237 



The prime requirement for an economically efficient operation is the assurance 

 of exclusive rights for a sufficiently large area for a sufficient length of time. 

 These rights should be adequate to permit both exploration and exploitation, 

 as they do for the oil leases on the U.IS. continental shelf. Economic efficiency 

 should be considered not only in terms of the entrepreneur, but also in terms of 

 society. Social costs, such as those for protecting the entrepreneur's exclusive 

 rights, of ensuring an efficient allocation of capital and labor, and, possibly, of 

 preventing external effects (such as pollution) must also be considered in the 

 measurement of benefits and costs by which efficiency is gauged. Efficient man- 

 agement programs for the minerals of the sea floor may require some payment 

 to the public, whetlier the public be of the flag nation or of the world community. 

 The second criterion is that of acceptability. The implementation and viability 

 of any regime will dei>end upon how it is viewed by those nations that have an 

 influence on the decisions. This is essentially the question of how the regime 

 aft'ects the distribution of the wealth of the seas' bottom — or, more accurately, 

 how each participant perceives his own net gains (economic and otlier) in rela- 

 tionsliip to the net gains of all other participants. 



Assuming that the two criteria mentioned above can be met, the third test 

 of a legal regime is that of feasibility. To meet this test, it may be necessary 

 to develop new institutions — institutions for administration, enforcement, and 

 adjudication. The necessity for new institutions should not be considered an 

 impediment to the establishment of regime. Indeed, it is in keeping that these 

 totally new resources and totally new problems should require new institutions. 

 There are four general alternatives that may be considered in the search 

 for a regime to govern the minerals of the sea floor. One alternative is to do 

 nothing — to "wait and see" what emerges from actual development before 

 attempting to establish a regime. A second alternative — that might be called 

 the "coastal state" or "national lake" approach '' — is to divide up the oceans 

 along lines that are equidistant from the shores of the coastal states. The third 

 system — referred to as the "flag nation" approach ^ — would permit exploitation 

 under the jurisdiction, and with the protection, of the nation whose flag is 

 flown by the discoverer and exploiter. And the fourth approach is to permit 

 exploitation under the jurisdiction, and with the protection, of an international 

 authority. 



WAIT AND SEE 



The first aproach is to do nothing about the establishment of a regime until 

 the issue is forced subsequent to the actual development of manganese mining 

 operations. In discussing the pros and cons of the "wait and see" approach, 

 four questions can be raised : 



1. Is exploitation likely to be deterred by the absence of a regime under 

 which the exploiter can gain and maintain exclusive rights to a resource 

 area? 



2. Can the necessary rules and regulations be written with sufficient 

 precision prior to the actual development of mining operations? 



3. When development occurs and the pressures for a regime have to 

 be met, can international law be formulated quickly enough to accommodate 

 the needs of the developers and to resolve the conflicts that may occur? 



4. What effect will the pioneer developments have upon the formulation 

 of law and the establishment of a regime? 



The first question can best be an.swered by those companies that have a 

 strong interest in undertaking mining operations. There are those that main- 

 tain that the absence of a regime for exclusive rights will not deter investment 

 in a mining operation. They may feel that the seas are so large and the 

 resources so vast that there is no need to establish exclusive rights. Or they 

 may feel that once an operation is underway, their government will be forced 

 to protect their investment. 



* The "national lakes" terms, applied to fisheries, has been used by Wilbert M. Chapman 

 In an excellent presentation of the pros and eons of alternative "regimes for high seas 

 fisheries. Many of the points he makes are also relevant to discussion of deep sea minerals. 

 See Chapman, "Problems of the North Pacific and Atlantic Fisheries," (paper presented 

 at the annual meeting, Fisheries Council of Canada, Montreal, May 10, 1967). 



s See Northcutt Ely, "The Laws Governing Exploitation of the Minerals Beneath the 

 Sea." Exploiting the Ocean Transactions of the 2d Annual MTS Conference (Washington, 

 D.C. : Marine Technology Society, 1966) . 



