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Minerals, mining and maritime resource management
Ocean Management, 7 (1981) 25--40 Elsevier Scientific Publishing Company, Amsterdam -- Printed in The Netherlands
Minerals, Mining and Maritime Resource Management D.R. Denman *
Professor Emeritus at the University of Cambridge, Cambridge (Great Britain) (Accepted for publication October 13, 1980)
ABSTRACT The rapid development of offshore oil and gas production, mining and other activities over the last twenty years has reached a point where any comprehensive view of future oceanology cannot avoid asking by whom and how shall the natural resources of the seabed and its water be managed. To date, technology and management have advanced step by step and piecemeal. No one has seriously been concerned with the aims, power and place of comprehensive management. The question is of prime importance because technology attends upon management and looks to management for guidance and inspiration. Moreover, management promoted by motive can only act within the sanctions of law. For these reasons alone, the year 1980 is of critical importance to offshore management throughout the world. In 1980 the United Nations intend to sign the Law of the Sea Convention -- an event of paramount importance for future control and management of the seafloor and its resources.
This paper, with a special emphasis on seabed mining, looks at the world scene and analyses the existing and proposed power structure as it will affect the management of the maritime resources. The paper points the way to identifying the units of management as seats of power and the influences that play upon them. Management has, in a special way, always kept pace with the development of oceanology and its related technology and, in doing so, has tended to be exclusively concerned with design, placing and function of technological devices. This paper is innovatory. It relates management to * Present address: 12 Chaucer Road, Cambridge, Great Britain.
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the ownership and proprietary structure pertaining to the seabed and its natural inanimate resources and to the living resources in the superjacent waters. Holders of property rights in these resources, whether public ok private, national or international, hold the power of comprehensive management over the wealth within the ownership units. These units may be as large and extensive as the national continental shelves of specific nations or, at the other extreme, may be as small and confined as the proprietary units created by licensors and vested in licensees to exploit oil, gas, solid minerals and other resources. Management, so conceived, relates technology to the sanctions of law within which it must function and to the purposes which motivate managerial action. In conclusion, the paper uses its arguments to make the case for independent managerial services and draws attention to steps that are being taken to supply these through a new professional consortium to be set up in the United Kingdom.
TECHNOLOGY, THE HANDMAID OF MANAGEMENT The timing of this Conference, the fifth in a famous line, should arrest our attention. The Conference is addressed to the world in the opening months of 1980, a year which for all nations involved in maritime and offshore affairs could be the most critical of the century. This is the year when, after years of debate, the United Nations intends t h a t the participating nations to its Third Conference on the Law of the Sea will, at their ninth session, formally sign the World Convention which will govern the activities of sovereign nations in national and international waters. A Convention of laws controlling the ownership and use of seabed resources and actions in the superjacent waters may, at first glance, seem remote from the purpose of this present Conference with its primary concern for technology. Technology, however, for all its fascination, relevance and importance is essentially the art of designing and providing tools for a job. To be effective and efficient, technology must be appropriate to the circumstances of its use and to the competence of its users. Racing cars, tuned to do 150 mph, are a waste of m o n e y , time and skill as taxicabs in the high street. The technics may be perfect, but traffic congestion and speed control laws make the racing car an inappropriate and, indeed, an inadequate tool in the hands of the taxi-driver. He has to manage his vehicle with dispatch and profit. He needs a car to fit the job. In short, technology is the handmaid of management. It needs to know what management has to do and is permitted to do. And the advanced technology of seabed and maritime exploration and exploitation is no exception. A conference on advanced offshore technology which did not touch
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u p o n management would be sadly ill-balanced; and all the more so at a time when management needs to heed the proposed sanctions of a World Convention of laws. Let us then, within the brief scope of this paper, turn our attention to the fundamentals of seabed resource management, so far as our present intelligence can discern them.
HOW? WHAT? WHY? Management of the seaward resources of a nation does not differ in its general principles from the management of landward resources, although in the application of the general principles, the management of maritime resources requires its own understanding and expertise. In b o t h spheres, management means the taking of decisions a b o u t the use of resources. Management is not an abstract exercise, b u t in every sense a pragmatic one. It needs to answer the questions: H o w ? What? and Why? With the first of these questions, technology comes into its own. H o w a resource field is explored and exploited is a matter of the technics employed. We could have as many laws and conventions as men could dream of, but unless applied science could devise ways and means of erecting oil rigs and sinking wells in ocean depths, the laws and the sanctions would be useless bits of paper. Management must know h o w to do what it wants to be seen to be done. Even so, as with the finely tuned racing car, technology can make possible to be done what in law is n o t permitted to be done. Laws controlling the ownership, possession and use of resources determine what can be done; they answer the What? Management has to move within these sanctions. What the law recognizes by way of proprietary title to interests in the seabed and the ocean waters is, therefore, of first consequence to the management of these resources. Anarchy is the despair of management. So it is that the World Convention of the Law of the Sea is intended to provide an ordered world stage for maritime resource management. The question Why? is pertinent to the manager -- whether public or private, corporate or individualistic. One who applies technology within the sanctions of the law to achieve a specific purpose must know w h y he is doing so. Management cannot be understood without motive. Motive is the touchstone against which the achievements of management are measured. A management scheme to distribute resources may be highly successful, although very unprofitable, if the motive is to ensure equal shares in the ownership of the resources. Technology, law and motive are, therefore, the criteria of resource management, landward and seaward.
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MULTI-USE MANAGEMENT Over the last t w e n t y years, the offshore industries have been generated and spurred into action by the prospects of taking natural gas, petroleum and condensate from the seabeds of the world. But following this lead exploration has revealed so much else besides. The range of metallic wealth seems to be enormous and even the very waters themselves are yielding heat and kinetic power as sources of energy. Added to which there is the promise of food culture to augment the traditional fish harvests. The Law of the Sea Conference calls upon the member states of the U.N. to have regard to the management of all maritime resources. As with the management of land, management of maritime resources can and should mean multi-use management. Indeed, what makes consideration of maritime resources management so pressing at the present time is the need for a comprehensive approach. Such management as has developed of necessity hitherto has been piecemeal. Because what is done with one resource can adversely or beneficially affect another and the ecology and environment of the oceans in general, management in the future must move towards the comprehensive. National policies hitherto have not been propitious for proper management of the seabed resources. Here, in the U.K., with production licenses limited strictly to petroleum extraction, coal vested in the National Coal Board and gas in the British Gas Corporation, and the seabed of territorial and other waters otherwise in the control of the Crown Estate Commissioners, the outlook for comprehensive management is limited. Nevertheless, the practicalities press the case for comprehensive resource management and the future will increase the pressure.
A WORLD FOCUS The way in which piecemeal management has already affected outlook is evident in the structure of the programme of this very conference, excellent and rich though the range of items may be. Oil and gas production are being handled in a series of papers quite apart from the presentations on ocean mining and dredging. Management of one form of resource should not be dissociated from management of the other. The one affects the other. Even so, and for that very reason, it is possible to introduce the subject of maritime resource management quite logically under one or the other heading. And looking at the subject from the world view, as we are doing, it is more apposite t h a t this paper should be introduced in this section, concerned as it is with ocean mining. However smug individual nations may be about the management of the resources of their respective territorial waters and the
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wider expanse of their continental shelves, cosy within the prescriptions of their national statutes, a world view must focus on the exploitation and management of the seabed resources of the international deep oceans. The Law of the Sea Convention when signed will set up an international authority, commissioned, equipped and financed to deal with the resources of the seabeds of the deep oceans, resources which, while including liquid and gaseous substances, are mainly minerals in the form of polymetallic nodules. This, then, is where we can start. As a first step into the general theme of maritime resources management, we shall look at what the Law of the Sea Conference intends shall happen a b o u t mining these and the other mineral resources of the deep oceans. Before we do so, however, let us remind ourselves what it is we should be looking for. Our pursuit is intelligence on marine resources management. To this end we shall need to discern how policies and the laws, regulations and rules which support them determine the units of operation within which managerial decisions are taken. What is done in each unit of operation will depend upon the extent of the right to decide and to do and upon economic and other circumstances which influence motive. These are our criteria of analysis.
THE INTERNATIONAL SEABED AUTHORITY The national jurisdiction of sovereignty of each coastal nation runs o u t to sea b e y o n d the coastline. Exactly where the boundary of a nation's jurisdiction shall lie, that is to say the manner of the definition of it, has n o t yet been finally agreed upon b y the United Nations Law of the Sea Conference. As we shall see presently, there is a substantial measure of agreement a b o u t the general pattern. What is now as certain as anything can be is the intention that the seabed running from the margins of the coastal jurisdictions under the deep oceans shall be designated the "Area". And the management of the exploration and exploitation of the mineral resources of the Area shall be the responsibility of the International Seabed Authority. It should be especially noted that the Area is not an extent of the deep oceans but only of their seabeds. The Authority is responsible for the activities in the Area and these are confined to the exploration for and exploitation of the mineral resources. The Authority will be governed b y t w o institutions -- the Assembly and the Council. N o t only will the Authority have its international political jurisdiction over the Area, to allocate its resources to State Parties to the Convention and to private and public b o d i e s seeking authority to operate on its seabed, it will itself be enabled and expected to set up machinery to exploit the seabed directly on its own behalf. To this end the Authority shall set up and operate what will be known as "The Enterprise".
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In a flight of collectivist fancy, the proposals for the International Seabed Authority see it acting as trustee over the Area and its resources in the interests of all mankind. All rights in the resources are to be vested in mankind collectively and administered by the Authority. All State Parties to the Law of the Sea Convention, whether coastal or landlocked, will thus benefit in a joint heritage. Draft Article 140 requires particular consideration to be given to the interests and needs of the developing countries. The Authority is the notional seat of power for executive purposes. The exercise of the power lies with the Assembly which consists of all State Parties to the Convention. But it is with the Council of 36 elected by the Assembly that active decisions will lie. The composition of the Council ensures representation of State Parties according to their investment inputs into the Area, their national consumption of world resources, their export of minerals similar to those to be derived from the Area and of the developing countries with special interests and of others to ensure a geographical distribution of seats.
THE PARALLEL SYSTEM The Law of the Sea Conference takes much pride in what it calls the "parallel system" for conducting activities within the Area. This system is a kind of "one for you and one for m e " game. Whoever wants to exploit minerals in the Area will have to agree a plan of work with the Authority. The plan, once agreed, would be a formal contract to develop the territory specified in the plan. No such contract will be granted to applicants who do n o t meet tests of technical and financial competence imposed by the Authority. Previous to obtaining a contract, the would-be operator would be required to prospect the territory -- or have it prospected for him by consultanks. He would have to find at least two mineral bearing sites. One such site would be selected by the Authority for use either by the Enterprise or by a developing nation and the other would become the contractual site of operations allocated to the applicant. In this way the A u t h o r i t y and the Enterprise would built up a reserve of sites as the years went by. The parallel system has other features besides this one-for-one obligation. The Enterprise will start from scratch. It will need to be financed by hundreds of millions of dollars, especially in the first stages. The financial arrangements proposed include interest-free loans from the State Parties, interest-bearing loans and an income from operators who hold contracts to exploit the Area. Taxes or levies will be raised as consideration for granting the contracts of operation. A precise formula has not yet been agreed upon. Suggestions vary between a fixed royalty as percentage of the market value of the minerals extracted and processed and a smaller charge of this kind plus a percentage of net pro-
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fits. Recently there has been talk of a premium in addition, even to the tune of 60 million dollars per mine site. There is a more or less definite consensus that the State Parties will be required to ensure that the Enterprise has sufficient funds to m o u n t its first mining project. Also to enable the Enterprise to keep pace w i t h the mineral operators in the Area it is intended that ways and means should be found for obliging an applicant under contract to assist the Enterprise by providing it with expertise and equipment. Clearly, the designers, inventors and manufacturers of technological equipment for use on the seabeds of the deep oceans will in future have to look beyond the immediate specifications of their clients and purchasers to what the officials of the International Seabed Authority will require of successful applicants for operating contracts in the Area.
LIFTING METALLIC NODULES It is apparent from the debates of the Law of the Sea Conference and the proposed Articles resulting therefrom that the major, if not the sole activity, in the Area for some time to come will be the lifting and processing of metallic nodules. The prospect of what could happen has generated as many fears as hopes. In the m e d i u m term, world supplies of copper, cobalt, manganese, nickel and other metals could be augmented to an extent that would disturb the world markets. Developing countries, especially the land-locked ones whose economies are bolstered upon revenues from the export of such minerals, were apprehensive of what may come out of the deep ocean beds of the Area. Consequently it is proposed that special conditions shall govern the making of contracts by the Authority with operators exploiting the deposits of metallic nodules. Such conditions do not adhere to contracts for the working of other resources. The conditions prohibit the Authority from approving plans of work for the exploitation, if the level of production of minerals from nodules would cause nickel production to run above a calculated ceiling, a ceiling based on a formula related to past trends. Details of the wording of the contracts are not available; but presumably a general contract to lift and process nodules would be valid if it required any nickel inadvertently raised to be excluded from processing and marketing.
NEARER WATERS This exceedingly rough sketch o f what is intended by world opinion for the seabeds of the deep oceans is, it is hoped, drawn in clear enough outline for architects, manufacturers and purveyors of advanced offshore technologi-
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cal devices to have some inkling of what management in the Area will require of them in the future. Let us now turn our attention to nearer waters. The Area over which the International Seabed Authority operates is, as we have seen, that stretch of the seabeds of the oceans that lies beyond the several and respective jurisdictions of the coastal nations. Within those jurisdictions are other divisions of primary importance to all who would understand the fundamentals of maritime resource management. The scope of national authority varies within the devisions. What may be done in one may be beyond the power of the Government of a coastal nation to sanction in another. The divisions are, therefore, of first consequence to the management of the seabeds and their associated waters. The designations of the divisions are commonplace to the parlance of the Law of the Sea Conference. But as yet they are not universally accepted. And where a term is used, as with our own Continental Shelf of the U.K., it may well denote something different from what the Law of the Sea Conference intends. Nevertheless, the designations are now so much a part of the text of what will be the Convention of the Law of the Sea that we may safely accept them in any consideration of management policies and practices for the future. Apart from the Area, the designations as embodied in the draft Articles of the Law of the Sea Conference are five: the Territorial Sea; the Contiguous Zone; the Exclusive Economic Zone; the Continental Shelf; and the Continental Margin.
THE DIVISIONS The Territorial Sea is an area of sea, air space and seabed adjacent to the land territory of a coastal State and extending over 12 nautical miles from a low water baseline. Over this stretch of waters and seabed, the coastal State has complete sovereignty. The Contiguous Zone is so called as it is contiguous with the territorial waters. It extends for 24 nautical miles beyond them and is an area within which the coastal State may take action to prevent infringement of its customs, fiscal, immigration and sanitary regulations within its territorial sea. The Exclusive Economic Zone of a coastal State also lies adjacent to its territorial sea and extends beyond it for not more than 200 nautical miles from the low water baselines. It is a zone over which the coastal State has sovereign rights for what may be termed economic purposes to the exclusion of other States. All other States have, however, freedom of navigation and overflight and to lay submarine cables and pipelines in the exclusive economic zone. The sovereignty of the coastal State in its exclusive economic zone is for the purpose of exploring and exploiting, conserving and managing the natural resources, living and non-living, of the
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seabed and subsoil and of the superjacent waters; and for other activities for economic purposes such as the production of energy from the waters and winds. And more particularly, a coastal State may in its exclusive economic zone establish and use artificial islands, installations and structures; undertake marine scientific research and preserve the maritime environment. Each coastal State has a natural elongation of its land territory below its adjacent seas. In general the elongation as seabed, inclines downwards to the ocean floor. Geographical convention has denoted the upper portion of the incline, the continental shelf, the middle section, the continental slope and the final drop, the continental rise. The entire incline from the land mass to the ocean floor is termed the Continental Margin. The Law of the Sea Conference proposed its own definition of the Continental Shelf. It is to be that extent of seabed and subsoil that extends outward from the baselines of a coastal State for a distance of 200 nautical miles or which runs to the outer edge of the Continental Margin. For the purpose of this definition, the Continental Margin is not necessarily the natural Continental Margin. The outer edge is to be either 60 nautical miles from the f o o t of the natural continental slope or is to be determined b y reference to the thickness of the sedimentary rocks of the seabed. In either case the outer edge of the Continental Margin and hence the extremity of the Continental Shelf is n o t to extend b e y o n d a line 350 miles distant from the baselines or a line 100 nautical miles b e y o n d the 2,500 metre isobath. A coastal State will have exclusive sovereign rights over its Continental Shelf to explore and exploit its natural resources. These rights will n o t affect the legal status of the superjacent waters; and they are subject to the rights of all States to lay submarine cables and pipelines on the Continental Shelf. It is intended, however, that where a coastal State exploits the non-living resources of its Continental Shelf b e y o n d 200 nautical miles from the baselines it shall make payments in cash or in kind to the Authority; the Authority shall then distribute the receipts among the State Parties to the Law of the Sea Convention. Payment will increase gradually over the years to a maximum of 7% of value or volume.
THE T R U M A N PROCLAMATION These jurisdictions are of critical importance to coastal States in the management of their maritime resources. They are n o t y e t binding b u t could soon become so. In the meantime several coastal States have defined and delineated their respective Continental Shelves as suits them. The very notion of a Continental Shelf as a legal entity and prolongation of the area of national sovereignty is an example of law catching up with technology in the management of maritime resources. The very notion of the Continental
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Shelf as a sovereign area goes back to the Truman Proclamation of 1945: "Having concern for the urgency of conserving and prudently utilizing its natural resources, the Government of the United States of America 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". At the present time this notion of the Continental Shelf as an area of the seabed over which the jurisdiction of the pertinent coastal State is extended is widely accepted. Each State, however, has to frame its own laws in respect of it and agree its limitations and boundaries with neighbouring States as necessary. In the U.K. the Continental Shelf Act, 1964, is the primary statute law.
U.K. ILLUSTRATION Ownership and other rights over the Continental Shelves of the sovereign nations are of first consequence to maritime resource management. Whoever seeks authority to exploit the seabed and its superjacent waters must at the present time find out how the law views the Continental Shelf. In the brief scope of this paper, we can only illustrate the general from the particular. And for this purpose we shall take the U.K. legislation; looking at it in general and then to see how its application affects the fundamentals of management, first in respect of minerals other than the gas and petroleum resources and subsequently how it relates to these latter. The Continental Shelf Act, 1964, was drafted on the assumption that Great Britain had rights outside her territorial seas over the seabed, its subsoil and its natural resources. The rights are not defined as either property rights or ownership. They are not defined in any way. Provision is made that they shall be exercisable over designated areas of the seabed. The rights, however, are vested in the Crown. The Continental Shelf for the purpose of the Act and the exercise of the rights is made up of the designated areas as they exist at any one time (see Fig. 1). Excluded from the vested rights in the Crown were the rights in respect of coal. These were vested in the National Coal Board subject to the consent of the Secretary of State for Energy for any use of them. Under the Petroleum (Production) Act, 1934, the property in petroleum existing in its natural condition was also vested in the Crown. Under that Act the appropriate Minister of State had power on behalf of the Crown to issue licenses to search, bore for and get petroleum. A corresponding right to issue ticences in respect of petroleum (including any mineral oil or relative hydrocarbon and natural gas) is given to the Secretary of State for Energy on behalf of the Crown in the exercise of righ~ over the
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Fig. 1. Continental Shelf Act. Designated areas.
Continental Shelf. In 1975 the Petroleum and Submarine Pipe-Lines Act made it illegal for a n y o n e to construct or use pipelines in, under or over the territorial seas of Great Britain and the seas in any designated area of the Continental Shelf without authorization of the Secretary of State for Energy. As a result of this legislation, managerial rights over the seabed and subsoil of the Continental Shelf of Great Britain are in three different executive hands. In general the rights to search for, win and process minerals and otherwise to use the seabed and its subsoil are, on behalf of the Crown,
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administered by the Crown Estate Commissioners. Coal mining in all its aspects and phases is the prerogative of the National Coal Board. And the granting of licences for prospecting for and extracting petroleum and natural gas are issued by the Secretary of State for Energy; he and his Department are also responsible for authorizing the construction and use of pipelines in the areas of the controlled waters.
CROWN ESTATE POLICY Ownership of the supreme estate in the seabed of the territorial seas like that of the foreshore of Great Britain is vested in the Crown. Management policy, therefore, over the territorial seabed differs from that over the Continental Shelf. Over the former, wayleaves have to be granted for cables and pipelines and formal leases given for permanent installations. Administratively the distinction does not affect policy. Mineral workings, almost without exception, take place on the Continental Shelf. Formal leasing of harbour installations and licenses to dredge the seabed for navigation purposes are c o m m o n activities close inshore. The form of legal instruments used, the methods and execution of valuations and similar technical features of resource management in these near coastal waters take their colouring from landware operations. The only mineral activities in the near waters are, at present, mine dredging for tin-bearing silt off Cornwall. Mineral extraction on the Continental Shelf is entirely limited to dredging for non-metalliferous aggregates. Licences are granted in consideration of royalties which are levied at rates that are standard per tonne in specific areas of operation, e.g. the Thames approaches, the Norfolk coast approaches, etc. There is little attempt to link royalty rates to market values or development costs. The management policy of the Crown Estate Commissioners is private to them. It is the dredging operations especially on the Continental Shelf which have special interest for maritime resource management. Licences are granted for dredging but only after the Crown Estate Commissioners have in each case consulted the Department of the Environment and through it all and every other interest likely to be affected by the dredging operations, especially those concerned with oil and gas production, coal mining, fisheries and navigation. The Crown Estate Commissioners in this passive sense practise comprehensive multi-use management.
COAL BOARD POLICY At present coal is mined over the seabed from land-based pitheads. Mines in places run o u t 5 miles or more under the sea. A special expertise has devel-
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oped from experience for operating under the sea and construction of mines in the seabed is governed b y statute law. The extent to which this form of seabed mining can be taken and where it can operate depends largely on the thickness of seabed cover under the workable coal seams and on the distances from pitheads to the coal face. Too great a distance creates a logistic manpower problem. But with m o d e m technology increasing locomotive speed, workable distances are being extended. Some thought is being given to researching the practicalities of sinking access and vent shafts through the sea to the subjacent coal bearing seabed. Such devices would only lengthen the distances offshore of workable coal faces. Coal would still be extracted from the landward pitheads, as the sea shafts would be either vents only, or vents and carriage lifts for the miners. In the meantime, seismic surveys are being made of the coal measures in the Continental Shelf, against the long distant day when technology may make sea-placed pitheads practical and commercial propositions.
PETROLEUM EXTRACTION MANAGEMENT POLICY Although the right to grant exploration and production licences and to authorize the laying of pipelines over the seabed of the Continental Shelf as vested in the Secretary of State for Energy is n o t a right of ownership, it is a puissant right of management. It gives power to decide what shall be done, the manner of the doing of it and who the operators shall be. With petroleum licensing, the Secretary of State is statute b o u n d to make regulations governing the terms on which the licences shall be granted and model clauses for incorporation in them. He is thus required to expose, in some measure, his managerial policy to the public. There is no similar obligation in respect of the authorization of the construction and use of pipelines. Licensees will, each in their own way, have managerial problems. While at law a licence does n o t convey a proprietary interest or estate in the seabed and its resources, it creates for the licensee something very close to it, especially where the licence can endure for 30 years. The licensee will have to consider his investm e n t policy. The terms of the licence, especially those affecting duration, user obligations and alienability will have a direct bearing u p o n h o w he manages it as an asset. To have previous and clear knowledge of h o w the licensor manages his affairs and regards the privity of contract which the licence will establish between himself and the licensee is of great value to the licensee. What then is this policy? The Secretary of State in the discharge of his managerial obligations has divided the Continental Shelf of Great Britain into rectangular quadrants, some 369 o f them. Each quadrant is subdivided into enumerated blocks and licences are granted in respect of one or more
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blocks. Payments are charged for the gramting of licenses; there are standard charges, irrespective of the nature and siting of the licensed block. In addition, if the licensed enterprise is successful, royalties at standard percentage rates are payable. Before the production stage, a licensee is required to execute a scheme of prospecting; and if and when production is commercially possible, the licensee must submit and agree with the licensor a develo p m e n t and production programme. These programmes afford room for manoeuvre and negotiation and the obligations undertaken by the licensees reflect the differential between the siting and operational prospects of differing blocks. It is now the practice to issue licenses only to members of operational consortia. Usually one of these is accepted by the others as the prime or sole operator. Management policy rests mainly with the operator with whom ultimate decisions lie in the event of disagreement. However rich the seabed and its waters may be, the licensee is concerned only with the petroleum or natural gas. In managing his affairs he is obligated to have regard to the effect of his operations on fishing and navigation, but not as assets in a multi-use managerial policy. Although the managerial intentions of the Secretary of State in respect of pipeline authorization are not patent in the same way, it is apparent from certain actions taken that he has already used the powers granted to him under the Petroleum and Submarine Pipelines Act 1975 to study the formation of gas gathering pipeline systems so as to rationalize the conveying of natural gas from the seabed to the shore.
A PRESENT AND FUTURE NEED From the run of the general evidence and the particular illustrations in the realms of U.K. experience and policy, the salient features of marine resource management are apparent. The unit of management can be an entire continental shelf, or the seabed of territorial waters or of an exclusive, economic zone. Management will need to know the potential bounds of its own domain and what lies within them - - t h e need for initial surveys and monitoring. The creation of derivative interests by operational contracts or production licences will call for intelligence about the nature, siting and number of these and their standing in relation to economic, fiscal and environmental policies. And in this respect supreme authorities responsible for national seabeds will need special guidance on the merits or otherwise of multi-use management. Holders of lesser interests will wish to understand the identity of these, the powers pertinent to them as units of management and the economic and environmental criteria influencing the use of t h e m . Conditions which affect use, as for example the exclusion of nickel from the lifting pro-
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grammes of metallic nodules, will require an appropriate technology. And the alienation of lesser interests created by licences and so on, will, among the holders of them, generate a special market which management will need to comprehend, a market with its own values; taking standard payments from recipients of petroleum production licences, for example, suggests that the quasi-proprietary interests created by the licences must have differing exchange values -- a matter of considerable importance to management. In looking at this supremely important subject of maritime resource management, we have, I suggest, seen it in its infancy. Nonetheless, it is real enough. Because management is inescapable, it has hitherto found a spontaneous modus operandi. Acquisitions, evaluations, transfers and resource use decisions have been effected and taken by whoever happened to be at hand for the task. A considerable body of knowledge and wealth of experience has been gained in this way. In some directions - - a s with the "land m e n " of the American off industry -- these managerial skills are generating a new type of professional expert consultant. Over all, however, such professional expertise as exists and is capable of giving comprehensive managerial advice is in-house to the bigger operating concerns. That a need exists, an urgent need for professional, independent services is patent. There is at the present time a move here in Britain to set up the first consortium of professional experts in maritime resource management to give a comprehensive service here and elsewhere in the world. From this first step much is likely to follow. The demand is there, the supply is on the way.
REFERENCES Publications Ashcroft, P.G., 1979. The Law of Offshore Installations. Int. Maritime Seminars. Lloyds of London Press Limited. Ashcroft, P.G., 1978. The Exploitation and Conservation of Natural Fuel Resources of the United Kingdom and its Continental Shelf. Journal of the Institute of Advanced Legal Studies of the University of London. Bentham, R.W., 1977. The Laws of the Sea Conference: the Present Position. International Business Lawyer, Vol. 5 (ii). Bentham, R.W., 1978. The Concept of a Continental Shelf. The Law of the Sea and Natural Resources Journal. Crown Estate Commissioners, 1979. The Crown Estate. Department of Energy, 1978. Gas Gathering Pipeline Systems in the North Sea. Energy Paper Number 30. Department of Energy, 1979. Development of the Oil and Gas Resources of the United Kingdom. The Royal Institutior/ of Chartered Surveyors~ 1974. The Services of the Minerals Surveyor.
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The Secretary of State for Energy, 1978. Continental Shelf Act, 1964. Report for Year 1977/78. United Nations, 1978. Third United National Conference on the Law of the Sea. Official Records. Vol. VIII. Informal Composite Negotiating Text. United Nations (Apr. 1979). Third Conference on the Law of the Sea. Informal Composite Negotiating Text/Revision 1. United Nations (Sept. 1979). Third Conference on the Law of the Sea. Reports to ttle Plenary of the Conference.
Legal instruments Petroleum (Production) Act, 1934 (Ch. 36). Continental Shelf Act, 1964 (Chapter 29). Mineral Workings (Offshore Installations) Act, 1971 (Chapter 61 ). Petroleum and Submarine Pipe-lines Act, 1975 (Chapter 74). The Petroleum (Production) Regulations, 1976 (No. 1129), 1976. The Petroleum (Production) Amendment Regulations, 1978 (No. 929), 1978.
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Minerals, Mining and Maritime Resource Management D.R. Denman *
Professor Emeritus at the University of Cambridge, Cambridge (Great Britain) (Accepted for publication October 13, 1980)
ABSTRACT The rapid development of offshore oil and gas production, mining and other activities over the last twenty years has reached a point where any comprehensive view of future oceanology cannot avoid asking by whom and how shall the natural resources of the seabed and its water be managed. To date, technology and management have advanced step by step and piecemeal. No one has seriously been concerned with the aims, power and place of comprehensive management. The question is of prime importance because technology attends upon management and looks to management for guidance and inspiration. Moreover, management promoted by motive can only act within the sanctions of law. For these reasons alone, the year 1980 is of critical importance to offshore management throughout the world. In 1980 the United Nations intend to sign the Law of the Sea Convention -- an event of paramount importance for future control and management of the seafloor and its resources.
This paper, with a special emphasis on seabed mining, looks at the world scene and analyses the existing and proposed power structure as it will affect the management of the maritime resources. The paper points the way to identifying the units of management as seats of power and the influences that play upon them. Management has, in a special way, always kept pace with the development of oceanology and its related technology and, in doing so, has tended to be exclusively concerned with design, placing and function of technological devices. This paper is innovatory. It relates management to * Present address: 12 Chaucer Road, Cambridge, Great Britain.
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the ownership and proprietary structure pertaining to the seabed and its natural inanimate resources and to the living resources in the superjacent waters. Holders of property rights in these resources, whether public ok private, national or international, hold the power of comprehensive management over the wealth within the ownership units. These units may be as large and extensive as the national continental shelves of specific nations or, at the other extreme, may be as small and confined as the proprietary units created by licensors and vested in licensees to exploit oil, gas, solid minerals and other resources. Management, so conceived, relates technology to the sanctions of law within which it must function and to the purposes which motivate managerial action. In conclusion, the paper uses its arguments to make the case for independent managerial services and draws attention to steps that are being taken to supply these through a new professional consortium to be set up in the United Kingdom.
TECHNOLOGY, THE HANDMAID OF MANAGEMENT The timing of this Conference, the fifth in a famous line, should arrest our attention. The Conference is addressed to the world in the opening months of 1980, a year which for all nations involved in maritime and offshore affairs could be the most critical of the century. This is the year when, after years of debate, the United Nations intends t h a t the participating nations to its Third Conference on the Law of the Sea will, at their ninth session, formally sign the World Convention which will govern the activities of sovereign nations in national and international waters. A Convention of laws controlling the ownership and use of seabed resources and actions in the superjacent waters may, at first glance, seem remote from the purpose of this present Conference with its primary concern for technology. Technology, however, for all its fascination, relevance and importance is essentially the art of designing and providing tools for a job. To be effective and efficient, technology must be appropriate to the circumstances of its use and to the competence of its users. Racing cars, tuned to do 150 mph, are a waste of m o n e y , time and skill as taxicabs in the high street. The technics may be perfect, but traffic congestion and speed control laws make the racing car an inappropriate and, indeed, an inadequate tool in the hands of the taxi-driver. He has to manage his vehicle with dispatch and profit. He needs a car to fit the job. In short, technology is the handmaid of management. It needs to know what management has to do and is permitted to do. And the advanced technology of seabed and maritime exploration and exploitation is no exception. A conference on advanced offshore technology which did not touch
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u p o n management would be sadly ill-balanced; and all the more so at a time when management needs to heed the proposed sanctions of a World Convention of laws. Let us then, within the brief scope of this paper, turn our attention to the fundamentals of seabed resource management, so far as our present intelligence can discern them.
HOW? WHAT? WHY? Management of the seaward resources of a nation does not differ in its general principles from the management of landward resources, although in the application of the general principles, the management of maritime resources requires its own understanding and expertise. In b o t h spheres, management means the taking of decisions a b o u t the use of resources. Management is not an abstract exercise, b u t in every sense a pragmatic one. It needs to answer the questions: H o w ? What? and Why? With the first of these questions, technology comes into its own. H o w a resource field is explored and exploited is a matter of the technics employed. We could have as many laws and conventions as men could dream of, but unless applied science could devise ways and means of erecting oil rigs and sinking wells in ocean depths, the laws and the sanctions would be useless bits of paper. Management must know h o w to do what it wants to be seen to be done. Even so, as with the finely tuned racing car, technology can make possible to be done what in law is n o t permitted to be done. Laws controlling the ownership, possession and use of resources determine what can be done; they answer the What? Management has to move within these sanctions. What the law recognizes by way of proprietary title to interests in the seabed and the ocean waters is, therefore, of first consequence to the management of these resources. Anarchy is the despair of management. So it is that the World Convention of the Law of the Sea is intended to provide an ordered world stage for maritime resource management. The question Why? is pertinent to the manager -- whether public or private, corporate or individualistic. One who applies technology within the sanctions of the law to achieve a specific purpose must know w h y he is doing so. Management cannot be understood without motive. Motive is the touchstone against which the achievements of management are measured. A management scheme to distribute resources may be highly successful, although very unprofitable, if the motive is to ensure equal shares in the ownership of the resources. Technology, law and motive are, therefore, the criteria of resource management, landward and seaward.
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MULTI-USE MANAGEMENT Over the last t w e n t y years, the offshore industries have been generated and spurred into action by the prospects of taking natural gas, petroleum and condensate from the seabeds of the world. But following this lead exploration has revealed so much else besides. The range of metallic wealth seems to be enormous and even the very waters themselves are yielding heat and kinetic power as sources of energy. Added to which there is the promise of food culture to augment the traditional fish harvests. The Law of the Sea Conference calls upon the member states of the U.N. to have regard to the management of all maritime resources. As with the management of land, management of maritime resources can and should mean multi-use management. Indeed, what makes consideration of maritime resources management so pressing at the present time is the need for a comprehensive approach. Such management as has developed of necessity hitherto has been piecemeal. Because what is done with one resource can adversely or beneficially affect another and the ecology and environment of the oceans in general, management in the future must move towards the comprehensive. National policies hitherto have not been propitious for proper management of the seabed resources. Here, in the U.K., with production licenses limited strictly to petroleum extraction, coal vested in the National Coal Board and gas in the British Gas Corporation, and the seabed of territorial and other waters otherwise in the control of the Crown Estate Commissioners, the outlook for comprehensive management is limited. Nevertheless, the practicalities press the case for comprehensive resource management and the future will increase the pressure.
A WORLD FOCUS The way in which piecemeal management has already affected outlook is evident in the structure of the programme of this very conference, excellent and rich though the range of items may be. Oil and gas production are being handled in a series of papers quite apart from the presentations on ocean mining and dredging. Management of one form of resource should not be dissociated from management of the other. The one affects the other. Even so, and for that very reason, it is possible to introduce the subject of maritime resource management quite logically under one or the other heading. And looking at the subject from the world view, as we are doing, it is more apposite t h a t this paper should be introduced in this section, concerned as it is with ocean mining. However smug individual nations may be about the management of the resources of their respective territorial waters and the
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wider expanse of their continental shelves, cosy within the prescriptions of their national statutes, a world view must focus on the exploitation and management of the seabed resources of the international deep oceans. The Law of the Sea Convention when signed will set up an international authority, commissioned, equipped and financed to deal with the resources of the seabeds of the deep oceans, resources which, while including liquid and gaseous substances, are mainly minerals in the form of polymetallic nodules. This, then, is where we can start. As a first step into the general theme of maritime resources management, we shall look at what the Law of the Sea Conference intends shall happen a b o u t mining these and the other mineral resources of the deep oceans. Before we do so, however, let us remind ourselves what it is we should be looking for. Our pursuit is intelligence on marine resources management. To this end we shall need to discern how policies and the laws, regulations and rules which support them determine the units of operation within which managerial decisions are taken. What is done in each unit of operation will depend upon the extent of the right to decide and to do and upon economic and other circumstances which influence motive. These are our criteria of analysis.
THE INTERNATIONAL SEABED AUTHORITY The national jurisdiction of sovereignty of each coastal nation runs o u t to sea b e y o n d the coastline. Exactly where the boundary of a nation's jurisdiction shall lie, that is to say the manner of the definition of it, has n o t yet been finally agreed upon b y the United Nations Law of the Sea Conference. As we shall see presently, there is a substantial measure of agreement a b o u t the general pattern. What is now as certain as anything can be is the intention that the seabed running from the margins of the coastal jurisdictions under the deep oceans shall be designated the "Area". And the management of the exploration and exploitation of the mineral resources of the Area shall be the responsibility of the International Seabed Authority. It should be especially noted that the Area is not an extent of the deep oceans but only of their seabeds. The Authority is responsible for the activities in the Area and these are confined to the exploration for and exploitation of the mineral resources. The Authority will be governed b y t w o institutions -- the Assembly and the Council. N o t only will the Authority have its international political jurisdiction over the Area, to allocate its resources to State Parties to the Convention and to private and public b o d i e s seeking authority to operate on its seabed, it will itself be enabled and expected to set up machinery to exploit the seabed directly on its own behalf. To this end the Authority shall set up and operate what will be known as "The Enterprise".
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In a flight of collectivist fancy, the proposals for the International Seabed Authority see it acting as trustee over the Area and its resources in the interests of all mankind. All rights in the resources are to be vested in mankind collectively and administered by the Authority. All State Parties to the Law of the Sea Convention, whether coastal or landlocked, will thus benefit in a joint heritage. Draft Article 140 requires particular consideration to be given to the interests and needs of the developing countries. The Authority is the notional seat of power for executive purposes. The exercise of the power lies with the Assembly which consists of all State Parties to the Convention. But it is with the Council of 36 elected by the Assembly that active decisions will lie. The composition of the Council ensures representation of State Parties according to their investment inputs into the Area, their national consumption of world resources, their export of minerals similar to those to be derived from the Area and of the developing countries with special interests and of others to ensure a geographical distribution of seats.
THE PARALLEL SYSTEM The Law of the Sea Conference takes much pride in what it calls the "parallel system" for conducting activities within the Area. This system is a kind of "one for you and one for m e " game. Whoever wants to exploit minerals in the Area will have to agree a plan of work with the Authority. The plan, once agreed, would be a formal contract to develop the territory specified in the plan. No such contract will be granted to applicants who do n o t meet tests of technical and financial competence imposed by the Authority. Previous to obtaining a contract, the would-be operator would be required to prospect the territory -- or have it prospected for him by consultanks. He would have to find at least two mineral bearing sites. One such site would be selected by the Authority for use either by the Enterprise or by a developing nation and the other would become the contractual site of operations allocated to the applicant. In this way the A u t h o r i t y and the Enterprise would built up a reserve of sites as the years went by. The parallel system has other features besides this one-for-one obligation. The Enterprise will start from scratch. It will need to be financed by hundreds of millions of dollars, especially in the first stages. The financial arrangements proposed include interest-free loans from the State Parties, interest-bearing loans and an income from operators who hold contracts to exploit the Area. Taxes or levies will be raised as consideration for granting the contracts of operation. A precise formula has not yet been agreed upon. Suggestions vary between a fixed royalty as percentage of the market value of the minerals extracted and processed and a smaller charge of this kind plus a percentage of net pro-
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fits. Recently there has been talk of a premium in addition, even to the tune of 60 million dollars per mine site. There is a more or less definite consensus that the State Parties will be required to ensure that the Enterprise has sufficient funds to m o u n t its first mining project. Also to enable the Enterprise to keep pace w i t h the mineral operators in the Area it is intended that ways and means should be found for obliging an applicant under contract to assist the Enterprise by providing it with expertise and equipment. Clearly, the designers, inventors and manufacturers of technological equipment for use on the seabeds of the deep oceans will in future have to look beyond the immediate specifications of their clients and purchasers to what the officials of the International Seabed Authority will require of successful applicants for operating contracts in the Area.
LIFTING METALLIC NODULES It is apparent from the debates of the Law of the Sea Conference and the proposed Articles resulting therefrom that the major, if not the sole activity, in the Area for some time to come will be the lifting and processing of metallic nodules. The prospect of what could happen has generated as many fears as hopes. In the m e d i u m term, world supplies of copper, cobalt, manganese, nickel and other metals could be augmented to an extent that would disturb the world markets. Developing countries, especially the land-locked ones whose economies are bolstered upon revenues from the export of such minerals, were apprehensive of what may come out of the deep ocean beds of the Area. Consequently it is proposed that special conditions shall govern the making of contracts by the Authority with operators exploiting the deposits of metallic nodules. Such conditions do not adhere to contracts for the working of other resources. The conditions prohibit the Authority from approving plans of work for the exploitation, if the level of production of minerals from nodules would cause nickel production to run above a calculated ceiling, a ceiling based on a formula related to past trends. Details of the wording of the contracts are not available; but presumably a general contract to lift and process nodules would be valid if it required any nickel inadvertently raised to be excluded from processing and marketing.
NEARER WATERS This exceedingly rough sketch o f what is intended by world opinion for the seabeds of the deep oceans is, it is hoped, drawn in clear enough outline for architects, manufacturers and purveyors of advanced offshore technologi-
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cal devices to have some inkling of what management in the Area will require of them in the future. Let us now turn our attention to nearer waters. The Area over which the International Seabed Authority operates is, as we have seen, that stretch of the seabeds of the oceans that lies beyond the several and respective jurisdictions of the coastal nations. Within those jurisdictions are other divisions of primary importance to all who would understand the fundamentals of maritime resource management. The scope of national authority varies within the devisions. What may be done in one may be beyond the power of the Government of a coastal nation to sanction in another. The divisions are, therefore, of first consequence to the management of the seabeds and their associated waters. The designations of the divisions are commonplace to the parlance of the Law of the Sea Conference. But as yet they are not universally accepted. And where a term is used, as with our own Continental Shelf of the U.K., it may well denote something different from what the Law of the Sea Conference intends. Nevertheless, the designations are now so much a part of the text of what will be the Convention of the Law of the Sea that we may safely accept them in any consideration of management policies and practices for the future. Apart from the Area, the designations as embodied in the draft Articles of the Law of the Sea Conference are five: the Territorial Sea; the Contiguous Zone; the Exclusive Economic Zone; the Continental Shelf; and the Continental Margin.
THE DIVISIONS The Territorial Sea is an area of sea, air space and seabed adjacent to the land territory of a coastal State and extending over 12 nautical miles from a low water baseline. Over this stretch of waters and seabed, the coastal State has complete sovereignty. The Contiguous Zone is so called as it is contiguous with the territorial waters. It extends for 24 nautical miles beyond them and is an area within which the coastal State may take action to prevent infringement of its customs, fiscal, immigration and sanitary regulations within its territorial sea. The Exclusive Economic Zone of a coastal State also lies adjacent to its territorial sea and extends beyond it for not more than 200 nautical miles from the low water baselines. It is a zone over which the coastal State has sovereign rights for what may be termed economic purposes to the exclusion of other States. All other States have, however, freedom of navigation and overflight and to lay submarine cables and pipelines in the exclusive economic zone. The sovereignty of the coastal State in its exclusive economic zone is for the purpose of exploring and exploiting, conserving and managing the natural resources, living and non-living, of the
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seabed and subsoil and of the superjacent waters; and for other activities for economic purposes such as the production of energy from the waters and winds. And more particularly, a coastal State may in its exclusive economic zone establish and use artificial islands, installations and structures; undertake marine scientific research and preserve the maritime environment. Each coastal State has a natural elongation of its land territory below its adjacent seas. In general the elongation as seabed, inclines downwards to the ocean floor. Geographical convention has denoted the upper portion of the incline, the continental shelf, the middle section, the continental slope and the final drop, the continental rise. The entire incline from the land mass to the ocean floor is termed the Continental Margin. The Law of the Sea Conference proposed its own definition of the Continental Shelf. It is to be that extent of seabed and subsoil that extends outward from the baselines of a coastal State for a distance of 200 nautical miles or which runs to the outer edge of the Continental Margin. For the purpose of this definition, the Continental Margin is not necessarily the natural Continental Margin. The outer edge is to be either 60 nautical miles from the f o o t of the natural continental slope or is to be determined b y reference to the thickness of the sedimentary rocks of the seabed. In either case the outer edge of the Continental Margin and hence the extremity of the Continental Shelf is n o t to extend b e y o n d a line 350 miles distant from the baselines or a line 100 nautical miles b e y o n d the 2,500 metre isobath. A coastal State will have exclusive sovereign rights over its Continental Shelf to explore and exploit its natural resources. These rights will n o t affect the legal status of the superjacent waters; and they are subject to the rights of all States to lay submarine cables and pipelines on the Continental Shelf. It is intended, however, that where a coastal State exploits the non-living resources of its Continental Shelf b e y o n d 200 nautical miles from the baselines it shall make payments in cash or in kind to the Authority; the Authority shall then distribute the receipts among the State Parties to the Law of the Sea Convention. Payment will increase gradually over the years to a maximum of 7% of value or volume.
THE T R U M A N PROCLAMATION These jurisdictions are of critical importance to coastal States in the management of their maritime resources. They are n o t y e t binding b u t could soon become so. In the meantime several coastal States have defined and delineated their respective Continental Shelves as suits them. The very notion of a Continental Shelf as a legal entity and prolongation of the area of national sovereignty is an example of law catching up with technology in the management of maritime resources. The very notion of the Continental
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Shelf as a sovereign area goes back to the Truman Proclamation of 1945: "Having concern for the urgency of conserving and prudently utilizing its natural resources, the Government of the United States of America 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". At the present time this notion of the Continental Shelf as an area of the seabed over which the jurisdiction of the pertinent coastal State is extended is widely accepted. Each State, however, has to frame its own laws in respect of it and agree its limitations and boundaries with neighbouring States as necessary. In the U.K. the Continental Shelf Act, 1964, is the primary statute law.
U.K. ILLUSTRATION Ownership and other rights over the Continental Shelves of the sovereign nations are of first consequence to maritime resource management. Whoever seeks authority to exploit the seabed and its superjacent waters must at the present time find out how the law views the Continental Shelf. In the brief scope of this paper, we can only illustrate the general from the particular. And for this purpose we shall take the U.K. legislation; looking at it in general and then to see how its application affects the fundamentals of management, first in respect of minerals other than the gas and petroleum resources and subsequently how it relates to these latter. The Continental Shelf Act, 1964, was drafted on the assumption that Great Britain had rights outside her territorial seas over the seabed, its subsoil and its natural resources. The rights are not defined as either property rights or ownership. They are not defined in any way. Provision is made that they shall be exercisable over designated areas of the seabed. The rights, however, are vested in the Crown. The Continental Shelf for the purpose of the Act and the exercise of the rights is made up of the designated areas as they exist at any one time (see Fig. 1). Excluded from the vested rights in the Crown were the rights in respect of coal. These were vested in the National Coal Board subject to the consent of the Secretary of State for Energy for any use of them. Under the Petroleum (Production) Act, 1934, the property in petroleum existing in its natural condition was also vested in the Crown. Under that Act the appropriate Minister of State had power on behalf of the Crown to issue licenses to search, bore for and get petroleum. A corresponding right to issue ticences in respect of petroleum (including any mineral oil or relative hydrocarbon and natural gas) is given to the Secretary of State for Energy on behalf of the Crown in the exercise of righ~ over the
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Fig. 1. Continental Shelf Act. Designated areas.
Continental Shelf. In 1975 the Petroleum and Submarine Pipe-Lines Act made it illegal for a n y o n e to construct or use pipelines in, under or over the territorial seas of Great Britain and the seas in any designated area of the Continental Shelf without authorization of the Secretary of State for Energy. As a result of this legislation, managerial rights over the seabed and subsoil of the Continental Shelf of Great Britain are in three different executive hands. In general the rights to search for, win and process minerals and otherwise to use the seabed and its subsoil are, on behalf of the Crown,
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administered by the Crown Estate Commissioners. Coal mining in all its aspects and phases is the prerogative of the National Coal Board. And the granting of licences for prospecting for and extracting petroleum and natural gas are issued by the Secretary of State for Energy; he and his Department are also responsible for authorizing the construction and use of pipelines in the areas of the controlled waters.
CROWN ESTATE POLICY Ownership of the supreme estate in the seabed of the territorial seas like that of the foreshore of Great Britain is vested in the Crown. Management policy, therefore, over the territorial seabed differs from that over the Continental Shelf. Over the former, wayleaves have to be granted for cables and pipelines and formal leases given for permanent installations. Administratively the distinction does not affect policy. Mineral workings, almost without exception, take place on the Continental Shelf. Formal leasing of harbour installations and licenses to dredge the seabed for navigation purposes are c o m m o n activities close inshore. The form of legal instruments used, the methods and execution of valuations and similar technical features of resource management in these near coastal waters take their colouring from landware operations. The only mineral activities in the near waters are, at present, mine dredging for tin-bearing silt off Cornwall. Mineral extraction on the Continental Shelf is entirely limited to dredging for non-metalliferous aggregates. Licences are granted in consideration of royalties which are levied at rates that are standard per tonne in specific areas of operation, e.g. the Thames approaches, the Norfolk coast approaches, etc. There is little attempt to link royalty rates to market values or development costs. The management policy of the Crown Estate Commissioners is private to them. It is the dredging operations especially on the Continental Shelf which have special interest for maritime resource management. Licences are granted for dredging but only after the Crown Estate Commissioners have in each case consulted the Department of the Environment and through it all and every other interest likely to be affected by the dredging operations, especially those concerned with oil and gas production, coal mining, fisheries and navigation. The Crown Estate Commissioners in this passive sense practise comprehensive multi-use management.
COAL BOARD POLICY At present coal is mined over the seabed from land-based pitheads. Mines in places run o u t 5 miles or more under the sea. A special expertise has devel-
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oped from experience for operating under the sea and construction of mines in the seabed is governed b y statute law. The extent to which this form of seabed mining can be taken and where it can operate depends largely on the thickness of seabed cover under the workable coal seams and on the distances from pitheads to the coal face. Too great a distance creates a logistic manpower problem. But with m o d e m technology increasing locomotive speed, workable distances are being extended. Some thought is being given to researching the practicalities of sinking access and vent shafts through the sea to the subjacent coal bearing seabed. Such devices would only lengthen the distances offshore of workable coal faces. Coal would still be extracted from the landward pitheads, as the sea shafts would be either vents only, or vents and carriage lifts for the miners. In the meantime, seismic surveys are being made of the coal measures in the Continental Shelf, against the long distant day when technology may make sea-placed pitheads practical and commercial propositions.
PETROLEUM EXTRACTION MANAGEMENT POLICY Although the right to grant exploration and production licences and to authorize the laying of pipelines over the seabed of the Continental Shelf as vested in the Secretary of State for Energy is n o t a right of ownership, it is a puissant right of management. It gives power to decide what shall be done, the manner of the doing of it and who the operators shall be. With petroleum licensing, the Secretary of State is statute b o u n d to make regulations governing the terms on which the licences shall be granted and model clauses for incorporation in them. He is thus required to expose, in some measure, his managerial policy to the public. There is no similar obligation in respect of the authorization of the construction and use of pipelines. Licensees will, each in their own way, have managerial problems. While at law a licence does n o t convey a proprietary interest or estate in the seabed and its resources, it creates for the licensee something very close to it, especially where the licence can endure for 30 years. The licensee will have to consider his investm e n t policy. The terms of the licence, especially those affecting duration, user obligations and alienability will have a direct bearing u p o n h o w he manages it as an asset. To have previous and clear knowledge of h o w the licensor manages his affairs and regards the privity of contract which the licence will establish between himself and the licensee is of great value to the licensee. What then is this policy? The Secretary of State in the discharge of his managerial obligations has divided the Continental Shelf of Great Britain into rectangular quadrants, some 369 o f them. Each quadrant is subdivided into enumerated blocks and licences are granted in respect of one or more
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blocks. Payments are charged for the gramting of licenses; there are standard charges, irrespective of the nature and siting of the licensed block. In addition, if the licensed enterprise is successful, royalties at standard percentage rates are payable. Before the production stage, a licensee is required to execute a scheme of prospecting; and if and when production is commercially possible, the licensee must submit and agree with the licensor a develo p m e n t and production programme. These programmes afford room for manoeuvre and negotiation and the obligations undertaken by the licensees reflect the differential between the siting and operational prospects of differing blocks. It is now the practice to issue licenses only to members of operational consortia. Usually one of these is accepted by the others as the prime or sole operator. Management policy rests mainly with the operator with whom ultimate decisions lie in the event of disagreement. However rich the seabed and its waters may be, the licensee is concerned only with the petroleum or natural gas. In managing his affairs he is obligated to have regard to the effect of his operations on fishing and navigation, but not as assets in a multi-use managerial policy. Although the managerial intentions of the Secretary of State in respect of pipeline authorization are not patent in the same way, it is apparent from certain actions taken that he has already used the powers granted to him under the Petroleum and Submarine Pipelines Act 1975 to study the formation of gas gathering pipeline systems so as to rationalize the conveying of natural gas from the seabed to the shore.
A PRESENT AND FUTURE NEED From the run of the general evidence and the particular illustrations in the realms of U.K. experience and policy, the salient features of marine resource management are apparent. The unit of management can be an entire continental shelf, or the seabed of territorial waters or of an exclusive, economic zone. Management will need to know the potential bounds of its own domain and what lies within them - - t h e need for initial surveys and monitoring. The creation of derivative interests by operational contracts or production licences will call for intelligence about the nature, siting and number of these and their standing in relation to economic, fiscal and environmental policies. And in this respect supreme authorities responsible for national seabeds will need special guidance on the merits or otherwise of multi-use management. Holders of lesser interests will wish to understand the identity of these, the powers pertinent to them as units of management and the economic and environmental criteria influencing the use of t h e m . Conditions which affect use, as for example the exclusion of nickel from the lifting pro-
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grammes of metallic nodules, will require an appropriate technology. And the alienation of lesser interests created by licences and so on, will, among the holders of them, generate a special market which management will need to comprehend, a market with its own values; taking standard payments from recipients of petroleum production licences, for example, suggests that the quasi-proprietary interests created by the licences must have differing exchange values -- a matter of considerable importance to management. In looking at this supremely important subject of maritime resource management, we have, I suggest, seen it in its infancy. Nonetheless, it is real enough. Because management is inescapable, it has hitherto found a spontaneous modus operandi. Acquisitions, evaluations, transfers and resource use decisions have been effected and taken by whoever happened to be at hand for the task. A considerable body of knowledge and wealth of experience has been gained in this way. In some directions - - a s with the "land m e n " of the American off industry -- these managerial skills are generating a new type of professional expert consultant. Over all, however, such professional expertise as exists and is capable of giving comprehensive managerial advice is in-house to the bigger operating concerns. That a need exists, an urgent need for professional, independent services is patent. There is at the present time a move here in Britain to set up the first consortium of professional experts in maritime resource management to give a comprehensive service here and elsewhere in the world. From this first step much is likely to follow. The demand is there, the supply is on the way.
REFERENCES Publications Ashcroft, P.G., 1979. The Law of Offshore Installations. Int. Maritime Seminars. Lloyds of London Press Limited. Ashcroft, P.G., 1978. The Exploitation and Conservation of Natural Fuel Resources of the United Kingdom and its Continental Shelf. Journal of the Institute of Advanced Legal Studies of the University of London. Bentham, R.W., 1977. The Laws of the Sea Conference: the Present Position. International Business Lawyer, Vol. 5 (ii). Bentham, R.W., 1978. The Concept of a Continental Shelf. The Law of the Sea and Natural Resources Journal. Crown Estate Commissioners, 1979. The Crown Estate. Department of Energy, 1978. Gas Gathering Pipeline Systems in the North Sea. Energy Paper Number 30. Department of Energy, 1979. Development of the Oil and Gas Resources of the United Kingdom. The Royal Institutior/ of Chartered Surveyors~ 1974. The Services of the Minerals Surveyor.
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The Secretary of State for Energy, 1978. Continental Shelf Act, 1964. Report for Year 1977/78. United Nations, 1978. Third United National Conference on the Law of the Sea. Official Records. Vol. VIII. Informal Composite Negotiating Text. United Nations (Apr. 1979). Third Conference on the Law of the Sea. Informal Composite Negotiating Text/Revision 1. United Nations (Sept. 1979). Third Conference on the Law of the Sea. Reports to ttle Plenary of the Conference.
Legal instruments Petroleum (Production) Act, 1934 (Ch. 36). Continental Shelf Act, 1964 (Chapter 29). Mineral Workings (Offshore Installations) Act, 1971 (Chapter 61 ). Petroleum and Submarine Pipe-lines Act, 1975 (Chapter 74). The Petroleum (Production) Regulations, 1976 (No. 1129), 1976. The Petroleum (Production) Amendment Regulations, 1978 (No. 929), 1978.
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