36 



If at the end of the road it turned out that the companies needed 

 further reassurance in order to get them to invest under the 

 treaty, then the only possible answer would be risk insurance, 

 either offered commercially— and it might be available commercial- 

 ly, if we had done a good job on the rules and regulations, for 

 example. If commercial risk insurance were not available, then 

 there could be an adaptation of the type of insurance we now offer 

 to investors in other countries under OPIC. 



The costs of the insurance are likely to be less under the treaty 

 than outside it, because the legal risks are likely to be less under 

 the treaty than outside it. So you then finally get to the key point, 

 which is that if on balance the industry is better off under an 

 improved treaty than without it, and if it takes insurance to induce 

 investment under the treaty, then by all means, let us provide that 

 insurance, because by that route, the United States will gain the 

 other benefits of the treaty. 



Conversely, if we kick over the treaty, we will find ourselves 

 with an equal or greater need for providing insurance in order to 

 get a company to act, but at the same time, we will have lost all 

 the other benefits. 



Now, these shorthand statements, such as the ones you have 

 read, gloss over all of this. 



The industry has been unable to change gears quickly. For a long 

 time they regarded themselves as in effect putting pressure on the 

 Conference and on the U.S. delegation to get a better treaty. 



Their criticisms of the treaty have been picked up by people 

 whose basic objection to the treaty are essentially ideological. 



Now, last year, Mr. Chairman, and Mr. Bingham, I would not 

 have told you that there would be no investment under the legisla- 

 tion. I was personally responsible for getting the last administra- 

 tion to change its position from opposition to the legislation to 

 support of the legislation. I did that because we needed the negoti- 

 ating leverage created by the perception on the part of the Confer- 

 ence that we were indeed prepared to go forward under that legis- 

 lation. 



Now the situation is one in which we have obtained all the 

 negotiating leverage we could possibly need because of the possibil- 

 ity we may kick over the treaty regardless of its benefits to the 

 United States, so it ought to be clear, therefore, that insofar as 

 U.S. access to strategic minerals is concerned, we should prefer the 

 treaty. 



It is not a question of trading off U.S. access to minerals against 

 U.S. politico-military interests in freedom of navigation. It is a 

 question of having better assurance of access to seabed minerals 

 under the treaty than without it, and I do not know a single 

 representative of the seabed mining industry who, as I said at the 

 conclusion of my prepared statement, disagrees with that, with one 

 possible exception. 



Mr. Bingham. My time has expired, but you have just made one 

 of the most significant statements that I have heard in any hearing 

 on this subject. 



I trust the industry press is here and will faithfully report what 

 you have said, that there will not be investment without a treaty. 



