Daily Archives: November 26, 2015

Geopolitical Damnation 27: UNCLOS

No, that’s not a typo. We’re not talking about UNCLES, we’re talking about UNCLOS, short for the United Nations Convention on the Law of the Sea — an international agreement that resulted from the third United Nations Conference that took place between 1973 and 1982 and finally came into effect in 1994 (a year after the 60th nation signed the treaty). (So if you think your Legal department is slow approving your latest contract, they’re running at breakneck speeds compared to the glacial United Nations.)

This international agreement, that has been agreed to by 166 countries and the European Union as of 2015, replaced the conventional freedom of the seas concept that was the de-facto, unwritten, agreement between nations from at least the early 17th to the late 20th century that stressed the freedom of all nations to navigate open waters.

However, as of the early 20th century, this de-facto unwritten agreement was not enough for those wishing to engage in global trade as nations that wanted to protect mineral resources, fish stocks, or pollution-free waters started to stretch the conventional definition of territorial waters from the accepted 3-mile limit all the way up to a new 12-mile zone in 66 cases and, in 8 cases, a 200-mile limit. If every country has a different territorial claim, how do you know if your ship suddenly leaves international waters and enters a nation’s waters, and, conversely, how do you know how long you have the protection of your nation while entering or exiting your waters?

Under this new agreement, countries have, from the low-water line or a straight baseline (when the coastline is deeply indented, has fringing islands, or is highly jagged) a:

  • 12 nautical mile territorial zone
    where the nation has complete control as it is free to set laws, regulate use, and use any resource; in this zone, vessels generally have the right if innocent passage
  • 12 nautical mile contiguous zone
    where the nation can continue to enforce laws in four specific areas: customs, taxation, immigration and pollution, but only if the infringement started within the state’s territory or territorial waters, or if this infringement is about to occur within the state’s territory or territorial water
  • 200 nautical mile exclusive economic zone
    where the coastal nation has sole exploitation rights over all natural resources.

This all sounds crisp and clean, but there are a number of caveats that you need to be aware of if you are the Procurement person responsible for managing ocean freight.

You have no protection against theft or piracy beyond the 12 nautical mile territorial zone.

Unless the product originated from, or is being shipped to, the nation the contiguous zone belongs to, then the nation has no claim to customs or taxation, and can’t do anything. So, from a shipping perspective, the continuous and extended zones offer you nothing.

You have no protection from the nation within the 12 nautical mile territorial zone (or even the 12 nautical mile contiguous zone under certain circumstances).

The right of innocent passage is only valid so long as you are passing through waters in an expeditious and continuous manner, which is notprejudicial to the peace, good order or the security” of the coastal state. If the nation decides that your vessel is a threat, it can be stopped, seized, and the crew brought up under criminal (or terrorist) charges and held indefinitely without release.

You don’t even have protection against the nation in the extended zone.

If your vessel or crew gets associated with a crew or vessel that is trying to illegally exploit natural resources in any way, shape, or firm, your vessel can be stopped, seized, and the crew brought up under criminal charges.

Now, the chances of these last two happening are low, unless your vessel is registered to a nation that is currently at diplomatic odds with the nation whose waters it is passing through. For example, if there are embargoes or military conflict, the vessel can be captured simply to use as a negotiation point. Not always likely, but always a possibility hiding in the darkest corners of the shadows just beyond the corner of your eye.

The crux of this post is that when it comes to open waters, it doesn’t matter whether your ship is in a zone or not, because either way it’s not safe. Protection from pirates leaves it open to seizure by law enforcement and freedom from law leaves it open to pirates. Damnation covers the open sea.