Deep Sea Mining (Temporary Provisions) Bill [Lords]

HC Deb 29 April 1981 vol 3 cc841-81

Order for Second Reading read.

6.58 pm

The Under-Secretary of State for Industry (Mr. John MacGregor)

I beg to move, That the Bill be now read a Second time.

The Bill is summed up in its title—Deep Sea Mining (Temporary Provisions). It is a measure to regulate mining on the bed of the deep seas, far out in the oceans of the world. On the sea bed exist valuable hard mineral resources known as manganese or polymetallic nodules. United Kingdom companies, among others, are interested in mining them. The Bill provides a statutory framework for the development of that nascent industry.

The Bill is also described as a temporary provisions measure because it is an interim provision pending agreement on an international regime. The third United Nations Conference on the Law of the Sea has for several years been working towards international agreement on this matter. When, as we hope, a satisfactory agreement is reached and enters into force, the international arrangements will supersede the national provisions set out in the Bill.

The Government are keen to improve the security and availability of future supplies of raw materials for British industry. The vast bulk—about 90 per cent.—of our consumption of non-energy industrial raw materials is imported. The United Kingdom is heavily dependent on a small number of countries for supplies of some minerals which are critical raw materials for our manufacturing industry. Our industrial prosperity is dependent on assured supplies of key raw materials at stable prices, and supplies of nickel, cobalt, copper and possibly managanese from the sea bed are a welcome prospect.

Moreover, the prospect of vigorous participation in the new industrial activity of sea bed mining by British companies promises an exciting new economic opportunity to benefit both the companies and the British economy.

Perhaps I should explain what and where the mineral-bearing nodules are. Although no scientist, I should like to have been able to explain how and why, but it appears that answers to those questions are less easy to come by. The nodules that give rise to so much current interest and activity are technically described as concretions of a number of elements. They are sometimes described as being like charred potatoes and I saw one for the first time today. Like potatoes, they vary in size and where they occur they carpet the sea bed in a single layer.

We do not fully understand how and why the nodules form, but it is clear that they require the undisturbed conditions that are found only in areas of the deepest ocean. Although nodules have been found in various parts of the world's oceans, it is only in the north Pacific that the deposits appear rich enough to justify pioneering commercial mining operations. The prime area of interest lies in the Clarion-Clipperton zone between Hawaii and California, which is in an area of about 3 million square kilometres far away from any land and where the sea is about 5,000 metres deep.

The major deposits of nodules are located far out at sea, beyond the limits of national jurisdiction. They are, therefore, resources of the high seas and, in accordance with the doctrine of the high seas, any country has the freedom to recover them.

Mr. Tam Dalyell (West Lothian)

The brief from the Institute of Geology gave the impression that there were possibilities of viable exploitation in the Indian Ocean and not only in the north Pacific. Is it the Government's view that exploitation is possible only in the north Pacific?

Mr. MacGregor

The view expressed to me to date, particularly by companies engaged in the initial prospecting, is that interest lies in the Pacific area.

In view of the potential economic importance of the resources, there has been much international interest in and concern about their exploitation. In 1969 and 1970 that concern was formalised in two resolutions of the United Nations. The first sought to impose a moratorium on deep sea mining until international arrangements come into force. The second was a declaration of principles that the sea bed beyond the limits of national jurisdiction and its resources were the common heritage of mankind.

Such resolutions are not international law; they are merely exhortatory. However, we have taken them carefully into account in formulating our national nsmeasures in the Bill. In the light of those resolutions, the third United Nations Conference on the Law of the Sea was convened in 1973 to negotiate an international system of regulations for sea bed mining. The conference has been meeting regularly since then and has made significant progress in developing an international regime that implements the principle of the common heritage of mankind, while providing a framework for commercial mining operations.

There is a draft convention containing complex provisions for operations both by private companies and by an international sea bed authority acting on behalf of mankind as a whole. It had been hoped that the final details of the package would be sorted out this year, but that timetable has slipped. Nevertheless, we remain hopeful that there will soon be a satisfactory conclusion to the negotiations.

Hon. Members will be aware of the press coverage of the UNLOSC negotiations in New York in March and April this year. The decision by the United States Administration to carry out a full-scale review of their policy towards the law of the sea and meanwhile to play no active role in the negotiations has obviously been a setback, albeit temporary, to the conference. It has certainly not improved the prospects for an early agreement on a generally acceptable convention text.

Nevertheless, we remain of the view that it is important to have a generally acceptable international basis for sea bed mining to give the industry a secure future, and we hope that the United States review will be concluded as quickly as possible and will not diminish the prospects of obtaining agreement to an international convention.

If nothing else, the present circumstances illustrate clearly the sort of uncertainties that may continue to face Governments and mining companies until an international convention has been agreed comes into force. It is because of those uncertainties that this interim measure is needed to give our mining industry a firm basis for continued activity, pending the entry into force of an international agreement.

Hon. Members may wonder why we need a national measure for deep sea mining at this stage, given that so much effort has already been devoted to working out an international system of regulations.

The answer to that question is fourfold. The first—I understand from noises on the Opposition Benches that there is great interest in this aspect of the problem—is the position within UNLOSC. Even if the lengthy negotiations are concluded this year—or, more likely, next year—it will be several years before an agreed convention comes into force. There is to be a preparatory commission to draw up detailed rules and regulations and to organise the setting up of the international authority, and that work alone may take a few years.

It will also take some time for the required number of States to ratify the convention. The present negotiating text requires 60 States to ratify the convention to bring it into force. Therefore, we are considering a system which, in practice, could not become operative, even in favourable circumstances, before the mid- to late-1980s.

That ties in with the second important aspect. The inevitable delay and uncertainty in the international arrangements leave the developing deep sea mining industry in a difficult position. The industry is newly formed and has to carry out much development work before it will be ready to embark on commercial operations. Expenditure of up to £100 million per project is needed for the next stage and the mining companies are not prepared to invest such sums without a stable, or reasonably stable legal framework in which to operate.

Mr. Jim Craigen (Glasgow, Maryhill)

Does the hon. Gentleman think that a temporary measure passed by this House will give companies that long-term stability?

Mr. MacGregor

I will discuss later the hon. Gentleman's reference to a measure passed by this House, with its implication that measures are being passed by this House alone. The Bill will undoubtedly give companies a better basis, and a reasonably stable basis, than they would have without the Bill, especially if other actions elsewhere were not carried out.

If the mining companies allow their programmes to run down because they have no assurances, it will take many years to build them up again. To go ahead, the companies need certain assurances. I come to part of the answer to the hon. Member for Glasgow, Maryhill, (Mr. Craigen). Given the political and legal uncertainties at the international level, the companies have turned to their respective Governments for assurances.

I recognise that national measures can provide only partial assurances and are clearly no substitute for an internationally agreed regime. However, national measures can help to maintain the momentum of the deep sea mining industry so that it may be able to participate fully when the international position is clarified. It is in the interests of providing support and encouragement for the industry, specifically the United Kingdom companies that are involved, that we have introduced the Bill.

The third reason for legislation now is that the companies, including British companies, that have been pioneering the development of sea bed mining have already expended considerable efforts on prospecting large areas of the ocean floor. They wish to secure claims to potential areas that they have already identified as worthy of further exploration.

The fourth factor relevant to the timing of the measure has been the progress made in other countries. I said that I would return to this matter. The United States and the Federal Republic of Germany enacted domestic deep sea mining legislation last year—in fact, before the new American Administration was elected—and we introduced the Bill in another place before that event. The United States and the Federal Republic of Germany will be accepting applications for exploration licences within a few months.

Our mining companies have sought similar opportunities and cannot afford to be left behind in this important new industry. What is more, other countries, such as France, the Netherlands, Italy and Belgium, plan to introduce legislation in support of their companies' interests. Their legislation is in prospect, or in the preparatory stages. So United Kingdom companies need equivalent support now.

Having set out the background against which the Bill is set, I shall now review some of its salient features.

Mr. T. H. H. Skeet (Bedford)

Is there not real urgency here? Do I understand correctly that the United States will be issuing licences on 1 January 1982 and that therefore we must be in step with them, or most of the consortia will go through American legislation rather than through the United Kingdom legislation? Is it not important that we pursue the matter on time?

Mr. MacGregor

I cannot confirm without checking the exact date that my hon. Friend gave, although it will be within a few months, as I said earlier. My hon. Friend's second comment about where the consortia might otherwise go is a material one.

Mr. Dalyell

The Minister mentioned the French and the Belgians. My understanding is that they have in mind not the north Pacific, but other areas of the ocean. Is that not so?

Mr. MacGregor

I do not think that question is particularly relevant to the introduction of general legislation which is designed to cover all areas, as defined in the Bill, of the deep sea bed. Where prospecting will take place is not relevant.

Clause 1 prohibits United Kingdom nationals from exploring for or recovering the mineral resources on the deep sea bed without a licence. At present, those activities may be carried out as part of the freedom of the high seas, but our mining companies are unwilling to invest further vast sums of money without more specific legal arrangements. The clause contained definitions of the key terms "deep sea bed" and "hard mineral resources". "Deep sea bed" is defined as any part of the bed of the high seas in respect of which sovereign rights in relation to the natural resources of the sea bed are neither exercisable by the United Kingdom nor recognised by Her Majesty's Government in the United Kingdom as being exercisable by any other Sovereign Power". In practice, that means areas beyond the recognised continental shelf of any State, areas which are many miles from anywhere.

There may, of course, be disputed claims about the sovereign rights to certain areas, and in such cases the areas will be regarded as part of the deep sea bed for the purposes of this Bill so long as her Majesty's Government do not recognise either of the claims. The clause makes it clear that the Secretary of State may issue a certificate resolving questions on the definition of the deep sea bed.

"Hard mineral resources" are defined as deposits of nodules that contain significant quantities of manganese, nickel, cobalt, copper, phosphorus or molybdenum. In practice, a mixture of these and other elements and compounds is found together, but these are the key ingredients—the ones that make commercial recovery worthwhile. Current plans for commercial operations concentrate particularly on the production of copper, nickel and cobalt, with manganese as an optional fourth product, depending on the state of the market.

Clause 2 outlines the licensing arrangements for exploration and exploitation. The Secretary of State is empowered to grant licences to fit and proper applicants, although he must take account of any relevant factors, including the need to set aside no-go areas to provide a sound basis for scientific assessment of the environmental impact of mining operations. The form of applications and the evidence to be supplied will be specified in regulations, but in general applicants for an exploration licence will need to supply evidence of their expertise in this highly technological field.

Mr. Dalyell

The Minister mentioned the scientific aspects. I do not expect him to answer my question off the cuff, but it would be useful if it could be answered in the winding-up speech. Can we be given a clear idea of what the scientific criteria will be for this impact?

Mr. MacGregor

My hon. Friend the Minister of State has heard the hon. Gentleman's question, and I am sure that if he can he will answer it when he winds up.

I was talking about clause 2. Applicants for exploitation licences will also need to supply data and records of exploration activities and evidence of their financial capability to fund the operation.

Licences will give authority for either exploration or exploitation in a specified area of the deep sea bed. Exploration is defined in clause 17, which deliberately distinguishes exploration from the general prospecting that is a necessary preliminary to any deep sea mining project. Prospecting is not specific to any one site and can be freely carried out without impinging on the activities of others. It is not, therefore, subject to prohibition or licensing. Exploration, however, covers all the activities that an operator must carry out on his chosen site before going into commercial production.

Mr. Dick Douglas (Dunfermline)

Which resources are available to Her Majesty's Government to administer such a complicated operation as vetting exploitation and/or exploration far away from land and in remote areas of the world?

Mr. MacGregor

I take the point, and I wish that I could reply to it now. If the Bill receives a Second Reading tonight, it can be pursued in Committee.

Exploitation licences cover the period of commercial production on a specific mine site—that is, when the operation is of a sufficient scale to be economically viable.

This Bill is not intended to—nor will it—impinge on the carrying out of marine scientific research. Since only exploration and exploitation are prohibited by the Bill, unless licensed, there is no call for any reference on the face of the Bill to marine scientific research. The Bill will simply not impinge on such activities.

The period of licences will be set long enough to meet the needs of the mining industry. Although a decision has not yet been taken, I expect that an exploration licence will run initially for 10 years, but may be extended for further periods of up to five years, if appropriate.

Mr. Dalyell

I cannot understand the statement that the Bill will not impinge on scientific research. It may or may not do so, but how can the Minister say that it will not impinge?

Mr. MacGregor

A distinction can be drawn between the exploration that goes on in connection with deep sea mining and the actual terms of the Bill. I am sure that the hon. Gentleman is aware that this deep sea mining is already taking place. I confess that I am not a scientist, but the scientific evidence on this subject is at a very early stage, and, presumably, much remains to be learnt as time passes. That will be part of the process that is envisaged in the Bill and in others and, ultimately, in the international convention. But there is no need to cover marine scientific research as such in the Bill in relation to licensing under clauses 2 and 17. That could still take place, irrespective of the Bill.

I was discussing the periods of licences. I expect that exploration licences will run initially for 10 years but may be extended for further periods of up to five years, if appropriate. An exploitation licence may be granted for 20 years to cover the useful productive life of a single site.

Licences will contain a number of terms and conditions which the licensee must adhere to, or risk the revocation of his licence, in accordance with clause 6. I am sure that the hon. Gentleman will consider that important. These conditions will include matters such as requirements to supply the Secretary of State with information about the licensed operations, restrictions on disposing of waste and a requirement to pay an annual fee to cover the costs of administering the licensing scheme.

The timing of the licences will be subject to two conditions. Exploration licences may not be issued before 1 July 1981, and exploitation licences may not take effect before 1 January 1988, so as to allow reasonable time for the international convention which is now being negotiated at the law of the sea conference to come into force. If progress at the conference goes smoothly, as we all hope it will, we can expect this legislation to be superseded by the international regime before there is any commercial production from the sea bed. If not, the companies have an assurance that, if they wish, they may proceed under this legislation as from 1988.

Mr. Craigen

Will this legislation facilitate international agreement?

Mr. MacGregor

I do not see how this legislation as such will hinder it. The opportunity to continue to develop in this area will be helped by the Bill. If and when the convention comes into force, exploration and so on will have taken place, experience of the whole process will have been gained, and at that stage we should be in a much better position to move on into the full force of the international convention. I shall refer later to several other points on that aspect that are contained in the Bill.

Mr. Dalyell

My friend and constituent, Lord Ritchie-Calder and, I know Mr. Peter Warren of the Institute of Geologists, fear that this could sour the whole thing. I believe that that is likely. If we go sailing ahead, is there not a prime facie case to suggest that things will not be smooth?

Mr. MacGregor

I read the noble Lord's speech, and I thought the satisfactory responses to his general points were made in another place. It is extremely unlikely that what he fears will take place. A more important consideration is that if a considerable time is taken to reach agreement on the convention and to move on to the stages that I described earlier, there will be a long delay during which the mining companies will be uncertain and will probably not invest the large extra sums involved. The ultimate loss will be to mankind in general. These processes are essentially seen as a transition towards the time when the convention comes into force.

Mr. Skeet

Does not my hon. Friend agree that when the United States legislation was passed in 1980, the succeeding part of the conference was extremely profitable and it seemed to accept that legislation as a useful interim measure?

Mr. MacGregor

My hon. Friend is quite right. The delays which have taken place since then have nothing to do with that legislation, because it was introduced before the new United States Administration were elected.

Clause 3 provides for taking account of the licences and other authorisations for deep sea mining which may be granted by other States which pass legislation corresponding to the Bill. This arrangement will enhance the rights that attach to any licence issued by the United Kingdom, as it will lead to recognition by other States. That is part of the partial assurances which will help the United Kingdom mining companies. If the laws of those States are similar in aim and effect to our own, they may be designated reciprocating countries.

In effect, that means that anyone operating under an authorisation granted by a reciprocating country will not be subject to the prohibition in the Bill, and the Secretary of State will not be able to grant a licence to anyone else for a site already covered by a reciprocating authorisation.

More broadly, recognising other countries with similar aims and standards will effectively contribute to the orderly development of the industry and to properly controlled and co-ordinated exploitation of sea bed resources.

Mr. Dalyell

Co-ordinated by whom?

Mr. MacGregor

Co-ordinated by those who at that stage are involved in the whole process. Damaging conflict will be avoided if reciprocating countries agree mechanisms for resolving overlapping licence applications and if they adopt similar standards for operations. This clause lays the foundation for reaching beneficial agreements of this kind.

Mr. Peter Archer (Warley, West)

The Minister has been patient in giving way. However, it may shorten the debate if he relieves our anxieties on this point. What kind of mechanisms do the Government have in mind for ensuring that Britain and other countries do not simultaneously grant licences in respect of the same areas? Will the ocean be divided into spheres of influence, or how will it be done?

Mr. MacGregor

Perhaps I can respond to that point in a moment.

Clauses 4, 5, 6 and 7 make provision on preventing interference with licensed operations, protecting the marine environment, varying and revoking licences, and the freedom of the high seas. All are necessary supplementary provisions. The provisions made in clause 5 for protecting marine creatures and plants and their habitat are worthy of attention. Although there is no evidence to date that exploration activities disturb the marine environment, we cannot yet know the full effects of the new mining techniques. This clause is, therefore, supplemented by the power to make regulations under clause 12 preventing mining methods that may be harmful to the marine environment. Other conditions thought necessary for the protection of marine life may be included in licences as appropriate.

Clause 8 is an unusual provision but necessary. It gives the Government the power to take countervailing measures against another State that discriminates against United Kingdom registered ships in connection with deep sea mining. United States legislation includes a provision restricting United States licensed explorers and miners in their use of foreign vessels. This is clearly against the interests of our shipping industry, and the United Kingdom may wish to retaliate against such protectionist policies. If it is decided to make use of this provision, full account will of course be taken of the commercial interest of the mining companies and the terms of any existing contracts.

Clauses 9 and 10 make provision for collecting a levy on sea bed mineral production, keeping it in a trust fund and paying it over to the international authority that will be established when the law of the sea convention comes into force. Therefore, hon. Members will recognise that here too there are transitional arrangements towards that ultimate stage if and when it comes. It reflects the principle that everyone should benefit from the mineral wealth of the sea bed and anticipates the provisions of the international convention. Similar arrangements are contained in the corresponding American and German deep sea mining laws, and are evidence of good faith in the international negotiations.

In practice these clauses will not become operational until commercial production begins, which cannot be before 1988 in accordance with the provisions of clause 2. By then, we hope an international treaty will be in force. Wherever practicable, the details of the levy and the fund are left to be prescribed in regulations which may be made nearer the time that the levy will be operational. The fund into which the levy is paid is to be managed by the Treasury and, subject to Treasury instructions, invested by the National Debt Commissioners.

In case there is no agreement to an international regime, provision is made to cease collection of the levy and to wind up the fund. At this stage it is not realistic to forecast what might best be done with the money in such circumstances—we hope the situation will not occur. Any decision can best be taken at the relevant time, and the Bill simply provides for the money to be paid into the Consolidated Fund.

Clauses 11, 12 and 13 covering inspection, regulations and safeguarding confidential information are self-explanatory. Examples of the matters that may be covered by regulations under clause 12 are listed in the schedule.

It may be helpful for me to comment on clause 16. This exempts activities carried out under this Bill from the provisions of the Dumping at Sea Act 1974. This provision does not in any way reduce the standards to be imposed on dumping from deep sea mining operations. Conditions on dumping as on other matters, will be included in licences issued under the Bill. This provision simply means that dumping will be controlled in the context of the overall work programme that is licensed. It eliminates any difficulties that might otherwise arise through overlapping jurisdiction in this matter.

I hope that what I have said makes it clear to the House that the fundamental objective of the Bill is to provide a temporary statutory framework within which our mining companies can continue their valuable development work in this new industry. It anticipates the entry into force of a satisfactory international regime which we are determined to achieve if it can possibly be done within a reasonable period.

Perhaps I may add that if on one or two points I have not been able to give a sufficiently full reply, I have no doubt that my hon. Friend will deal with them when he winds up the debate.

In the interests of continued United Kingdom participation in deep sea mining and the orderly development of the industry, I commend the Bill to the House.

7.30 pm

Dr. John Cunningham (Whitehaven)

The Opposition have the deepest misgivings about the timing and content of the Bill. The Minister's speech has left more questions than it has answered.

The Bill comes after seven years of United Nations Law of the Sea Conference delegates' work—slowly, admittedly, but with thoroughness and considerable success—towards international agreement on wide-ranging international controls on maritime and marine activities. Let us remind ourselves that those activities take place over two-thirds of the world's surface. Successive British Governments, Conservative and Labour, have participated in those negotiations with the expressed commitment of achieving agreement on a new and comprehensive international regime—as, until recently, have successive American Administrations.

As the Minister said, those proposals and discussions took as their starting point the agreed principle that the oceans of the world are part of the common heritage of mankind and should therefore be controlled and managed and, if necessary, exploited only from that common standpoint. There were, and are, many important reasons why that view should prevail and endure. The Opposition believe it to be in the best interests of all nations, including our own. We therefore adhere to that position.

I remind the House that the draft treaty, almost finalised, covers territorial seas and contiguous zones, straights, archipelagic States, exclusive economic zones, continental shelves, high seas navigation, fisheries and conservation, the regime for islands, enclosed seas, rights of access of land-locked States, protection and preservation of the marine environment and scientific research, development and transfer of marine technology, a disputes procedure and deep sea mining outside national jurisdiction. That is what is involved in the treaty, and that is what is at stake if it is not ratified.

The implications of reaching, or indeed of failing to reach, such an agreement should be obvious to us all. Until March of this year success seemed at least to be in sight. In March, however, the Reagan Administration, following the President's inauguration, announced that they were withdrawing their delegates from participation and that they would have a complete and fundamental rethink about what was involved. They did not have the courtesy to do that through diplomatic channels but simply announced it rather offensively in a press statement. That is the reality of what happened. Anyone who thinks that that is conducive to further rapid progress on the treaty is deluding himself.

That decision has been widely criticised within the United States by Elliot Richardson, who had been in charge of the American negotiating team. It has been criticised in the Third World by the Group of 77, which now embraces between 130 and 140 countries. It has been widely critised in this country in leading articles in many newspapers and scientific and technical journals. Seven years' work has been placed in jeopardy. It is no wonder that the delegates to the United Nations conference are in a bitter and angry mood.

It is worth paying a little attention to some of the criticisms that have been levelled at what has taken place. A leading article in The Times on 10 March concluded that instead of agreement there would be the threat of maritime lawlessness, with countries reverting to acting according to their narrow interests, declaring 200 mile (or more) territorial seas, interfering with the freedom of navigation and unilaterally appropriating sea-bed resources. The consequences would not be limited to maritime issues. It would only be a matter of time before disputes spilled over into the arena of international politics. That cannot he in the interests of the United States. The Opposition agree with that. Nor, we would add, can it be in the interests of the United Kingdom.

In a major article on 17 March the Financial Times similarly concluded that too much bitterness would be created by such a move for the Third World simply to acquiesce. Instead there is the real danger that coastal states would again begin a drive to enlarge their claims over straits, continental shelves and what are now considered to be high seas. It is not in the interests of the United States or its allies to allow this. There have thus been major, serious and damaging criticisms not only from Opposition Members of Parliament.

I wish to refer also to what the Brandt report said about the activities of transnationals on technology and mineral development. It is true that Brandt was not referring specifically to the Law of the Sea Conference, but the message is the same. On page 272, as one of its priorities for action, the Brandt report states: International codes of conduct and effective national laws should be agreed to ensure the broader sharing of technology, to control restrictive business practices and to provide a framework for the activities of transitional corporations. A better international investment regime should both enable developing countries to benefit from the expertise and resources of multinational corporations, and promote stable relationships between these corporations and host Governments. It would also encourage greater initiatives and investments for the exploration of minerals and oil in the Third World which are essential for the prospects of world supplies. The weakest countries will require special assistance to permit them to participate effectively in such a regime. I submit that that is apposite to the Bill. It is amazing how many lessons the Western industrial nations need to learn in order to take cognisance of the hostility and animosity generated by activities of this kind, which are added to by the timing of the introduction of the Bill. What is really happening? There are clues to be found in the speech of the Minister of State in another place, in the Bill itself and in the speech of the Under-Secretary of State today. As the Under-Secretary of State said, the Bill was the third of its kind in the world, following the action in the United States of America and the Federal Republic of Germany. We are told by the media that France, Italy, Japan, Belgium and Holland are likely to follow. In other words, the rich and powerful industrial nations of the West are acting in concert. That is the whole purpose of getting unity of approach on licensing and the rest. It is clear that a deal has been done.

This is quite openly commented upon by informed people in the media and elsewhere, and apparently secret discussions have been taking place since 1980, or perhaps earlier, on this issue. No one should believe that any of this is fooling the Group of 77 into believing that the real intent is to get an international regime. The real intent seems to be quite the reverse, in spite of the protestations that we hear from the Government.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd)

Absolute nonsense.

Dr. Cunningham

The Minister of State says that that is absolute nonsense. It is one thing for the Government to say publicly what they have said—and I acknowledge that they have said that they are committed to getting an international regime—but the actions of the Government seem to many people, not least to the official Opposition, to contradict that expressed aim. They do not seem to us to be likely to achieve that goal. That is the reality.

Mr. Peter Bottomley (Woolwich, West)

Will the hon. Gentleman kindly spell out his view of the timing? Clearly, the Bill was introduced before the Elliot Richardson or Reagan Administration change came to the Law of the Sea Conference.

Dr. Cunningham

I do not see the change of the American Administration as being significant to the timing of the Bill. My point is that the Bill follows a similar Bill in America and one in the Federal Republic of Germany. We understand that it is simply one Bill in a long line of Bills that will come from other Western industrial nations.

The Bill and its contents, as my hon. Friend the Member for West Lothian (Mr. Dalyell) said, have been devastatingly criticised by his constituent, Lord Ritchie-Calder, and by other people in the scientific world, so that there are great scientific concerns about the intent or our ability to deliver the commitments that the Minister made in his opening remarks. I shall come back to that in a moment.

Why have we been presented with the Bill at this time? That is our first and most fundamental question. Why is it necessary at all, in view of the Government's expressed intention of hoping quickly to finalise an international regime? What is so crucial that it is worth jeopardising the whole of the treaty and all the implications to which I referred a moment ago? How, and in what circumstances, have the Western industrial nations taken the decision to proceed with deep sea mining? Will not this cause bitterness, add to the bitterness and resentment that already exist, and develop into lasting hostility to us, with damaging consequences?

There are strategic issues involved here for major naval and trading Powers. Rights of passage, to which I have referred, through straits and sea lanes are likely to be placed in jeopardy if things go badly wrong. What will happen to the much-vaunted rapid deployment force if that occurs?

We know that the possible—now it seems the probable—availability of mineral resources is important, but far more important are the world issues that are bound up in the proposed treaty, and the issues related to them, which were so graphically spelt out in the Brandt report.

As a chemist, I need no convincing—nor do the Opposition—of the importance of mineral deposits and the massive potential that exists. The Minister mentioned one or two of them. I understand that cobalt, copper, iron, lead, manganese, molybdenum, nickel, vanadium and zinc, in varying quantities, may be available. They are certainly in many cases very important to us. In the fullness of time there may well be others, and I have no doubt that our ability to extract these and other minerals will improve. So will our ability to understand what is happening in the marine environment, which we do not understand very well at the moment. We also tend to minimise the potential damage to the environment from the scale and the nature of the operations that will be necessary to recover these substances in economic quantities. That scale will, of necessity, be vast, and the problems associated with it will be large and long term.

From the reading that I have done I understand that areas of the Atlantic and Indian oceans, as well as the Pacific ocean, offer some potential, but that, as the Minister rightly says, the area in the mid-Pacific is likely to be the most prolific. Over 300 million square kilometres of that ocean are apparently ripe for exploitation, and the ratios of the minerals there are the highest so far discovered. It is estimated that in the world as a whole about 54 million square kilometres of sea bed could produce economic quantities of nodules. Surely, with the quantities involved, there will be enough for everyone, and enough for us to take time to ensure that the resources are exploited in the way in which the Government say is their real intention.

There are, then, some arguments—the Government have mentioned some, and there are some from industry—for proceeding, and I do not deny that for a moment. There is the question of the development of the technology and the costs involved. The Minister gave four important reasons why it was necessary to have the Bill at this time. It is somewhat amusing for the Minister to say that the Bill—which he called a temporary measure, and which is referred to in its title as a temporary measure—is a Bill to bring stability. How can a temporary measure bring stability? It is a contradiction in terms. How can national legislation bring stability to an area over which we have no authority and no legal jurisdiction? What stability is brought about in that way? That is a fundamental question.

If licences for exploitation are to be issued in the next 12 months, that will be a further torpedo against the chances of the treaty on the law of the sea. The Minister of State shakes his head, and we shall be interested to hear what he says on that matter.

The Under-Secretary talked of licences being issued for 20 years. What is temporary about 20 years? It is an absolute eternity in terms of giving someone a concession to exploit resources in a marine environment. The damage that could be wreaked in 20 years could be colossal. There is nothing temporary about a proposal to give someone a concession for 20 years, so we were not over-impressed by some of the reasons that the Minister has advanced for saying that we should proceed at this time.

It is clear that the world as a whole may run short of some of these elements. That was brought out in another United Nations document, the Leontief report, in 1977, which said that world supplies of some of these minerals could well run out by the end of the century. It is unfortunate that more attention has not been given—as with other resources, such as energy—to the conservation and recycling of those resources that we already have, rather than having a determination to press ahead at enormous cost—these will not be cheap operations—to exploit more resources in the marine environment.

Mr. Hurd

Is the hon. Gentleman saying that British companies should not continue their efforts in this field? Is he saying that they should let American, French and German companies proceed while they fall back and perhaps drop out of the race? Is that his advice?

Dr. Cunningham

As I think the Minister well understands, I am saying that we should use all our effort and bring all our influence to bear to conclude an international treaty. That is our priority. The Government say that it is their priority, but their actions belie that claim. That is our charge.

Industrial countries of the world produce two and a half times as much in minerals per head as do developing countries, but we consume 16 times more per head than do developing countries. That is likely to become increasingly unacceptable to those countries. Furthermore, the West depends largely upon imports for its supply of minerals. About 70 per cent. of all our supplies are imported, mainly from the developing countries, and that dependence is increasing.

The argument can be used both ways. It might be said that that is all the more reason for having our own independent resources, and I see some merit in that argument. However, if we proceed in a way that gives great offence, and if we deny such countries a share in the exploitation of those resources, we are likely to put our existing supplies in jeopardy. It will take a long time—if it is at all possible—to achieve independence of supply. During that time we shall become increasingly dependent upon supplies from the very countries that we are now offending. That is an important consideration and it should be taken into account.

In addition to oil, the marketing, processing or production of minerals such as bauxite, copper, iron ore, nickel, lead, zinc and tin are dominated in each case by a small number of transnational companies. Those companies can, and occasionally do, exert political power through commercial power. Occasionally—I stress that word—companies have used that power unethically, and even illegally.

We know that the tension that exists between those companies and Third world countries—such companies are based mainly in the rich, developed nations—has been a major element in North-South relations, and there is a risk that the activities of such companies will further damage relations. That is all the more reason why we should work carefully and openly for the proposed wide-ranging treaty, as a result of which all would share in the advantages of the resources of the oceans. It would represent a magnanimous approach and would give a lead and example that others would find stimulating. Few" if any, would be able to ignore it. It would give real meaning to the phrase that such resources are the "common heritage of mankind".

But, no. Given their industrial and economic philosophy and their attitude to the Third world, it is perhaps typical that the Government should decide otherwise. It is interesting to ask what would happen if the treaty were ratified by more than 60 countries. The Treaty would not have to include Britain, the United States of America, Germany, France or Italy. It needs to be ratified by only 60 countries to become effective. What would the situation be? What attitude would we then adopt? That is another important question for the Government to consider.

I wish to ask a number of questions about the details of the Bill. I have already mentioned authority. My right hon. and learned Friend the Member for Warley, West (Mr. Archer) will deal with the legal basis of the proposals. What authority have we to issue licences in the way proposed? We are falling into line with our competitor countries. The Minister asked whether we should let them go ahead. It seems that we are not only to become involved with those countries, but to become involved in an organised, planned way. It may well be that any "competition" is purely window-dressing.

I mentioned that we had reservations about the temporary nature of the proposals. We have reservations also about the title of the Bill and the impact, intent and likely result of issuing licences for periods of up to 20 years. In addition we have reservations about the proposed controls on pollution and damage to the marine environment and life. I do not know anyone or any company that claims to have the knowledge, expertise or technical ability to give such guarantees on the large-scale exploitation of minerals from the deep ocean beds of the world. I do not know of any company that can make that claim. Indeed, I would regard any such claim as dubious. Many of those in the technical and scientific world will agree with that point of view.

Nodules have built up over thousands of years. The marine environment has Iain untouched for thousands of years. Marine life has developed undisturbed over thousands and thousands of years. Have we the audacity to presume that with our paucity of knowledge and experience we can give guarantees? I blame the Government a little for suggesting that we can be sure about such things. No one can guarantee that we can do what is proposed without causing serious and lasting damage to the marine environment.

Mr. Archie Hamilton (Epsom and Ewell)

Is it not true that any technological advance, whether it invokes going to the moon or any other form of development, may cause damage?

Dr. Cunningham

Of course, I accept that. I should not like hon. Members to think that I am anti-technology. After all, one of the most sensitive technological establishments is in my constituency, namely, Windscale. I have been a consistent supporter of the development of nuclear power. Therefore, I do not hold the view that the hon. Gentleman may fear that I do.

The development of new technology and new processes shows—often in retrospect—that we should be more careful and that we should take more time to examine the risks involved and the balance of risk. I agree that we cannot eliminate risk completely, but experience, particularly of some multinational companies, shows that they are not the best guardians. That is all the more reason why time should be taken for consideration. It is all the more reason for licensing. I agree with the point raised by my hon. Friend the Member for Dunfermline (Mr. Douglas). Licensing is one thing; inspection and control are something else.

As a result of my experience in the Labour Administration, I can tell hon. Members about the difficulties that we had in monitoring the flaring of gas by oil companies in the British sector of the North Sea. That is on our doorstep. What possibility is there of carrying out realistic, detailed and systematic control of operations that take place several thousand miles away in the mid-Pacific? Will the inspection and monitoring that will guarantee these matters take place?

Mr. Skeet

If the hon. Gentleman says that it is impossible to monitor private companies, how will such a complicated and clumsy body as the international sea bed authority carry out monitoring? Governments, looking after their national interests and integrating their legislataion with their neighbours, will look after the real interests of mankind much more effectively.

Dr. Cunningham

I was not asserting that the international regime would be any more successful, but I believe that there would be a slightly greater chance of success. An international regime could be closer to the action and there could be a more comprehensive approach by national Governments working in concert. Whichever approach we take, it will be difficult.

We have a query about the levy and the fund. Industry has been saying that the levy should not be too high, or it will scare people off. That is typical of multinational operations everywhere. The Government's experience in the North Sea shows that, in retrospect, we always realise that we have been too generous. We then increase taxation and royalties and decide to take more in the public interest, although there is a limit to that. We should not fall for the blandishments of the multinational mining lobby.

I am also unhappy with the Government's proposal that the fund should be wound up, which is indicative of their pessimism. Why should the levy not continue, even if there is no maritime regime? Why should the fund not be designated for our aid programme? That is a more generous view and is far more likely to gain the respect of Third world countries than if we say that the money is to go to the Consolidated Fund—in other words, we shall keep everything if there is no international regime. The proposals will follow the new Committee procedure, so those and other questions will then be examined in greater detail.

The Government's decision to act now is wrong in principle. The Bill is also wrong in detail and, in some respects, inadequate. It is not in the national interest to jeopardise finalisation of the law of the sea treaty. We shall vote against the Bill. Some years ago we committed ourselves to the need for an international ocean regime. We reaffirm that commitment.

8.2 pm

Mr. T. H. H. Skeet (Bedford)

We have listened to the hon. Member for Whitehaven (Dr. Cunningham) clutching at straws with both hands. There are problems. We are trying to work out an international convention beneficial to mankind, but there are many ways of doing that without setting up an International Sea bed Authority.

Under international law, companies or consortia that want to mine nodules in the Pacific can do so without an international convention, but they are hesitating because they hope that one will ultimately be realised. It was expected that it would be negotiated at Caracas this year, but the timetable has gone awry and it may not happen until next year. One cannot predict these things with great accuracy. It could be at a later date. The Minister stated that the convention is not likely to be operating, under the normal road to signature and ratification, before the mid or late 1980s, so we are concerned with the intervening period.

We must take account of two facts. First, industrial teams dealing with technology have to be kept together. Secondly, as the Minister said, we must take account of progress in other countries. If the United States is to issue licences in early January 1982, even though the mining cannot be attempted before 1988, we should be at a disadvantage if we could not do the same. As I said, a consortium could go through the American system instead of ours, or possibly take advantage of the German system.

The Group of 77 is not totally against the approach. Clause 18(3) of the Bill gives the Secretary of State the right to revoke the legislation when all the provisions become merged in a convention. That is why what we are discussing is temporary. The House will have some control, because the matter will first be considered by the House on an affirmative resolution.

When the American legislation was endorsed by the President on 28 June 1980, it was expected that there would be a great clamour from the Third world, but that did not happen. The next session of the conference on the law of the sea was most profitable, as many matters were agreed.

The Bill defines hard mineral resources as manganese, nickel, cobalt, copper, phosphorus and molybdenum. In passing, I point out that the British Nationality Act 1948 is mentioned in clause 1(6). I hope that the Minister will note that and have it altered.

What are those minerals used for? Cobalt is critical for jet engine blades, electronic applications and metal alloys, manganese for steel production and nickel for corrosive resistance in chemical and refinery plants. It also has many other applications. Molybdenum is used for imparting hardness, strength and corrosion resistance to steel and no-ferrous metals. Copper has many applications, including electrical wiring and tubes.

As has been said, the United States has taken a strong line under the new President in wishing to review the position. That is reasonable. As a new organisation, it wishes to consider the effect on its national interest. Is the United States to be for ever dependent on Zambia, Zaire and Zimbabwe for cobalt? Should it not be able to obtain cobalt from nodules? Will it have to depend on South Africa and the Soviet Union for manganese? Should it not have the choice of obtaining it from nodules in the 1990s?

It is estimated that in 1978 the United States imported $2.4 billion of nickel, copper, cobalt and manganese. Nodules could ultimately reduce the United States net imports of manganese from 98 per cent. of consumption to zero, of cobalt from 97 per cent. to zero, of nickel from 77 per cent. to 42 per cent. and of copper from 19 per cent. to 15 per cent., and the United States is a major producer of copper.

We should go into the matter a little more deeply. The dependence of the Western world on South Africa and the Soviet Union must be considered injudicious, particularly when we remember the strategic value of key materials. Let us take world production figures as percentages in 1975.

In that year Canada produced 30 per cent. of the world production of nickel, the Eastern bloc 19 per cent., New Caledonia 16 per cent. and Australia 9 per cent. Of the countries producing 75 per cent. of world production, only one can be classified as a developing State. The remainder can be classified as industrialised States.

The Eastern bloc produced 31 per cent. of the world production of manganese in that year, South Africa 24 per cent., Gabon 11.4 per cent. and Brazil 8.1 per cent. From the countries producing 75 per cent. of world production, only one can be classified as a developing State.

Zaire produced 53 per cent. of the world production of cobalt, Zambia 9 per cent., the USSR and Cuba 10.6 per cent. and New Caledonia and Australia about 12 per cent. Therefore, of 86 per cent. of world production, only three developing countries are the beneficiaries, and they may wish to preserve their interests. Zambia has expressed that view. Nickel and cobalt are exchangeable in many industrial uses.

The United States of America is a major producer of copper, producing more than 18 per cent. The centrally planned economies of the non-free world produced 19.7 per cent., Chile 11.9 per cent. and Canada 10.4 per cent., followed by Zambia, Zaire and Peru. Of 80 per cent. of world production, the leading producers are the United States of America, the centrally planned economies of the East and Canada, which would presumably be interested in sea bed production anyway. A clear picture emerges. The greatest beneficiaries will be not the Group of 77 but the industrialised States of the world. That is unique.

Mr. Dalyell

My right hon. and learned Friend the Member for Warley, West (Mr. Archer) raised a matter which the Minister could not clarify. Suppose there is a section—we shall call it section X—measuring 10 kilometres by 10 kilometres, valuable in producing copper. If the Canadians, British, Belgians and Americans cast envious eyes on that area, how, under unilateral legislation, do we work that out? The hon. Member for Bedford (Mr. Skeet) has made a great study of these matters. I listen to him with great interest. What is his solution to the conundrum put forward by my right hon. and learned Friend which the Minister did not answer? Can the hon. Gentleman answer it?

Mr. Skeet

I shall answer the question when I come to deal with the international organisation for the deep sea bed. I can see the problem. If there is a good deal of local or national legislation, it will have to be co-ordinated. It will be easier to do that than to organise the bureaucracy in an international sea bed authority. I promise that I shall answer the hon. Gentleman on that point later.

The informal text of the draft convention on the law of the sea has been under negotiation since 1973. I appreciate that that is seven to eight years. The text contains 320 articles and eight annexes. I hope that hon. Members appreciate that within its jurisdiction lies two-thirds of the world's surface. It would have been much greater but for the fact that the exclusive economic zone has been established or agreed, and the area of the continental shelf has been redefined. It must be acknowledged that the continental shelf area, as extended, will accommodate all the oil and gas reserves of the world.

I do not think that the Government will agree with me, but I can see problems arising at every corner with an international sea bed authority. A new cartel is being established for more than two-thirds of the world's surface, and in it a triumvirate of powers are being vested—regulatory, fiscal and operational, including marketing. All those powers are being vested in one body. What is the system of appeal? In the system that we are establishing there is an appeal to the Secretary of State. The United States has a system in which the Minister responsible will be in control. There will be a council and an assembly of the ISA. One cannot overrule the other, except on certain matters. There appears to be a complicated system of voting rights in the council.

Mr. Dalyell

The hon. Gentleman is being candid with the House. Is he saying that he does not want an international regime? Surely his objections to an international regime would apply even if there were agreement by all the nations of the United Nations Conference on the Law of the Sea. Is that not an argument for going ahead on a rich country basis?

Mr. Skeet

That is a direct question. Of course, I want an international convention. We should think about it carefully. The change of Administration in the United States provides an opportunity to reconsider one or two matters. Its decision about the EEZ is correct. Its decision about the continental shelf is reasonable. We shall not examine most of the proposals in the document tonight because it is too vast to cover in the time available. However, it is only right that the House should consider the difficulties. Nobody likes a monopoly, but the ISA will be a monopoly. It is not virtuous simply because it is a public monopoly. We have already been faced with OPEC which is an international body, although admittedly not under the United Nations. But monopolies are not good in any circumstances.

The format of the ISA is incompatible with the accepted principles of free trade, free access to materials and free competition, upon which the economies of the industrial West are based. It may be that that system must change and that a new system will come into operation in the style that is now being formulated. But the West must recognise the changes that are being wrought.

A dangerous precedent will be established by the ISA. When we come to divide Antarctica or space, will we have the same sort of treaty? Many who have not advocated an ISA on this occasion will say that they reserve their defence. Many who concede that, will say that every international convention, whether it be the mandatory transfer of technology or something else, will be governed by the treaty.

The ISA may indeed bureaucratise the sea and achieve a purpose that was never intended. I fully accept that the companies should work for the betterment of mankind. That has been the whole of my philosophy of life. I do my best to press them along that course. But I do not think that the ISA will achieve that purpose. We had great faith in the League of Nations prior to the war, but it came to nought. The United Nations has not been able to stand up to any of the conflagrations which have occurred across the world. Yet I still support the United Nations. I simply ask that we recognise its limitations.

The system of parallel developments envisaged by the Kissinger proposals in 1976 is a distinctly cumbersome procedure. When a company applies to the ISA for a licence it must apply for two—one for the company to develop under the rules and regulations that will eventually be laid down and the other will be banked by the ISA.

They have no technology and it will take them years to acquire it. I do not know what they will do with it. It may be put aside. It will probably be a long time before anything is done. the delays could be prolific.

I greatly fear that political rather than practical criteria will be used in reaching decisions. If an international body is put in control of taxation, royalties and the rate of return, it may prove to be unreasonably onerous. That may deter the companies from doing anything.

If those with technology are deterred because they cannot see an adequate return, not one of the Group of 77 will be able to do what the companies are able to achieve. I agree that the technology should be made available to mankind, but that must be subject to certain terms and conditions.

The text states: The programmes for the transfer of technology to the enterprise and to developing States with regard to activities in the area, including inter alia facilitating the access of the Enterprise that is the operating arm of the ISA— and of developing States to the relevant technology, be given under fair and reasonable terms and conditions. It must be remembered that 96 per cent. of technology is vested in firms throughout the world. It is in the firms that are innovative. If there is to be a mandatory transfer, data will have to be paid for. It will have to be subject to certain conditions. It is a concept that is easy to put on paper, but it will not be easy to implement. For example, the United States of America, the United Kingdom and the Federal Republic of Germany may lose their technological lead. Of course, they will not want to lose it. Those countries may say that there is a risk that proprietary information will be leaked and that the enterprise which is the operating arm, will hand it out to a third party—perhaps a competitor. If that happens, there will be no right of appeal and the information will be lost.

The United Kingdom, for example, may come up against security and defence provisions. The Government may not allow the information to be alienated. It is praiseworthy that the Third world should have all the technology and information available to enable these things to be done, and there are many ways in which this can be provided.

I shall try to answer the question that was posed by the hon. Member for West Lothian (Mr. Dalyell). A licensing system for granting exploration blocks would be more difficult under the ISA than under joint Government licensing arrangements secured by a mini-convention negotiated between several directly interested countries with both the technology and the finance to mine nodules. That is not to say that an international convention would be inhibited. It is right to look forward to an international convention at an early stage. However, I have grave doubts about its immediate implementation.

The forecast of mineral demand has fallen substantially in recent years. Negotiations during seven to eight years have led to certain issues that were previously considered crucial being downgraded in importance. That has happened because of the passage of time and changing circumstances. I shall give one or two illustrations—

Mr. Dalyell

Before the hon. Gentleman does that—

Mr. Skeet

May I finish the sentence?

Mr. Douglas

The hon. Gentleman has been speaking for 20 minutes.

Mr. Skeet

One of the great difficulties is that I cannot see nodules coming into large-scale production for many years. Those years are being deferred even further because of certain matters which I shall mention later.

Mr. Dalyell

How binding in law would be agreements reached under the so-called mini-convention if there were an international treaty? There is no guarantee that the carry-over arrangements would be binding on the subsequent participants.

Mr. Skeet

A mini-convention would apply only to the contractees. It would not bind anyone else. However, the contractees are those who are likely to do the mining. A mini-convention would be merged in time into an international convention. I think that everybody should ultimately participate in the developments. I am in favour of a convention being negotiated, but that will take time to achieve.

I shall indicate why I feel that the Third world will not receive the benefit of nodules at an earlier date. Much sea bed mining will not be attempted if it is feasible to work the nickel laterite deposits in Australia, Indonesia, the Philippine Islands and New Caledonia. Initial mining would not take place before 1988 at the earliest. The existence of low-grade ores might be rather more attractive than ores that come from the deep ocean. Additional land reserves of manganese are to be found in many countries, including Australia, China, India, Gabon, Ghana, the Ivory Coast and Brazil. That will probably give the nodules, which have the highest content of manganese, low priority.

It is essential to maintain industrial expertise in the development of deep sea marine technology. I shall set out the conditions which, in my judgment, should be laid down. First, there should be the acceptance of a convention that is suitable for sea bed operations beneficial to mankind and not simply assumed to be so. Secondly, there should be the establishment of a preparatory commission to lay down the regulations and the procedures of the ISA. That could take a long time, because agreement would have to be secured. Thirdly, preparatory investment protection is crucial to guarantee the inviolacy of the money that has been and, is likely to be spent before the convention comes into operation. I regard national legislation as crucial.

The Minister has not mentioned that production ceilings will be established by the treaty. I agree that the legitimate interests of producers and consumers must be considered. However, it is wrong that there should be a trade-off between producers. The strategic interests of industrial States should be considered and at least recognised, and that will involve security of supply.

The United States of America absorbs no less than 20 per cent. of the world total production of manganese, yet it produces only 1 per cent. Therefore, it must have a secure source of supply. We must import all our supplies of these key materials. Therefore, we want a secure base as well. Competition from an additional source of supply is not necessarily inhibiting. For example, work on the continental shelf has not been inhibited, because we have land supplies of oil in the Middle East.

I do not want to detain the House too long, but it is only right that I should make clear one or two matters which are of crucial importance.

Mr. Douglas

More?

Mr. Skeet

I have given a little background and it is important that Opposition Members should listen a little further.

Clause 9 deals with the levy. Can the Minister say whether the taxation which will be made available ultimately to the United Nations or an international sea bed authority will be offset against national taxation? It would be unreasonable if the consortia had to pay twice—if it were taxed here and also by an international sea bed authority.

Clause 9(1)(a) is also a matter of great concern to me. Its provisions do not appear in the German legislation, whereas those in clause 9(1)(b) do. Why do we not have a simple system and include only clause 9(1)(b)? Clause 9(1)(a) will cover the sale of nodules and clause 9(1)(b) will cover the recovered products. An arithmetical formula would be able to work out what (a) is, and that would make sense. The matter could be dealt with in that way.

We want a stake in the business for our own companies. Both sides of the House accept that. If the legislation is acceptable to the companies and if it is fair and reasonable, many of the international consortia will want to operate in the United Kingdom, not in Western Germany and the United States. The United States legislation is comprehensive. I should have thought that our legislation was much better.

The care of the environment, which has caused some concern to the Opposition, is dealt with in clause 5. It is a simple clause. The United States legislation is extensive. I believe that our system is much better. As is mentioned in the schedule, certain provisions can be laid down by regulation and not put in the Act.

Another matter which I find distasteful in the American legislation, which I hope will not be repeated here, is that section 102 says: Each permittee shall use at least one vessel documented under the laws of the United States for the transportation from each mining site of hard mineral resources recovered under the permit issued to the permittee. Why should there be a vested interest in ships of the United States? I am not certain that we have done any good work by putting what is known as foreign discriminatory action in clause 8. I recommend that that clause be dropped. I assume that it was put in simply as a stick to strike possibly the United States of America. It would be better to follow our usual traditions and to deal with that in due course by negotiation.

I am surprised that the United States legislation says: Except as otherwise provided in this paragraph, the processing on land of hard mineral resources recovered pursuant to a permit shall be conducted within the United States". I know that a provision says that they could be processed in other parts of the world with consent. However, I believe that we should not follow the instructions in the petroleum production regulations and say that, like North Sea oil, minerals must be brought ashore in the United Kingdom, although at a later stage they may be exported. When one is dealing with the great distances over which those minerals may be carried, it is better to leave it to the companies to decide where they will be processed rather than to provide that in the legislation.

Mr. Richard Body (Holland with Boston)

My hon. Friend has more to say and I do not wish to intervene unnecessarily. I have more fundamental misgivings about the Bill than he has. Does my hon. Friend believe that the German legislation is more satisfactory than the Bill?

Mr. Skeet

I have had the opportunity to go through the German legislation in an English translation. We should not favour that legislation because of the background picture in Germany. There is a withholding tax of between 20 per cent. and 25 per cent. It might be difficult to repatriate funds under that legislation. I have examined the three pieces of legislation and I believe ours to be the best. When a number of international consortia have been assembled, the country with the best economic environment and legislation will get most of the business later. We should aim to be that country. The Opposition might be impatient, but they will concede that the more business that the United Kingdom secures the better.

Mr. Nicholas Baker (Dorset, North)

I am interested in what my hon. Friend says about the obligations on companies. How important does he believe the obligations are in terms of employment and safety? I have come across many examples of employees of companies engaged in the North Sea and elsewhere whose health has been damaged and whose remedies have been small or minimal.

Mr. Skeet

That is a helpful observation. Under the schedule to the Bill The safety, health or welfare of persons employed in any licensed operation or in any ancillary operations will be covered by the regulations. That is the time-honoured way of operating in the United Kingdom. There is no point in providing extensive coverage in the legislation.

I am glad that in clause 18(3) there is provision for revoking the arrangement if an international settlement or convention is agreed. With the separate legislation which is likely to flow in over the years it is important that a monitoring body should ensure the compatibility of national legislation. If we agree on that at an early stage, we shall prevent difficulties later on.

It might be argued that because an international convention will apply eventually it is not necessary to have the provision at this stage. However, I believe it to be useful because, apart from the three countries that we are discussing now, France, Belgium, the Netherlands, Italy and Japan are in line for legislation of their own.

The date for licensing applications in the United States is 24 January 1982. It is important that the United Kingdom applies the same date. The legislation must be put through the House as expeditiously as possible. Otherwise, the American legislation could be used and we could be disadvantaged. I hope that the Foreign Office will bear that in mind and consider the broader issues. It would be meritorious to help British companies a little more in a sphere in which they have considerable expertise.

8.40 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I always enjoy the peppery style of the hon. Member for Bedford (Mr. Skeet), but he will forgive me if I do not follow his long trail. He brought it home clearly that this Bill is about resources. That is what the whole debate is about. I can well understand the development team seeking some assurance to enable them to get on with their pioneering work. What I question is whether this temporary legislation will give them the necessary long-term safeguards which I would have thought they require in order to do this type of work.

Any industrial opportunities that are available ought to be seized with both hands by this country. What is so disturbing is that, despite all the discussions that have gone on at the United Nations law of the sea conferences over the past two decades or more and despite all the efforts to achieve international agreement, we have here something resembling almost legal piracy; the Government are attempting to introduce legislation to exploit the treasures of the deep seas.

The Government describe this as a temporary measure pending international agreement by the third United Nations Conference on the Law of the Sea. However, it is clear from what has been said that the United States has already led the way and Germany has quickly followed. In effect those two countries have jumped the United Nations starter gun and the United Kingdom Government are simply going to limp along behind them. It would have been far more impressive if the Minister had said that arms were going to be twisted at international level in order to get the kind of international agreement we have been seeking for the past two decades rather than backs broken to get to the resources on the ocean bed.

Without international agreement, unilateral action by nations will leave companies in a most vulnerable position in the long term and will creat potential conflict. My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to the Indian Ocean. I am sure that what was at the back of his mind was that if the Siberian adventures of the Soviet Union do not come to pass that country will probably be looking much more closely at what resources might lie on the bed of the Indian Ocean, quite apart from its examination of what is available in the Pacific.

Clearly the legislation has enormous long-term implications for world resources and the global environment. Nearer home we know that oil and natural gas deposits in the North Sea have created all sorts of problems over claims and lines of demarcation. Perhaps the Minister of State, Foreign and Commonwealth Office will tell us this evening whether we have resolved all our problems with the Republic of Ireland over median lines.

The potential represented in deep sea mining and the shortage of resources outlined by the hon. Member for Bedford suggest that there will be a considerable source of conflict in the years ahead. The measure that the Government are attempting to pass into law is one of the biggest smash and grab efforts in a long time.

The Minister knows well that the technological know-how is concentrated largely in the hands of the industrialised nations and that they have the largest demand for the resources that will be available. What I fear is that the guarantees cannot exist without international agreement. Even if we get international agreement there has to be monitoring, as the hon. Member for Bedford pointed out. Clearly, with the United States having decided to review everything, the whole issue has been thrown back into a cauldron of uncertainty. Despite all the lip-service that we pay to the Brandt proposals and the needs of the Third world, efforts of this character will not strengthen the approach towards achieving a better balance between the technology of the North and the needs of the South.

The Minister highlighted another issue in his remarks about having just seen the nodule. I know that the Lord Privy Seal co-ordinates law of the sea matters and other marine matters. With our involvement in the North Sea and with the prospect of deep sea interests being much closer, the United Kingdom should have a single Ministry for marine affairs. Our country is surrounded by sea. We have a coastline of about 6,500 miles. Perhaps a Ministry of marine affairs—

Mr. Douglas

The Government have been at sea for years.

Mr. Craigen

My hon. Friend, who I know is anxious to make a good contribution, says that the Government are already at sea, but that does not guarantee that they have the necessary expertise.

Seeing my hon. Friend the Member for West Lothian on the Opposition Front Bench, and knowing his interest in scientific matters, I am prompted to ask what consideration the Government have given to the long-term geological effects of North Sea oil depletion on our coastline. My hon. Friend knows from his constituency the effect of mineral under-workings on land. Within the foreseeable future, problems may be affecting our coastline because of depletion in the North Sea.

The Bill impinges on mineral resources and on transportation throughout the world, because the oceans are a mass highway for the passage of goods and materials. Moreover, as two-thirds of the world's surface is ocean, the sea represents a considerable food storehouse and global thermostat and reservoir. So mankind has a considerable ecological interest in the sea, quite apart from the need for mineral resources. The right hon. Member for Taunton (Mr. du Cann) periodically raises in the House the issue of hydrography and the need for the adequate charting of our seas, particularly the North Sea.

My hon. Friend the Member for Whitehaven (Dr. Cunningham) referred to the necessity for departmental back-up in monitoring mining activities. I understand that some years ago the Customs and Excise was approached about extraction from the ocean bed, but the department would not touch it because it did not have available the necessary manpower.

Dr. Kurt Waldheim, speaking at Caracas on 20 June 1976, said that these deliberations must succeed, lest old quarrels on land be replaced by new quarrels at sea. We should not underestimate the importance of the Bill, nor the indication in the Bill that the Government are simply easing off in the necessary efforts to achieve international agreement.

8.50 pm

Mr. Richard Body (Holland and Boston)

I agree substantially with some of the misgivings expressed by the hon. Member for Clasgow, Maryhill (Mr. Graigen). All of us are concerned about the views expressed so clearly by the Group of 77. The group undoubtedly has had its suspicions aroused by the manoeuverings of the various international companies that will seek the licences. It can look back on unhappy experiences with some of those companies.

First, why is the Bill necessary? The Law of the Sea Conference, after many holdups and procrastinations, is at last making progress. A text is soon to be broadcast, which, one understands, will be satisfactory to the world. One would have thought that it would be more sensible to await the natural course of events after that. I searched for some time for an explanation for the legislation. The United States and Germany have gone ahead determinedly.

Reading the Official Report of the debate in the other place, one realises what is reasonable. Six international consortia have already invested £150 million. It seems that the consortia wish to invest still more money and are unlikely to plunge—we were told in that debate—another £100 million into the project unless they have assurances contained in legislation.

There is only one way to know how reliable the Bill's assurances are. In issuing the licences the Minister must not only have regard to the criteria set out in clause 5—which do not add up to much—but must consult his counterparts in other countries so that there will be an international carve-up and each consortium will have a fair slice of the cake. Thus, there will be a portion for each consortium. In that way rough justice will be done.

No doubt justice will follow for the six international consortia, but I doubt whether much justice will follow for any interests emerging from developing countries that might wish to have a stake. I have misgivings about the Bill. I should prefer not to seek a licensing system which can be done only on an international basis for the security that the companies require. I should prefer us to wait one or two years for a more rational licensing system, preferably under the aegis of the United Nations.

Mr. Skeet

If we are to prosecute the course that my hon. Friend recommends, he should realise that industrial teams are already being paid. They will have to be disbanded because companies will not commit further funds to the projects. Should they not have State guarantees to protect them?

Mr. Body

My hon. Friend knows that I have rather robust and old-fashioned views about the market economy. I am torn between those views and common sense as expressed by my hon. Friend. I recognise the force of what he has said. One realises that it is important that those companies which have a major stake must be protected. We cannot expect them to go ahead without the sort of security that they have been seeking. But my anxiety is that the Bill will not provide that security and that it can be provided only later, when there is an international carve-up, clandestinely I expect, and the Government will have to act in liaison with their counterparts in other countries, so that each consortium has a fair share and there is no conflict among them. It is a process that I regret, but it may be inevitable.

8.55 pm

Mr. Dick Douglas (Dunfermline)

I have listened with interest to the debate, and particularly to the remarks of the hon. Member of Holland with Boston (Mr. Body). He has a rugged view of the market economy and would not regard it as uncharitable if I said that this view on this issue would be "finders keepers"—those who have the technology to seek nodules should have the right not only to explore but exploit their finds.

That view has a rugged aura about it which may appeal to many Conservative Members, but we have to ask the Government whether there is a strategy behind the Bill or whether it is merely tactical. If there is a strategy, A has to reside in the international rule of law. What is the status of our law and the laws of other nation States in regard to international law? I realise that that may be a difficult and complicated question for the Minister to answer.

It seems to me that the Bill is not part of a strategy, but is tactical, and that the tactics relate not to the rule of law, but to acceptance of the fact that certain nations need the raw materials and—or have the technology to exploit them. The nations with the technology are the United States, Germany and Japan.

The United States is the leader in this area, because the technology bounces off the space programme, which may seem contradictory, and because of the United States' historic lead in offshore oil exploitation. Many of the techniques involved in deep sea mining, particularly drilling, relate to offshore oil techniques.

I am referring not only to drilling to depths of 600 or 800 ft. but to the techniques of dynamically positioned drill ships. Those techniques exist in the United States, and to some extent in Japan. I ought to declare an interest, because I have some knowledge of drilling and I am associated with Scott Lithgow, which has built two dynamically positioned drill ships. Therefore I appreciate some of the technology involved.

If it is to be argued that we shall be left behind in the technology, we ought to consider the present position of drilling in the United Kingdom. The latest Brown Book shows that the United Kingdom's share of exploration and appraisal drilling in our own continental shelf is only 31 per cent. That is a shocking commentary on our ability to exploit technologically our indigenuous resources.

I accept the provisions of clause 8 in terms of trying to get a blocking arrangement in the use of ships, and so on, but I am not satisfied that the Bill will do the job that the Government seem to want it to do. I believe that it will fly in the face of world opinion. We have to balance economic advantage with the position of the rich nations trying to gain an unfair share of a resource that we claim to have internationalised. My hon. Friend the Member for Whitehaven (Dr. Cunningham) said that the Bill flies in the face of the proposals in the Brandt report. Therefore, in terms of giving the companies the assurances that they want, I have great misgivings about whether the Bill will do the job.

I appreciate that time is limited, and I do not want to trespass too much on the patience of the House, but I wonder whether there are lessons to be learnt from our experience of the continental shelf. In the beginning, much of the offshore oil exploration technology was in the hands of the United States. We recognised that fact in our legislation, because we indicated quite clearly that there would be sharing arrangements. If we grant licences, should not the responsibility of the consortia include the encouragement of companies from the developing world so that they will at least share in the technology? To some extent that would meet the point made by the hon. Member for Bedford (Mr. Skeet), that somehow or other the developing nations would not have the technology to participate.

We sought to balance our relative lack of technology by writing partnerships into our terms and conditions for licences. On occasions, the Labour Government wisely said that preferential treatment would be given if a public authority was involved.

I accept that in technological terms exploration could be beneficial, but that must be balanced against the ecological argument. That brings me to the question of regulatory authorities. It is all very well for hon. Members to say that no international authority can do this, but no national authority can do it either. If there is to be reciprocity in licensing agreements, is it not possible to write into those agreements a requirement that there should be international co-operation, to ensure that the ecological systems are not disturbed?

The Minister must put a better case for the Bill. I am sure that in Committee we shall go through the measure line by line and clause by clause. The Government's majority will ensure that the Bill will become law, but the Minister must recognise that some of us have grave misgivings about rushing ahead.

It is all very well to say that there will be no exploitation until 1988, but no company will make the type of investment necessary for that exploitation without some clear indication that there is a market for the product.

Perhaps the Minister will also spell out the nature and structure of the British consortia that are likely to apply and their relationship to the United Kingdom in taxation terms. The hon. Member for Bedford raised an interesting point when he said that if we did not act the consortia would register themselves under the United States licensing system. That is a persuasive argument.

What are the benefits in terms of taxation, security and protection for the consortia or any consortium in the United Kingdom? I have an engineering background, and I do not believe that science and technology can be put back into the bottle and recorked. There must be clear regulations. I am a little sad that the Government of my country want to dash ahead at a time when we are struggling to get international agreement.

I accept that the Government will get the Bill, but I hope that they will understand the concern that is felt by Labour Members. We are expressing not only our concern, but the concern that is felt internationally, and we hope that the Government will bear that concern in mind.

9.06 pm

Mr. Teddy Taylor (Southend, East)

The Bill appears to be a small and sensible measure, but anyone who has Britain's interests at heart must view with suspicion any measure which has anything to do with our Foreign Office. I therefore put three questions to the Minister, and hope that he will answer them before we proceed further.

The first is a simple question. Will not the Bill make it more difficult to achieve the international agreement which the Government say they want and which everyone agrees is needed? It will be more difficult to achieve international agreement if there are more and more interested parties with a stake. With an American Bill, a German Bill and a British Bill, many licences will be issued, and many interested parties will have to be squared off, almost on a competitive basis, the British trying to do more for their licensees, and the Americans and Japanese doing likewise. So this Bill may make it that much more difficult for an international agreement to be achieved.

The second question is one that the Minister should answer on Second Reading. We have these splendid, able teams who are anxious to get on with exploration but want a little more security. In the event of an international agreement, which will no doubt be superimposed national licences, will the Government clearly undertake to give appropriate compensation to consortia which have obtained a licence and spent a lot of money and which then find that an international agreement knocks their apparent security for six?

The third question is also simple. If the British Government give a licence to a person and find that the Germans or the Americans have given a licence, or someone else has given a licence, will the individual or consortium get the money back? The Minister may say that there may be a nod or a wink arrangement or a telephone conversation saying "We shall not give it for the same area as the Germans gave it." If that happens, it will not be a British Bill. It will then be an established cartel.

Having put those three questions to the Government, I want to raise two further issues. If, as I hope, there is an international agreement and a great deal of cash comes in, I hope that the Government will argue the case for getting rid of the cash quickly to the Governments concerned, whether of under-developed countries, Britain, Turkey, or any other country. I hope that they will hand out the cash quickly and not establish yet another international bureaucracy to support projects throughout the world.

One of the most dangerous threats, apart from Socialism, to the free economies of the world is the growth of international bodies handing out the equivalent of national contracts. The Government are well aware of the problems of subsidisation, but an even greater danger to the freedom of our economies is the growth of organisations which hand out massive contracts, which can distort the natural disciplines of a capitalist economy, and which seem to provide an immense number of highly-paid jobs for clapped-out politicians and others whom they want out of the way.

I therefore hope that, if we have a fund, the Government will ensure that the cash is handed out quickly and that we do not have a gigantic new organisation with headquarters in Geneva and lots of conferences for all our friends who enjoy that kind of activity.

Secondly, if we have international agreement, let us have some means of enforcement, even if it has to be three secondhand gunboats to shoot those who do not agree. We should always remember what happened to the whales. If 77 countries come to an agreement that only their licensees may do something, and if we then find that someone else is operating from Liberia or wherever, surely we should have some procedure to destroy their works. Those who do not agree should remember the international agreement on whales. Everyone agreed, but the poor bloody whales go on getting killed.

9.10 pm

Mr. Tom Normanton (Cheadle)

Inasmuch as the Bill gives clear evidence of recognition that an international agreement on the law of the sea and all that flows from it is desirable and necessary and one day will have to be reached, the House should give it a warm and constructive welcome. Nevertheless, at this stage I have a number of questions for the Minister.

First, how does my hon. Friend see the Bill matching up, marrying or being compatible with the thinking on this subject which is and has been developing within the European Community? The Minister referred to Germany. I earnestly hope that he or his right hon. Friend has had general discussions on this theme in the appropriate Council of Ministers. If not, I hope that the House will be given an assurance that there will be a long and intensive dialogue along these lines.

Secondly, does he see the possibility—having studied the Bill fairly carefully, I do—of the Bill serving as a guideline to the kind of legislation which in my opinion will ultimately have to be formulated and promulgated on a Western European basis, which to me means on the basis of the European Economic Community?

Thirdly, I hope that my hon. Friend will not mind my reminding him that the European Community, of which Britain is a signatory, is in treaty linked with the Lomé II convention—an institution which brings the 61 ASP States into ever-increasing commercial, industrial, financial and even, in a remote sense, social relationships with Western Europe and the European Community. I earnestly hope that the Minister will bear in mind the importance that those countries place upon finding some solution to this long-standing problem involving a law of the sea which in many cases will affect them as much as, if not more than, the countries of Western Europe.

Bearing in mind the fact that three Conservative Members serve on the EEC consultative assembly on the Lomé convention, will the Minister use them to help give a better and more constructive understanding of his aims and objectives as I interpret them in the Bill? I assure my hon. Friends on the Front Bench that we welcome the spirit of the initiative, but we recognise that it is only too easy for it to be misunderstood and misinterpreted, by those with politically hostile thoughts in mind, in terms of the Lomé convention States.

Lastly, I ask that British firms which are interested in this area of profound high capital investment and ever-increasing complexity of high technology should be invited to look carefully at—and, indeed should be helped to avail themselves of—the financial support which the Community readily makes available for projects in this area.

The initiative of the Government should be welcomed and given constructive—perhaps critically constructive—consideration by hon. Members. On the other hand, the Bill, when it comes into effect, must not be one of those many measures on the statute book which serve as a dead hand to inhibit investment, initiative and the expansion of technology in an area of ever-growing importance. I hope that it will not, and I accept the assurances, which I read into the speech of my hon. Friend the Under-Secretary of State, that that is not in the Government's mind. If I interpret his views correctly, I am confident that that will not be the case.

9.16 pm

Mr. Peter Archer (Warley, West)

It has transpired that my hon. Friends the Members for Whitehaven (Dr. Cunningham) and for Dunfermline (Mr. Douglas) were right: this has been a debate about international law.

You will not believe this, Mr. Deputy Speaker, but I find international law a very emotive subject. It is one of the things that turn me on. I accept at once that that places me in a minority. But international law is about conducting international relations without recourse to war. It is about peace. Perhaps, if it had been recognised earlier that this was a debate about peace, there would have been more of our colleagues adorning the Benches on each side of the House.

I become emotional about international law because it is a method by which the nation States accept rules about their behaviour towards one another, about resolving disputes by adjudication, and about renouncing the use of physical or economic muscle in favour of consensus to decide who gets what. I am sure that that will appeal to Conservative Members, because law and order was one of the subjects that figured largely in their manifesto.

The importance of international law in relation to the sea bed is a subject about which some of us have felt passionately for many years. My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to my noble Friend Lord Ritchie-Calder. Many years ago, my hon. Friend and Lord Ritchie-Calder and I were fighting shoulder to shoulder on this matter, on which I wish more people would chain themselves to the railings. There is not time now to recognise the contribution that they made, but perhaps the House will forgive me if I spend a few minutes in rehearsing the route by which we arrived at this debate.

The sea, as we have been told more than once, occupies more than two-thirds of the earth's surface, yet for the greater part of the world's history it has received very little attention from lawyers or legislators, mainly because human activities there have been very simple. People wished to sail on the waters without wishing to add to the problems imposed by natural conditions, so it was necesary to eliminate piracy, and the Governments of the world co-operated to bring that about.

It was necessary to have elementary international rules about navigation, but usually there was plenty of room to sail without colliding. People wanted to fish, but there was enough for everyone, if only because there were narrow limits on what could be caught with the technical means available. People wished to use the oceans as sewers for their pollutants, but before the recent onset of industrial pollutants, the sea was big enough to absorb them. Countries wished to control a sufficient strip of water around their coasts to ensure that they were not surprised by hostile invaders. For that purpose, three miles was quite sufficient.

So the rules were simple and they were basically about nations keeping off one another's backs. The regime that obtained in the seas until the mid-twentieth century was basically the regime that obtained on land 3,000 years ago, when man was a hunter. In this century those activities became more complicated. Ships became faster, larger, less manageable and more numerous. As a result, the navigation rules had to be more complicated. Fishing techniques became so effective that some species are in danger of extinction. Unless there are effective limits on fishing, that occupation will self-destruct. As the hon. Member for Southend, East (Mr. Taylor) pointed out, species such as the whale and the dolphin look as if they will be deliberately hunted to extinction.

Over large areas pollutants are being poured into the ocean more quickly than it can absorb them. That is particularly true of oil, but it is also true of many other substances. Unless all the coastal and river States agree to improve their pollution standards—admittedly, with the corresponding expense—we shall end up by poisoning one another. Hostile invaders can travel at such speeds that the old three-mile limit is pointless. The seas can be used as hiding places for weapons of mass destruction. People have discovered various means of using the sea for leisure pursuits, and techniques have evolved for winning mineral resources, particularly oil, from below the seas.

All those activities require regulation. Unless they are regulated, they are mutually incompatible. An oil rig can be a danger to navigation. A pollutant can poison off the fish stocks. This century has brought its own problems. In addition, it has brought in a new factor, namely, the nodule. Knowledge of the existence of the nodule was not new. The "Challenger" returned from its voyage in 1836 with the information. But that was simply an interesting scientific discovery. It was known that there was immense wealth on the ocean floor, but there was no technique for exploiting it. Only in International Geophysical Year, in 1957–58, did it emerge that those minerals might be recovered from the ocean floor and that they might be recovered one day more cheaply than from the land. It was a new ball game. Until then no country had much incentive to stake out part of the ocean floor as its territory.

It was accepted that outside the jurisdicton of a nation State there were things of interest, but they did not matter much. Now the danger arose that there could be a rush to stake out national territorial claims and that there might be a latter-day Klondike. It produced a list of dangers similar to that produced in the Klondike. My hon. Friend the Member for Dunfermline mentioned one such danger. He pointed out that those who were economically strongest and most technologically advanced could get there first and scoop the lion's share of the world's wealth, while the rest of the world was deprived of any share. It would be like the enclosure movement in Britain in the eighteenth century, which decimated commons. There was the danger that the arguments and squabbles over who grabbed what would lead to the risk that one of those squabbles would escalate into a major war. It was like the rush to establish colonies in Africa in the nineteenth century. In addition, there was a danger that we would endow an area that occupies a substantial part of the earth's surface with opportunities for enrichment without the accompanying law and order, just like the Klondike.

As the hon. Member for Bedford (Mr. Skeet) pointed out, happily this was not the only area in which a need became apparent for establishing an international regime of law and order in what had previously been territory outside national jurisdiction. Happily, international agreement was reached about Antarctica before the prizes became too glittering. In outer space increasing occasions arose for conflict, but the countries involved were determined to resolve their difficulties. So we had some idea how to proceed.

It was clear that in relation to the oceans we needed to establish two principles. First, there was a need to set limits to the area over which an individual State could claim territorial jurisdiction. Already, the three-mile limit had generally become a 12-mile limit. For some purposes some countries spoke of a 200-mile limit. In 1958, they got together at the Geneva convention. That assured coastal States of jurisdiction over offshore areas to a depth of 200 metres or, beyond that, to the limit where the depth admitted the exploitation of natural resources. Even at that date it was not generally realised that that formula virtually renounced all limits on human greed and that there was technology within the foreseeable future for exploitation at much greater depths than 200 metres. It was vital to set limits on the territorial demands of nation States.

Secondly, there was a need to ensure that areas outside the exclusive jurisdiction of nation States should not be left without regulation as a domain of anarchy but should be regulated by an international authority—but, with respect to the hon. Member for Bedford, not an ineffective international authority like the League of Nations but one backed by national authorities and police forces. Neither was it to be a bureaucratic international authority, as suggested by the hon. Member for Southend, East. It was intended to have the means of enforcement to impose a regime of law and order, without which no company could safely invest the cost of exploitation and research. In return, it would ensure that those who exploited and profited from the mineral resources would pay a contribution from which the remainder of mankind would benefit, particularly in the less technologically developed countries.

Many of us, even in those days, were concerned. We wrote about the matter and discussed it. For a time, we wondered whether agreement would be reached before it was too late. Even then, it seemed that there was no limit to human folly.

Then, at the United Nations General Assembly in 1967, Ambassador Pardo made a speech. It is not given to many speeches to change the course of history, but his did. The United Nations adopted his terminology and agreed that the sea bed beyond the limits of present national jurisdiction was the common heritage of mankind. It proceeded to establish a permanent committee on the peaceful uses of the sea bed and the ocean floor. In 1970, the committee recommended that there should be convened a Conference on the Law of the Sea, which duly happened in 1973.

There followed seven years of hard work and bargaining. Jacob's seven years of work for Rachel were a holiday compared with the work that some people put into the Law of the Sea Conference. I accept that it did not always demonstrate a sense of urgency, but it produced a plan that was generally agreed for an international sea bed authority, which would license mining in the common area, exact a levy on the products of the sea bed to be used for the benefit of mankind and participate in running some of the activities through its commercial undertaking—the Enterprise.

It was hoped that when the conference reconvened for this session it would be able to resolve the outstanding disputes, to agree the final text and to sign it as an international convention. It is true that no State will be bound until it ratifies, and I agree that it will be a few years before the convention becomes effective because of waiting for 60 ratifications, but matters were moving in the right direction and at least the vital signatures would have been on the text.

However, commercial interests in the United States, and I suspect, elsewhere, as my hon. Friend the Member for Whitehaven said, did not want international agreement. They wanted to scoop up the profits for themselves. In June 1980, the United States Congress passed the Deep Sea Bed Hard Mineral Resources Act. It purported to recognise that eventually there would be an international authority, but in the interim it claimed to license United States citizens and companies to prospect and recover minerals. The United States was going it alone.

When the delegates assembled for the 10th session, as has been said, they read the bald press release by the United States ambassador. It was as though Dan McGrew had charged into the marshal's office and announced that he was considering his attitude to law and order but would meanwhile proceed with robbing the bank.

Mr. Skeet

The Americans did not want the money for themselves. There is a levy. It is taxation, but it is being paid into a separate fund for the benefit of mankind. It is not enrichment for the Americans or the companies.

Mr. Archer

I shall come to the relationship between the profits to be made and the size of the levy, compared with the levy that would have been imposed had the law of the sea conference reached a successful conclusion—a very different matter. And there is a difference between a fund under international control and one in the control of an individual country.

Mr. Archie Hamilton

How long does the right hon. and learned Gentleman think it right for us to wait for the conference to reach a decision? How many years will that take?

Mr. Archer

The United States could have waited for one more session, which could have been sufficient. It was an act of national selfishness and national cynicism. The hon. Member for Holland with Boston (Mr. Body) gave the reason for that, and it was the same reason as that given in The Times on 9 March. The Times put it neutrally, and in a way that might appeal to the hon. Member for Epsom and Ewell (Mr. Hamilton). It said: The mining consortiums feel, however, that the system is weighted against them. They alone have the technology to mine on the ocean floor, but fear that the arrangements under the convention would severely limit their ability to make profits, and make them vulnerable to political decisions by the new authority. That is exactly what it would have done. That is what it was intended to do.

It is curious that the Bill was introduced in another place before the press release issued by the American Government. I am not suggesting that there is anything sinister about that. No doubt they made their views known to the Government. But it shows that a number of things were being said privately among Governments before even the delegates to the law of the sea conference were informed. The companies pressing for all this might have paid a higher levy, but they would have had the protection of a stable international regime. They cannot complain about the absence of law and order and then renounce it when it suits their book.

I accept that that provided a problem for Governments, including ours. I do not want to be unfair to them. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) put his finger on the matter when he said that if a group of people are in sight of agreeing a set of rules for their mutual benefit, by which they all renounce the use of individual muscle in favour of justice and civilised behaviour, when one of them announces that he prefers discord to harmony and that he will grab what he can the remainder are faced with a dilemma. If they simply continue to talk, they risk finding that he has already scooped the pool and there is nothing left to talk about. It is therefore tempting to break off the discussions and join in the scrum.

I fear that in law and order there is the operation of Gresham's law—bad behaviour drives out good behaviour and uncivilised behaviour drives out civilised behaviour. But to retaliate in kind without hesitation is to support the wreckers, to abdicate any power to redeem the position and to jettison any prospect of focusing international opinion in favour of a better future.

As has been said again and again, this measure will sour the whole atmosphere. It will substantially set back the hope of international agreement. In the process, it will jeopardise other activities, such as navigation, antipollution measures and fishing. I accept that it is a matter of judgment as to which of the reactions would have been appropriate to the American action. If it rested there, I suppose that I would be compelled to concede that the Government differ from us but that it is a matter of weighing conflicting considerations.

The matter does not rest there, for three reasons. First, the Bill itself discloses a fallacy. The action would be justified if it was vital to act immediately. But clause 2(4) makes it clear that no exploitation will be authorised by licence granted under this Bill until 1 January 1988. There is no question of anyone making a penny of profit by licence under the Bill for another seven years. The Government well know that companies do not need to be licensed to prospect. They can prospect now.

That is why the problem of jurisdiction does not arise. Anyone can license anybody to do anything. My hon. Friend the Member for West Lothian could license me to remove the Tower of London. That would mean that he would not object if I removed it. The problem would arise if somebody else subsequently objected. That is the problem that the companies are inviting the Government to consider. The companies do not want to spend money on prospecting unless there is a reasonable guarantee that their sites will be protected from incursions by cowboys.

Dr. John Cunningham

They want the Government to back them up.

Mr. Archer

Indeed. But that could be achieved without legislation. It would require only a declaration by the Government that when their investments were likely to bear fruit they would be protected. That is all that the Government are achieving in the Bill. Of course, any future Government might disagree with such a declaration. But a future Government could repeal the Act.

Mr. Skeet

Would a future Labour Government repeal the Act?

Mr. Archer

Whether a future Labour Government would repeal it would depend on many circumstances.

Mr. Skeet

Ah.

Mr. Archer

Of course. We are talking about a situation that has not yet arisen. That is our argument. The Bill is premature. It is not required yet.

Mr. Skeet

If the Bill is enacted and no international convention is signed in one year's time or two years' time, or by the time of the next general election, and if, by a great misfortune, a Labour Government were returned, would that Government repeal the Act?

Mr. Archer

A number of other questions would have to be asked.

Mr. Skeet

Answer that question.

Mr. Archer

There are many factors that would determine such a decision. The weakness of the hon. Gentleman's question is that if the Bill were not on the statute book there would be a much greater prospect that the convention would be signed in one or two years' time. This legislation will achieve nothing that could not have been achieved without it. As has been said repeatedly, the companies will have no security from this legislation that they could not have had by means of an international agreement. It is a totally disruptive and provocative measure. It was premature to introduce it at this juncture.

Secondly, the United Kingdom is placing itself in the vanguard of those wo have jumped to follow the American example. As has been said, West Germany followed America very quickly along the path to anarchy. Those are two countries which are renouncing respect for the international community. There may be others which are proposing to do so. Nothing would have been lost if we had waited to see what course other countries took. That was one of the factors which should have determined whether the United Kingdom legislated, and whether a future Government would repeal the Act.

Mr. Skeet

Is the right hon. and learned Gentleman saying "Wait and see"?

Mr. Archer

Of course. There are times when I really wonder. To legislate without waiting to see strikes me as the politics of the crystal ball. If it were vital to legislate at once it would be a different matter. Of course, the hon. Gentleman does not care about the other factors. He has other fish to fry, and we know what they are.

Nothing would have been lost if we had waited to see what the other European countries did. The United Kingdom has legislated in advance of them. It will appear in the history books that we enthusiastically rushed to hang on to the American coat tails. That is how it will appear to developing countries. They will see our action as a deliberate and cynical denunciation by technologically advanced countries of their international obligations.

Thirdly, the Law of the Sea Conference had almost reached agreement on the text of a convention. The text made provision for a levy on the value of the minerals extracted and included the requirement that the money should be paid into a United Nations fund for the benefit of all mankind. I accept that the Bill provides for a levy to be paid by the holder of a licence to exploit. Clause 9 provides for the payment of the levy and clause 10 provides that it shall be paid into a fund.

Clause 9 sets out the method of calculation. There are two alternatives. It is accepted that whichever method is used—obviously the companies want a choice and they will adopt whichever method suits their books—will produce a levy that will be about half that which would have been produced by the Law of the Sea Conference text. So a company which recovers minerals under this legislation will save itself about half of what it would otherwise have had to pay and will deprive the rest of the world of that amount.

So it is hardly surprising that the Group of 77 has announced that it will not recognise unilateral national legislation on the subject. In another place the Earl of Gowrie conceded that the figure was about half. He spoke of the disincentives to mining companies and the difficulty of competing with other countries if their levies were lower than ours. I accept that. That is the argument. In such matters it is the most selfish, the most anti-social and the meanest nation—so far, the United States—that establishes the norm for everyone else. That is Gresham's law.

It is possible that a low rate of levy was adopted to put pressure on the developing countries to agree to all the outstanding demands of the advanced countries.

Mr. Skeet

They are still negotiating.

Mr. Archer

Of course they are still negotiating, but that is twisting their arms a little. Is it not a little international blackmail? If that is true, it is a shameful device. If it is not, it is just an announcement that the companies wish to get away with the minimum payment that they can make.

There are two other matters that I should like to raise on Second Reading, since they go to the foundation of what we are discussing. In a number of interventions, my hon. Friend the Member for West Lothian asked what would happen if two national Governments issued licences for the same site. He received no answer. I have no doubt that the answer is coming now, but it troubles me that it was a fundamental question. It was the obvious question. A child would have asked it upon hearing about the Bill. Yet obviously, it was not uppermost in the Minister's mind.

That troubles me because it appears to mean either of two things. Either, the Government have not considered the matter and are leaving such questions to chance. Perhaps the Minister will tell us the procedures for avoiding duplication, who will arbitrate if there is a dispute, and according to what rules they will arbitrate. Will they be privately agreed rules or will they be published so that we know what they are? The other possibility is that the Governments concerned might have reached an informal agreement to divide the deep ocean bed—the common heritage of mankind—among national spheres of influence. If that second conclusion is right, I can only echo the words of Miss Marlene Dietrich: When will they ever learn? In 1973, in the early days of the Law of the Sea Conference, America proposed a scheme that became designated "the Nixon proposal". It divided the ocean bed into blocks, like a patchwork quilt. Each country was to be allocated a number of blocks. So the United States would have a few blocks, and the United Kingdom and Monaco would have a few blocks in the middle of the Pacific. We asked what machinery there would be for enforcement in relation to the United Kingdom.

We asked how Monaco could get its gunboats to the middle of the Pacific and how it would exploit it, even if it could do so. That was like the Anglo-Saxon system of agriculture, except that there are methods of marking strips in a field, however unsatisfactory, but no one has yet devised a method of marking out boundaries on the ocean floor. It must have been one of the battiest schemes—

Mr. Archie Hamilton

rose—

Mr. Archer

I shall give way in a moment.

It must have been one of the battiest schemes ever thought of. I use the expression "thought of in its loosest sense. Some of us were worried in case the British Foreign Office took it seriously. In fairness, I shall say that it abstained from the vote on the proposal.

I attended a press conference on 15 June 1973. It was attended by my right hon. Friend the Member for Deptford (Mr. Silkin), who has long been concerned about that topic, by Sir John Foster, who was then a Conservative Member, a former Minister and a distinguished lawyer with an international practice, by Lord Wilberforce, one of this country's most distinguished judges, whose knowledge of making international law was not confined to theory, because he represented this country in negotiations on a number of occasions, by the Right Rev. Prelate the then Bishop of Norwich, Dr. Lancelot Fleming, who, in addition to being a distinguished theologian, enjoyed a formidable reputation as a geologist and explorer, and by Mr. Patrick Armstrong, clerk to the all-party group on world government, who has made a lifetime study of the subject.

We warned that if that proposal were proceeded with not only would the technical problems be insoluble but, human nature being what it is, it would be a recipe for disputes, uncertainty, violence, national confrontations and, ultimately, for wars.

The proposal was abandoned long ago. It is remembered as one of the more bizarre episodes in the history of international relations. It is destined to be included in a book that I shall write in my retirement, if someone does not beat me to it—an anthology of silly suggestions.

I am troubled because I wonder whether, the proposal having been buried, its ghost has been resurrected. If the alternative to misunderstandings and conflict about duplicate licensing is an agreement about spheres of influence of that kind, we might be confronted with a version of the Nixon proposal which appears to be less absurd only because it has not been spelt out.

My hon. Friends the Members for Whitehaven, for West Lothian and for Dunfermline raised another question. The oceans are a meeting place for many different activities with complicated inter-relationships, which means that one activity might seriously affect others. Mining activities might pollute the beginnings of a food chain, which will seriously affect fish stocks and the conservation of rare fish and mammals. The difficulty is that we know so little about the ecology of the ocean floor. If we once arouse Leviathan we do not know what chain of events we shall begin.

The Law of the Sea Conference has paid great attention to that. However, the Bill simply provides in clause 5 that the Secretary of State "shall have regard" to such matters. That is a vague formula to protect such an important consideration. The Bill was improved in another place with the help of my noble Friend Lord Ritchie-Calder. I am not an uncritical admirer of the House of Lords, but I accept that sometimes a good thing comes out of Nazareth. But there is still reason for great anxiety. The activities that the Bill will licence are irreversible. We cannot unpollute or revive an extinct species. We need more assurances.

In much of human activity regulation for the foreseeable future must be by the nation State. That is what the House is about. But there are spheres of activity, and they are increasing, which need other machinery for decision-making, and where ordinary people believe that they could be better represented. The Bill is a proposal by the Government, but many people in this country bitterly resent what is being done in their name.

The Minister was right to say that the subject is exciting. It is immensely exciting. The question is, who is seeking to stifle these exciting possibilities? Last Sunday The Sunday Times carried an article under the heading: Reagan tries to play King Canute. It is not the Opposition, not the developing countries, not the United Nations and not world opinion that are opposed to an exciting future. Of course there is a chance to win untold wealth for the benefit of mankind and perhaps to transform the world's economy. The only question is, who is to benefit and in what measure?

But there are more exciting prospects still. There is a chance to substitute law and order for anarchy over two-thirds of the world's surface. There is a chance to show that there are better ways of resolving disputes than by the use of force. There is the chance to establish co-operation in place of conflict and perhaps to use this as an example over other and wider ranges of human activity. There is a chance to bring mankind together instead of dividing it. If we in the United Kingdom turn our backs on those prospects we shall be judged by posterity, and we shall be judged to our eternal shame. That is why hon. Members on this side of the House will vote against the Bill.

9.50 pm

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd)

The hon. Member for Whitehaven (Dr. Cunningham) and the right hon. and learned Member for Warley, West (Mr. Archer) made rather similar speeches; they were powerful and interesting speeches which were easy to listen to, but there seemed to be a strange hole in the middle of the argument. They both made strong speeches in favour of an international treaty on this subject. Then they used the conviction which they held, and which the whole House holds, as if it were a reason for voting against the Bill. There seemed to be a gap in the argument which they were unable to fill.

There is no need for either hon. Gentleman to wag his finger at this side of the House about the desirability of having an agreement and a treaty. We looked into this shortly after we were elected and came to the conclusion that there was no doubt that in the British national interest we needed a treaty. As has been pointed out often, the present draft is the result of many years' patient work. Although it is not what we would have drafted ourselves in all respects, nevertheless it should form the basis of the eventual agreement.

The British delegation has worked hard under this Government, as under the last Government, to reach agreement—not least in the last few weeks. The idea that there is some conspiracy in which we are involved to frustrate the negotiations is absurd. I do not think it is believed by anybody except the Opposition. The echoes which reach us of the views of the Group of 77 do not support that belief.

A treaty is still some way off. The date when a treaty would enter into operation is several years away. Even if agreement were reached tomorrow—obviously it is not going to be—then there would be the period of the preparatory commission followed by the period of ratification. It is the gap between this evening and the date when even on the most optimistic assumption an international agreement could come into force that this Bill is about.

I asked the hon. Member for Whitehaven whether during this period, which will last several years, he wanted Britain to fall out of the race. He did not answer the question. On his analysis, which has just been repeated by the right hon. and learned member for Warley, West, the answer to that question must be that he does want Britain to fall out of the competition. He wants no legislation because he is going to vote against the Second Reading. He wants no kind of protection, even imperfect, to be extended to British companies while their competitors, other members of the consortia, will be going ahead and developing their investment and expertise.

The hon. Member for Glasgow, Maryhill (Mr. Craigen) put forward the same argument. He started by saying that he did not want British industry to lose its opportunities, then he went on to fall into exactly the same hole by producing an argument that we should do nothing for the time being. I do not understand how that attitude of doing nothing over this crucial period of several years would benefit the Third world in any way.

I cannot see how this would advance the aims of hon. Gentlemen opposite. If we abstain from legislation at this time it will simply mean that British companies might—I think my hon. Friend the Member for Bedford (Mr. Skeet) was going to say "would"—lose interest, to some extent check their investment and thus postpone the contribution which Britain could eventually make to the enterprise when there is an international agreement.

Dr. John Cunningham

The Minister is prostituting his experience in foreign affairs when he pursues the argument which he is pursuing. Everybody who has taken any interest in this issue knows that we do not need to license companies to prospect, to explore or even to exploit these resources. The point is—he knows it without my reminding him—that we are breaking ranks in the international sphere in this activity in a way which jeopardises the reaching of an international agreement in the shortest possible time. I accept what the Minister said about the time taken to reach international agreement. We do not need to take these measures to allow these companies to be involved. The Minister knows that as well as I do.

Mr. Hurd

That is not their view. They say that they need a measure of this kind, or they will find it difficult to do A and B, and the hon. Gentleman says that they do not need it—

Dr. Cunningham

They do not need it.

Mr. Hurd

Who is to make the decision? It is the companies, not the hon. Gentleman. On the second point, the hon. Gentleman has produced no evidence to support the thesis that, by passing this legislation, we are jeopardising or souring the continuing negotiations. The Carter Administration passed the United States legislation. There was some sporadic criticism at the time, but where is the evidence that that United States legislation of last year soured the negotiations? It did not. Where is the evidence that the German legislation also on the statute book soured the negotiations? It is a proposition that has been repeatedly put forward without any evidence to support it.

This is one of the difficulties we find in the whole range of North-South issues. We are constantly being told that certain actions or inactions by the Government are bringing our name into disrepute in the Third world. We always hear it from right hon. and hon. Members on the Opposition Benches. We do not hear it from the developing countries. The only evidence outside this House brought to bear was the evidence quoted from Lord Ritchie-Calder. He is a distinguished gentleman, but that is a different matter from his being able to show the House that this legislation and other decisions of this kind by the Government are producing the effect in the Third world that they allege. The evidence is not produced because it is not there.

Mr. Douglas

Will the Minister tell us the status of the complementary national legislation in international law? That is the kernel of the argument.

Mr. Hurd

I was expecting the right hon. and learned Member for Warley, West to develop the point, but he did not. I thought it was one of the main Opposition arguments so we examined it carefully. There are no grounds for supposing that this legislation infringes international law in any respect, any more than the United States legislation or the German legislation did. Nor is that the view of the international community as a whole.

Hon. Members have rightly tackled and probed the question of the protection of the environment. They are also right to say that there can be no guarantee that this measure, or any measure, would provide total security for the marine environment.

I draw attention to paragraph 5 of the schedule, which, under the heading "Subject matter of regulations" lays down that the Secretary of State may include in the regulations The prohibition of any method of working which in the opinion of the Secretary of State is or is likely to be harmful to any marine creatures, plants or other organisms or their habitat". That is a fairly wide definition, but it is not a total guarantee. Once again I ask the House to accept that the choice here is between some protection or no protection, some licensing or no licensing, some provision for the environment or no provision for the environment, in this period of several years that we are talking about. That is the choice, and we believe it is right to make an effort in this direction, accepting that it may not be, at least at the outset, complete.

The hon. Member for Dunfermline (Mr. Douglas) asked whether there would be co-operation with other Governments on the evironmental point and the answer is "Yes".

My hon. Friend the Member for Bedford in a remarkably perceptive speech—[Interruption.] There is a certain amount of mockery from hon. Members who were not here to listen to my hon. Friend's speech. He went to the core of the matter. He has misgivings not about the principle of a treaty but about what he called the danger of bureaucratising the system. The danger exists. My hon. Friend the Member for Southend, East (Mr. Taylor) covered the same ground. We are involved in the negotiation—

It being Ten o'clock, the debate stood adjourned.

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