654 
Authority) to enable economic operation and assure the producer time to re- 
cover his investment and an “adequate return thereon.” Failure to comply with 
work requirements would be ground for revocation. 
Upon expiration of the registration period, further exploration or exploita- 
tion of the subject resources or area should be subject to the regime as it then 
exists, without any re-registration preference. 
To cover the Authority’s administrative costs, it should be empowered to fix 
registration fees. 
Comment: Our 1968 Report (pp. 12-13) suggested consideration of a registry 
scheme as a long-range objective in contrast with proposals for vesting jurisdic- 
tion in a supranational agency to grant or deny mineral concessions in the areas 
beyond national jurisdiction. We consequently approve the Commission’s similar 
conclusion, which avoids vesting of ‘title’ to deep-sea resources in the United 
Nations (p. 147) and which seeks to create an administrative organ of limited 
but useful scope. In varying ‘degrees, however, we have misgivings over specific 
details of the Commission’s proposa', including the following: 
(1) The structure of the Authority. Its organization must reflect the realities 
of ocean capabilities, and must be insulated from caprices of the moment in the 
General Assembly. 
(2) The power of the Authority to veto claims and to fix their size and dura- 
tion. In order to avoid the abuses which can arise from monopoly power, the 
rights of claimants in all essential respects should be established in the treaty 
creating the regime. 
(3) The denial of any re-registration preference to a state which had devel- 
oped the area concerned. Such a policy could seriously impair incentive to exploit. 
(4) The provision that claims must be registered by a state or states. This 
presents problems in situations where private enterprise has invested in pre- 
liminary exploration and seeks to perfect its rights in an area before claim- 
jumpers can take advantage of its work. It should be made certain that the prin- 
ciple of “first-come, first-registered’’ would apply as of the date the applicant 
gave proper notice to the Authority that it had filed with a member state an 
application that it register on the applicant’s behalf. 
(5) The standard of an “adequate return.” This is a difficult and unrealistic 
concept to apply to the extractive industries, where risks are high and many un- 
successful attempts have to be paid for out of the small percentage of successful 
ventures. 
(6) Scientific research. Care must be exercised to prevent the registration 
system from being used to impede genuine scientific research. 
(7) The concept of “paper claims,” i.e., speculative registrations. A specula- 
tive race to the registry office, a “race to grab,” is inevitable if the reward for 
being first in line, without any prior exploratory effort, is to receive a power to 
exclude all others from a large area for a period of several years. Experience 
with mineral laws on land has proven this. 
2. International Fund (p. 149) 
This proposal is intended to compensate the world community as common owner 
of the resources by using the ‘economic rent” for purposes that the world com- 
munity agrees will promote the common welfare. The Commission wisely declares 
that these purposes must be other than general purposes of the U.N. 
The International Registry Authority would fix a rate of payment (not so high 
as to kill incentive) of a portion of the value of production which it would turn 
over to the Internatidnal Fund. The Authority should have no voice in the Fund’s 
management. The membership of the Fund should be determined by the U.N. 
General Assembly. 
Comment: We endorse the principle here recognized, that the agency con- 
cerned with production should be separated from the agency distributing the 
proceeds. It is probably the best way to give practical recognition to the proposi- 
tion that the resources are the legacy of mankind and to the fact that all states 
should be entitled to participate in the benefits. However, the question arises 
whether it is justifiable discrimination to require royalty-type payments from 
the mineral extractive industries when other users of ocean space (e.g., fishing 
and merchant marine) are not so burdened. 
Our other comments are: 
(1) If there are to be royalty-type payments, the Commission is to be com- 
mended for the formula ‘a portion of the value of production” rather than “net 
return on investment.” Cf. Comment (5) on the Registry, above. 
