Mr. Auerbach also stated that the outer limits of the Continental Shelf most probably cannot be negotiated apart from the issue of the regime for the subsea areas beyond the shelf.

With regard to the regime governing the exploration and exploitation of resources under the deep seas, the Commission recommended creation of an International Registry Authority, as an autonomous agency within the United Nations family. Membership would be determined according to a "multiple principle" of representation, taking into account technological capacity and geographic distribution. Claims to exploit would be granted to nations on a "first come, first registered" basis, provided that the body undertaking exploration was technically and financially competent and willing to do so. Exploration and exploitation activities would then be conducted under the civil and criminal law of the registering nation, however, the Authority would be permitted to inspect operations under the registered claims.

The Commission also recommended that an "intermediate zone" be created to encompass the seabed beyond the redefined shelf, with a seaward boundary of the 2,500-meter isobath or 100 nautical miles (from the baselines used to measure each nation's territorial sea), whichever is greater. According to Mr. Auerbach:

This intermediate zone would be treated in all respects like the subsea areas of the deep seas beyond it, except that only the coastal nation or its licensees, which need not be its nationals, would be authorized to explore or exploit the mineral resources in the zone. Only the coastal nation, therefore, would be authorized to register claims in its intermediate zone with the International Registry Authority.

The Commission recommended that the Secretary of the Interior be authorized to waive competitive bidding in the intermediate zone, on the grounds that such discretion is necessary to encourage the recovery of mineral resources, including oil and gas, from deeper waters. Dr. James A. Crutchfield, Professor of Economics in the Graduate School of Public Affairs at the University of Washington, Seattle, also served on the Stratton Commission and presented its position to the Subcommittee.

Dr. Crutchfield gave three reasons why he favors the Commission's proposal for an intermediate zone beyond a narrowly-defined Continental Shelf. They were: First, the proposal is an acceptable compromise between security interests and the desire to encourage exploitation as it becomes economically feasible;

Second, the proposed regime would provide a flexible basis for development on an orderly basis as technological capability increases, and,

Third, the intermediate zone arrangement would offer an opportunity for the smaller nations and noncoastal states to derive some benefits from the exploitation of seabed minerals.

A written statement was received from Lewis M. Alexander, Professor of Geography, University of Rhode Island, and incorporated into the hearing record.

He supported the intermediate zone proposal as a means of accommodating conflicting interests and of adjusting the interests of the United States with those of other states of the world community.

He stated that the United States would seem to favor a narrow Shelf in terms of defense and science, in order to maintain as large an area of high seas as possible, but would favor a wide Shelf in terms of mineral exploration and exploitation.

Under the proposed intermediate zone regime, "mineral exploration and exploitation would be under the control of the coastal state, while defense and scientific activities could be carried on by other countries within the zone.'

Professor Alexander also predicted the type of regime other countries of the world would support and reached several conclusions. He said almost half the countries of the world might support an international regime covering as broad an area as possible, since they have little or no Continental Shelf to develop. In terms of technological capability, developed countries might favor a wide area of national jurisdiction, while the developing countries would gain from both a wide Shelf, leaving them with large areas to lease to foreign entrepreneurs, or a large international regime and an international fund, which would be used to aid the developing countries.

Mr. Alexander stated that "the great advantage of the intermediate zone proposal is that it provides for a belt of transition between the area where the legitimate interests of the international community are paramount and the area where the legitimate interests of the coastal State prevail." In addition, it could be adopted in stages, beginning with a limited interim provision and progressing to the solution of more difficult problems.

He indicated that there are four basic methods used by spokesmen who advocate a policy conclusion regarding the limits of national jurisdiction (1) exploitability, (2) water depth, (3) geology, and (4) distance from shore. After considering the advantages and disadvantages of each of these, Mr. Alexander suggested the following:

The Continental Shelf, over which the coastal State exercises sovereign rights for the purpose of exploring it and exploiting its natural resources, should extend only as far seaward as the 200-meter isobath. Beyond this would be the intermediate zone, * * * extending to the geographic point of contact between continental and ocean-type rock. This would represent a more viable geologic boundary than would the outer edge of the continental rise, which in some areas would lie hundreds of miles out on the ocean floor. The seaward boundary of the intermediate zone would be a series of straight lines joining geographic coordinates equated as closely as possible with the point of contact beneath the seabed between the two types of rock. This regime would apply to islands as well as to the mainland.

Mr. Alexander concluded that:

The United States should approach with extreme caution any proposals for further reducing the areas of the high seas, whether within the water column or on or beneath the seabed. Where restrictions to freedom are necessary, alternative arrangements to the outright extension of exclusive national rights are often possible.

SUBCOMMITTEE CONCLUSIONS REGARDING SHELF LIMITS

It appears to us that those who advocate a narrow Continental Shelf, or a narrow Continental Shelf coupled with an intermediate. zone, do not do so on legal grounds, that is, on a reasoned interpretation of the legal doctrine of the Continental Shelf. Instead, it seems that their conclusions are grounded more on a policy preference.

As we stated in the introduction of this report, we adopt the view of the American Branch of the International Law Association regarding the seaward limits of the legal Continental Shelf. That position is not only consistent with the wisest of policy preferences, but more importantly soundly interprets the present law. It holds that "rights under

the 1958 Geneva Convention on the Continental Shelf extends to the limit of exploitability existing at any given time within an ultimate limit of adjacency which would encompass the entire continental margin."

This interpretation, we feel, is the most objective, rational, and sensible we have had put before us. It avoids the two major errors commonly committed by those who attempt to interpret the 1958 Geneva Convention on the Continental Shelf regarding its definition of the seaward limits of the Shelf. These misconstructions are (1) that the Continental Shelf Convention is so vague as to be meaningless insofar as the shelf limits question is concerned; and (2) that the present seaward limit of the legal Continental Shelf is already fixed at the edge of the entire continental margin.

Regarding the vagueness misconstruction, we are persuaded that the 1958 Geneva Shelf Convention is sufficiently precise as to permit a positive, reliable, and adequate interpretation of the breadth of the legal Shelf. The exploitability clause read together with the adjacency clause clearly connotes an expanding boundary which at any given time extends to the limit of exploitability then existing, within an ultimate limit of adjacency. Adjacency as applied to the legal Continental Shelf means the seaward limit of the natural prolongation of the submerged land continent. The submerged land continent encompasses the geomorphic Shelf, slope and rise. Thus, the rule laid down in the 1958 Geneva Convention on the Continental Shelf, as we interpret it, holds that the sovereign rights of coastal nations to explore and exploit their legal Continental Shelf extend to the limit of exploitability existing at any given time within an ultimate limit of adjacency which encompasses the entire continental margin.

As to the misconstruction regarding present limits, it has been contended that as Article 2 of the Geneva Shelf Convention precludes any exploration or exploitation of the Shelf without the consent of the coastal State and moreover assures the exclusivity of such rights on the part of the coastal State, the limits of the Shelf-for all practical purposes must already extend to the edge of the submerged land continent. To adopt this view renders the exploitability clause meaningless. We therefore prefer the view of the American Branch of the International Law Association, quoted above, which gives appropriate recognition to the exploitability clause.

The significance of the exploitability clause, however, we feel is not so much related to the ultimate limit of the legal Shelf as it is to the present limit. What then is the value of an expanding boundary when the ultimate limit has been predetermined? We feel that a boundary limited at any given time to the existent limits of exploitability precludes qualitatively excessive claims of jurisdiction on the part of coastal nations. The rights of the coastal nation in its legal Shelf, as provided for in the 1958 Geneva Convention, relate primarily to the exploration and exploitation of natural resources.

The drafters of the 1958 Geneva Convention were mindful of the need to limit the jurisdictional claim of the coastal nation to the natural resources of the submerged land continent in order to preclude any abrogation of the high seas freedoms. The expanding boundary concept is consistent with the intent of the Convention's drafters as

it is an additional means of prohibiting jurisdictional claims not related to the exploration and exploitation of the natural resources of the submerged land continent.

Some, however, have suggested that a few coastal nations have been overstepping their rights under the Geneva Shelf Convention by claiming areas of exclusive national jurisdiction far in excess of those contemplated by that treaty, and that such claims qualitatively are in abrogation of the freedom of the seas doctrine. We have found little evidence to support such allegations. The overwhelming majority of coastal nations which have become parties to the Shelf Convention have limited their jurisdictional claims both qualitatively and quantitatively to the terms of that treaty. They have indeed honored their solemn commitments.

Nevertheless, because of the small handful of examples of jurisdictional claims alleged to be violations of the Shelf Convention some few persons have advocated superseding the 1958 Geneva Convention on the Continental Shelf with a new treaty designed to incorporate anew the freedom of the seas doctrine. We see no more logic in such a position than we do in reenacting the criminal statutes. The best means to insure that a law is obeyed is to seek to enforce it, not to pass a new law redundantly stating an existing crime to be unlawful. Likewise, the best means to preserve the freedom of the seas doctrine is to insist that it be adhered to. This cannot be achieved by proposing a new treaty which restates the already existent doctrine of the freedom of the seas. In short, the freedom of the seas doctrine is adequately incorporated in the existing Geneva Conventions on the Law of the Seas and is well recognized in customary principles of international law.

Returning to the Continental Shelf issue, we made reference above to the Geneva Convention as one useful source of law which helps define the nature of our rights in our submerged land continent. We also note the 1969 opinion of the International Court of Justice concerning the North Sea Cases which affirms the source of our rights in our submerged land continent. That source is an inherent right which exists by virtue of our sovereignty over the land. Our sovereign right to explore and exploit the natural resources of our submerged land continent is therefore not dependent on the acquiescence of other nations. As the Court stated, it is an inherent right. Accordingly, no nation, or group of nations, may negotiate away that right without our consent. Nor may we, or any other group of nations, negotiate away the sovereign right of any other coastal nation to explore and exploit its natural resources, without that nation's consent.

IV. ECONOMIC AND CONSERVATION CONSIDERATIONS RELATED TO ALTERNATIVE OUTER CONTINENTAL SHELF BOUNDARY LOCATIONS

The following areas of study were discussed in the testimony of economists: the potential value of seabed minerals in terms of their contribution to the growth of the U.S. economy, the appropriate Federal role in terms of providing incentives and control through rules and regulations, the economic impact of alternative Outer Continental Shelf boundary locations and regimes governing areas beyond national jurisdiction, and the accommodation of conflicting uses of the ocean.

For the purposes of this report we refer only to testimony related to the Shelf limits issue, that of establishing a regime for the deep seabed, and the issue of the interim policy to be followed pending the entry into force of a deep seabed regime.

Testifying were: Leonard L. Fischman, a consulting economist (who supported the narrow Shelf interpretation of the 1958 Geneva Convention); Prof. Walter J. Mead from the University of California at Santa Barbara, and Miller B. Spangler of the National Planning Association (who advocated a wide-shelf interpretation).

Dr. Spangler recommended that development of the following be encouraged: (1) offshore oil development in difficult environments or presently high-cost regions, (2) deep sea nodules having high quantities of strategic metals, and (3) new fishing technologies to secure U.S. leadership in aquaculture developments. These resources were selected because their scale of development has a large potential for easing long-range balance-of-payments difficulties, finding substitutions for growing imports, and reducing our dependency on politically unstable regions of the world for strategic materials affecting our national security.

Incentives should be initiated early in order to secure an ample margin of U.S. technological leadership, Dr. Spangler recommended. Selective application of a "principle of variable incentives" to those offshore oil leases which enhance the national interest, should be maintained only until technologies are proven to be cost-effective. Suitable incentives would include higher allowable rates of oil production, larger lease sales, and reduced royalty payments.

A different combination of incentives is necessary to promote the development of a cupro-nickel nodule industry, due to the large techno-economic risks of operating in deep water, the uncertainties over future jursidiction of the deep seabed minerals, and market uncertainties. Alternative approaches which might be followed by the Federal Government include the funding of a major fraction of the research and development costs of a full-scale mining operation by private firms awarded contracts in competitive sealed bidding, financing development on a pilot scale, or establishing a quasi-public corporation to develop and operate nodule mining activities.

Also suggested by Dr. Spangler were (1) the imposition of market controls to attract the participation of land mining firms and to protect their interests, and (2) tax abatement measures.

In discussing the establishment of rules and regulations for marine mining operations beyond the limits of national jurisdiction, Dr. Spangler stressed the criticality of encouraging investment by U.S. enterprise while at the same time promoting both our national security interests and sound international relations.

He favored the wide-shelf interpretation of the 1958 Geneva Convention and stated that "the 'rubber boundary' character of the present Geneva Convention need not impede government-business cooperation in the United States to develop marine resources for essentially the full width of the Continental Shelf, slope, and rise." He found little reason for concern that the wide-shelf interpretation would exclude U.S. firms from mineral activities off the coasts of other nations, on the grounds that satisfactory arrangements in the past have been made to allow U.S. oil companies to invest in operations off foreign shores.