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«By Sharefah A. Almuhana, Winner of the Best International Future Lawyer Award 2016 About the Author Sharefah Almuhana graduated in May 2016 from Case ...»

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Governing Shared Natural Resources of the

International Seabed Area

By Sharefah A. Almuhana,

Winner of the Best International Future Lawyer Award 2016

About the Author

Sharefah Almuhana graduated in May 2016 from Case Western Reserve University School of

Law, Cleveland, OH, U.S.A, with S.J.D – Doctoral Degree in Law.

Sharefah also holds LLB and LLM both are from Kuwait University School of Law. Before

going to the U.S. Sharefah served in the Kuwaiti Government as a “Legal Researcher” at the Ministry of Public Works of Kuwait. She is currently “Legal Intern” in a U.S. Immigration Law firm in Laramie, WY, U.S.A where she is learning about the U.S. Immigration Law and exposing to humanitarian cases regarding refugees, asylum seekers, and victims of human trafficking.

Sharefah scholarly and researching interests include all aspects of the public and international law.

1 Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016 Executive Summary I.

This research attempts to establish a strategy to distribute the potential outcomes from exploiting the natural resources existing in common and global property areas, namely, the International Seabed Area (the Area), which is located beyond the limits of national jurisdictions and is rich in valuable mineral deposits such as nickel, copper, cobalt, iron, and manganese. The huge deposits found beneath the oceans are commercially sound and estimated to satisfy the energy needs of the world for centuries.

Although most nations accepted the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which preserved the Area and its resources as a common heritage of mankind, the United States did not ratify this convention due to objections to its eleventh part, which regulates the exploitation activities in the Area. Even after several revisions to 2 that part of the convention by the Implementation Agreement in 1994, the U.S. still refused to join UNCLOS. The U.S. refusal to ratify the convention threatens its intended role as the Constitution of the Seas. This refusal may also affect other countries’ commitments to be bound by the convention provisions. In the worst scenario, the exploitation system of the Area, which took years to build, could eventually collapse if the U.S. continues to refuse to join.

This research stresses the importance of a proper strategy that depends on a combination of free market policies and royalty system to divide outcomes resulting from the exploitation of the oceans’ resources to make the convention appealing to all countries regardless of their economic growth or technological development. This proposal therefore seeks to advance the Law of the Seas for the wellbeing of all mankind by assuring that all Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016 powerful states will join the convention and negotiate their objections with the international community.

In order to do so, I will provide an evaluation of the current system of the international body established by the Convention to oversee the activities in this region, which is called the International Seabed Authority. Then, I will recommend an ideal sociolegal system to govern the common property resources of the International Seabed Area by introducing a strategy that guarantees a distributive justice and applying this strategy to the exploitation system of UNCLOS. This strategy will be put into action by using the major theories of distributive justice (also known as socio-economic justice or social justice) and literature of common property governance system. This body of literature will help identify the factors that effectively support common governance and the factors that get in the way

–  –  –

cooperate when they agree on their understanding of distributive justice. If an agreement could be reached regarding what the general principle of the government regime would be so that regime can be called fair, entities with different interests would cooperate. If they could not reach an agreement regarding that principle, they would not cooperate. For this reason, rules and policies for the governance of common-pool resources require that the cooperating parties overcome barriers to negotiations, agree on how to make the gain bigger and agree on a fair division of the gains from cooperation as well as the risks. This research will conclude by justifying the choice of the presented system and describing how this system avoids the failures of the system in part XI of UNCLOS.

–  –  –

This study has the following questions:

1. What are the elements that constitute the best governance system to approach the problems of the common property resource at the international level? Alternatively, under which circumstances a governance system for globally shared resources would

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2. What is the most appropriate economic, political or social principle on which an international distributive justice system should rely?

3. Is it possible to resolve the problems of the international common property resource by using the same proposals and methods to resolve the problems of the local

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4. What are the unique challenges or problems an international common property resource system, such as the exploitation system of the resources of the International Seabed Area, confront and that require special consideration?

This study has the following objectives:

1. To highlight the problems of the common resources property systems on the international level, particularly, the problem of sharing the resources of the International Seabed Area.

2. To stress the importance of having a theoretical background and a methodological

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Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016

3. To reevaluate the existing exploitation system for the International Seabed Area resources, and to suggest an ideal legal system with a new institutional framework to govern these common resources in a way that is just for all countries of the world without harming efficiency.

4. To demonstrate that problem-solving methods at the national level might be useful to solve similar problems on the international level.

5. To address how the system in this thesis would overcome those challenges and become acceptable to all countries and in particular, to the U.S.

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resources property problems. Common pool resource problems arise when a resource can be harvested by more than one individual or organization. Because no person can preclude other owners from harvesting the resource, each person has the incentive to take and sell the resources quickly because the first person who harvests the resource first receives the value of the resource. Examples of these problems include the overfishing and pollution.

Several factors are involved in addressing such problems, including social, economic, political, and environmental factors. If there is a ban on harvesting the resource, the resources cannot be used for the good of humanity. On the other hand, if no controls are put on the harvesting of the resources, the common pool will be extinguished as those with a right to harvest the resource will continue to harvest beyond the sustainable rate. Some way must be found for those with a right to harvest the resource to cooperate, and this requires Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016 that the costs and benefits of harvesting the resource be fairly distributed, which raises difficult issues of distributive justice.

At the international level, exploitation of the common material resources of the deep seabed in areas beyond national jurisdictions could result in a global and highly complex economic problem of overexploitation if there are not clear rules to govern the production process in these un-owned areas of the seas. In the same way, the exploitation of the seabed resources may cause environmental problems if the rules of a marine environment protection are violated or if they are not hermetically crafted. Furthermore, political problems may emerge if a state does not fulfill its international obligations regarding exploitation of the International Seabed Area. Moreover, exploitation may lead to social

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or if they are defective, weak, unclear, or unfair. Therefore, to resolve the common property problems effectively, particularly at the international level, these problems must be examined by taking many factors into account. In other words, complex institutional frameworks are needed to deal with the different social, economic, environmental aspects and to get the best possible outcomes.1 This thesis demonstrates how a social basis could be essential to govern the international common resources property, which is also known as “the global commons” or “common heritage of mankind.” For the purpose of this study, I will focus on the Seabed International Area of part XI (The Area) of the United Nations Convention of the Law of the Sea (UNCLOS) 1982. I choose this system because it is of a complex nature that can be 1 Elinor Ostrom, Beyond Markets and States: Polycentric Governance of Complex Economic Systems, 100 THE AM.

ECON. REV. 641,665(2010).

Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016 addressed only through economic, political, environmental, social, and legal systems. It also presents an almost complete developed model for an international common property resource system and addresses many questions regarding distributive justice and the best mechanism to achieve it. In addition, I think if I could reach an ideal socio-economic legal system for seabed resources, this system would be applicable for other international common resource property problems such as outer space resources, resources in Antarctica, and for any other international common resources that may emerge in the future as a new problem like the hydrocarbons of the Arctic region.

The purpose of this thesis is to provide an ideal legal system framework to govern the property rights over natural resources of the International Seabed Area. This ideal legal system must ensure that the resources of the Area are exploited efficiently and in a

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the exploitation, that all countries agree to this system, and that the system is flexible enough to respond to changing circumstances now and in the future.

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The goal of this proposal is to develop an idea of how owners of a common resource can set up an institution to govern the resource. The common heritage of mankind was intended to mean that no one country owns the deep seabed. Rather, it is owned in common.

Therefore, it would be beneficial to recommend a governance system that is fair and efficient for sharing the seabed resources. In order to develop the ideal governance system, I draw on several bodies of literature that address questions of the dynamics of cooperation and international cooperation. In that connection, Elinor Ostrom and her followers have studied Sharefah A. Almuhana Winner of the Best International Future Lawyer Award 2016 what it is that makes cooperation in governance possible and what creates barriers to governance in the common pole resources property institutions. This body of literature will help identify the factors that effectively support common governance and the factors that get in the way of effective common governance. Ostrom’s literature on the governance of common-pool resources will be used as a basis to generalize from what we know about how that kind of governance should be approached to what we should take into account when common governance is undertaken by countries in the international or global level rather than by individuals, national companies or governmental agencies in the local level. Ostrom

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pool resources depend on an equitable sharing of the costs and benefits of harvesting the resource.

As a result, to develop the proposal presented in this dissertation, it is necessary also to show how the concepts of distributive justice (also known as socio-economic justice or social justice) have been used in the theoretical and policy literature.

Ostrom identifies the characteristics that are important to make people able to cooperate over common-pool resources in her "Design Principle."2 However, she does not 2

Id. at 641,653. This list describes the design principles:

“IA. User Boundaries: Clear and locally understood boundaries between legitimate users and nonusers are present.

IB. Resource Boundaries: Clear boundaries that separate a specific common-pool resource from a larger socialecological system are present.

2A. Congruence with Local Conditions: Appropriation and provision rules are congruent with local social and environmental conditions.

2B. Appropriation and Provision: Appropriation rules are congruent with provision rules; the distribution of costs is proportional to the distribution of benefits.

3. Collective Choice Arrangements: Most individuals affected by a resource regime are authorized to participate in making and modifying its rules.

4A. Monitoring Users: Individuals who are accountable to or are the users monitor the appropriation and provision levels of the users.

4B. Monitoring the Resource: Individuals who are accountable to or are the users monitor the condition of the resource.

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justice. To illustrate, the cooperation over the common pool resources consists of two stages.

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