Doug Bandow, now a senior fellow at the Cato Institute, served as a special assistant to President Regan and a deputy representative to the Third United Nations Conference on the Law of the Sea. He bluntly explains that “the treaty would resurrect the redistributionist lobbying campaign once conducted by developing states unwilling to deal with the real causes of their economic failures. Indeed, the LOST would essentially create another UN agency with the purpose of transferring wealth from industrialized states to the Third World voting majority.”6
In the 1970s and ’80s, third world nations promoted what Bandow says they “euphemistically called the New International Economic Order—global management and redistribution of resources, technology, trade, and wealth.”7 In the United Nations, they formed a Group of seventy-seven countries that set about their search for new sources of income and wealth for their countries and their corrupt leaders. They tried to get the United Nations Industrial Development Organization (UNIDO), the United Nations Educational, Scientific and Cultural Organization (UNESCO), the Food and Agriculture Organization of the United Nations (FAO), the United Nations Centre for Transnational Corporations (CTC), the United Nations Conference on Trade and Development (UNCTAD), and the United Nations itself to help them soak rich nations to benefit their third world dictators. All these agencies “became international battlegrounds” in the third world’s desperate search for wealth. Our wealth!
The demands of the third world dictators for more aid have become more insistent and their approach more militant over the past thirty years. Where once they played off the rivalry of the United States and Russia during the cold war—going first to one and then to the other in a bidding contest for their support—they now sought to play on the conscience of the developed world to pry out more aid. Suddenly music groups like U2 held concerts devoted to raising global awareness of poverty. Appeals to world compassion sparked efforts to increase foreign aid appropriations.
Britain’s prime minister Tony Blair took the lead in pledging to contribute seven-tenths of one percent of his nation’s Gross Domestic Product (GDP) to third world nations and called on all developed countries to follow his lead.
Global economist Jeffrey Sachs wrote a book optimistically titled The End of Poverty, in which he chronicled the rapid decline of poverty throughout the world. Heralding China’s and India’s emergence from hardship, he called for massive increases in foreign aid to continue the progress so evident in east and south Asia.
But Sachs missed the point. It was not foreign aid that had lifted China and India out of poverty, but international commerce. Through private sector entrepreneurial initiative rather than public charity, these nations cut their poor populations dramatically and spread a middle-class standard of living. It was trade with the United States and direct foreign investment in their businesses rather than foreign aid that had vanquished poverty.
No matter how loudly U2 sang or Blair demanded higher levels of foreign aid, the American people weren’t biting. They were largely unmoved by these appeals. While we doubled our foreign aid spending, it still comes to only four-tenths of one percent of GDP—half of the hoped-for global standard.
Seeing that the strategy of trying to shame the developed world into increased aid wasn’t working, the third world dictators hit on a new vehicle to get money: the Law of the Sea Treaty.
Why not grab hold of the money that gushed out of oil wells drilled deep in the bottom of the ocean? Weren’t these resources “the common heritage of mankind”? How could any nation lay claim to these rich resources that lay far off its coastline, even beyond the two-hundred-mile economic zone generally asserted by seacoast nations?
These dictatorships acted like Groucho Marx did when he learned, in his movie Night at the Opera, that the wealthy, elderly widow he was currently romancing had given money to the opera so they could sign a tenor who would sing for a thousand dollars a night—an astronomical sum in those days. Rubbing his hands together, Groucho said, “There’s got to be some way I can get a piece of that.”8
Bandow explains that to these African, Asian, and Latin American autocracies, “no fight was more important than that over the LOST.” After all, didn’t the treaty itself explicitly articulate its purpose to “contribute to the realization of a just and equitable international economic order which takes into account the interests and needs of mankind as a whole and, in particular, the special interests and needs of developing countries”?9
The Law of the Sea Treaty does more than just increase the flow of wealth from developed nations to third world dictatorships. It confers on them the power to tax American property.
No longer do they have to ask for money. They can demand it. And it’s a lot of money. According to the US Extended Continental Shelf Task Force, which is currently mapping the undersea region, the resources there “may be worth billions if not trillions” of dollars.10
The treaty gives a new multinational body—the International Seabed Authority (ISA)—the right to impose taxes on offshore oil and gas wells equal to 7 percent of the royalties they would otherwise pay to their nation’s treasuries. The Seabed Authority, based in Kingston, Jamaica, would rule the waves—and the seabed beneath. A body much like the United Nations’ General Assembly, it is governed by 160 member nations, each with one vote.
Secretary Rumsfeld stresses that “pursuant to the treaty’s Article 82, the US would be required to transfer to this entity a significant share of all royalties generated by US companies—royalties that would otherwise go to the US Treasury.”11
“Over time, hundreds of billions of dollars could flow through the Authority with little oversight. The US would not control how those revenues are spent: The treaty empowers the Authority to redistribute these so-called international royalties to developing and landlocked nations with no role in exploring or extracting those resources.”12
Rumsfeld calls this transfer of wealth by its real name: welfare. “This [treaty] would constitute massive global welfare, courtesy of the US taxpayer. It would be as if fishermen who exerted themselves to catch fish on the high seas were required, on the principle that those fish belonged to all people everywhere, to give a share of their take to countries that had nothing to do with their costly, dangerous and arduous efforts.”13
US CAN’T CONTROL WHO GETS OUR MONEY
The money could go anywhere, with the US having little if any control over it. The money would go into a global fund that a thirty-six member committee of the ISA would allocate around the world. The United States would sit on the committee and have one vote, only one.
The treaty specifies that the distribution of the aid would be decided by the council based on “consensus,” a provision that treaty advocates have said amounts to giving the US, in effect, a kind of veto. But experience has proven that without a formal veto the requirement of consensus would give us very little real leverage with which to direct the flow of aid, even to stop the money from going to terror-sponsoring nations or entities.
And one wonders if President Obama’s representatives on the ISA Council can be counted on to fight to direct the revenue to good countries. After all, it’s his administration that gives $1 billion in foreign aid to the Palestinian Authority and Hamas and $1.3 billion to the Muslim Brotherhood regime in Egypt!
Rumsfeld explains that “these sizable ‘royalties’ could go to corrupt dictatorships and state sponsors of terrorism. For example, as a treaty signatory and a member of the Authority’s executive council, the government of Sudan—which has harbored terrorists and conducted a mass extermination campaign against its own people—would have as much say as the US on issues to be decided by the Authority.”14