Washington, DC – This morning, Senate Foreign Relations Committee Chairman John Kerry (D-MA) delivered the following opening statement at a hearing that brought together top leaders of the business community – including leaders in telecommunications, oil and gas and manufacturing – who support the Law of the Sea Treaty.
“Our companies want this Treaty, simply bottom line, because it affects their bottom lines,” said Sen. Kerry. “Our failure to join the Treaty actually forces them to look elsewhere – greater expense, greater uncertainty, and lack of protection of American sovereignty. The status quo is simply not acceptable.”
The full text of Chairman Kerry’s hearing statement, as delivered, is below:
Good morning. I’m delighted to have this very significant panel of business leaders here this morning to further help us evaluate, and think about, the Law of the Sea Treaty.
I was actually out to dinner with Tom Donohaue maybe a year and a half ago, or so, and at the very end of the dinner, Tom turned to me and he said, “By the way, when are you going to get this Law of the Sea Treaty done?”
I was completely taken aback. That was the last thing I expected to hear about at the dinner, and I said, “Why are you bringing that up, why’s that a concern?”
He said, “Are you kidding? I’ve got members who are desperate to get this thing done so they can go out and explore, mine, do what’s necessary to produce energy for America.”
I went back and talked to my staff. I told Tom I would in fact look into it and give it a good effort. And that’s what really brought us here because I met with various representatives of those industries and became convinced that American competitiveness and American jobs were at stake.
So we’re not here because of any political agenda. We’re not here because the Administration decided this was the moment. This is really coming from America’s business community and I think people will hear that very powerfully here this morning. I think that there’s any urgency to it and that’s what we will examine today.
We’ve heard from our nation’s top military leaders, the Secretary of Defense – the first sitting Secretary of Defense to testify in favor of it. We’ve heard from the Secretary of State – and every past Secretary of State – Republican and Democrat alike – have together signed an op-ed that they wrote, which has been reproduced in national newspapers regarding it. We’ve heard from treaty experts and opponents – and we’ll hear from more, still. We’re not finished on that score.
Our military leaders have consistently supported U.S. accession to this for more than two decades now. Some have argued that we should prefer to rely on customary international law to protect our navigational freedoms. But most of the national security community completely disagrees with that and does not believe that we should leave our national security to an unwritten set of rules subject to change by other countries and subject to change at any point in time. The capacity to have things change also presents uncertainty to the business community and as we hear again and again up here, nothing is more damaging to long-term business plans and investments – capital formation, job creation – than a lack of certainty about what the rules of the road are.
Today, we shift away our focus from the military and on to our energy and economic security. We’re going to hear directly from top business and industry leaders who, combined, represent millions of businesses and jobs.
Our companies want this Treaty, simply bottom line, because it affects their bottom lines.
Joining the Law of the Sea will provide benefits to U.S. business and industry that are not available through any other means. Just a quick few examples:
The telecommunications industry. As we’ll hear shortly, we have vast undersea cable networks and they provide a backbone for the worlds voice and data networks.
When there is a problem – if a country were to seek to block a company from laying cables or impeding the repair of damaged cables – the Law of the Sea provides redress. A party to the treaty can bring suit on behalf of its companies within the context of the Law of Sea agreement.
But, since the U.S. is on the outside of that agreement today, we cannot take advantage of this legal roadmap. Our companies have to piggy back on efforts by governments that are party to the Convention. So instead of standing up for our companies when they need our help, our failure to join the Treaty actually forces them to look elsewhere – greater expense, greater uncertainty, and lack of protection of American sovereignty. The status quo is simply not acceptable.
Lowell McAdam, the CEO of Verizon, who I am very pleased is here today, will go into some of the detail regarding that. And all you have to do is listen to AT&T, the Telecommunications Industry Association, Verizon, and others all of whom urge U.S. accession to this treaty.
On energy security, people come to the same conclusion. The United States is blessed with hundreds of thousands of square miles of extended continental shelf. We can double the size of the United States in effect from what is undersea and available to us for exclusive jurisdiction and that will be critical to our energy security for years to come.
The only way to maximize the legal certainty – and establish clear title – over the extended shelf is through recognition by the Continental Shelf Commission. As a non-party to the treaty, we are shut out from this process. We are shutting ourselves out.
This makes a critical difference to our energy companies – as we’ll hear. They want and need certainty to invest the billions of dollars required to develop energy in the extended shelf, especially in the Arctic where the Chinese and the Russians are already laying claims. Instead of doing what we can do to encourage environmentally sound energy exploration in those areas, our failure to join the Law of the Sea is deterring it.
We’re pleased to have Jack Gerard here today to speak on behalf of the American Petroleum Institute and explain exactly why – what I’ve just said – is the case.
Mr. Gerard is not alone. Listen to Rex Tillerson, the respected head of ExxonMobil, who recently wrote to Senator Lugar and myself urging ratification of the treaty.
Or listen to Marvin Odum, the head of Shell Oil Company, which employs over 22,000 people in this country and strongly supports the US joining the Law of the Sea. Marvin was unfortunately unable to join us today but he has submitted testimony for the record. His full testimony will be placed in the record as if read here in full. A short excerpt – this is Marvin Odum:
“If the United States were to become a party to the Convention, it could participate in the internationally-recognized process for claiming its extended continental shelf and its rights over oil and gas, which would provide legal certainty for accessing and developing these energy resources. Without this clear claim, our company would not find investment conditions favorable.”
So finally, let’s turn to manufacturing. As many of you know, rare earth minerals are critical to a large part of modern manufacturing. Rare earth minerals are an essential component of our communications systems, of our defense control systems – missile defense control technology, and other weapons systems. The scope of rare earth mineral use is in electronics, computers, cell phones and all of the advanced weapons systems – some of which I’ve named. Today, my friends, China controls about 97 percent of the production market for these minerals. Can anybody in their right minds suggest that the United States is safer and our companies are advantaged sitting in a situation where you can’t invest because you can’t be safe, and you can’t be legally protected – and we’re sitting on the outside.
We cannot secure the international recognition for deep sea mining claims that our companies want in order to invest billions of dollars unless we are part of this treaty.
So, on rare earth minerals, on oil and gas, on whatever unknown minerals and/or products may be findable under the ocean – we have a choice. We cannot join the major industrialized nations that have already joined up – and that are already using this to their advantage, and secure the benefits of the sea for Law of the Sea, as well as the sea, for our businesses and industries. Or, we can remain on the outside, deprive our companies of the legal, investment, and operational security they seek, cede American competitive advantage and watch while other companies take the spoils.
I think the choice is clear.
Today we have people who can speak with much more authority than I can because it’s their livelihood, it’s their life endeavor, and I think we need to listen to them.
Thomas Donohue is President and CEO of the U.S. Chamber of Commerce, representing broadly many of these industries..
Jack Gerard is President and CEO of the American Petroleum Institute, which all of our major producers are partners.
Jay Timmons is President and CEO of the National Association of Manufacturers.
And Lowell McAdam is Chairman and CEO of Verizon.
Gentlemen, welcome. Thank you for being with us.