Foreign Relations of the United States, 1969–1976, Volume E–3, Documents on Global Issues, 1973–1976

59. Executive Summary of the Report Prepared by the Antarctic Policy Working Group on United States Policy on Antarctic Mineral Resources¹ ²

Washington, undated

NSDM 263 Response: U.S. Policy On Antarctic Mineral Resources

Executive Summary

NSDM 263 directed the Under Secretaries Committee to analyze what the U.S. might wish to seek or to avoid in discussions on an internationally agreed approach to any commercial exploration and exploitation of Antarctic mineral resources, and requested a report on preliminary consultations and a proposed diplomatic and political action program.

NSDM 263 further provided that it is the objective of the United States to ensure that, if undertaken, commercial exploration and exploitation in Antarctica do not disrupt implementation of the Antarctic Treaty or become a cause for significant international discord; to ensure that any exploitation is compatible with environmental considerations and with U.S. obligations under the Treaty; and to gain acceptance of an internationally agreed approach to commercial resource activities which would (a) permit free access to the Antarctic Treaty area; (b) be without prejudice to and appropriately compatible with, U.S. law of the sea interests; (c) provide for the protection of the Antarctic environment; and (d) preserve rights under the Treaty of scientific research. It also provided that while the U.S. is seeking an internationally agreed approach, it should oppose actions by any nation with the purpose of commercial exploration and exploitation in Antarctica, and urge other nations to join the U.S. in this interim policy.

Introduction:

The Eighth Antarctic Consultative Meeting to be held June 9–20 in Oslo, will consider the issue of “Antarctic resources—effects of mineral exploration.” A preparatory meeting will discuss the relationship between Antarctica seabed resources and the current Law of the Sea negotiations.

Seven countries have made territorial claims in Antarctica; certain claims overlap and some areas remain unclaimed. The U.S. has not advanced a claim. Along with the Soviet Union and others, the U.S. has refused to recognize the validity of any territorial claim, and has consistently sought to protect its juridical position on nonrecognition of claims.

Twelve states, including the seven claimant states and the major non-claimants with Antarctic interests (including the U.S., U.S.S.R., and Japan) are signatories to the 1959 Antarctic Treaty. The Treaty has largely eliminated disputes arising out of the conflicting claims situation. The Treaty has heretofore provided a useful and mutually beneficial framework for international cooperation in Antarctica, while prohibiting military activities on the continent.

The potential for exploitation of mineral resources raises questions regarding the continued viability of the Treaty regime should commercial resource operations commence. In particular, should commercial mineral recovery occur, it may lead to discord between claimants and non-claimants, or between competing claimants over resource ownership.

I. Nature of an Internationally Agreed Approach

A. U.S. Interests at Stake

U.S. interests underlying NSDM 263 may be stated as follows:

1. Preserve the viability of the Antarctic Treaty and, in particular, the underlying arms control, inspection, freedom of scientific research, environmental protection and international cooperation features.

2. Prevent Antarctica from becoming a source of international conflict.

3. Ensure that any resource exploration and exploitation is consistent with environmental considerations.

4. Facilitate an increase in the global supply of minerals resources, through

(a) Defining property rights to Antarctic mineral resources;

(b) Ensuring reasonable conditions of investment consistent with U.S. interests, including environmental protection.

5. Ensure non-discriminatory guaranteed access by the U.S. to all areas to which an Antarctic mineral resource regime may apply.

6. Ensure appropriate investment opportunity for U.S. nationals.

B. Nature and Economics of Commercial Recover of Antarctic Mineral Resources

An interagency working group on this topic reached the following conclusions:

Offshore areas - Available data and scientific inference indicate a good probability that oil and/or gas may be present in the Antarctic continental shelf. U.S. firms have indicated some interest in conducting exploratory work, but none have indicated specific plans to do so. The difficulties and costs of production in Antarctica suggest that commercial exploitation is unlikely at least in the next decade.

Manganese nodules of the Antarctic seabed have relatively low metal content, and do not appear to be of commercial interest in the foreseeable future.

Land areas - Geological theory and scientific findings indicate a strong likelihood that hard minerals, including iron and coal, are present in the Antarctic land mass, but suggest that petroleum is not. Commercial exploitation of hard minerals appears unlikely in the foreseeable future.

C. Alternative Internationally Agreed Approaches to Antarctic Mineral Resources

This section seeks to refine the NSDM 263 directive to seek an “internationally agreed approach.”

It is concluded that the U.S. should not seek a detailed regime establishing detailed rules and regulations governing resource activities at this time. While the U.S. has taken this general approach in the Law of the Sea negotiations, the difference in the negotiating forum, the lack of sufficient resources information, and the potential for economic inefficiency that might result from such a detailed system make it inappropriate in Antarctica.

However, substantial steps can now be taken to develop an internationally agreed decision-making competence which could make the necessary detailed decisions when and if needed in the future. Any such procedure should assure to the U.S. sufficient control over resource decisions to protect U.S. interests. Different procedures might be used to make resource policy decisions, and to implement decisions once made.

1. Competence for Resource Policy Decisions

Consideration was given to exclusive reliance on the existing Antarctic Treaty consultative mechanism to make resource policy decisions. This approach was rejected by all agencies for the time being. The consultative process employs the rule of unanimity which may prevent furtherance of U.S. environmental and scientific interests. However, this does not preclude use of the consultative forum for negotiation of a resource regime.

OPTION 1: National Legislative Approach

The U.S. should seek an agreement which would recognize the right of all nations to undertake mineral resource activity exclusively pursuant to national legislation. Such an agreement should require each party to recognize rights granted by others only when the terms and conditions of the domestic legislation are substantially similar to its own legislation. The U.S., under this option, would not rely on “agreed measures” of the Consultative Meetings which would be incompatible with our domestic legislation or would interfere with commercial recovery operations conducted pursuant to such legislation.

Proponents of Option 1 argue that this approach would avoid potentially burdensome regulation by an international body; would introduce competition among the licensing states, giving each state an incentive to adopt an optimal legislative regime; would create incentives for states to seek the optimal level of pollution and scientific activity; would offer the claimants greater benefit from access to all of Antarctica than from access to their claimed areas alone; and would allow bargaining among firms to deal with other problems.

Opponents of Option 1 argue that it might be seen as the functional equivalent of unilateral exploitation and would be unacceptable to others; would effectively require claimant states to permit exploitation under foreign legislation in areas they regard as national territory, an equivalent to renunciation of their claims; could lead to serious international discord and set the stage for a “U.N. Takeover” of Antarctica; would lead to “flags of convenience” and inadequate protection of the sensitive Antarctic environment; would lead U.S. firms to seek foreign licenses to the detriment of U.S. environmental, balance of payments, and energy interests; would not necessarily stabilize property rights; and would not solve resource problems such as the common pool problem nor allow orderly resolution of competing claims to resources.

OPTION 2: A New Decision-Making Competence

The U.S. should seek an agreement which would recognize the right of the U.S. and others to undertake mineral resource activity in Antarctica subject to a special mineral resource arrangement. Issues such as the mechanism for acquiring rights to resources resolving competing claims, managing the common pool problem, and establishing and enforcing standards to protect the environment would be addressed with sufficient flexibility to avoid problems that may be encountered with the existing consultative mechanism or exclusive reliance on domestic legislation. The U.S. should seek to emphasize reliance on balanced decision-making procedures which give us sufficient protection from adverse decisions, and basic agreed principles, which constrain and guide the decision-making procedures.

Proponents of Option 2 argue that this approach provides realistic opportunities to avoid resurfacing underlying conflicts regarding territorial claims; would better stabilize acquisition of property rights and facilitate commercial resource exploration and exploitation; reduces pressures on U.S. firms to operate under foreign legislation and flags of convenience; best protects U.S. environmental, scientific, strategic, and other interests; and is consistent with the prior U.S. approach to Antarctic policy.

Opponents of Option 2 argue that a new decision-making procedure adequate to protect U.S. interests might also have the power to impose discriminatory and potentially burdensome regulations on mineral resource activities; that it may not be possible to change the existing rule of unanimity; and that the U.S. could unwittingly take a position contrary to our interests without more detailed consideration.

2. Implementing Procedures

If Option 2 is selected, a number of alternative procedures to implement resources decisions and policies should be explored. Some alternatives considered here include implementation through the national legislation and practices of the Consultative Parties; implementation through a single Party acting on behalf of the others with rotating responsibility; and creation of an international technical administration. It was concluded that it is premature to decide who should implement resource policy decisions, and that this issue should be kept under review.

3. Compulsory Dispute Settlement

It is recommended that the U.S. should seek agreement on binding compulsory third party dispute settlement procedures regarding potential mineral resource activities in Antarctica.

D. Scope of Immediate U.S. Objectives

OPTION: The U.S. should seek first to achieve a prompt resolution of issues related to the exploration phase of development and basic conditions related to the exploitation phase, while pursuing a more comprehensive settlement of exploitation issues.

Supporters of this option argue that it simplifies further negotiations by concentrating on the most immediate problem; that exploration may suggest exploitation is unlikely and that further negotiations are therefore unnecessary; and agreement on exploration may be possible without addressing the underlying claims issue.

Opponents argue that firms would be less likely to undertake exploration without a stable exploitation regime; that firms would face uncertainties after exploration as to when and under what conditions exploitation could proceed; and that negotiation of an exploitation system would be more difficult after the existence and location of resources is confirmed.

II. Regime Applicable to Offshore Seabed Resources

This section raises the question of the relationship between an Antarctic mineral resources regime and the International Seabeds Resources Authority (ISRA) under negotiation in the Law of the Sea negotiations. This issue raises highly complex legal problems. Three options are presented:

OPTION A: The U.S. should seek a special regime for offshore seabed resources in Antarctica which guarantees access for the U.S. and others to the area to which the regime applies

Proponents of Option A argue that the LOS deep seabed resource regime will be the product of a highly politicized negotiation, and is not a starting point for Antarctic policy; that ISRA jurisdiction over Antarctic seabed resources would force the claimants to assert vigorously their claims to protect their juridical positions and that a breakdown of the Antarctic Treaty could result; that U.S. passivity on the issue or support for ISRA jurisdiction would impair our ability to achieve our objectives in the Antarctic forum; that it may be possible for the U.S. to provoke ISRA to extend its own jurisdiction at a later time if it becomes desirable to do so and the LOS Treaty is ambiguous in this regard; and that freedom of scientific research and preservation of the environment would be better served by a special Antarctic regime.

OPTION B: The U.S. should seek the inclusion of offshore mineral resources in Antarctica in the International Seabed Area

Proponents of Option B argue that a decision by the LOS Conference that offshore areas of Antarctica are beyond the limits of national jurisdiction is tantamount to a global rejection of the territorial claims in Antarctica; that the status of the high seas around Antarctica might be better protected; that freedom of scientific research and preservation of the marine environment are equally important elements of our LOS objectives; and that an LOS deep seabed resource regime might become effective before any special Antarctic regime, thus expediting resource production.

OPTION C: For the time being, the U.S. should reserve the option of applying either the ISRA regime or a special regime to offshore seabed resources in Antarctica

Proponents of Option C argue that we do not have sufficient information on the nature of either regime to make an intelligent choice at this time; that potential U.S. interests in the commercially attractive and ecologically sensitive living resources in Antarctic might be compromised by selection of either Option A or B, and that this study has not analyzed how the choice would impact on these interests; that our non-resource interests could be adequately protected either way; and that an LOS deep seabeds regime might become effective and needed technologies developed before a special regime is in place, thus expediting resource production.

III. Moratorium Policy

OPTION 1: The U.S. should continue its present interim policy: during the time the U.S. is seeking an internationally agreed approach, it will oppose actions by any other nation directed towards commercial exploration and exploitation of Antarctic mineral resources, and will urge other nations to join in such an interim policy. This policy should be kept under continuing review.

Proponents of this option argue that it would discourage licensing activities which are prejudicial to U.S. non-recognition of territorial claims; would be subject to change as circumstances warrant in the future; would not necessarily delay prompt initiation of exploratory activities by U.S. firms, since we have no information that such activities are contemplated; would allow the U.S. to oppose others’ actions prejudicial to our interests while retaining our own freedom of action; and would increase the likelihood that an adequate international approach competent to protect the environment would be in place prior to the initiation of exploration and exploitation.

Opponents argue that this policy is potentially self-perpetuating, since the U.S. may find it difficult to retract from the policy during potentially protracted negotiations; that it could delay exploration activities to the detriment of our energy resources interests; and that it could deny the U.S. information necessary for the development of a wise resources policy.

OPTION 2: The U.S. should seek agreement of the Parties at the Eighth Consultative Meeting to Oppose for 2 years actions by any nation intended to facilitate drilling in the continental shelf adjacent to Antarctica.

Proponents argue that this policy would be acceptable to the other Parties; could increase our bargaining leverage; would permit preliminary exploration activities; and might discourage environmentally dangerous drilling activities.

Opponents argue that this policy might become self-perpetuating; might impair U.S. credibility; might over play our negotiating leverage; might delay acquisition of resources information necessary for the development of a wise resources policy; and, to the extent exploration is productive, might limit chance of an eventual claims settlement.

OPTION 3: The United States should discontinue its stated policy of voluntary restraint and oppose any formal or informal moratorium on commercial activities in Antarctica.

Proponents argue that this would allow exploration and exploitation to proceed as quickly as market conditions allow; that it would maximize any bargaining leverage derived from the potential for unilateral action; that it would prevent a “lock-up” of Antarctic resources at a time when the U.S. is seeking new sources of energy; and that claimant states are unlikely to issue exclusive licenses prejudicial to the U.S. claims position while negotiations are underway.

Opponents argue that this policy could ultimately preclude U.S. access to the energy and other resources of Antarctica if unrestrained commercial activity ensues and the Antarctic Treaty structure collapses; could harden the positions of the other Parties, particularly of the claimants in any negotiations; could stimulate the issuing of licenses to the detriment of the U.S. position on nonrecognition of claims; could permit resources activities to take place with inadequate flag-state environmental safeguards; and could impair U.S. credibility.

1. Source: Ford Library, National Security Adviser, Presidential File of NSC Logged Documents, Box 14, 7500581, U.S. Policy on Antarctic Mineral Resources. Confidential. Forwarded as NSC–U/SM–55G on January 27, 1975 by Gathright to the Assistant to the President for National Security Affairs, the Director of Central Intelligence, the Chairman of the Joint Chiefs of Staff, the Chairman of the Council on Environmental Quality, the Director of the National Science Foundation, the Administrator of the Environmental Protection Agency, the Administrator of the Federal Energy Administration, the Assistant to the President for International Economic Policy, the Deputy Secretary of Defense, the Deputy Secretary of the Treasury, and the Secretaries of Interior, Commerce, and Transportation.
2. The report considered policy options for resolving the principal issues related to extraction of Antarctic mineral resources.