The Bush Administration is pushing LOST, for some godforsaken reason. It’s a bad idea. The good parts of LOST are a part of customary international law and are enforced by the US Navy. The bad parts are an unenforceable bureaucratic nightmare.

LOST tries to balance the need for Freedom of the Seas against National Sovereignty and sovereign action. This is never an easy issue. In international law, states are the highest authority, so they act in their own interests. Often, technology and state power shapes laws based on common practice.

In general, the Law of the Sea determines a state’s territorial waters (12 nautical miles from the shore), the exclusive economic zone (the EEZ is up to 200 miles from the shore), and ownership of the seabed on the continental shelf. It also manages issues relating to peaceful free passage through territorial waters, especially through straights, canals, and other passages. All these issues were settled through customary practice, technology, and the enforcement of the Royal and American Navies.

Outside state territorial waters is the “Global Commons” consisting of unowned water and seabeds. Technically, since no state or corporation owns the territory, they all have rights to free use. The management of the Global Commons is in the interests of states. They want to divide responsibility and create predictability. Common practices determined how to handle pollution that causes dispersed damage across the commons and related issues.

There are fundamental problems with LOST that cannot be resolved. Too much of the treaty is wedded to the long-rejected socialist fads of the 1970s, collectively called the “New International Economic Order.” The idea was to transfer wealth and technology from developed countries to developing countries. Since then, everyone realized that this was counterproductive at best and deeply destructive at worst. LOST revisions gradually stripped away the worst socialist provisions, but the core problem remains.

The United States rejected Part XI of LOST. This part creates a UN Regulatory Agency – International Seabed Authority – to manage Deep Sea Mining in the Global Commons.

This won’t work for a few reasons. The US would pay 25% of the ISA budget but would not receive equal voting power. In practice, this means that ‘free-rider’ nations will control the International Organization and redirect US and Japanese money for their benefit alone. This encourages widespread corruption, unaccountability, and highly politicized practices. And currently, the only companies that are technologically capable of deep sea mining are from wealthy developed states. The UN steals and redistributes money and technology through a highly politicized mechanism, thereby discouraging mining altogether. Since the 1990s, Socialism was generally rejected as an intelligent economic principle, so even undeveloped nations are wary of UN agencies.

There are inherent conflicts of interest. Article 87 defines the “Freedom of the High seas” and grants all states equal rights of navigation, overflight, to lay submarine cables and pipelines, fishing, scientific research, and to construct artificial islands. Most of these, like scientific research, allow multiparty cooperations. Deep Sea Mining and Fishing are problematic because of the issue of “conflicting uses.” Multiple parties are competitors. Only one corporation can mine a specific area at a time – so who gets the rights to mine? Fishing is another contentious issue.

Article 136 recognizes that the ocean floor and its resources are the “common heritage of mankind.” Article 137 prevents states from claiming ownership of the seabed beyond their EEZ, as “no state shall claim or exercise sovereignty or sovereign rights over any part” (1) of deep sea; and “all rights in the resources of the Area are vested in mankind as a whole, on whole behalf the Authority shall act.” (2) The International Seabed Authority will create the regulations and standards for mining.

One problematic aspect of the treaty is Article 140: The “Authority shall provide for equitable sharing of financial and other economic benefits derived from activities in the area through any appropriate mechanism, on a non-discriminatory basis…”

The ISA and its subagency, Enterprise, would collect fees for granting mining licenses, and require corporations to pay a royalty on all profits to be distributed to poorer states. Without international agreement, the ISA is a dead agency. The United States refused to ratify, criticized the anti-market mechanism, and claimed that it would be ineffective, if not outright detrimental, to the ocean mining.

In 1994, the U.N. General Assembly created reforms to implement market principles into the organization. The mandatory technological redistribution was dropped in favor of purchasing the technology at commercial prices. This is still problematic since it would nullify patents. The market reforms are far more conducive to actual mining than the 1982 treaty and may provide a more reasonable start for a future international regime. More reforms are still needed.

Currently, the costs of deep-sea mining are still higher than land-based mining, so no commercial operations are underway. A mining company can mine in three types of locations: On land, on a state controlled continental shelf, or in the Deep Sea. Mining is cheapest on land and property-rights are completely secure. Property Rights and the cost-benefits of mining get progressively worse the further one moves from the shore. This means that pound for pound of minerals, companies get greater profits on land. The incentives, however, are backwards. The international organizations actively punish companies if they attempt to engage in deep-sea mining. This completely discourages technological and market development. LOST and the UN IGOs are reactionaries stunting economic growth of both developed and developing states.

Not being an economist or geologist, I cannot offer a detailed solution, but only a general outline. Any deep-sea mining will require some measure of distributing property rights or access to mining sites and regulations. The “Tragedy of the Commons” scenario will occur if rampant mining occurs without any property ownership. Even if individuals and states are made aware of the full costs of operations, nothing will happen if the international organization is founded on socialist principles that prohibit mining. Instead, states should permit companies to expand as technology allows. Once actual seabed mining occurs, new customs will form according to realistic demands and from that point a new body of customary international law will develop.

Attempting to prematurely create an international regime to govern mining tainted it with overreaching idealism resulting in its rejection.

The EEZ provides an example of how the mining issue will be resolved. President Truman unilaterally expanded US control over the sea and continental shelf to match the abilities of new technology. This move was later universally recognized by LOST and its organizations. A similar process of unilateral expansion followed by international recognition will likely occur when states and corporations finally possess the technology to access the ocean floor.