized that they are comfortable with, 
and want to rely on, the compulsory dispute resolution provisions in 
the Convention.
    Because the U.S. remains on the sidelines, it puts its telecom 
companies at a competitive disadvantage and fails to provide them 
important legal rights. They do not benefit from the legal certainty 
and dispute resolution options that companies based in other countries 
enjoy. In order to support its telecom companies and protect vital 
communications infrastructure, the U.S. should join the Law of the Sea 
Convention.

                               CONCLUSION

    The U.S. Chamber urges the Senate to give its advice and consent to 
the Law of the Sea Convention. The Convention has the resounding 
support of every industry it impacts. It codifies legal rights on which 
U.S. businesses rely on a daily basis and provides access and clear 
legal title to new frontiers of hydrocarbon and mineral resources. 
Consequently, accession will lay the groundwork for investment that 
boosts the U.S. economy and creates new jobs. Now that new technologies 
and changed conditions have made it cheaper and easier to access the 
wealth beneath the oceans, the United States simply cannot afford not 
to join the Convention.

    The Chairman. Thank you very much, Mr. Donohue, for very 
clear testimony. We appreciate it.
    Mr. Gerard.

  STATEMENT OF JACK N. GERARD, PRESIDENT AND CHIEF EXECUTIVE 
     OFFICER, AMERICAN PETROLEUM INSTITUTE, WASHINGTON, DC

    Mr. Gerard. Thank you, Mr. Chairman and Ranking Member 
Lugar, and Senators Webb and Corker and Isakson. It is a 
pleasure to be here with you today.
    And in light of your statement, Mr. Chairman, as you 
started, I guess we need to thank Tom for this opportunity as 
well. Is that right?
    The Chairman. That is right.
    Mr. Gerard. It is always good to be here with him at the 
table, and the others.
    On behalf of the 500 member companies, along with the 9.2 
million Americans, men and women who work in the U.S. oil and 
natural gas industry, we appreciate the opportunity to be here 
today to testify in support of accession to the Law of the Sea 
Treaty.
    We agree with Secretary of State Hillary Clinton, with 
former Secretary of State Condoleezza Rice, and with the other 
Secretaries of State before her, as well as Presidents of both 
political parties who have urged accession, that joining the 
Law of the Sea Convention is truly in the best interests of the 
United States.
    Today, the United States relies on oil and natural gas for 
over 60 percent of all the energy we consume. Recent economic 
projections by our own Department of Energy in the Obama 
administration show that 30 years from now, 57 percent of all 
the energy we consume in the United States will continue to be 
oil and natural gas.
    Other projections show the demand for world global energy 
led by oil and natural gas will increase by over 50 percent in 
the next 20 to 30 years. Energy is a very serious issue, 
particularly to our global economy. Companies spend billions of 
dollars annually looking for and producing oil and natural gas 
around the world.
    To give you some insight, from just 2009 to 2011, the 
industry spent over $700 billion just in the United States 
drilling and exploring for additional opportunities. Just last 
week at the lease sale conducted the central Gulf of Mexico, 
the U.S. oil and gas industry paid $1.7 billion in bonus bids 
to the Federal Government to secure rights to develop those 
resources in the Gulf of Mexico.
    Preliminary studies estimate that the U.S. Extended 
Continental Shelf as a result of accession to the Law of the 
Sea Treaty likely totals 1 million additional square kilometers 
and could contain resources worth billions, if not trillions, 
of dollars to our U.S. economy.
    The Convention provides a clear objective means of 
asserting U.S. authority and gaining international recognition 
of that authority, reducing the potential for jurisdictional 
conflicts between nations. This provides certainty for business 
planning so that companies can manage their financial risk over 
the lifetime of their investment.
    I might add that when we in the oil and gas business look 
for investment opportunities, we are not looking quarter by 
quarter, year by year. We look 10, 20, 30, at 40-year horizons 
when we are talking about multibillion dollar investments.
    This certainty will increase the likelihood of companies 
investing in the Extended Continental Shelf. This, in turn, 
will result in more U.S. jobs, more U.S. revenue to our Federal 
and State governments and many other benefits.
    The Convention also broadens the definition of the 
Continental Shelf in a way that would significantly favor the 
United States. As Tom touched on earlier, it would secure an 
additional 4.1 million square miles of ocean under U.S. 
jurisdiction and provides a mechanism for laying claim to 
vitally needed natural resources in the Arctic and other areas 
where other countries--Russia, for instance--have already laid 
claim, will protect our navigation rights and freedoms for our 
vessels.
    We understand that there are legitimate concerns about 
certain aspects of the Convention. We greatly appreciate the 
attention by members to ensure that this Convention is truly in 
the best interests of the United States.
    While I am here today to express to you the benefits of the 
Convention for the oil and natural gas industry, our 
expectation is that the administration and the Congress will 
continue to work to ensure that U.S. interests are protected as 
they represent the Nation in the implementation of the Law of 
the Sea Treaty.
    In short, the Law of the Sea Convention will advance and 
protect America's energy interests. It will mean a level 
playing field and new opportunity for marine sources 
development all around the world.
    Thank you again, Mr. Chairman and members of the committee. 
And I look forward to your questions.
    [The prepared statement of Mr. Gerard follows:]

                  Prepared Statement of Jack N. Gerard

    Thank you, Chairman Kerry, Ranking Member Lugar and members of the 
committee. My name is Jack N. Gerard and I am the president and CEO of 
the American Petroleum Institute.
    API is a national trade association representing more than 500 
member companies in the oil and natural gas industry. On behalf of our 
members and the more than 9.2 million American men and women whose jobs 
are supported by the U.S. oil and natural gas industry, I want to 
express my appreciation for the invitation to appear before you today 
to speak on this very important issue.
    It is an issue that is important to the our member companies, to 
the millions of employees whose jobs these companies support, directly 
or indirectly, and the thousands of communities in every state of the 
union where these companies--and the companies that provide them goods 
and services--have a presence.
    We agree with Secretary of State Hillary Clinton that no country is 
better served by this Convention than the United States. And we agree 
with former Secretary of State Condoleezza Rice and other Secretaries 
of State before her--as well as Presidents of both parties who have 
urged accession--that joining the Law of the Sea Convention will 
advance America's interests.
    Experts, both within the government and outside, agree that America 
will need more energy of all types in order to grow and to meet its 
growing energy demand. Today, the U.S. relies on oil and natural gas 
for over 60 percent of the energy it consumes.
    Since 2000, our industry has invested nearly $2.3 trillion in U.S. 
capital projects to meet ourcountry's growing demand for energy. The 
significant investments made here in the United States not only support 
the 9.2 million jobs mentioned above, but also support millions of 
America's retirees through pension funds, IRAs, 401ks and other 
investments. At a time when millions of Americans are unemployed, the 
oil and natural gas industry has been a key driver of job creation and 
economic activity.
    It also supports 7.7 percent of U.S. gross domestic product, and 
has provided $86 million a day in revenues to the Federal Government in 
taxes, royalties, rental payments, and other production fees. That's 
more than $30 billion per year. And with the right policies to access 
more domestic oil and natural gas, there will be more jobs, and more 
revenue for State and Federal treasuries: more than $800 billion by 
2030.
    According to the Energy Information Administration, projections for 
2035 show oil and natural gas will still provide nearly 57 percent of 
growing U.S. energy consumption--even with significant increases in 
renewable energy use.
    So the question isn't whether we will need more oil and natural 
gas, but where will we get it? Will we use our own vast energy 
resources or will we rely on others? Our Nation has the resources, and 
one of the key areas with great potential for energy production is our 
Continental Shelf.
    Just last week, the Department of Interior conducted a lease sale 
in the Central Gulf of Mexico where 56 oil and gas companies submitted 
bids on 454 lease tracts and paid a total of $1.7 billion to the U.S. 
Treasury to secure their rights to those lease tracts. This was in an 
area where there has already been plenty of production, and companies 
are committed in investing in this key U.S. offshore area.
    Preliminary studies estimate that the U.S. Extended Continental 
Shelf likely totals 1 million square kilometers and could contain 
resources worth billions--if not trillions--of dollars.
    The U.S. Geological Survey estimates that about one quarter of the 
world's undiscovered oil and natural gas lies beneath Arctic waters 
alone, and there is also the possibility of high yields of oil and gas 
in the Extended Continental Shelf off of our Atlantic and Pacific 
coasts. Modern technology makes it possible today to access these 
resources. With the right leadership and vision, we can take control of 
our energy future.
    The Law of the Sea Convention provides the certainty that companies 
need to invest the billions required and offers the potential of 
greatly and definitively broadening the offshore areas from which we 
can access new resources to meet our Nation's growing energy needs. It 
will lead us to a greater energy future, with more jobs, more economic 
growth, higher government revenues, and enhanced energy security.
    Companies spend billions annually looking for and producing oil and 
natural gas around the world. From 2009 to 2011, the industry spent 
over $600 billion in U.S. drilling and exploration activities. They 
make these substantial investment decisions by weighing carefully the 
level of risk against the potential for returns on investment.
    Because the industry must plan, invest and operate under long lead 
times, it is crucial that government policies including our tax 
framework encourage investment and provide certainty for business 
planning so that companies can manage their financial risk over the 
lifetime of the investment.
    The Convention provides a clear, objective means of asserting U.S. 
authority and gaining international recognition of that authority, 
reducing the potential for jurisdictional conflicts between nations.
    With greater certainty and the predictability provided by the Law 
of the Sea Convention, industry will have greater incentive to fully 
take advantage of the significant advances in technology that allow us 
to extend operations into areas once considered out of reach or 
uneconomical. Indeed, the Convention would provide a significant 
incentive for industry to continue to develop the technology to push 
into even deeper waters in frontier areas.
    Given the rapid economic and political changes sweeping the world, 
the U.S. can no longer afford to be left out of the process. U.S. 
accession would ensure that American companies that are engaged in 
offshore energy production remain competitive in the global market. 
And, as companies that take their responsibility to their shareholders 
seriously, they are more likely to invest in projects they believe have 
the greatest certainty in their operations and the highest returns 
possible.
    As advances in technology push us further from our shores and into 
areas of harsher climates, the potential for conflicts with other 
nations' territorial claims inevitably increases. As such, there is a 
more pressing need for certainty and stability in the delineation of 
boundaries. Accession to the Convention would fulfill this need.
    In addition, it will give the United States a seat at the table as 
the Commission on the Limits of the Continental Shelf continues the 
process of dividing up millions of square miles of offshore territory 
and assigning management rights to all of the world's marine 
resources--a process that has been described as ``probably the last big 
shift in ownership of territory in the history of the Earth.''
    Today there is no American official, no American geoscientist, 
sitting at the table while this important work progresses. We can't 
emphasize strongly enough that the United States cannot afford to be 
left out of this process.
    The Convention broadens the definition of the Continental Shelf in 
a way that significantly favors the United States with its broad 
continental margins, particularly in the North Atlantic, Gulf of 
Mexico, the Bering Sea, and the Arctic Ocean. In the case of the United 
States, this secures an additional 4.1 million square miles of ocean 
under U.S. jurisdiction. That's more than 3 billion acres--an area that 
is larger than the U.S. land area.
    It should come as no surprise that our companies are interested in 
taking advantage of the resources in those areas beyond 200 miles--
again, on behalf of their shareholders and the millions of jobs they 
support--in ways that continue to demonstrate environmentally sound 
drilling development and production technologies. Offshore petroleum 
production is a major technological triumph.
    We now have development projects located in water depth in the Gulf 
of Mexico that not too long ago few thought possible.
    New technologies are allowing oil explorers to extend their search 
for new resources of oil and gas out to and beyond 200 miles for the 
first time, providing the potential for the largest discoveries in a 
generation to be made in field sizes not even imagined before.
    We need to get on with the mapping work and other analyses and 
measurements required to substantiate the extent of our shelf, and some 
of the best technology for accomplishing this resides in the United 
States. Establishing the continental margin beyond 200 miles is 
particularly important in the Arctic, where there are already a number 
of countries vying to expand their offshore jurisdictional claims.
    Such features as the Chukchi Plateau and component elevations, 
situated to the north of Alaska, could be claimed by the U.S. under the 
provisions stated in the Law of the Sea Convention. U.S. companies have 
a clear interest in setting international precedents by being the first 
to operate in these frontier areas--and to continue demonstrating 
environmentally sound drilling development and production technologies.
    The Convention will increase certainty in a significant manner and 
will in turn make it much easier to decide to invest billions of 
dollars in future operations.
    One other important consideration is our international oil trade. 
U.S. companies are leading participants in the global oil market, and, 
in 2010, about 44 percent of U.S. maritime commerce consists of 
petroleum and petroleum products. Trading routes are secured by 
provisions in the Convention combining customary rules of international 
law with new rights of passage through straits and archipelagoes.
    Accession to the Convention would put us in a much better position 
to invoke such rules and rights. Steady growth in the demand for 
petroleum throughout the world means increases in crude oil and product 
shipments in all directions throughout the globe. The Convention can 
provide protection of navigational rights and freedoms in all these 
areas through which tankers will be transporting larger volumes of oil 
and natural gas.
    From an energy perspective, we see potential future pressures 
building in terms of both marine boundary and Continental Shelf 
delineations and in marine transportation.
    The Law of the Sea Convention will provide the necessary certainty 
and predictability to ensure we have access to another significant 
potential energy resource.
    I know there is considerable concern about royalties and whether, 
as a result of accession to this treaty, our companies would be paying 
royalties to the United Nations or another international organization.
    While it is true that some royalties (7 percent at most) would 
ultimately be shared with the International Seabed Authority (ISA)--an 
independent intergovernmental body established by the Convention, and 
not part of the U.N.--the U.S. would still retain all bonus bids, 
annual rental fees, and most of the royalties from these leases. A 
company would make all payments to the U.S. Government and then it 
would be the responsibility of the U.S. Government to share this 
royalty with the ISA beginning in the sixth year of production.
    Over the last 10 years, oil and natural gas companies have paid to 
the U.S. Treasury more than $70 billion to conduct offshore exploration 
and production activities. They have paid $15 billion in bonus bids, 
$2.2 billion in rentals, and $54 billion in royalties. As I mentioned 
earlier, just last week, at the lease sale conducted in the Central 
Gulf of Mexico, the U.S. oil and gas industry paid $1.7 billion in 
bonus bids to the U.S. Government in order to secure rights to develop 
those resources.
    If that lease sale had been conducted on our Extended Continental 
Shelf after U.S. accession to the Convention, the U.S. would still 
receive all of those bonus bids in addition to all annual rental 
payments prior to production and all royalties from the first 5 years 
of production. It is only in the sixth year of production that the U.S. 
would begin to share a small portion of its royalties with the 
International Seabed Authority.
    We recognize that the royalty sharing provision is a tradeoff for 
the certainty that the Convention will provide and the vast economic 
returns that the U.S. will realize through development of its Extended 
Continental Shelf. But without the certainty provided through the 
Convention, the likelihood of companies investing will decrease, and 
the United States would likely collect little to no bonus bids, 
rentals, or royalties at all with regard to the Extended Continental 
Shelf.
    Our industry also understands that there are concerns with regard 
to the development of the implementation policies and procedures for 
the Convention, particularly with regard to how the International 
Seabed Authority might spend the royalties it receives. But we believe 
that is precisely why the Senate must approve this treaty.
    Accession to the Convention now would allow the United States to 
participate in the drafting of these procedures and provide a leading 
voice in how the royalty funds are used. We cannot influence the 
process and ensure that our concerns are addressed if we are not 
sitting at the table.
    Once the policies and procedures of the ISA have been established, 
the U.S. would have a permanent seat on the ISA Council with the power 
to block adoption or modification of all major rules, regulations and 
procedures. Specifically, this would include the distribution of funds, 
the development of economic adjustment programs, and amendments to the 
seabed mining provisions of the Convention. In short, no money could be 
spent without the complete and total agreement of the United States. 
The implementation details are being hashed out today, and the 
negotiations are being conducted without us.
    Without accession to the Convention, the United States cannot be a 
part of those discussions, and if we're not part of those discussions, 
we have no input on how the Convention will be implemented and we have 
no say on how the royalty funds are used, including royalties paid on 
production from other nations' Extended Continental Shelf.
    In short, with a seat at the table of the International Seabed 
Authority's Council, the United States would not only be able to 
exercise leadership in the expenditure of this money, it would also 
have veto power to block expenditures it disagrees with. We believe the 
Law of the Sea Convention offers the United States the chance to 
exercise needed leadership in addressing these pressures and protecting 
the many vital U.S. ocean interests.
    If the United States were not to become a party to the Convention, 
it could negatively affect opportunities to lay claim to vitally needed 
natural resources in the Arctic and areas where other countries--
Russia, for instance--have already made submissions with respect to the 
outer limit of their Continental Shelf.
    Today, the United States does not participate--even as an 
observer--in the Commission on the Limits of the Continental Shelf. We 
are watching from the outside as the guidelines and protocols for 
conduct on the world's oceans are developed and as certain provisions 
of the Convention are implemented.
    Over the past few years, our industry has made great strides in 
providing more of the energy our Nation's consumers and our Nation's 
economy need. As our economy improves, we will need even more energy 
from all sources. We are a technology-driven industry that has been 
able to create jobs throughout the economic downturn. Greater access to 
dependable, domestic resources for exploration and production is the 
cornerstone of our energy future.
    Accessing the resources in the Extended Continental Shelf would be 
available to us under this Convention would also mean more money in the 
Federal Treasury through royalties, leases, bonus bids and tax revenue. 
With certainty of access to additional offshore areas, our government 
could see much more in revenue and our economy would see more jobs and 
more growth.
    Ultimately, these are components that collectively will lead to 
greater national security.
    The oil and natural gas industry has been a bright spot in our 
troubled economy, accounting for 3 percent of all jobs created since 
2009, while boosting America's manufacturing industries and 
revitalizing communities.
    As an industry, we have looked at the Convention from a business 
perspective and supported it through the past several administrations--
under both Republicans and Democrats. Our position is one that we have 
held for over 15 years.
    The American oil and natural gas industry is ready to step up to 
the plate, but in order for it to succeed, it must be allowed to play 
on a level international playing field.
    The Law of the Sea Convention will go a great distance to provide 
us that level playing field.
    It is good for our Nation, and we urge this committee and the 
Senate to give its approval.

    The Chairman. Thanks very much, Mr. Gerard.
    And Mr. Timmons, just before you do start, let me just say 
in response to your expressed hope that the Congress is going 
to--
that the Senate is going to make sure that we protect and 
address any of those concerns that exist, I want to again say 
to my colleagues that we will have a set of specific 
declarations and understandings that clarify some of the 
concerns that have been raised by people as we have gone along 
here.
    So there will be crystal clarity with respect to issues 
raised about tax or jurisdiction, et cetera, and that will be 
taken care of in this.
    Mr. Timmons.

    STATEMENT OF JAY TIMMONS, PRESIDENT AND CHIEF EXECUTIVE 
 OFFICER, NATIONAL ASSOCIATION OF MANUFACTURERS, WASHINGTON, DC

    Mr. Timmons. Well, thank you very much, Mr. Chairman, 
Senator Lugar, and members of the committee, for the 
opportunity to speak about the Law of the Sea Treaty, which is 
vital for both our national security, as well as our economic 
security.
    The National Association of Manufacturers is the Nation's 
largest manufacturing trade association, and we represent 
12,000 manufacturers of all sizes across our country. I am 
pleased to add the voice of manufacturers in support of the 
adoption of the Law of the Sea Treaty because its approval is 
absolutely critical for manufacturers' ability to compete and 
succeed in the global marketplace.
    One key to manufacturing growth and competitiveness is 
exports. Ninety-five percent of the world's consumers live 
outside of the United States. So reaching these potential 
customers is absolutely necessary for manufacturing 
competitiveness.
    Most significantly, it is 20 percent--20 percent--more 
expensive to manufacture in the United States than it is among 
our major trading partners, and that is after you remove the 
cost of labor. This treaty will help reduce the cost of 
manufacturing in two very important ways.
    First, it will provide new opportunities, as you have heard 
from my colleagues here, for energy exploration. Secure and 
reliable sources of energy are a significant concern for 
manufacturers, which consume one-third of our Nation's energy 
output.
    And second, it will open up access to critical inputs for 
many manufacturing applications. If you use a cell phone or a 
computer or drive a hybrid car, chances are that components of 
that product contain what are known as rare earth minerals. 
Rare earths are the basic inputs in the production process for 
many items, such as renewable energy products, defense 
products, consumer electronics, and others.
    Today, as was noted by the chairman, China produces upward 
of 95 percent of the world's supply of rare earth minerals. 
Brazil, India, Malaysia, and Canada are the remaining sources. 
And while China uses 60 percent of the rare earths that it 
mines today, there is no doubt that it will likely use all of 
that that it produces eventually.
    Now, if that happens, that is going to jeopardize 
manufacturers' access to these materials. Costs will rise, as 
they have been, not only on manufacturers, but also on 
consumers. The economy will suffer, and more jobs will be in 
jeopardy.
    The United States has an opportunity to tap a new source of 
rare earths and avoid this scenario, but first we need to 
ratify the Law of the Sea Treaty. The development of resources 
in and on the deep seabed is incredibly expensive, as you might 
imagine. Companies in the United States are unlikely to invest 
heavily in deep seabed mining because of the risk of legal 
challenges to their activities.
    Today, many U.S. companies have the means to explore and 
develop these resources and minerals, but they will only do so 
if there is a structure in place that contains internationally 
recognized agreements. Ratification of the treaty will give 
companies the certainty that they need to begin to develop 
these resources.
    Foreign mining companies whose governments have joined the 
Convention have access to the international bodies that grant 
the legal claims to operate in the deep seabed area. U.S. 
companies are currently excluded from those bodies simply 
because we have not adopted the treaty.
    Manufacturers cannot afford for the United States to sit on 
the sidelines when it comes to the Law of the Sea Treaty. We 
are in a global economy, and countries are working feverishly 
to take away our mantle of economic leadership. To strengthen 
manufacturing in the United States and maintain our economic 
position, we need to adopt policies that promote long-term and 
sustained economic growth.
    Manufacturing in the United States employs over 12 million 
Americans with high-paying jobs, and the sector supports 5 
million more jobs in this country. No doubt everyone in this 
hearing room would like to see those numbers grow. A strong and 
prosperous country needs a strong manufacturing sector, and 
this treaty will strengthen manufacturing, and it will 
strengthen our Nation.
    Thank you again for the opportunity to speak with you 
today.
    [The prepared statement of Mr. Timmons follows:]

                   Prepared Statement of Jay Timmons

    Thank you, Chairman Kerry and Ranking Member Lugar, for holding 
this hearing and including the business community in your deliberations 
on an issue that is vital to our national security and our global 
economic competitiveness.
    I am pleased to appear before this committee to discuss the U.N. 
Convention on Law of the Sea and its importance for America's 
manufacturers. I am Jay Timmons, president and CEO of the National 
Association of Manufacturers (NAM). The NAM is the Nation's largest 
industrial trade association, representing small and large 
manufacturers in every industrial sector and in all 50 States. Our 
membership includes both large multinational corporations and small and 
medium-sized manufacturers.
    Our charge at the NAM is to promote policies that make the United 
States the best place in the world to manufacture.
    It's no surprise then that ratification of the Law of the Sea 
Treaty is a priority for many of the NAM's members. Its adoption is 
critical for manufacturing competitiveness in the United States.
    While my testimony will focus primarily on mineral development on 
the deep seabed, that is not the only reason for the urgency in 
adopting this treaty.
    In today's global economy, exports are more important than ever. 
Ninety-five percent of the world's consumers live outside the United 
States, so reaching these potential customers is critical for 
manufacturing competitiveness.
    This treaty will secure international lanes of commerce and ensure 
that manufacturers can export their products efficiently. It protects 
our sovereign interests and promotes international commerce.
    Secure shipping lanes are a priority for NAM members. Last year, 
cargo ships and other ocean liners carried $570 billion of U.S. 
exports. Discounting our exports to Mexico and Canada, which travel by 
rail and truck, this total accounts for more than 50 percent of our 
exports by value and more than 90 percent of our exports by weight.
    And, with global commerce comes the need for global communication. 
The telecommunications industry needs the Convention to expand the 
right to lay and maintain submarine cables in the oceans of the world 
and provide stronger protections for cables against damage by other 
parties.
    We can also strengthen manufacturing by ensuring that manufacturing 
in the United States is cost competitive. Currently, it is 20 percent 
more expensive to manufacture in the United States than it is among our 
major trading partners.
    This treaty will help reduce the cost of manufacturing in two 
important ways.
    First, it will provide new opportunities for energy exploration. 
Secure and reliable sources of energy are a significant concern for 
manufacturers, which consume one-third of the energy produced in the 
United States.
    Energy companies need the certainty the Convention provides in 
order to explore beyond 200 miles and to place experts on international 
bodies that will delineate claims in the Arctic.
    And next, it will help reduce manufacturing costs by opening up 
access to critical inputs used in many manufacturing applications.

             RARE EARTH MINERALS ARE VITAL TO MANUFACTURING

    Manufacturers in the United States require access to basic inputs 
for the production process in order to become and remain competitive in 
the global economy. As manufacturing grows more high tech, ``rare 
earth'' minerals are becoming increasingly important to manufacturers 
and their supply chains. Rare earth minerals consist of 17 elements 
that are important for numerous manufacturing applications, including 
in the production of chemicals, defense products, consumer electronics, 
wind turbines, hybrid car batteries and other renewable energy 
products. They are also used as catalysts for petroleum refining.
    Until a decade ago, the United States was 100 percent self-reliant 
for rare earth production, with domestic companies producing enough to 
supply U.S. manufacturers. Over time, however, U.S. production was 
halted as it became economically and environmentally cost prohibitive.
    Companies in various countries--including the United States--are 
looking at reopening closed mines and developing new deposits, but 
these efforts could take a number of years to fully come on line.
    The deep seabed offers a new opportunity for the United States to 
gain steady access to these vital rare earth minerals. Polymetallic 
nodules are located on the deep ocean floor. These nodules typically 
contain manganese, nickel, copper, cobalt and rare earth minerals. 
However, U.S. companies cannot actively pursue claims in the areas 
where these nodules are dense unless the United States ratifies the Law 
of the Sea Treaty.

                        DEEP SEABED DEVELOPMENT

    There is no doubt the world is very different today. We are a 
global economy, and countries are working feverishly to take our mantle 
of economic leadership away from us.
    Deep seabed mining is an emerging global industry and, indeed, a 
key ingredient to economic growth and competitiveness. We have 
companies in the United States with the means to explore and develop 
the resources and minerals on and in the seabeds of international 
waters, but they will only do so if there is a structure that contains 
internationally recognized agreements in place. This treaty will 
institute that legal framework upon which companies--and countries--can 
rely.
    U.S. multinational companies expect other countries to abide by 
international standards and rules in other areas, such as intellectual 
property, counterfeiting, dumping, and international financing. So do 
we. It, therefore, is logical that we would expect the same when 
determining our ability to access the resources of the seabed.
    The Law of the Sea Convention provides the only internationally 
recognized legal regime for extracting mineral resources from the ocean 
floor in the deep seabed, an area over which no country has sovereign 
rights. The International Seabed Authority (ISA) develops the rules, 
regulations, and procedures relating to the deep seabed. The Convention 
guarantees the United States, and only the United States, a permanent 
seat on the decisionmaking Council of the ISA--with an effective veto 
over decisions impacting U.S. interests.
    The development of deep seabed claims is incredibly expensive. 
Companies in the United States are reluctant to invest heavily in deep 
seabed mining because of the risk that their activities would not 
withstand a legal challenge since the U.S. is not a party to the 
Convention. Conversely, foreign companies, because their governments 
have joined the Convention, have access to the international bodies 
that grant the legal claims to operate in the deep seabed area. The 
U.S. cannot represent the interests of its companies in those bodies.
    Lockheed Martin, for example, has two deep seabed claims that 
predate the Law of the Sea Convention. It has continued to extend its 
licenses through the National Oceanic and Atmospheric Administration 
(NOAA). These claims will be instantly recognized by the International 
Seabed Authority (ISA) if the U.S. joins the Convention. However, 
without the U.S. becoming a party to the Convention, Lockheed Martin is 
unable to secure U.S. sponsorship of these claims at the ISA.

                    CHINA'S DOMINANCE OF RARE EARTHS

    Our Nation's ability to access rare earth minerals may be the most 
pressing economic security issue we face.
    Today, a single country--China--holds a virtual monopoly on the 
mining and production of rare earth elements. China produces more than 
90 percent of the world's supply and also consumes roughly 60 percent 
of that supply. Brazil, India, Malaysia, and Canada are the other 
sources of the remaining paltry supply of rare earths.
    China recently imposed significant export restrictions on its rare 
earth production. In 2010, it announced it would cut exports of rare 
earth minerals by 40 percent by 2012. Just last week, Chinese officials 
released a white paper defending the country's export control 
restrictions on rare earths. Earlier this year, the United States 
joined with Japan and the European Union to file complaints with the 
World Trade Organization (WTO) over China's export policies on rare 
earths. Experts believe China may eventually consume 100 percent of the 
rare earth minerals that it produces, jeopardizing U.S. manufacturers' 
access to these materials and, at the very least, significantly driving 
up costs for companies that use these minerals. These increased costs 
would impose significant and detrimental costs on the many millions of 
consumers who use these products and could have a profound negative 
impact on U.S. national security.
    At the same time, the Chinese are accelerating their own deep 
seabed mining efforts. They have increased government funding for 
seabed mining, and the government announced a $75 million national deep 
sea technology base in 2010. China is also expanding its engagement 
with the ISA, where it secured one of the four ISA exploration licenses 
issued in 2011. The Chinese can boast more than 20 years of sustained 
technical and political efforts to develop the deep seabed, funded by 
the government.
    A close look at the map of claims in the Clarion Clipperton Zone 
(CCZ), a location in the Pacific Ocean that is rich with rare earths, 
shows active claims by China, Japan, and Russia ``planting their 
flags,'' so to speak. Recently published reports have indicated that 
the Chinese are actively surveying other claim areas in the CCZ, 
including those of the United States. Russia, Tonga, and Nauru were 
also granted deep seabed mining licenses by the ISA last year. At last 
count, the ISA has 17 pending or completed applications for 
exploration--up from just 8 in 2010.
    Only ratification of the Law of the Sea Convention and engagement 
with the ISA will provide a sufficient mechanism to secure 
international recognition of U.S.-based claims and rights. 
Manufacturers and consumers will benefit from a more diverse and 
competitive market for rare earths, and deep seabed mining is an 
opportunity for the U.S. to quickly diversify its rare earth sources.

                               CONCLUSION

    Manufacturing in the United States employs 12 million Americans 
with good-paying jobs. The sector supports 5 million more jobs in this 
country. Everyone in this hearing room would like to see those numbers 
grow. A strong and prosperous country needs a strong manufacturing 
sector.
    To strengthen manufacturing in the United States, we need to adopt 
policies that make our country more competitive in the global 
marketplace by reducing the cost differential we face with our economic 
competitors. Other nations are actively seeking to knock us from our 
mantle of economic leadership, yet, too often, we remain on the 
sidelines. Manufacturers can't afford for the United States to sit on 
the sidelines when it comes to the Law of the Sea Convention.

    The Chairman. No, thank you very much, Mr. Timmons. We 
appreciate it.
    Mr. McAdam.

  STATEMENT OF LOWELL C. McADAM, CHAIRMAN AND CHIEF EXECUTIVE 
      OFFICER, VERIZON COMMUNICATIONS, INC., NEW YORK, NY

    Mr. McAdam. Thank you, Mr. Chairman, Ranking Member Lugar, 
and members of the committee. Thank you for the invitation to 
speak before the committee today.
    I would ask that my full remarks be entered into the 
record.
    The Chairman. Without objection, they will be.
    Mr. McAdam. So far today, you have heard a broad 
perspective from my esteemed colleagues on the Law of the Sea. 
What I would like to do is discuss ways that the Convention 
will strengthen protection for a global undersea cable network 
operator. My views are based on more than 20 years in the 
telecommunications industry, during which time I have helped 
build both fixed and mobile networks domestically and 
internationally.
    As a major communications company utilizing the 
international seabed to provide voice, video, Internet, and 
data services over a network of more than 80 submarine cables, 
Verizon supports the U.S. ratification of the Law of the Sea 
Convention. Fiber optic submarine cables are the lifeblood of 
U.S. carriers' global business and the digital trade route of 
the 21st century.
    Aside from our land-based connections with Canada and 
Mexico, more than 95 percent of international communications 
traffic travels over 38 submarine cables, each roughly the 
diameter of a garden hose. Without these cables, current 
satellite capacity could carry only 7 percent of the total U.S. 
international traffic.
    Any disruption to the global submarine network can have a 
significant effect on the flow of digital information around 
the world, as well as an impact on the world economy. As one 
official from the Federal Reserve noted in referring to 
submarine cable networks, ``when communications networks go 
down, the financial sector does not grind to a halt. It snaps 
to a halt.''
    There must be an appropriate legal framework based upon 
global cooperation and the rule of law to protect submarine 
cables. The Convention provides this necessary framework in 10 
provisions applicable to submarine cables. These provisions go 
beyond existing international law to provide a comprehensive 
international legal regime for submarine cables wherever they 
are deployed.
    Several incidents recently underscore the urgent need for a 
clear and unambiguous framework protecting this vital 
communications infrastructure. First, some nations have 
attempted to encroach on the ability of U.S. operators to 
deploy, maintain, and repair undersea cables. This is in 
violation of the Convention. With a seat at the table, the 
United States can more effectively oppose these types of 
foreign encroachments on restrictions and enforce the 
Convention's freedoms to lay, maintain, and repair undersea 
cables.
    Second, ratification of the Convention will help U.S. 
companies better contend with disruptions to undersea cables. 
For example, in March 2007, large sections of two active 
international cable systems in Southeast Asia were heavily 
damaged by commercial vessels from Vietnam and taken out of 
service for about 3 months.
    More than 106 miles of cable were removed from the seabed 
and repaired at a significant cost. It would have been very 
helpful if the United States, as well as affected U.S. 
companies, including Verizon, had been able to use the 
Convention to compensate cable owners, arbitrate disputes over 
service disruptions, and deter future violations.
    Finally, the Convention will help the U.S. Government and 
affected companies respond when countries attempt unlawfully to 
require licenses or permits before submarine cables can be laid 
or repaired. As an example, Verizon is a co-owner of the 
Europe-India Gateway submarine cable system, which passes over 
the Continental Shelf claimed by Malta but never enters Malta's 
territorial seas.
    Even though the Convention allows for such transit without 
interference by coastal nations, Malta's resources authority 
has threatened legal action if the cable operators do not 
obtain a license and pay a significant fee. Not only do these 
fees add unforeseeable cost on existing undersea cable systems, 
they raise the specter of coastal nations imposing similar 
requirements for the sole purpose of raising revenue at the 
expense of the cable operators and owners.
    By signing on to the Convention, the United States will 
have an enhanced ability to effectively support American 
parties to such disputes and enforce the treaty's expressly 
stated freedom to lay and maintain submarine cables in 
international waters without tolls, taxation, or fees levied by 
coastal states.
    Once the United States is party to the Convention, Verizon 
and other U.S. telecommunications companies can work with the 
appropriate U.S. agencies to enforce the freedoms to lay and 
repair cables, saving millions of dollars over the life of a 
cable system. This Convention will improve the reliability of 
our critical infrastructure and put U.S. companies on a level 
playing field for operating international cable systems.
    In conclusion, Senate ratification of the Convention will 
provide confidence to U.S. companies that their undersea 
submarine cable investments are protected by more specific and 
reliable international law. The Convention will provide 
tangible benefits to the United States through specific new 
protections for critical submarine cable infrastructure. 
Verizon urges the Senate to ratify the Convention.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. McAdam follows:]

                 Prepared Statement of Lowell C. McAdam

    Mr. Chairman and members of the committee, it is an honor to appear 
before you today to discuss the United Nations Convention on the Law of 
the Sea. I will discuss the ways that the Convention will strengthen 
protection for the global undersea cable networks on which our economy 
and national security rely.
    My views are based on my more than 20 years in the 
telecommunications industry, during which I have helped build fixed and 
mobile networks in the United States and other regions of the world.
    As a major communications company utilizing the international 
seabed, Verizon supports the U.S. ratification of the Law of the Sea 
Convention.
    Verizon is a global leader in delivering broadband and other 
wireless and wireline communications services to consumer, business, 
government and wholesale customers in more than 150 countries and for 
all of the Fortune 500 Companies. We deliver these services over a 
network circling the globe and supported by more than 80 submarine 
cable systems.
    Fiber-optic submarine cables are the lifeblood of U.S. carriers' 
global business. Aside from our land-based connections with Canada and 
Mexico, more than 95 percent of U.S. international traffic--voice, 
video, Internet and data--travels over 38 submarine cables, each the 
diameter of a garden hose. Without these cables, current satellite 
capacity could carry only 7 percent of the total U.S. international 
traffic.
    Fiber-optic submarine cables are the international digital trade 
routes of the 21st century. And thus, any disruptions to the submarine 
cable global network can have significant impact on the flow of digital 
information around the world, with severe consequences for the world 
economy. As one official from the Federal Reserve noted in referring to 
submarine cable networks, ``When the communication networks go down, 
the financial sector does not grind to a halt, it snaps to a halt.'' 
\1\
---------------------------------------------------------------------------
    \1\ Stephen Malphrus, ``Keynote Address,'' ROGUCCI Summit, Dubai, 
U.A.E., October 19, 2009.
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    Given their importance to global networks and the world economy, 
there must be an appropriate legal framework based upon global 
cooperation and the rule of law to protect submarine cables. The 
Convention provides this necessary framework in 10 provisions 
applicable to submarine cables, going beyond existing international law 
to provide a comprehensive international legal regime for submarine 
cables wherever they are--whether in territorial seas, in Exclusive 
Economic Zones 
(or ``EEZ''), on Continental Shelves, or on the high seas. Once the 
Convention is ratified, the United States Government will be able to 
insist on compliance by other nations with these protections. Several 
recent events underscore the urgent need for a clear and unambiguous 
framework for protecting this vital communications infrastructure.
    First, some nations have attempted to encroach on the ability of 
U.S. operators to participate effectively in the deployment, 
maintenance, and repair of undersea cables. To oppose these types of 
foreign encroachments or restrictions effectively, the United States 
must have a seat at the table where it can enforce the Convention's 
freedoms to lay, maintain, and repair undersea cables.
    Second, ratification of the Convention will also help U.S. 
companies better contend with disruptions to undersea cable service. 
For example, in March 2007, large sections of two active international 
cable systems in Southeast Asia were heavily damaged by commercial 
vessels from Vietnam and taken out of service for about 3 months. More 
than 106 miles of cable were removed from the seabed and repaired, at a 
cost of more than $7 million. It would have been very helpful if the 
United States, Verizon, and other affected U.S. companies had been able 
to use the Convention to compensate cable owners, arbitrate disputes 
over service disruptions, and deter future violations.
    Third, the Convention will also help the United States Government 
and international companies respond when countries attempt to 
unlawfully require licenses or permits before submarine cables can be 
laid or repaired. As an example, Verizon is one of the co-owners of the 
Europe India Gateway submarine cable system, which passes over the 
Continental Shelf claimed by Malta but never enters Malta's territorial 
seas. Even though the Convention allows for such transit without 
interference by coastal nations, Malta's Resources Authority has 
threatened legal action if the submarine cable operators do not obtain 
a license and pay a fee. Not only do these fees add unforeseeable costs 
on existing undersea cable systems, they raise the specter of coastal 
nations imposing similar requirements for the sole purpose of raising 
revenue at the expense of the cable owners. By signing on to the 
Convention, the U.S. will have the discretion to add its diplomatic 
efforts in the ongoing dispute with Malta and enforce the treaty's 
expressly stated freedom to lay and maintain submarine cables in 
international waters without tolls, taxation or fees levied by coastal 
States.
    Finally, the Government of India imposes onerous requirements on 
cable ships outside its territorial seas, including submarine cable 
repair ships. India requires cable ships to enter one of its ports for 
a security inspection, which triggers a customs bond against the value 
of the ship and any cable being carried. Although the bond may be 
repaid at the end of the repair, other fees are not. Getting a permit 
can take more than 3 months. The net result: India has become one of 
the most expensive places to maintain and repair submarine cables, with 
unnecessary costs running to the millions of dollars.
    Once the United States is a party to the Convention, Verizon, and 
other U.S. telecommunications companies can work with the appropriate 
U.S. agencies to enforce, when necessary, the freedoms to lay and 
repair cables on the Continental Shelf and the EEZ--saving millions of 
dollars over the life of a cable system, improving the reliability of 
our critical infrastructure, and putting U.S. companies on a level 
playing field for operating international cable systems.
    If the Congress fails to act to ratify the Convention, U.S. 
companies will continue to operate at a disadvantage vis-a-vis our 
global counterparts, indeed having to work through our international 
providers and their respective governments to seek protection of their 
submarine cable infrastructure under the Convention.
    In conclusion, Senate ratification of the Convention will provide 
confidence to U.S. companies that their undersea submarine cable 
investments are protected by more specific and reliable international 
law. The Convention provides tangible benefits to the United States 
through specific new protections for critical submarine cable 
infrastructure. Verizon urges the Senate to ratify the Convention.

    The Chairman. Well, thank you very much, Mr. McAdam. I 
really appreciate that.
    I apologize for having had to step out just for a minute. I 
think you will be able to tell your grandchildren that while 
you were speaking, history was being made. It is just that it 
wasn't exactly your speech that made it. [Laughter.]
    Mr. McAdam. Wouldn't be the first time.
    The Chairman. But it is my understanding--I don't have the 
full story here. I think Tom also got a message, if I am 
correct. But I think the entire ACA was upheld, with the 
exception of the Federal Government's power to terminate 
Medicaid funds. That was very narrowly drawn.
    But otherwise, that is what I understood. Is that what you 
understood, Tom?
    Mr. Donohue. Yes. This is very complicated. First of all, 
the individual mandate was found to be a tax. And it appears, 
and I have very little information--we had talked about this--
that the Chief Justice moved to the other side so that he could 
write the opinion, and I think the opinion is going to be very 
interesting to read. And so, we probably none of us want to say 
anything for the next half hour.
    The Chairman. I think that is pretty accurate. We will wait 
and get a readout at the appropriate time.
    But let me come back, if we can, to the importance of what 
is being said here. And I think your statement today, Mr. 
McAdam, actually is a very, very important one because I don't 
think a lot of people have focused on the extent to which an 
entire society--defense industry, finance, banking, all of 
this--is wrapped up in the movement of information and the 
degree to which the ability to protect that is obviously very, 
very significant.
    And to have rights with respect to it that are clear is 
obviously critical with respect to any kind of dispute and/or 
intervention by someone, by a terrorist group or by a nation 
state. And obviously, one could envision any such intervention 
taking place in the world we are living in today. So I 
appreciate what you have said.
    And it raises the larger question that I want to ask all 
four of you. Some of the folks who have raised questions about 
the treaty--and we don't challenge anybody's right to do that. 
Obviously, there are different opinions here about these 
things. But they have argued that companies, that there is 
nothing to bar you from just going out. Just to go out and do 
what you want to do.
    They argue that you can drill for oil and gas in the 
extended shelf, that you can mine the deep seabed, you can fix 
your cables. Just go do it, and if there are any problems, we 
will just use the U.S. Navy and U.S. military power to protect 
those operations.
    Now I am not going to go into any of the questions raised 
about war powers resolution, the politics of war, any of that. 
Just give us the practicalities. What does that approach do for 
your ability to, in fact, go out and do it, if anything? Could 
each of you respond to that?
    Maybe you want to start, Mr. Gerard?
    Mr. Gerard. Surely. I think in simple terms, Senator, the 
thing to remember is the word ``certainty.'' And as you quoted 
earlier, Marvin Odum, chairman of Shell in the United States, 
made a simple comment. And he said without certainty, the risk 
is too high.
    And fundamentally, from an oil and gas perspective, that is 
what we looked at. We go through political calculation, risk 
calculation on every project. And if there is question as to 
who has that right or who owns that land or who has access, we 
might be able to have a theoretical conversation about what the 
U.S. Navy can or cannot do, but we are talking billions of 
dollars of investment.
    One quick anecdote, Senator, that you might appreciate. 
Shell Oil is moving, hopefully, to the Arctic, even as we 
speak. A few days ago, they just released two of their vessels 
from the Seattle region, headed up to the Arctic.
    They are in the fifth year of a permit. They have invested 
$4 billion. That is a ``B,'' $4 billion. And hopefully, this 
summer, they will get their first permit for their first drill 
hole.
    So when we talk about investments, we are talking about 
multibillion dollar efforts here. So unless we have certainty 
and know who has got the right claim, who controls that area, 
our money will not go there, and I think Marv Odum made that 
quite clear in his statement.
    The Chairman. Yes. Mr. Donohu.
    Mr. Donohue. Let me state for 1 minute, Mr. Chairman, on 
the issue of capital that it takes--whether it is to dig up 
rare earth minerals or whether it is to go for oil and gas or 
whether it is to make other advances, capital doesn't come if 
it isn't safe. Money goes where it is safe, where it can be 
profitable, and where it is protected.
    And so, when we are talking about certainty, we are talking 
about a form of protection that we know we can get the permits, 
we can do our business. And by the way, of course, we can 
always say we have a great Navy, even though we are shrinking 
the size of the Navy and we haven't done sequestration yet and 
all of that sort of thing.
    I think it is a lot cheaper. I think it is a lot smarter. I 
think it is a lot more credible in the courts of the world to 
be a party to this treaty. And I think we must keep sight of 
the fact that when you are on the inside, you can do something 
about it. When you are on the outside, are you just going to 
tell them we have great massive Navy power, and we are going to 
go do what we want to do?
    If it ever came to that, of course we can. But I think it 
is important. We are going to have competition for these areas. 
If we don't lay a claim to these extended areas, there are lots 
of other people. As you mentioned, I think it was you, in the 
Arctic, we have got the Russians. We have got--the Chinese will 
be there. Everybody is up there. Everybody wants to get in on 
the deal.
    Well, why don't we just put our footprint there? All we 
have to do is put this treaty in place with the adjustments 
that should be made, put our people there, and lay claim to 
what is rightly the resources of this country.
    The Chairman. Anybody else want to? You don't need to. Yes, 
Mr. Timmons.
    Mr. Timmons. Well, 161 other countries would likely not 
recognize our claims if we are not a part of the treaty and 
they are. The world is a very different place today than it was 
40 years ago. We are a global economy. We compete 
internationally. We are competing for those 95 percent of 
consumers who live outside of the borders of the United States.
    Many of the companies that would be able to invest and take 
advantage of the resources of the deep seabed are international 
in nature, and they have operations in other countries. And 
through commitments and treaties, they rely on other countries 
to follow the rules. Whether it be in areas like dumping or IP 
protection or financing, these other countries--or these 
companies will want to follow the rules as well, or they simply 
will not invest.
    The Chairman. Now let me ask you one other question with 
respect to this. That we are hearing from some people--we are 
hearing from some people that this may be a back door way of 
enforcing the climate change treaty, something like the Kyoto 
Protocol.
    Now I know we have had many discussions, Mr. Donohue, about 
that. We have worked together on some energy stuff. I know the 
Chamber's and other people's concerns about costs being dumped 
on you that you can't handle and make you noncompetitive. And 
that has been a major issue as we wrestle with how to deal with 
these things.
    So I will ask each of you the very same question. Do you 
have any concern that joining the Law of the Sea is going to 
require the United States to somehow be mandated into the Kyoto 
or any other climate change agreement?
    Mr. Donohue.
    Mr. Donohue. Well, if you read what seems to be the 
treaty's environmental interests, we have met all of them. All 
of them, period. And if we were a party to the treaty and 
inordinate or particularly inappropriate climate demands were 
made on us, we would have the ability to veto it. Veto it. It 
takes one veto.
    The Chairman. Let me ask you--yes, Mr. Timmon.
    Mr. Donohue. You tell me how you think that is wrong, and I 
will be happy to discuss it with you.
    Mr. Timmons. I think that is a very important point that 
Mr. Donohue has just made. We would have the only permanent 
seat on the Seabed Authority, and we would have the right to 
object to any provisions that are put forward.
    That said, there is nothing in the treaty that I have read 
that indicates that we would have to join Kyoto or any other 
treaty of that type. And that is coming from an organization 
that does not support Kyoto and has serious reservations about 
a cap-and-trade regime.
    The Chairman. Some critics have additionally argued that if 
the U.S. joins the Convention, we are going to lose jobs. Does 
the Chamber of Commerce agree with that?
    Mr. Donohue. No. If you expand the economy, if you--and 
many of our jobs in the future are going to come from mining, 
from energy, from trade, and this clearly is a treaty that will 
enhance that, not detract from it. And I believe, as we have 
said publicly not only about this treaty, but about energy, 
mining, and other industries, these are where a lot of the jobs 
of the future are.
    I think it would create jobs.
    The Chairman. Anybody else want to comment on that?
    Mr. Gerard.
    Mr. Gerard. I would just say, Senator, clearly it will be a 
job creator.
    Let me just add one other anecdote, and I know I am raising 
a touchy issue here--Keystone XL pipeline. A lot of people 
don't realize the Keystone XL pipeline has 2,400 U.S. companies 
involved in its development from 49 different States. We have 
only not found someone in the State of Hawaii that is involved 
in the Keystone XL pipeline development.
    So when you look at energy infrastructure, energy 
investments, they are huge job creators, and they occur places 
that you least expect. The multiplier effects in energy, 
particularly in oil and natural gas, are very significant.
    And so, we see nothing but upside through ratification, 
through the accession process to secure those rights, hopefully 
so we can secure the opportunities to develop that resource, 
and it will flow clear across this country in a variety of 
different ways.
    The Chairman. Thank you.
    Yes, Mr. McAdam.
    Mr. McAdam. Yes, Mr. Chairman, I would just point out in 
our industry, telecommunications, the buzz word, No. 1 word is 
``reliability.'' And we invest as a company $16 billion to $17 
billion a year into our networks.
    And we in the undersea cable area in particular invest in 
mesh networks so that we can avoid issues with large storms or 
earthquakes off the coast of Japan. So we invest to get a level 
of certainty for our customers.
    When a nation takes a unilateral action like I referred to 
in my testimony, you can't counter that with another 
investment. So this treaty allows us to have certainty around 
those sorts of unilateral actions and the belief that we can 
resolve any conflict amicably and quickly.
    And so, my view is it will help us with our certainty 
around investments. We will make more investments, and that, in 
turn, will create more jobs.
    The Chairman. My time is up. Let me come back another 
round.
    Senator Lugar.
    Senator Lugar. Thank you, Mr. Chairman.
    I want to pursue some more of the certainty argument. This 
was made by others in earlier hearings of the committee, and 
yet we pursued this during the last hearing with former 
Secretary of Defense Don Rumsfeld, who testified against the 
treaty.
    So I raised the question with Secretary Rumsfeld how he 
would deal with the situation in which American companies were 
testifying, as you have today, that without certainty they 
would not be prepared to invest the billions of dollars that 
are required. Thus, there would not be the creation of the jobs 
nor the degree of energy independence or the other attributes.
    Now his response, and I hope I do justice to it, he 
observed that while businesses always prefer greater certainty, 
they enter into uncertain investments all the time when they 
believe the potential benefits justify the risks. On that 
basis, he suggested United States companies that saw potential 
benefits from deep seabed activities would go right ahead and 
make those investments even if the United States did not ratify 
the Convention because as a practical matter, there is no 
impediment to their doing so outside the Convention rules.
    And second, he observed U.S. companies might consider 
entering into joint ventures with companies from countries that 
are parties to the Law of the Sea Convention. They could, 
therefore, secure rights under the Convention in that way 
without the United States needing to join the Convention 
ourselves.
    Now these were supporting comments in terms of not 
ratifying, and the basic thoughts of the opponents were that we 
are forfeiting sovereignty. We are forfeiting money through the 
royalties and those aspects.
    And finally, that there simply is no reason why we should 
not proceed anyway. We have the greatest fleet on earth. And if 
we are challenged, we have the ability to rebut whoever is 
challenging us.
    So this is repetitious. But nevertheless, these arguments 
have been strongly made. That is the reason we are going 
through these hearings for the third time, not having had 
ratification, starting from 2003 onward.
    How do you respond to Secretary Rumsfeld suggesting that 
after all is said and done, you like certainty, but you take 
risks all the time. And you have to sort of consider what the 
profit may be and proceed, given our fleet and given our 
general stature in the world.
    Mr. Gerard, do you have a thought about that?
    Mr. Gerard. I do. There is risk, and then there is risk, 
Senator Lugar. In this case, there is risk, everyday business 
risk associated with doing business and making risk assessments 
and judgments. Very fundamental to that risk assessment is 
property right--who has right, who doesn't have right. This is 
a very fundamental issue.
    When you go out in the open waters beyond our 200-mile 
nautical mile border today, the risk goes up very 
significantly. I would suggest if the return is that great, 
then there would be people there today, and there aren't.
    To the second point that he has raised is probably correct. 
What will eventually happen is U.S. companies will be forced to 
partner with other nations who have acceded to the treaty--the 
161, I believe, that were mentioned earlier--to find 
opportunities around the globe because they cannot find 
certainty or protect their own interests through U.S. law, 
through U.S. practice. And so, we would find them teaming up 
with the Russians, with the Chinese, and others where their 
preference would be to take the lead and to go alone or to find 
others as their junior partners in assessing and managing this 
risk.
    Senator Lugar. By definition of these partnerships, we 
already divide up the profits, leaving aside the royalties in 
the sixth year.
    Mr. Gerard. Well, that is right. And plus, you are at the 
behest of others in looking for those partners. We have, I 
might say, the best companies in the world, the most 
technologically advanced. We are on the cutting edge of the 
abilities to go out in these deep waters and produce these 
energy resources.
    Wide open risk without any limitation is a clear detriment, 
and as you have heard the people making those decisions in the 
boardrooms, the risk is too high.
    Senator Lugar. How do we deal with this second proposition 
that is being offered? And that is that after all we do have 
the largest fleet, the only fleet that is everywhere. This is 
too bald a statement, but the idea is if there is a problem 
with somebody, you just shoot them up. You just plow right on 
through.
    That people recognize might and so forth. Therefore, all 
this quibbling over the royalties and so forth, we are just 
simply as a nation losing our sense of sovereignty, our sense 
of our ability, really, to manage things. Why doesn't that work 
really in the real world?
    Mr. Donohue. You know, Senator, we are a party to many 
agreements around the world, and there was a lot of opposition 
to them. A lot of people were upset that we went into the WTO.
    What we have found, a single important thing we have found 
it was a way to adjudicate differences between countries. And 
most of the time, the United States has won. On occasions, we 
have lost, and even then, we have ignored some of those things 
to our own detriment.
    But I happen to think--while I have great confidence in the 
military, I happen to think it would be better if we could 
avoid most of the need to confront militarily by joining an 
organization that 161 countries are already in, couldn't all be 
wrong, and having a way to participate vigorously in the 
process.
    Clearly, the amount of money that you are going to pay in 
some sort of royalties or fees is a fraction of what the 
Government is going to make on this deal. And clearly, it would 
be much, much better to find a way to explore these tremendous 
resources without having to do it under the protection of naval 
power.
    I mean, under that argument, we could sail across any--go 
anywhere in the world and pull up with our Navy and say, by the 
way, we are going to dig right here, and maybe your--and those 
people may be claimants to that property because of their 
participation in the treaty. I wouldn't know. But I just think 
the argument that we are the toughest guys on the block is too 
simple. We will just go in there and do what we want is 
probably not the best argument for us to make.
    Mr. McAdam. Senator, if I could just, a couple comments on 
both of your questions here. While we certainly do accept risk 
and we balance that in all of our investments, it is very 
prudent for us to look for opportunities to lower risk wherever 
we can. And this seems like a very reasonable way to do that.
    We do partner with many different companies to do these 
large undersea cable networks that I talked about. And in some 
of the disputes that I have mentioned, we have had to go to 
countries like the U.K. and France and ask them, frankly, to 
carry our water for us. And it seems almost an assault on our 
sovereignty that we have to go do that because we don't have a 
seat at the table.
    For me to try to convince the Navy to go dispatch a 
destroyer to fight over a garden-hose-size cable going into 
another country seems to be a bit of overkill.
    Senator Lugar. Thank you very much.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman. Thanks for having 
this hearing and your diligence in having many of these.
    And thank you, as witnesses, for being here. I know most of 
you well, and I appreciate you being here.
    And I will say that it is a little bit of an out-of-body 
experience to have especially you, Mr. Gerard, in here talking 
about something the administration is doing to help the oil 
industry. I think it is not a pejorative statement to say that 
they have done everything they can to hurt the oil industry.
    The Keystone pipeline that you talked about is a great 
example of this administration basically trying to keep 
something that is in the interest of Americans and American 
jobs from happening, very--it looks like for political reasons. 
And yet, you know, we have had members up here, people up here 
many times talking about this being good for the oil industry.
    So Secretary Clinton was up here talking about the same 
thing. So, as you can imagine, I am sitting up here, it is a 
little bit of an extraordinary experience. And I wonder if you 
could explain to me why you think the administration is working 
so hard to help the oil industry with this treaty, and yet 
domestically doing everything they can to damage it and keep it 
from being productive?
    Mr. Gerard. Well, I appreciate the question, Senator. And 
the irony wasn't lost on me either when I was invited to 
testify.
    But let me just say this. Let me step back, and let us take 
a broader world U.S. view. What we are talking about here is 
the future of the country and where we will stand in that 
global economy and our potential opportunities.
    And so, in our mind, we separate, if you will, those 
current domestic challenges or, in our view, inadequacies in 
terms of allowing us to produce our own domestic oil and 
natural gas. I think what you are alluding to, Senator, is 85 
percent of our domestic outer Continental Shelf is off limits 
today, as a result of U.S. policy where we do have sovereign 
rights currently.
    We are frustrated by that. Our views on that have not 
changed. But we look to the future, particularly in the Arctic. 
And under the Expanded Continental Shelf, we have the potential 
to move that 200-mile radius or limit out to 600 miles.
    Senator Corker. But let me ask you this question.
    Mr. Gerard. We think it is a big deal moving forward.
    Senator Corker. Right. And I understand. I appreciate you 
being here, and I appreciate you experiencing the irony, too. 
So you would be better off----
    The Chairman. We want you to appreciate his full answer, 
though, too.
    Senator Corker. Well, I had a feeling it might last a long 
time. [Laughter.]
    The Chairman. There is a lot to say. You have got to stand 
up to these things.
    Mr. Gerard. I will be brief. Go ahead, Senator.
    Senator Corker. The 200-mile piece, though, is probably 
easier gotten to by U.S. companies, is it not, and the extended 
piece is deeper and more difficult to explore, is it not?
    Mr. Gerard. Yes and no. To oversimplify it, in some places 
in the Arctic, the water is relatively shallow. In some areas 
off the Pacific coast, it goes deeper quicker. The Atlantic a 
little shallow. So it just varies in the area around the world.
    Senator Corker. You can understand the perplexing nature of 
having Secretary Clinton and others up here advocating for the 
petroleum industry when what we see here domestically is 
something very different. But I know that everybody----
    Mr. Gerard. I understand.
    Senator Corker. Yes, thank you so much.
    Mr. McAdam, I heard you talking about laying cable on the 
seabed, and I know you have companies that operate in the U.K. 
As matter of fact, you have a major base of operations there, 
and I know that the U.K. is signatory to this treaty. So I 
guess I am confused.
    If you had issues, and I know you operate on a global 
basis, and most of the companies that the Chamber represents 
that care about this treaty operate all around the world. I 
mean, these are not companies that operate in Soddy-Daisy, 
Tennessee. I don't understand why you can't adjudicate these 
claims through the U.K. if we are not signatory. It doesn't 
make any sense to me that all of this is riding upon the United 
States, us being signatory to this treaty.
    Mr. McAdam. Well, Senator, I just feel that we would be 
much more effective having a seat at the table and having that 
discussion. To go to the folks in the U.K., who are good 
partners certainly, and try to convince them to carry our water 
in talking to another country I think is difficult for them. 
They have to balance that with all their priorities, and I 
think that one step removed makes us less effective.
    Senator Corker. So, in each case, a company--let me make 
sure I understand correctly. A company doesn't have the ability 
to try to make claims itself. It has to have a country 
representing them in the process. Is that the way it works?
    Mr. McAdam. Well, we would certainly be active with our 
legal folks and with our operations on the ground. But our 
opportunity to be backstopped by the Federal Government is 
important to us and I believe will make us more effective.
    Senator Corker. But to answer the question, clearly, you 
have the ability to make claims directly, do you not? You don't 
have to come and ask permission of the U.S. Government to do 
so.
    Mr. McAdam. Certainly. We would use existing legal 
frameworks.
    Senator Corker. So to say--so to say that our country has 
to be signatory to these treaties--to this treaty when, 
basically, every one of these companies operates on a global 
basis and has other outlets through which to make claims is not 
a true statement, is it not?
    Mr. McAdam. Well, obviously, we have operated for years 
without the treaty. But our point is today merely we would be 
more effective if we had it.
    Senator Corker. And tell me how you would be more 
effective. Because I would assume that the many people that 
work for you in the U.K. believe that they have a very 
effective government that they work with, and I am sure when 
you are there before their governing bodies, you are telling 
them how effective they are.
    So tell me why that would make you more effective. I am 
having a hard time understanding that.
    Mr. McAdam. Well, I think the issue is that you have many 
countries around the world, like the example of Malta that I 
used, that can take this sort of unilateral action, and there 
isn't a framework for redress. So this gives us the ability to 
not only work with Malta directly ourselves, but also to bring 
in the State Department or other Federal Government rather than 
having to go a circuitous route through the U.K.
    Senator Corker. Yes. Now the issue of Malta is not one of 
those issues where there is even a veto process, is there? I 
mean, we can weigh in. But just to cite your Malta issue, that 
is not something where the U.S. Government would have a veto 
process. That is one where we would have a voice among many 
other nations in trying to cause that to be successfully agreed 
to. Is that correct?
    Mr. McAdam. I would have to look at the specific terms of 
the agreement and get our legal experts to weigh in on that. I 
am, frankly, not competent to offer the answer to that. If you 
would like, I will get that for the record, though.
    Senator Corker. So, look, I appreciate all of you being 
here, and I don't know whether you are being here as good 
soldiers or whether this is something that you are passionate 
about. But you certainly are people that I respect. And I am 
very neutral on this. I am here to learn. I have been to every 
one of these hearings, and certainly, there are people in the 
audience, Senator Warner and others, that I respect greatly in 
addition to all of you.
    I do want to say to you, Mr. Donohue, who I know well and 
certainly have worked closely with, your comment regarding the 
veto on the climate issue is categorically incorrect. And I 
would like for the record for your legal person to give us an 
opinion to that statement because I don't think that is 
correct.
    And I know that you are here, and you don't know every word 
of the treaty, as I don't. but I think you are mixing apples 
with oranges. And on the issue of the climate issue, we do not 
have a veto process in place for our own country.
    So if you could have your legal folks tell me differently 
as part of the official record or tell me that I am right, I 
would greatly appreciate it. But I think you are very wrong on 
that, and you can respond.
    Mr. Donohue. Well, Senator, it wouldn't be the first time I 
am wrong, but I am very enthusiastic. I am not here on behalf 
of anybody else. As the Senator indicated, I was the one that 
was pushing him to do this.
    I will be very happy to have our legal guys do that. I 
think they are probably very involved for the next 24 hours or 
so on what just came out of the Supreme Court. But by early 
next week, we would be very happy to do it. And I will come up, 
now that I understand that you are neutral on this and trying 
very hard to, as we all did for a long time, to get a good 
grasp on it, I will make it my business to come and talk to you 
about it.
    Senator Corker. You might bring that legal opinion with 
you.
    Mr. Donohue. No, I will send it beforehand so you have a 
chance to look at it.
    Senator Corker. And I say to all of you, look, I hope that 
what we will do--I do want to make the right decision on this 
treaty, and as in every issue, I really want to understand the 
details. But I hope that the responses will be deep and not 
rhetorical. I mean, I think there are a lot of details that 
many of us are concerned about, especially as it relates to the 
climate issue.
    But other issues that really matter to us, and some of the 
sovereignty issues really matter to us. And again, I respect 
all four of you. I know that there is no way that you could 
possibly know the details of this. You are here because you are 
the leaders of your organizations, and you have people in the 
bowels of your organizations that do know the details. But I do 
look forward to future conversations and very much thank you 
for being here, and I will see, I am sure, very, very soon.
    Mr. Donohue. Senator, just one point for the record. You 
know that the Chamber is perhaps the most aggressive 
organization in the city on climate issues that affect 
adversely this country and our economy. And talk about 
something I am really worried about is the climate decisions 
that were made just 2 days ago by the District Court. That is a 
real problem.
    So we have very good people on this. I will be very happy 
to get you an answer to your question. And I just want you to 
know I looked at this as a worrisome issue until I believe I 
have been carefully advised that we are OK here. But I will get 
that and come and see you.
    [A written response from Mr. Donohue to the question 
follows:]

    Two separate issues were under discussion at the hearing. One 
involved the United States veto over the important actions of the 
International Seabed Authority (ISA), and the second involved the 
concern that the United States approval of the Treaty would obligate 
the United States to comply with the Kyoto Protocol or other 
international environmental agreements that the United States has not 
approved.

                 UNITED STATES INFLUENCE WITHIN THE ISA

    LOS's 1994 Agreement provides the United States a guaranteed 
permanent seat on the ISA's 36-member Council. We are the only nation 
afforded this position. The 1994 agreement also requires that Council 
actions must be by consensus on issues such as rules, regulations, and 
procedures involving the ISA's deep seabed mining royalties. Because 
``consensus'' is defined as the absence of any formal objection, the 
United States enjoys a veto on important matters--including royalty 
distribution--decided by the ISA. Furthermore, the ISA's structure 
makes the Council the key decisionmaking body of the ISA. The rules and 
procedures for distributing the ISA's royalty payments require the 
Council's recommendation in order for the ISA's Assembly to act. Thus 
the United States role in the ISA is properly recognized as a veto.

           UNITED STATES ENVIRONMENTAL OBLIGATIONS UNDER LOS

    As you know, no organization has been more adamantly opposed to the 
Kyoto Protocol than the Chamber. As a result, we are extremely 
concerned by efforts to impose Kyoto onto the United States and 
American businesses.
    The Chamber is not concerned that United States approval of LOS 
would impose any new environmental requirements on the United States 
and American business primarily for two reasons. First, LOS does not 
require parties to comply with other international environmental 
treaties. Thus, the Kyoto Protocol does not apply to the United States 
because we are not party to it.
    Second, the United States already is in compliance with any LOS 
environmental provisions. Therefore, the United States would not be 
required to adopt additional environmental laws, regulations, or 
policies that might affect American business. Specifically, Article 212 
of the LOS Treaty requires states to ``adopt laws and regulations to 
prevent, reduce and control pollution of the marine environment from 
the atmosphere.'' The United States has strong atmospheric pollution 
laws and is already in compliance with this provision.

    Senator Corker. And if you could, since--and I thank the 
chairman for giving me an extra minute or two.
    Mr. McAdam, I would love it if somebody from your 
government relations office would share with me truly, since 
you operate around the world in most of these companies that 
Mr. Timmons and Mr. Donohue and Mr. Gerard represent do, I 
really would like to know for a fact why it enhances a 
company's ability to make claims when they can easily make it 
through any other country that they operate in.
    I would really like to know that. If you would send that to 
me, I would appreciate it. And again, I ask these questions 
with great respect.
    [The written information requested from Mr. McAdam 
follows:]

    Under the treaty, it is the State Parties who can best protect 
their constituents from unlawful incursions against domestic companies' 
submarine cable interests. If the United States were a party to the 
treaty, it could act on behalf of United States companies to protect 
U.S. interests in undersea cables. Without this protection, United 
States companies are forced to seek out the protection of foreign 
governments to help safeguard U.S. investments.
    Although these nations may make claims on behalf of foreign 
companies in their discretion, in practice obtaining such assistance 
may not be straight forward or timely. While U.S. companies in some 
instances in the past have been able to join with foreign companies who 
can appeal to their governments, there is no guarantee that such 
collaboration will be available in the future.

    The Chairman. Can I take a moment? I want to add--Senator 
Corker, if I could, just for a minute? First of all, you know 
how much I appreciate the due diligence you do on this stuff, 
and I really am grateful to you for taking the time and looking 
at this without all the external influences and kind of working 
through it.
    But let me just say to you with respect to the dispute 
resolution--and we will get this for the record. You have asked 
it of Mr. McAdam, but we will also have our own counsel add in, 
which is important, and we can spend some time with you on it.
    You cannot--only a country has access to dispute 
resolution, not an individual company. So it is irrelevant that 
they may have a company working here or there. They have to get 
the country to represent them. And that is where we are 
disadvantaged is that the United States can't bring that on 
behalf of our own company. You would have to persuade another 
country, not the company within the country.
    So they don't have some sort of ability because they have 
affiliates around the world to just use the affiliate to 
advantage their interest. That is No. 1.
    No. 2, with respect to the veto, there is sort of a split 
decision here. It is correct that the ISA, which is the larger 
group of the representative countries, doesn't have a veto. The 
Council has a veto. Mr. Donohue is absolutely correct with 
respect to the Council and the issues within the Council. And 
there are specific issues limited to the council.
    Senator Corker. But climate is not one of those.
    The Chairman. Let me just finish. You are correct. Climate 
is not one of those. But--and here is the critical ``but'' for 
you.
    Senator Corker. OK.
    The Chairman. There is a section which specifically states 
that you cannot be held accountable to any international law 
regarding climate or anything else unless you, as a nation, 
have signed up to it, and the U.S. Senate has never ratified 
anything. So under this treaty, in fact, we are completely 
protected as to any environmental effort because, one, it can't 
come through the Council where we have the veto, and two, it is 
specifically stated within the confines of the treaty that you 
only are subject to something if you have signed up to it.
    And nobody can come through the back door to make you sign 
up to it. So I think when you see that, I think you are going 
to feel completely comfortable.
    Final question, let me just ask you. I want to just get 
this on the record. Is any one of you here because you are a 
good soldier, or are you here because you are representing your 
industries and you are expressing the views of the people you 
represent?
    Mr. Timmons.
    Mr. Timmons. The latter, Mr. Chairman.
    The Chairman. Mr. Donohue.
    Mr. Donohue. I asked you first to please get busy on the 
deal, and you did, and I thank you very much.
    We will talk some more, Senator. This is a very serious 
issue in so many ways. And I think this is a vigorous 
discussion. And Mr. Chairman, thank you for resolving all that 
issue. My lawyers will get it done a lot faster now.
    The Chairman. Thank you.
    Mr. Gerard.
    Mr. Gerard. Until the question was asked, I didn't view it 
as being here in support of the administration. Our view 
transcends political party and administrations. Our view, 
regardless of who is in the White House, we look at the 
substance of the treaty, and that is our focus.
    The Chairman. And I want to emphasize again that the 
administration did not ask us to bring this treaty out now. We 
went to the administration and said, ``What do you think about 
it?''
    Again, it is clear on the record here, and Mr. Donohue has 
made it clear that he made the request for us to be here at 
this time initially, and that is what got us going.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    And thank you all for being here. I apologize for missing 
your testimony. I was at an energy hearing. So I am actually 
going to start with that, Mr. Gerard--energy.
    And I wonder if you could talk about why this treaty is 
important to the energy security of the United States. In your 
letter to the committee, you stated that accession will provide 
greater energy security by securing the United States exclusive 
rights for oil and gas production. So could you elaborate on 
that and why; talk about why it is important?
    Mr. Gerard. Surely. It gives us expanded opportunity with 
the extended outer Continental Shelf, the extended resource to 
develop those resources under the guise and direction of the 
United States and U.S. law. What we are focused on more 
specifically right now, which is talked about regularly, is the 
Arctic. It is estimated that the Arctic has one-quarter of the 
world's oil and gas reserves.
    That is a big number.
    And right now, as we look at it, we will be limited in our 
ability to go beyond our 200-mile Exclusive Economic Zone 
unless we become parties to the treaty and, thus, can claim the 
Extended Continental Shelf. It is estimated our claim up there 
could go as far as 600 miles. It would give us a very 
significant footprint.
    And coming back to the fundamental issues I talked about 
earlier before you got here, Senator, certainty is the key. If 
we have knowledge, understanding, and confidence into who has 
the rights, who controls, what law controls, it is much more 
likely the investment will flow. If the risk is too high, the 
investment will occur, but it will go elsewhere in the world.
    The world continues to shrink as to our ability to produce 
these resources. With modern technologies today, we can do 
things we couldn't think of 30 years ago when the treaty was 
first written and talked about. So it is a very significant 
time for us on a global basis to look at the potential for oil 
and gas development.
    Senator Shaheen. Thank you.
    Mr. Donohue, in your opening remarks, you stated that 
companies will be hesitant to take those investment risks and 
which echoes what Mr. Gerard just said. I wonder if you could 
talk specifically about any sector of the U.S. business 
community that opposes U.S. accession to this treaty? Have you 
heard from anybody who opposes it?
    Mr. Donohue. There are a number of think tanks and others 
who are--represent some elements of the business community. 
There are, as Senator Corker indicated, people who are 
concerned about environmental issues.
    But across the board, the people that we represent are 
concerned about the following issues. First, energy, which is 
the financial base on which we are going to fix this economy 
and give us more energy security.
    Second issue is some legal certainty, when 161 other 
countries are involved in the process of basically divvying up 
the natural resources in the sea. Also a lot of very important 
issues here on navigation, on supply chain management, on the 
ability to get at rare earth minerals.
    This, to me, this is very important, and it is an easy 
issue because you have all--you have many protections from any 
difficulties that might come from being a part of the treaty. 
You have many exclusions because you are not a part of the 
treaty.
    And as everybody on the panel indicated, you obviously have 
the protection of our Armed Forces. But we can't sort of run 
around the world doing our business like that every day, 
although I would say that the Chamber is a vigorous supporter 
of our Armed Forces because you can't participate in a global 
economy without security.
    And I think there is a very clear process in the Chamber 
that brings the great preponderance of our members to being in 
support of this. Senator, you might imagine, with more than 
300,000 members and the ability to legally represent 3 million 
companies, I can never get everybody to agree on anything, 
including what day it is.
    Senator Shaheen. But just to be clear, you haven't heard 
from the businesses that you represent any significant 
downsides to this country ratifying this treaty?
    Mr. Donohue. Exactly. That is correct. And I am more 
comfortable myself after I have spent a good deal of time 
exploring that question with our own associates and with people 
around the city and with Members of the Congress. And I thank 
you for that question.
    Senator Shaheen. Thank you.
    Mr. Timmons, Mr. Donohue talked about the rare earth 
minerals from China just now, and you pointed out in your 
testimony that China is in the process of sharply reducing 
those exports and that they may eventually consume all of them 
within the country. Can you talk about what the impact might be 
on both what the advantages of our ratification of the treaty 
gives us as we are competing for those rare earth minerals, and 
then what would happen if China, in fact, did consume what it 
is currently exporting all within country and what impact that 
would have on consumers and on businesses and jobs in this 
country?
    Mr. Timmons. Yes. If I could start with the latter question 
first? If we don't ratify the treaty and businesses don't make 
the investments necessary to take advantage of the rare earth 
nodules that exist on the seabed floor, and China does use all 
of its rare earth materials, it would be devastating to the 
American economy, to manufacturing, and to jobs in this 
country.
    The bottom line, as has been stated many times on this 
panel, is that businesses require certainty before they make 
multibillion dollar investments. Mining on the seabed floor is 
not an inexpensive proposition. It requires years of studying, 
planning, mapping, and significant investment to do so. And 
companies simply aren't going to do that without the certainty 
that the treaty provides.
    One of the reasons that we have the strong military that we 
have all acknowledged and that we all admire is because we have 
economic might in this country. The rare earth debate is one 
that businesses have been quite aware of for a number of years, 
but it is rather new in the public dialogue. But it is one that 
will determine our ability to compete and succeed in the 
international marketplace and this global economy, and it is 
one that we simply cannot take for granted moving forward.
    Senator Shaheen. And you talked about the importance of 
certainty before companies are going to be willing to invest 
large amounts of money that are required. Can you talk about 
the extent to which those investments are happening right now, 
or are those sitting on the sidelines waiting to see what 
happens with this debate?
    Mr. Timmons. They are sitting on the sidelines for the most 
part, Senator. And I would say that it is not only in this 
realm. I think it is very important to remember that it is 20 
percent more expensive to manufacture in this country than 
among our major trading partners after you take out the cost of 
labor.
    And that is because of lots of different things--taxes, 
regulation, energy, where for the first time in many, many 
years we actually have a slight cost advantage. But this is 
another significant amount of uncertainty that will not allow 
capital to flow to those investments.
    Senator Shaheen. Thank you.
    Mr. Donohue. Senator, just one comment, and Jack Gerard may 
want to mention. While there aren't many companies down on the 
deep part of the shelf bringing up the rare earth materials, 
many companies are preparing to do it. You just don't go out 
there with a boat and throw something over the side. This is a 
huge, complicated technical issue, and there is a lot of money 
being invested by American companies and by consortiums of 
companies to figure out exactly where it is, exactly how to do 
it, and exactly how to do it in a safe and environmentally 
sensitive way.
    Senator Shaheen. Thank you.
    The Chairman. Thank you, Senator Shaheen.
    Senator Isakson, thanks for your patience.
    Senator Isakson. Thank you, Mr. Chairman.
    Thank you all for coming. It is good to have you here today 
on what is a historic day.
    I need to get a couple of clarifications. I wrote down some 
things. Mr. Gerard, you made a statement, I think it was with 
regard to Shell that invested $4 billion in the Arctic, and 
they had sent two ships recently out from Washington to go 
there to their first claim. Is that correct?
    Mr. Gerard. Yes, they acquired the lease 5 years ago 
through the process of permitting and getting the ability to go 
out and actually start to drill a well. They have been in that 
process 5 years. It has cost them $4 billion to this point, and 
we hope they are going to get final approval to drill those 
first wells this summer during this summer season. But that is 
how long this process takes.
    My simple point was these are long-term investments, and 
they are very significant. So we have got to know that we have 
got some rights intact before we commit to make those 
investments.
    Senator Isakson. Who is granting that permit?
    Mr. Gerard. The U.S. Government.
    Senator Isakson. The U.S. Government. So it is on our 
current territorial waters?
    Mr. Gerard. Yes, it is within the 200-mile Exclusive 
Economic Zone.
    Senator Isakson. The extended seabed.
    Mr. Gerard. Yes.
    Senator Isakson. Thank you very much.
    Mr. Timmons, you made a statement, and I wrote part of it 
down. I apologize again if this is wrong, but this is an 
important issue for me.
    I am talking about the deep seabed. You talked about 
international bodies who have current authority to issue 
permits or issue permission on deep seabed. Did I miss that? 
Did I misunderstand you?
    Mr. Timmons. I think so.
    Senator Isakson. So, currently, if somebody was going to 
the deep seabed to try and mine rare earth minerals there is no 
current authority other than what authority might be under the 
Convention?
    Mr. Timmons. ISA. That is right. Under the Convention.
    Senator Isakson. And Mr. Donohue, the last time I brought 
this up, the chairman and I got into a 15-minute discussion. I 
blew up the whole meeting. But this veto thing is an issue of 
which there is a lot of conversation.
    The chairman, in his response back to you, talked about the 
Council. In terms of the Council, I understand the definition 
of ``veto'' to be when a member objects creating an absence of 
consensus. But I also understand that a simple majority of 
those present and voting on the Council or a two-thirds vote of 
the Assembly can override that absence of consensus. Am I right 
or am I wrong?
    Mr. Donohue. Senator, having watched the discussion here, 
committed to get some more detail for your colleagues, and not 
wanting to start another 15-minute harangue, I look forward to 
answering that question in specific detail.
    Senator Isakson. I appreciate that, and so does the 
audience.
    Mr. Donohue. Thank you.
    Senator Isakson. Thank you very much.
    Mr. McAdam, in your testimony, you refer to some nations 
have attempted to encroach on the ability of U.S. operators to 
effectively manage, deploy, or prepare maintenance and repairs 
on their lines. In your testimony, you cite Malta's attempt to 
assess a fee or a license. You talked about a Vietnam carrier 
that had done 106 miles worth of damage to your cable.
    Are those the two examples you are referring to in ``some 
nations,'' or are there some other examples that come to mind?
    Mr. McAdam. Yes, there are other examples, excuse me, for 
sure, Senator. Just one is in India. Even though we don't cross 
into their territory, they require the cable laying and 
maintaining ships to put into port, and they assess a fee 
against them. It is against the Convention, but they do that. 
And so, we have to take legal action or we just have to pay the 
fees.
    So those are three examples.
    Senator Isakson. So the Convention exempts you from having 
to pay a licensing fee or some type of arbitrary fee to 
maintain your cable or to lay your cable?
    Mr. McAdam. Right. That is all laid out in a framework that 
we can rely on versus having these unilateral actions that have 
occurred in many places.
    Senator Isakson. Does the Seabed Authority, the Assembly, 
or the Council have to issue you a license to lay a cable?
    Mr. McAdam. I would have to look at the specific details of 
that, Senator. I don't know that off the top of my head.
    Senator Isakson. Because I am sure we are laying cable now, 
and we are not a party to the treaty.
    Mr. McAdam. Right.
    Senator Isakson. So my question would be if we are laying 
cable now and we are not a party to the treaty, would being a 
party to the treaty, from your testimony, only benefit us to 
the extent that it would exempt us from paying fees to the 
countries?
    Mr. McAdam. No, it is not the fees. We are in and out of 
these cables constantly, upgrading the technology, doing 
maintenance on the cables. And I think the concern that we have 
is the arbitrary nature of what happens today.
    And if we can have greater certainty, we can predict our 
costs better and we can make those investments. That is my main 
point, Senator.
    Senator Isakson. Thank you very much, Mr. Chairman. I have 
got to join a conference call so I will have to yield back the 
balance of my time.
    The Chairman. Well, I appreciate that. Before you run out, 
Senator Isakson, let me just say to you quickly because you 
have raised an important question. The voting structure in the 
Council was significantly rewritten as part of the 1994 
implementing agreement. And it was rewritten in a way that 
gives the United States a tremendous amount of influence, even 
in matters where the Council does not act by consensus.
    So we do, in fact, do have a veto over every item that 
would be critical to us. Let me just be very specific quickly.
    A Finance Committee was created. We insisted on this. It 
has to make recommendations on all financial and budgetary 
matters before the full Council can make its decisions. The 
Finance Committee operates by a consensus, and there are 
provisions making clear that the United States will be 
permanently on that committee. So we have an ability to prevent 
any counterbudgetary or fiscal matter from being contrary to 
our interests.
    Then the Council, second, is divided into several chambers. 
For any other issue not decided by consensus, there is a rule 
stating that any chamber by majority vote can veto a matter, 
and the United States would be in the chamber with four 
members. So there, we would have to get two other members to 
agree with us, but we, again, could have a veto by virtue of 
that.
    And third, and this is very important, section 3, paragraph 
4 of the annex states that the ISA Assembly cannot take a 
decision on ``any matter for which the Council also has 
competence or any administrative, budgetary, or financial 
matter unless it does so based upon a recommendation of the 
Council,'' where we have the veto.
    So it can't change the recommendation of the Council. All 
it can do is accept it or send the matter back. So, in effect, 
because of our negotiations in 1994, which came out of 
President Reagan's questions about this, we have, in fact, 
negotiated a rather remarkable position for ourselves, which we 
are not able to exercise.
    And so, we will get this fully properly articulated in the 
context of the record, but I wanted you to be aware of that.
    Senator Isakson. Thank you, Mr. Chairman. Would you mind 
providing me with that from which you are reading?
    The Chairman. We will give the entire thing to you. We will 
give you all the details.
    Senator Isakson. Thank you, Mr. Chairman.
    The Chairman. You got it.
    Senator Shaheen. Mr. Chairman, can I ask that you share it 
with all of the members of the committee?
    The Chairman. Everybody on the committee will get it.
    Senator? Thank you, Senator Casey, for your patience.
    Senator Casey. Mr. Chairman, thank you, and thank you for 
calling this hearing. This is a vitally important issue, and we 
are spending time on a subject matter that I think we sometimes 
don't do enough on in Washington. And I am grateful to be part 
of this, and I am sorry I am late.
    I'm running the risk of being redundant, but I would say 
that redundancy is important in Washington. Repeating important 
messages is important. So I might be plowing old ground.
    But part of what I think hasn't been touched on with great 
detail yet, Mr. McAdam, are some of the statements in your 
testimony.
    I am reading from the first page of your testimony labeled 
page 2. And you say in the second to last paragraph, and I am 
quoting, ``Aside from our land-based connections with Canada 
and Mexico, more than 95 percent of U.S. international 
traffic--voice, video, Internet, and data--travels over 38 
submarine cables, each the diameter of a garden hose. Without 
these cables, current satellite capacity could carry only 7 
percent of the total U.S. international traffic.''
    With that as a predicate, I would ask you, what can you 
tell us about the importance of this treaty as it relates to 
our 95 percent dependence on that transmission?
    Mr. McAdam. Well, we invest a great deal, Senator, in 
making these cables as redundant as we can. We use the term 
``mesh networks.'' And if you think about it as a fence, you 
can cut certain pieces of it, but there are other pieces of the 
network that are redundant. And therefore, so we are the same 
as the Government in some ways, I guess, to make sure that our 
customers can rely on that service.
    That helps us when we have things like storms or 
earthquakes that sever the cables. But if a country takes some 
sort of a unilateral action, such as we have seen, and doesn't, 
frankly, support some of the repair operations that we had in 
Vietnam--and I referred to that in my testimony where it took 
many months to get those cables repaired--that really can 
impact global commerce.
    And so, the framework that we will have in place with the 
treaty allows us to have an ongoing dialogue with the country. 
We have a set of rules that we can rely on. If there are 
disputes, we have arbitration we can go to. We can enlist the 
help of the Federal Government where our local team can't make 
the proper headway.
    So it is a series of additional steps that give us greater 
certainty and allow us to make these sorts of investments.
    Senator Casey. Thank you.
    I am going to go back to a question I know that Senator 
Shaheen raised, and I am sure others did as well, on 
manufacturing.
    Mr. Timmons, I appreciate your testimony. I represent a 
State that has had a long and very substantial legacy and 
reputation for manufacturing. And we have had our challenges, 
as you and I have talked about. But we have had a bit of a 
resurgence, and I think we are, frankly, headed in the right 
direction in terms of being able to create and maintain 
manufacturing jobs.
    If I were traveling across Pennsylvania this August when we 
are going to be home, and someone grabbed me on the street and 
said tell me in a few words why this treaty is important for 
manufacturing, in terms of having a general strategy for 
manufacturing and especially for maintaining those jobs, what 
should I say to them in a few sentences? If you can help me 
with that.
    Mr. Timmons. Well, when you are looking at the issue of 
rare earth materials, it is a vital component of all 
manufacturing processes, particularly the chemical industry. 
You have a large preponderance of folks involved in the 
chemical industry. Without those rare earth materials, 
manufacturing simply will not be able to compete and succeed in 
the world marketplace.
    Ten years ago, this country was able to produce 100 percent 
of the rare earth materials that we used in manufacturing. 
Today, we onshore produce none. And that is because of many 
factors--regulatory matters, permitting, and other factors. The 
bottom line is if we can't access rare earth materials on the 
floor of the sea, we are going to be put at a significant 
competitive disadvantage.
    The manufacturing renaissance that you and I have spoken 
about will cease to exist, and it will harm our economy and 
cost jobs.
    Senator Casey. I hope I can be that articulate with the 
constituent.
    Mr. Timmons. Well, I don't think that is a couple of 
sentences, unfortunately. But I will work on that and get back 
to you.
    Mr. Donohue. But I would add one more sentence, and maybe 
you were going to say it. If we do this right, we will drive 
down the cost and increase the availability of fuels. And that 
is going to have a large, large effect on manufacturing and on 
your State's economy.
    Senator Casey. Thank you, Mr. Donohue.
    Mr. Gerard. Senator, I was just going to add something that 
you already know. The answer, the other answer that is very 
significant in your State is natural gas. As you know, the 
price is down to the $2 to $3 range today; 83,000 new jobs in 
your State as a result of that resurgence.
    And I think as Jay said earlier, that is primarily what is 
driving the manufacturing resurgence in the United States. We 
often forget that those chemical plants and others are 
primarily driven by the feedstock of natural gas, where they 
convert natural gas to all the products we consume every day 
and don't think about. So it is natural gas, low-cost, 
affordable, reliable energy that is driving those other 
benefits in our economy today.
    Senator Casey. I will submit some more questions for the 
record. I have got to run. But thank you so much for your 
testimony.
    Mr. Chairman, thank you.
    The Chairman. Thank you very much.
    Senator Shaheen, do you have any second round questions?
    Senator Shaheen. I do have a couple, Mr. Chairman.
    And I know that one of the issues that has been raised 
about the treaty and I heard some of that debate today has been 
what is the real authority of the International Seabed 
Authority, and how would our participation play in that?
    And I wonder if you all have looked at the Authority to the 
extent that it is operated today and whether you have any views 
about countries like Russia and China and what their actions 
have been on the Authority in our absence and whether they are, 
in fact, taking advantage of our inability to ratify the treaty 
and participate on the Authority? What impact has it had to 
have the United States not to be part of that body?
    Mr. Gerard. I will try, Senator. First is, to us, that is 
very significant. As Senator--Chairman Kerry mentioned earlier, 
the 1994 changes, the amendments were very significant in 
giving us additional power, a permanent seat on that Council in 
the Seabed Authority.
    The reason we say that is twofold. No. 1, any other 
decisions that come out of there, we essentially have that veto 
right. We interpret it as such, and so I am anxious to hear 
others' legal opinions. We have gone to outside counsel, and we 
view that we have that right and that authority within the 
seabed Council.
    But the other thing we shouldn't overlook, there has been 
talk about royalties and other things that come from oil and 
gas production beginning the 6th to the 12th year. Today, if 
those are produced any other place in the world, those dollars 
are going to go wherever that group that sits there are going 
to allow them to go. If we have the seat, the permanent seat in 
that Council, we have the ability to direct that to make sure 
those very significant resources aren't given to unfriendly 
nations around the world and aren't spent for purposes that are 
not in the best interests of the United States.
    So we think it is twofold. No. 1, we need to be there to 
secure our own rights. But No. 2, by being there, having a seat 
at the table, we can influence and have some direct leverage 
over the other decisions the Seabed Authority is making.
    Senator Shaheen. So, just to be clear, they are going to 
assess those rates from our companies whether we are a member 
of the treaty or not?
    Mr. Gerard. Well, they apply only beyond 200 miles. My 
point is that others who are participants who might be paying 
into that fund today, those dollars go elsewhere without us 
having any say until we accede and participate and become part 
of the treaty process. Does that clarify it?
    Senator Shaheen. Yes. Thank you.
    The other thing that I wonder, and again, this may have 
been covered to some extent. But I haven't heard much 
discussion since I arrived about how we benefit in the Arctic. 
I mean, you talked about that a little bit, Mr. Gerard, in 
terms of our ability to have much more of an opportunity to 
access the minerals that may and the resources that may exist 
under the Arctic.
    But can you also talk about how what is happening there 
with other countries, and are we lagging behind Russia and 
those other countries who may be also interested in the 
resources of the Arctic?
    Mr. Gerard. Well, if you look at the way the Authority is 
set up and the commission on the limitation of the Continental 
Shelf, which determines how far those boundaries may go based 
on the definition of the Continental Shelf, those nations that 
are active in the Arctic or seek to be active--Russia, Denmark, 
Norway, Canada, and others--are all participants. And many of 
them have already filed or laid claim to those lands or those 
potential lands in the outer Continental Shelf. We stand here 
watching that happen.
    We have a very, very significant interest in the Arctic. 
And as I mentioned earlier, Shell hopefully will start that 
again today. It is estimated that one-quarter of the world's 
oil and gas resources are under the Arctic. Why we would sit on 
the sidelines and watch the rest of the world develop that 
resource to us is somewhat mystifying, not to mention our own 
resources that we have within our own 200-mile Exclusive 
Economic Zone.
    We are the only industrialized nation in the world that 
does not take full advantage of our outer Continental Shelf. We 
think it would be a big miss, a missed opportunity to sit today 
and watch and 30 years from now wonder why we missed out when 
those decisions were made in the Arctic, which is so important 
to global advancement and economic development.
    Senator Shaheen. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Shaheen. Those 
were good questions and I think important part of the record. I 
appreciate it.
    Let me just close out. Senator Lugar does not have 
additional questions. I just have one or two quickly that I 
just want to get the record complete here.
    We will leave the record open, incidentally, for a week in 
case there are additional questions to submit in writing.
    Mr. Timmons, at a hearing before the committee a couple of 
weeks ago, we heard from one of the think tank folks out here 
from the Heritage Foundation, analyst who said that U.S. 
companies are free to exploit the deep seabed right now, and 
they have all the legal certainty necessary to support 
investments to drill in the deep seabed.
    And the analogy drawn by that witness was just like 
fishing. You know, you go out. Nobody owns the fish. It is 
every person for themselves.
    In light of the fact that you have got 161 nations and the 
European Union that are all parties to the Convention, it seems 
odd to sort of suggest an every person for themselves approach 
to this. And I wonder if you just--you have addressed it 
somewhat here, and you have talked about the certainty. I just 
want to be crystal clear whether that is an alternative. Is 
that viable?
    Mr. Timmons. Well, Senator, Mr. Chairman, I would say it is 
an alternative, but I don't think it is viable. We could 
proceed as a nation--I think it is very important to recognize 
that the world today is extraordinarily different than it was 
40 years ago. We are, again, a global economy. We have 
multinational companies that have the means to develop these 
resources, but they are simply unwilling to do so because of 
the risk that exists without ratification of this treaty.
    If that theory were, in fact, accurate, you would see the 
development of these resources today, and it is simply not 
happening.
    The Chairman. So I want to ask everybody this. Therefore, 
is it clear, are you saying here definitively today that the 
people you represent and the interests that you are here to 
advance will not be served by and that no one will invest, in 
fact, billions of dollars if you were to pursue that theory of 
every person for themselves?
    Mr. Timmons. I think our country would not be served if the 
treaty is not ratified because companies simply will not invest 
or take the risks if they don't have the certainty provided in 
this treaty. That means from a manufacturing perspective that 
manufacturing suffers, which means the economy suffers, which 
means jobs suffer.
    And so, it is in the long-term economic and national 
security interests of our country, in the view of 
manufacturers, that this treaty be ratified.
    The Chairman. Mr. Donohue.
    Mr. Donohue. Senator, if we don't join this treaty, we may 
find people doing that without the protection, but they may be 
the Russians, they may be the Chinese, and they may be on our 
extended outer Continental Shelf. Obviously, the Arctic is more 
available than it was before because of thinning of the ice 
while it is thickening on the South Pole, you know, all this 
stuff going on.
    But people are making plans and claims to establish 
themselves in the Arctic. And as Jack indicated, we are on the 
outside looking in, with all sorts of power. But as you know in 
your job, most of the most powerful things we can do, we can't 
do or we shouldn't do.
    And I think the benefits of making this fundamental 
adjustment, taking a seat at the table with a lot of strength 
to protect our interests at least gives us a raison d'etre for 
whatever steps we have to take to represent and to help this 
country. So the answer is, I don't think you are going to see a 
lot of American firms--you can get a permission from the 
Federal Government--this is another point--to access an area, 
but then they won't give you a permit to drill it.
    And we have all of those problems, but the bottom line, we 
have been arguing this thing for so long. And when the old 
arguments run out, then we have some new arguments. And I 
respect the people that have that view, and I suppose you could 
find some of my members that have that view, but not very many 
of them. And we have got tens and tens of thousands of them 
that think it is about time to get on with it.
    The Chairman. Final--yes?
    Mr. Gerard. Senator, I would just add there is a lot of 
different opinions about this, but I would suggest you look 
closely at those opinions where it really matters. You cited 
one earlier, the chairman of Shell, Marvin Odum. Rex Tillerson 
has sent you a letter.
    These are the individuals that are going to make those 
decisions, and they have been very clear and unequivocal saying 
they will not make those decisions. The risk is too high. There 
is too much at stake. They won't be able to convince boards and 
shareholders that that is the best use and the safest use of 
their money and their resource.
    So I would hope we would look at those that have experience 
that are on the front line making those decisions and perhaps 
in fairness give that opinion a little more weight than others.
    Mr. Donohue. And at the same time, to think about what the 
Joint Chiefs of Staff and our military leaders who are 
challenged to protect us in many ways, including in those 
areas, and you know they are not people easily convinced of 
joining committees.
    The Chairman. Well, final question, last question, I 
promise. It seems to me, listening to your testimony, that if 
companies aren't going to invest, that if we are looking at a 
reduction of the availability of rare earth minerals and we 
could be mining rare earth minerals, sounds to me like that 
takes a lot of people to produce the equipment to be out there 
doing it. That if we are looking at increased ability to find 
more energy sources for the United States, it takes people to 
go out and do that. And if you are talking about providing 
cheaper energy for the United States over the long term, that 
affects our economy. Bottom line to everything here, it seems 
to me, is jobs.
    This seems to me to be screaming at us that there is this 
availability of jobs for Americans out there if we were to do 
this, more than anything else. Would each of you comment? I 
mean, is that really what is fundamentally at stake here?
    Mr. Donohue.
    Mr. Donohue. The next great industry in this country is 
energy of every type, and that is going to create millions of 
jobs over time. We should not make this more difficult for us 
to access rare earth minerals, energy, and whatever else we 
might find while 161 other countries are out making their plans 
to do so. This is in the enlightened self-interest of this 
country and in the interest of our national security.
    And I respectfully say to those that disagree, and by the 
way, we have tried to learn something from them, that the 
positive part of this treaty so overwhelms and outweighs those 
objections, which I respect, that the plurality, as they would 
say up here, is highly significant.
    The Chairman. Mr. Gerard.
    Mr. Gerard. Senator, I was just going to add to that. Tom 
mentioned something that is very significant today. The energy 
opportunities of the United States today are of game-changing 
proportions. To put it in simple context, an economist just a 
few months ago said that within the next decade if the U.S. 
policy is done well, we will become the new Middle East for 
energy production.
    That is how serious this discussion is if we, as a nation, 
are serious about producing our own energy. So I think there 
are two dimensions to this answer. The first one is we need to 
think long term. We have to look at things like the Law of the 
Sea and say how do we secure our energy future, not only the 
next 10 to 20 years, but the next 50 to 100 years?
    Oil and natural gas will continue to be the foundation 
energy building block for many decades yet to come, even as we 
strive to move to alternative renewable forms and other less 
emitting forms of energy.
    But the second dimension we shouldn't overlook, and it goes 
back to Senator Corker's point earlier. We have got to get our 
act together as a country in our own permitting processes, in 
our own political will, and ability to produce our own energy. 
We can secure the border. We can secure the long-term future 
through the Law of the Sea, but we have got to have processes 
within the United States where we say energy is a priority.
    As Senator Casey pointed out earlier, in the last 18 
months, we have created 83,000 jobs in the State of 
Pennsylvania producing clean-burning natural gas that saved the 
consumers of Pennsylvania close to a quarter of a billion 
dollars in 1 year because that supply drove the price of 
natural gas down to where it is today.
    Now it can't stay there forever, but we have the same 
potential with oil. North Dakota, the No. 2 producer. 
Unemployment rate, 
3 percent. Median wage in North Dakota in oil production, 
$90,000 a year. Median wage for everybody else, $42,000 a year.
    We talk about jobs. We talk about energy security and 
revenue to the Government. We ought to think about energy 
particularly as we make this decision because it will be 
altering for this Nation for many years yet to come.
    The Chairman. Mr. McAdam, do you want to add? You don't 
have to, but if you want to add anything.
    Mr. McAdam. No, I think the only thing I would add is that 
while we aren't out mining the seabed for rare earth minerals, 
we are putting these cables across that provide the 
infrastructure so that these companies can make the investments 
and run their businesses effectively. And I think we should do 
everything we can to eliminate the risks associated with this 
vital network.
    The Chairman. Well, I want to thank all of you. I think 
your testimony has been extraordinarily significant, very, very 
thought out and thorough and, I think, important to this 
process. So we are very, very grateful to all of you for taking 
time here today.
    We will, as I said, leave the record open for a week, and 
we look forward to continuing the discussion with you over the 
course of the next months. Appreciate it.
    We stand adjourned. Thank you.
    [Whereupon, at 11:32 a.m., the hearing was adjourned.]
                              ----------                              


              Additional Material Submitted for the Record


         Responses of Thomas J. Donohue to Questions Submitted 
                       by Senator James E. Risch

    Question. If the United States accedes to the United Nations 
Convention on the Law of the Sea (UNCLOS), U.S. companies seeking to 
engage in exploratory or development activity in the deep seabed will 
be required to obtain permission from the International Seabed 
Authority. The 1994 Agreement relating to the Implementation of Part XI 
of UNCLOS changed the obligations of States Parties and their 
contractors in regard to the transfer of technology relating to the 
deep seabed. The relevant section of the 1994Agreement reads:

      SECTION 5. TRANSFER OF TECHNOLOGY
          1. In addition to the provisions of article 144 of the 
        Convention, transfer of technology for the purposes of Part XI 
        shall be governed by the following principles:
          (a) The Enterprise, and developing States wishing to obtain 
        deep seabed mining technology, shall seek to obtain such 
        technology on fair and reasonable commercial terms and 
        conditions on the open market, or through joint-venture 
        arrangements;
          (b) If the Enterprise or developing States are unable to 
        obtain deep seabed mining technology, the Authority may request 
        all or any of the contractors and their respective sponsoring 
        State or States to cooperate with it in facilitating the 
        acquisition of deep seabed mining technology by the Enterprise 
        or its joint venture, or by a developing State or States 
        seeking to acquire such technology on fair and reasonable 
        commercial terms and conditions, consistent with the effective 
        protection of intellectual property rights. States Parties 
        undertake to cooperate fully and effectively with the Authority 
        for this purpose and to ensure that contractors sponsored by 
        them also cooperate fully with the Authority;
          (c) As a general rule, States Parties shall promote 
        international technical and scientific cooperation with regard 
        to activities in the Area either between the parties concerned 
        or by developing training, technical assistance and scientific 
        cooperation programmes in marine science and technology and the 
        protection and preservation of the marine environment.

   Does Section 5 of the Agreement give you and your members 
        full confidence that, should they engage in exploratory or 
        development activity in the deep seabed, they will not be 
        compelled to share proprietary technology?
   How does the Chamber interpret the obligation to ``cooperate 
        fully and effectively with the Authority'' for the purpose of 
        sharing deep seabed mining technology with the Enterprise or 
        developing States?
   What types of deep seabed technology is the Chamber and its 
        members currently willing and able to transfer or otherwise 
        share with the Enterprise or with developing States?

    Answer. In his Oceans Policy Statement dated January 29, 1982, 
President Reagan objected to the provision in the draft Law of the Sea 
Convention that required transfer of technology by seabed mining 
companies to the International Seabed Authority (ISA) and to developing 
countries. President Reagan's concern was addressed in the 1994 
Agreement. Section 5(2) of the Annex to the 1994 Agreement provides 
that the technology transfer provisions of the original 1982 Convention 
``shall not apply.''
    Instead, Section 5 of the 1994 Agreement provides that the ISA may 
``request'' that a deep seabed mining contractor and its sponsoring 
State to ``cooperate in facilitating the acquisition of deep seabed 
mining technology'' by the Enterprise or by a developing State. The 
U.S. Chamber is not aware of any requests that have been made to 
potential U.S. seabed mining contractors or to the United States to 
acquire seabed technology.
    Unlike the original 1982 Convention, Section 5 of the 1994 
Agreement does not require a U.S. contractor or the United States to 
transfer any proprietary technology. Moreover, contractors and their 
sponsoring states are required only to facilitate the acquisition of 
mining technology ``on fair and reasonable commercial terms and 
conditions'' and ``consistent with the effective protection of 
intellectual property rights.'' Thus, if the ISA or the developing 
State requesting the technology is unwilling to acquire the technology 
on fair and reasonable commercial terms, or the contractor and 
sponsoring State believe that the transfer of the technology would not 
protect the intellectual property rights of the contractor, then there 
is no obligation whatsoever to facilitate the acquisition. These 
caveats give U.S. seabed mining contractors and the United States broad 
discretion to decline to facilitate inappropriate requests for seabed 
mining equipment.
    Of course, in many cases U.S. companies may affirmatively want to 
sell deep seabed mining equipment or technology to other countries or 
their contractors, provided the terms are commercially reasonable and 
the U.S. companies' intellectual property rights are protected. U.S. 
equipment manufacturers will benefit economically by export sales of 
seabed mining equipment to other countries, just as U.S. companies 
already sell billions of dollars of on-land mining equipment, 
construction equipment, and other heavy machinery into other countries.

    Question. In your written testimony you stated that the United 
States must join UNCLOS to ensure that U.S. companies such as Lockheed 
Martin may engage in deep seabed mining. You further stated that 
``other U.S. companies'' are ``poised to expand their operations and 
create new jobs'' in the deep seabed mining industry, should the United 
States accede to the Convention.

   Please identify any and all members of the Chamber or any 
        other U.S. company that, to your knowledge or in your opinion, 
        are ``poised'' to engage in deep seabed mining in the event 
        that the United States accedes to UNCLOS.
   Please identify all members of the Chamber or any other U.S. 
        company that comprise the ``nascent deep seabed mining 
        industry'' mentioned in your written testimony.
   Should the United States accede to UNCLOS before the end of 
        the year, how long will it be before any such member(s) or 
        companies will take steps to explore the deep seabed and/or 
        engage in any form of deep seabed development activity through 
        the Authority?

    Besides the fact that the United States is not a party to UNCLOS, 
what legal, financial, commercial, or other factors, if any, are 
currently preventing U.S. companies from engaging in the development of 
the deep seabed?

    Answer. In my written testimony, I stated, with respect to deep 
seabed mining, that ``Lockheed and potentially other U.S. companies 
[are] poised to expand their operations and create new jobs.'' 
(Emphasis added.) In other words, U.S. companies other than Lockheed 
may be interested in engaging directly in deep seabed mining, now that 
the necessary technology is more readily available and the market for 
deep seabed minerals and rare earths is more favorable, provided they 
would be able to receive a license to engage in seabed mining.
    Moreover, Lockheed or other potential mining contractors are not 
the only U.S. companies that would be able to create jobs and benefit 
economically from the startup of a U.S. deep seabed mining industry. 
Numerous other U.S. companies in potentially dozens of States--such as 
engineering companies, consulting firms, exploration companies, 
exploration and mining equipment manufacturers, and mineral processing 
companies--would be able to assist or participate in aspects of the 
emerging deep seabed mining industry, with the potential addition of 
hundreds or thousands of jobs and tax dollars to the U.S. economy. By 
refusing to approve the Convention, the Senate is blocking the ability 
not only of Lockheed but also of a diverse group of U.S. companies in 
many States that could become part of a lucrative U.S.-based deep 
seabed industry.
    The primary obstacle to the commencement of deep seabed mining by 
Lockheed and related U.S. companies is that the United States has not 
joined the Law of the Sea Convention. Lockheed has made clear that it 
is unwilling to invest the billions of dollars necessary to engage in 
deep seabed mining unless it has clear legal title to specific claim 
areas in international waters. If the United States joins the 
Convention this year, Lockheed or another U.S. mining contractor could 
apply for and receive a license at the next annual meeting of the ISA 
in July 2013.

    Question. U.S. persons and companies, including Lockheed Martin, 
are currently permitted to engage in deep seabed exploration and mining 
pursuant to the Deep Seabed Hard Mineral Resources Act (DSHMRA; 30 
U.S.C. Sec. Sec. 1441 et seq.), which states in part that ``it is the 
legal opinion of the United States that exploration for and commercial 
recovery of hard mineral resources of the deep seabed are freedoms of 
the high seas.''

   Please identify any and all legal barriers that would 
        prevent U.S. persons and companies from seeking licenses for 
        exploration and permits for commercial recovery of deep seabed 
        minerals pursuant to DSHMRA.
   Please explain why U.S. persons and companies are unable to 
        engage in deep seabed mining pursuant to DSHMRA and its 
        regulatory regime and why U.S. accession to UNCLOS is legally 
        necessary to do so.

    Regardless of U.S. accession to UNCLOS, do current U.S. laws, 
including DSHMRA, provide legitimate and sufficient legal authority and 
protections for U.S. companies to engage in exploratory or development 
activity in the deep seabed?

    Answer. The Deep Seabed Hard Mineral Resources Act (DSHMRA) was not 
intended to serve as a unilateral U.S. substitute for the international 
legal authority provided by the Law of the Sea Convention. Rather, the 
DSHMRA was enacted by Congress ``to establish, pending the ratification 
by, and entering into force with respect to, the United States of such 
a treaty, an interim program to regulate the exploration for and 
commercial recovery of hard mineral resources of the deep seabed by 
United States citizens.'' (Emphasis added.)
    Indeed, section 1402 of the DSHMRA specifically states that the 
United States ``does not thereby assert sovereignty or sovereign or 
exclusive rights or jurisdiction over, or the ownership of, any areas 
or resources in the deep seabed.''
    Accordingly, although the DSHMRA provides a U.S. domestic law 
framework for U.S. companies to seek licenses to engage in exploration 
and commercial recovery of deep seabed minerals, it does not provide 
the clear international legal title that U.S. companies--especially 
public companies that owe special obligations to public investors--
require before investing billions of dollars in exploration and 
resource extraction.
    Lockheed Martin has applied under the DSHMRA to the National 
Oceanic and Atmospheric Administration and has received an extension of 
its licenses to engage in deep seabed exploration. Lockheed has 
informed NOAA that it is prepared to engage in preparatory activities 
on land, but that it would not make the ``substantial investment in at-
sea exploration'' until it has the ``adequate assurance of security of 
tenure at the international level'' that would be provided by U.S. 
ratification of the Law of the Sea Convention. See 77 Fed. Reg. 12445, 
12446 (February 29, 2012).

    Question. It is a fact that companies in the United States, 
including Lockheed Martin, may enter a joint venture or other 
arrangement with countries that are already party to UNCLOS for the 
purpose of engaging in deep seabed mining under the Convention. Indeed, 
there is already precedent for such an arrangement between a Canadian 
company (Nautilus Minerals Inc.) and the Kingdom of Tonga, which were 
awarded a 15-year contract by the Authority in January of this year 
under the name Tonga Offshore Mining Limited.

   Should the United States not accede to UNCLOS, does anything 
        prevent U.S. companies that desire to engage in development 
        activity in the deep seabed from partnering with a States Party 
        (or a company therefrom) that can sponsor the endeavor before 
        the International Seabed Authority?
   In fact, with almost all contemporary oil, gas, and other 
        natural resource extraction and development enterprises 
        horizontally integrated, would not a partnership be expected 
        and even desired?

    Answer. U.S. companies may not be sponsored for licenses to engage 
in deep seabed mining under the Law of the Sea Convention by countries 
other than the United States. Article 4 of Annex III to the Convention 
provides that ``Each applicant [for a license] shall be sponsored by 
the State Party of which it is a national . . .'' For applications by a 
partnership or consortium, each company must be sponsored by the 
country of its nationality.
    A U.S. company could, of course, establish a foreign subsidiary 
that could be sponsored by another country for a license for the sole 
purpose of engaging in seabed mining. But this forced approach would 
have numerous commercial and economic disadvantages both for the 
company involved and for the United States, which would lose license 
and tax revenue and the jobs benefits.
    Equally important, U.S. companies, while making substantial 
investments in deep seabed exploration or mining, would lose the 
benefit of U.S.-input into the development of the rules and regulations 
for the seabed mining industry. In contrast, if the United States joins 
the Convention, the United States will have a permanent seat on the 
Council of the ISA, which would give the United States a permanent and 
significant voice in the development of the rules and regulations for 
seabed mining and the institutional management of the ISA.
    The ISA has now approved 17 applications by Parties to the 
Convention for contractors to engage in exploration for deep seabed 
minerals. At its most recent annual meeting, the ISA approved five 
licenses for seabed exploration of sulphides and polymetallic nodules, 
including applications by Korea, France, the United Kingdom, Kiribati, 
and Belgium. Clearly, the entities involved in these applications have 
concluded that there is significant mineral wealth on the deep seabed. 
The United States, however, had no voice in reviewing these 
applications and will have no voice in the development of the rules and 
regulations that will regulate the international seabed mining 
industry, unless the United States becomes party to the Convention. 
U.S. companies are losing significant commercial opportunities, and the 
potential to create thousands of new jobs, because the United States is 
not party to the Convention.
                                 ______
                                 

          Responses of Lowell C. McAdam to Questions Submitted
                         by Senator Jim DeMint

    Question. Verizon is currently fighting the FCC in court regarding 
two recently imposed regulations--net neutrality (``open Internet 
order'') and data roaming mandates. The FCC is a 5-member tribunal of 
sorts that is a creature of the U.S. Congress and bounded in theory by 
the laws of this country. They often overstep these laws, however, and 
appeals to the U.S. judiciary are entered by affected private 
companies. One wonders why a company like Verizon, which has 
consistently been affected by and fought extra-legal FCC decisions, 
would work for the creation of a new tribunal--particularly one that 
operates under the far less transparent and consistent authority of 
international law.
    Looking at the first case involving data roaming, the rules, which 
the FCC approved on a party-line 3-2 vote in April 2011, will require 
mobile broadband providers to provide data roaming on ``commercially 
reasonable'' terms and conditions. In essence this mandate requires 
that a company which has built its own network must offer that network 
to another company that, for whatever reason, has chosen not to build a 
network in the same geographic area. Here is Verizon's statement at the 
time of the order: ``By forcing carriers that have invested in wireless 
infrastructure to make those networks available to competitors that 
avoid this investment, at a price ultimately determined by the FCC, 
today's order discourages network investment in less profitable 
areas,'' Tom Tauke, Verizon Communications' executive vice president of 
public affairs, policy and communications, said in a statement. ``That 
is directly contrary to the interests of rural America and the 
development of facilities-based competition and potential job creation. 
Therefore, it is a defeat for both consumers and the innovation 
fostered by true competition.''

   What do you believe will happen when dealing with an 
        international body, with even less transparency or 
        accountability to American companies and taxpayers?
   Do you believe that an international body with little to no 
        accountability to the United States or industry will legislate 
        in a more satisfactory way than the FCC?

    Answer. We believe that the Convention would be helpful in dealing 
with the threat of expansion by coastal States. If the United States 
were a party to the treaty, it could act on behalf of U.S. companies to 
protect U.S. interests in undersea cables. Without this protection, 
U.S. companies are forced to seek out the protection of foreign 
governments to help safeguard U.S. investments. Thus, ratification of 
the Convention will help U.S. companies better contend with disruptions 
or threats to undersea cable service by giving them an avenue to work 
with the U.S. Government in a way that currently is not available. Once 
the United States is a party to the Convention, Verizon and other U.S. 
telecommunications companies can work with the appropriate U.S. 
agencies to enforce, when necessary, the freedoms to lay and repair 
cables on the Continental Shelf and the EEZ--saving millions of dollars 
over the life of a cable system, improving the reliability of our 
critical infrastructure, and putting U.S. companies on a level playing 
field for operating international cable systems.

    Question. Second, regarding Net Neutrality, there was another 3-2 
decision by the FCC in December 2010. The ``open Internet'' rules 
require wireline providers to be transparent in how they manage and 
operate their networks; prohibit the blocking of traffic on the 
Internet; and, prohibit wireline broadband providers from unreasonably 
discriminating against traffic on their network. Verizon accuses the 
FCC of overstepping its authority. And the company has said that 
because the FCC is trying to impose regulations it doesn't have 
authority to impose, it's creating uncertainty in the market that will 
ultimately harm innovation. Verizon's quote upon filing their legal 
challenge: ``Verizon is fully committed to an open Internet,'' Michael 
E. Glover, Verizon senior vice president and deputy general counsel, 
said in a statement. ``We are deeply concerned by the FCC's assertion 
of broad authority to impose potentially sweeping and unneeded 
regulations on broadband networks and services and on the Internet 
itself.''

   How long do you think it will be before you will have to buy 
        a lease or pay fees to the international body to lay cable?
   Are you prepared to pay for the additional fees, such as an 
        environmental impact study when you lay cable on the ocean 
        floor?

    Answer. The Convention gives cable owners the explicit legal 
protection for the freedom to lay and maintain cables in international 
waters. If the United States ratifies the treaty, it will have the 
ability to work with U.S. companies and our allies to help protect U.S. 
interests in underseas cables, including in connection with assessing, 
and if appropriate, challenging, any fees or levies assessed.