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damage and the executive branch should be authorized to establish a liability scheme insuring that claims for all damage will be paid. Seven: Review of Government action. Federal courts should have jurisdiction to review any violation of the legislation, including illegal inaction or arbitrary action by Government agencies. A citizen civil action provision should entitle any person to institute such a suit, with attorneys' fees awarded to a prevailing plaintiff. Thank you, Mr. Chairman.

[The prepared statement of Mr. Barnes follows:]

STATEMENT OF JAMES M. BARNES, REPRESENTING THE ENVIRONMENTAL DEFENSE FUND, THE FRIENDS OF THE EARTH, THE NATIONAL AUDUBON SOCIETY, THE NATURAL RESOURCES DEFENSE COUNCIL, AND THE SIERRA CLUB

Mr. Chairman, members of the committees; I am James Barnes, of the Center for Law and Social Policy in Washington, D.C. I appreciate this opportunity to appear before you today in connection with bills concerning deepsea mining on behalf of five environmental groups-the Environmental Defense Fund, the Friends of the Earth, the National Audubon Society, the Natural Resources Defense Council, and the Sierra Club. These national, nonprofit organizations, with a combined membership of more than 600,000, have long taken an active interest in protecting the marine environment. They have had a particular interest in the environmental implications of deepsea mining, and have presented their views to the government on this subject in connection with their participation on the Secretary of State's Advisory Committee on the Law of the Sea and through past testimony to Congressional committees relating to proposed deep seabed hard mineral legislation.

In past testimony before Congress, the environmental organizations have advocated that it would be unwise to enact legislation which would authorize deepsea mining licensing, exploration, and commercial development The basic reasons for that view were (1) that international agreement was an indispensable means to effective environmental regulation of the development of deep ocean resources, (2) that the passage of domestic legislation could adversely affect the possibility of reaching such agreement through the Law of the Sea negotiations, and (3) that adequate environmental analysis had not been undertaken to provide Congress with even a primary understanding of the environmental implications of any legislation sanctioning or promoting deepsea mining.

As Mr. Frank indicated last March in testimony before the House, the situation has changed. We now have the latest chapters of Law of the Sea to consider, the technological situations of the mining companies have improved, and NOAA has given us more information in the form of its DOMES studies. Domes I and Domes II. It now seems clear that the international community will not have a Law of the Sea treaty covering deepsea mining within the time frame required.

The deepsea mining industry is now at an advanced stage in its development of equipment and techniques and is proceeding without either U.S. Government or international supervision. Government supervision appears to be the best means of assuring that industry's plans are compatible with environmental protection. Environmental groups feel if government does not establish and enforce appropriate standards in a timely fashion, we will not be able to assure that deepsea mining moves forward in an environmentally acceptable manner. A U.S. domestic regulatory system is needed even if a Law of the Sea treaty is eventually negotiated which includes a multilateral system, since any multilateral system will be established too

EDF, whose principal place of business is 163 Old Town Road, East Sautauket, N.Y. 11733, has a membership of approximately 58,000 persons and a 700-member Scientists' Advisory Committee, including members residing in 18 foreign countries. Friends of the Earth, whose principal place of business is 529 Commercial Street, San Francisco, California 94111, has a membership of 20,000 persons and is affiliated with "sister organizations" in 12 foreign countries. The National Audubon Society, whose principal place of business is 950 Third Avenue, New York, N.Y. 10022, has a membership of approximately 340,000 persons, including members in more than 100 foreign countries. NRDC, whose principal office is 15 West 44th Street, New York, N.Y. 10035, and which has additional offices in Washington, D.C. and Palo Alto, California, has a membership of approximately 22,000 persons, including members residing in 8 foreign countries. The Sierra Club, whose principal place of business is at 530 Bush Street, San Francisco, California 94108, has a membership of approximately 180,000 persons, including persons residing in 67 foreign countries.

late and, based on the existing Informal Composite Negotiating Texts, may well be ineffective.

Finally, during prior testimony we have expressed concern about sanctioning deepsea mining without adequate environmental research and analysis to provide Congress and the American public with a reasonable prediction of what the environmental impacts will be. We remain concerned over the absence of a comprehensive environmental background, but no longer believe that it should be a basis for not proceeding. Indeed, as we see it, sound legislation will require that proper environmental studies be undertaken and comprehensive environmental regulations imposed. Thus, there will be an inducement for the companies to proceed in an environmentally prudent manner. At this time, neither we, the industry, or the government knows the precise nature or extent of the environmental impacts that will result from deepsea mining. We hope that deepsea mining will not lead to significant adverse impact. The National Oceanic and Atmospheric Administration of the Department of Commerce has moved forward with a number of studies over the last year, in its attempt to determine what the environmental impact of deepsea mining will be. These studies remain inconclusive. Indeed, we are likely not to have the answers until we have results of actual prototype mining. Fortunately, studies so far have not produced evidence that deepsea mining will lead to any significant adverse environmental impact which could not be minimized. They have identified potential problems. The only sensible conclusion is that we must proceed with care and must continue to have competent and thorough environmental analyses at each stage of the process, and then environmental regulation. Deepsea mining is a new industry, and we here have the opportunity for the government, industry, environmental organizations, and scientists to work together to see that this industry develops in a manner fully compatible with all of our national interests. I believe we can do so.

Now that Mr. Frank is Administrator of NOAA, I believe we can expect the government to coordinate its deepsea environmental research and analyses, to collect adequate baseline data, and to establish work plans to interpret that data. We should expect NOAA to develop work plans to assess the impacts of processing both onshore and at sea, and the comparative impacts of land and ocean mining for the minerals in question. We believe an analysis of comparative impacts is critical. If deepsea mining is preferable environmentally to land mining, those concerned with the environment may wish strongly to support the development of deepsea mining. I think Mr. Frank shares this view.

We believe the domestic legislation establishing environmental regulation of deepsea mining should be enacted in the near future. We compliment your Committees for beginning the process of drafting sound deepsea mining legislation and, in particular, those members of the Committees who have taken an active interest in this subject and who have evidenced a concern for the environment.

The bills we are discussing today have a number of important and very essential provisions relating to the environmental protection. However, there are a number of other critical environmental provisions which they do not have. These other provisions, or their equivalents, would have to be added before we would consider the final bill to contain a sound and reasonable environmental regulatory system which would ensure that deepsea mining will not result in significant adverse effects to the marine environment. If a bill were modified to include such provisions, and did not include provisions inconsistent with future Law of the Sea negotiations, we would support passage, with one caveat: that the proposed investments guarantee provisions be much completely thought out and justified. In this connection, we would urge the Committee to read carefully the recent report submitted to NOAA by Alan H. Kaufman entitled "Significant Legal and Economic Issues in Legislating Political Risk Protection for Ocean Mining Investments," July 15, 1977. This is the only detailed analysis we have seen which identifies the various goals that such a guarantee might foster, and the inherent problems of any such approach.

The particular language ultimately adopted in connection with any guarantee will have important implications for (1) the future development of the ocean mining industry and its basic structure and composition, (2) the definition of the "property interest" that a particular company has in its "guaranteed" license, (3) measurement of damages, and (4) likelihood of protracted litigation regarding all of these matters. Congress should consider carefully the antitrust implications of any guarantee provisions. It should determine precisely what sorts of investments it wishes to protect before enacting any legislation. Finally, Mr. Kaufman's research indicates

2A brief discussion of some of the environmental problems of ocean mining is included in Appendix I to this testimony.

that there may not even be any need for a guarantee, but that there may be adequate private sector coverage for these risks. This question should be investigated thoroughly.

We believe that any legislation on this subject should be clearly interim to a future LOS Treaty. The legislation should emphasize its transitional nature, so that it is not misinterpreted in the international community as a unilateral act of the U.S. to establish permanent national mining arrangements. We believe there should be no reference in the legislation to "exclusivity" in relation to licenses or permits. Such references-no matter how they are explained or qualified-could easily be interpreted as a claim of sovereignty by the U.S. over portions of the international seabed. We believe that whatever agency is in charge of administering the program should be given adequate authority to ensure that the different mining operations do not interfere with each other. Congress must face the fact, however, that regardless of the disclaimers of sovereignty that are included in the legislation, other nations may look at a mining operation fixed in position over a long period of years as not being a "freedom of the high seas."

I would like now to focus on those provisions in the bills relating to the environment which we believe are essential.

1. Findings Regarding the Environment. Section 2(a)(8) of S. 2053 states that Congress finds that deepsea mining activities should be conducted "in a manner to protect the quality of the environment." Section 2(a)(9) of S. 2085 states the finding that "the environmental effects of deep seabed mining are poorly understood, and it is important that the program of environmental assessment of deep seabed mining be accelerated." Provisions incorporating these conclusions should be in the final bill.

One of the underlying assumptions of S. 2053 and H.R. 3350 is that deepsea mining should be encouraged and promoted by the U.S. because possible future supply needs and in light of other factors relating to the national interest. We do not believe that such a conclusion, at present, could be a reasoned judgment based on our incomplete information as to both resource need and environmental impact. The bill should be changed to reflect the fact that many unknowns still exist about resource need, environmental impact, etc., and that these must be resolved by the Executive Branching before taking the specific steps outlined in the bills.

For example, Section 2(a)(8) of both H.R. 3350 and S. 2053 states that it is "in the national interest to establish a program to encourage the exploration and commercial recovery" of certain hard mineral resources of the deep seabed. Section 2(b)(4) of H.R. 3350 states that one of the purpose of the Act is "to allow the continued development of technology necessary to develop the hard mineral resources of the deep seabed as soon as possible." We do not believe that Congress, on the basis of information before it, can state so categorically that development of deepsea mining definitely should be promoted. No one, including Congress knows whether existing technology and capabilities are, from an environmental point of view, acceptable. Moreover, as to supply of the minerals in question, David E. McGiffert, Assistant Secretary of Defense, testified before the House International Relations Committee on July 25, 1977, regarding U.S. stockpiles and defense and civilian needs for the minerals that could be obtained from deepsea mining. Those minerals are nickel, copper, cobalt and manganese. He told the Committee the following things:

World reserves for all four minerals "are far in excess of annual production." In 1976, cobalt production was 39,000 tons, with world reserves estimated at 1.6 million tons; copper production was 8.1 millions tons, while reserves stood at 506 million tons; manganese production was 27 million tons, reserves were 6 billion tons; and nickel production was 881,000 tons, while world reserves were 61 million tons. Of course, reserves do not in any sense cover the actual quantity of the material in the world. For each of the four minerals, Mr. McGiffert testified that the Defense Department estimates actual world resources are at least 21⁄2 times the "reserves." The Defense Department concluded that there is no immediate need for mineral resources from deep seabed mining, either from a war or peacetime point of view, based on these large world reserves and the fact that the bulk of our present imports of these items come from stable and/or friendly nations. In short, there appears to be little likelihood of cartelization regarding these minerals that could legitimately be analogized to the oil situation.

2. Purposes of Act. In Section 2(b) of S. 2053, Congress declares that one of the purposes of the Act is "to insure that the exploration for and commercial recovery of hard mineral resources of the deep seabed are conducted in a manner which will protect the quality of the marine environment. Section 2(5)(3) of S. 2085 states that one purpose of the Act is "to accelerate the program of environmental assessment of ocean mining and to establish the necessary environmental regulations to insure

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protection of the marine environment.

." These obviously should be purposes of

the Act, and should be included in the bill. 3. Issuance of a License. Section 103(c)(3)(iii) of S. 2053 provides that the Secretary, before issuing a license, must determine that activities under the license will not "pose a threat of significant adverse effect on the quality of the marine environment." A similar provision is contained in Section 7(f)(1)(C)(iii) of S. 2085. We believe it is essential that the Secretary make such a determination before issuing a license. 4. Programmatic Statement. Section 109(c) of S. 2053 provides that the Secretary must file a programmatic environmental impact statement regarding the basic concept of deepsea mining, its current state of development, and its application in the areas of the Pacific Ocean most likely to be mined initially. H.R. 3350 and S. 2085 contain similar requirements. Obviously, this is an essential requirement. We would urge the Committees not to impose an unrealistic timetable for this programmatic statement, as is done in § 104 of H.R. 3350, which mandates 120 days for a draft statement, and 180 days for a final statement. Appropriate discretion should be left to the Secretary. We note that neither S. 2053 nor Ŝ. 2085 contains express provision for a draft statement to be circulated for comment, and assume that this is only an oversight.

5. Each License a Major Federal Action. Section 109(d) of S. 2053 provides that the issuance of any license or permit shall be a "major federal action" as that term is used in the National Environmental Policy Act. A provision similar to this also appears in H.R. 3350, but not in S. 2085. We believe that this provision is absolutely essential. Let me briefly point out why each license must be considered a major federal action. Prior to the issuance of a license, environmental analyses will have been undertaken, a programmatic environmental impact statement on generic issues will have been prepared, and standards will be in effect. However, neither the programmatic statement nor the standards and regulations promulgated can take into account all of the particulars of a specific license application. They would not be able to focus on the site of the license. They will probably not focus on the specific techniques or technology being used by the licensee. New techniques and technology will develop over time. And we will learn more about the environmental effects with experience. Hence, an impact statement for each license is necessary. Impact statements are regularly prepared for licenses under other laws of this nature. They have not resulted in undue delay or unfairness to industry. Indeed, when the government has focused earlier on generic problems, prepared programmatic impact statements, and established standards based on the programmatic statement, it has been able to prepare impact statements with respect to specific licenses promptly.

6. Prototype or Pilot Project Testing. It has been generally agreed by industry, the scientific community, the Executive Branch, and the environmental community that the full implications of a major deepsea mining program will not be understood until we have been able to monitor and analyze the impacts of a few mining operations. We believe, therefore, it is essential that licensing should proceed cautiously and that the first set of regulations should apply only to the early mining licenses. It should be understood that earlier determinations regarding environmental standards can and will be modified as more information becomes available as a result of the projects, and that continued monitoring will occur. Such a system was provided for in H.R. 3652. None of the present bills suggests proceeding with prototype or pilot projects in the first instance. We suggest the bill be changed to state such a policy. The Congress may want to consider explicitly limiting the initial licenses to being "prototype" licenses, with only a small number being given out. The target dates for commercial recovery could be moved back accordingly, so that NOAA and other agencies could monitor the prototype commercial operations for an appropriate period, perhaps two years. Such a system would have other benefits as well. It would not be as likely to be misinterpreted by the international community, and it would protect American taxpayers against large payments to licensees under any guarantee program enacted by Congress.

7. Promulgation of Regulations. Each of the bills now contains some language relating to promulgation of regulations, terms, conditions and restrictions regarding exploration for and commercial recovery of ocean minerals. Only S. 2085 makes it clear that these regulations are to be developed according to the requirements of the Administrative Procedure Act, with full opportunity for interested groups to participate, and that these regulations are to be developed "in a manner that will insure the maximum protection of the marine environment from damage including that associated with both retrieval and processing." See Section 6(c). We do not feel that the provisions of Section 109(b) of S. 2053 and Section 106(b)(9) of H.R. 3350 are adequate. We feel that it is important for the standards of protection to be linked to use of "best practicable technology," as is done in both S. 2085 and H.R. 3350.

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Each license should contain a detailed list of terms, conditions and restrictions to protect the environment, based on the impact statements that have been filed, and the general regulations. These terms and conditions should be publicized in some fashion so that interested groups and individuals can monitor the licenses being issued.

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8. Modification of Regulations, Terms and Conditions. Each of the bills contains provisions for modification of terms and conditions if that is necessary to protect the quality of the marine environment. S. 2053 and H.R. 3350 also provide, however, that "No modification may be made" if the Secretary determines "on the basis of substantial evidence" that "the national interest in obtaining hard mineral resources outweighs the potential injury to the quality of the marine environment The Secretary may also consider whether the modification would result in "significant economic loss. which would sustantially outweigh the potential injury to the quality of the marine environment. . ." Of course, none of these terms is defined, but it is readily apparent that a license could engage the Secretary in litigation forever over any proposed modification. And, since we are dealing with unknowns on the environmental side to a large extent, or at least with largely unquantified values, any balance would probably be struck in favor of the perceived national interest in having the minerals or of economics. Certainly those groups that would be interested in this question do not have the resources to engage in such drawn-out administrative and court procedures as such a provision would engender.

I would suggest we take a realistic view of the Secretary's position. He learns, based on NOAA's monitoring of early mining operations or from some other studies, that a particular aspect of mining has a strong likelihood of harming the environment. He doesn't know how much exactly, because we do not have an accurate assessment of the resources in the area. He does not know the long-term effects because the monitoring has been ongoing for only a short time. He feels that a particular modification in terms and conditions is appropriate. Suppose it "costs" $1,000. Don't we want him to have that general authority to act, without his hands being tied? I submit that we do, particularly where we have a new industry like deepsea mining, about which we know so little. Modification of regulations, terms, conditions and restrictions should be allowed whenever the Secretary determines that such action will have a strong likelihood of preventing harm to the marine environment.

9. Suspension and Revocation of Permits. Each of the bills contains various provisions for suspension and revocation. The only mention of environmental considerations for such a suspension, however, is in connection with emergency orders for immediate suspension. For example, Section 106(c) of S. 2053 allows immediate suspension if it is "necessary to prevent a significant adverse effect on the marine environment." Section 8(c) of S. 2085 and Section 104(c) of H.R. 3350 allow an immediate suspension of operations if delay will result in "an unreasonable threat to the quality of the environment by creating significant injury to that environment ." These terms are not defined. My comments regarding modification are appropriate here also. This kind of language imposes a burden of proof on the Secretary which he will never be able to meet. In essence, such language would ensure that there are never any suspensions or revocations due to environmental considerations unless there were some sort of catastrophe.

10. EPA Responsibility for Environmental Standards and Enforcement. H.R. 3350 and S. 2053 place most Executive Branch authority in the Department of Commerce. Section 9(b)(10) of S. 2085 makes EPA responsible for environmental standard-setting. Two types of responsibilities are included, one oriented toward promotion of deep seabed mining and economic regulation, and the other toward environmental standard-setting and enforcement. Environmental protection can best be assured if the same agency is not assigned all responsibility for promotion and environmental regulation. Such dual jurisdiction inevitably presents a potential conflict of interest and can result in non-objective decision-making benefitting those who favor development and harming the overall national interest. The agency best suited for environmental standard-setting_and enforcement duties of the type of question appears to be the Environmental Protection Agency, which has responsibilities of this nature in various other areas. While we agree that the Department of Commerce should be given regulatory or promotional functions, the Environmental Protection Agency should have jurisdiction for, or at least a fundamental role regarding, environmental regulation. The approval of two agencies might thus be required before issuance of a license. The provisions in 106(b)(9) of H.R. 3350 and 109(b) of S. 2053 providing for consultation with the EPA are wholly insufficient. 11. Scope of Regulation. It has been our understanding that the intent of Congress is that all aspects of deepsea mining would be regulated. However, each of the bills

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