jurisdiction of the state department. but i will say i think the gentlemen on either side of you -- the gentleman to your left mentioned many times that the modernization of nuclear armaments is very important, especially if you're reducing the number of though. in every public setting i can, i know this is not the state department, but that resolution has not been honored. and for what it's worth, it's not a really good way to build trust with folks on future treaty resolutions. so, again, none of this is directed at you, but the types of modernizations at sandea, los alamos and other places have been waiting for and civilian leaders and civilian military leaders have said is very important has not heard per the resolution of ratification, not directed at you, but just to say

that it's not the kind of thing that builds a lot of faith in those resolutions. >> if i could respond, senator, because i know this is a continuing concern of yours. and for the record, i just want to state that in fy-12, the administration did live up to the obligations that we agreed on by requesting $7.629 billion in weapons activities. congress did not appropriate that full amount, instead only appropriating $7.214 billion. that did create a shortfall. in fy-2013 we continued to honor our commitments by requesting $7.6 billion, 5% above the amount appropriated by congress for fy-12. that's one of the very few accounts in the entire government to receive an increase of this size and, you know, we would like to work with

congress to be able to have everybody on the same page concerning this. >> if it's okay, i appreciate that. and yet this year, that request was not made and the resolution says if those funding requirements are not met it's incumbent on the administration to come forth with a report to show how that affects the overall process. that has not happened. again it's not directed to you but overall at the administration. it does create problems as it relates to overall trust issues. thank you all for your testimony and look forward to future hearings. >> and, senator, i take very seriously this concern of yours. we will be submitting the 9b report shortly. >> thank you, senator corker. >> mr. chairman, let me thank all our witnesses.

i found their presentations to be as comprehensive a presentation as i've ever received on the treaty and i thank you for that. i thank you for particularly addressing the criticisms that have been made about this treaty. of course, it's typical of any treaty that we hear some of these complaints. i want to go into an issue that i think secretary clinton you alluded to. it is not a static situation. it's changing all the times and now there are groups that are meeting that would affect u.s. interests that we are not a party to. we don't have our representative there. the law of the sea is changing because of the treaty. and there is now discussions as to what should be the appropriate use of sea lanes and where should the mineral rights in the future go or what should be the international regime for dealing with some of these issues? and the united states, of course, is perhaps the most

significant player in these issues. and yet our interests are not being represented as these types of changes being debated. could you elaborate a little bit more as to what type of discussions are currently taking place that we truly are not part of? not involved as far as having our representative at the table during these discussions that very much could affect -- u.s. companies could affect the commercial operations, could affect all the interests that you mentioned. >> senator, you're absolutely right. with respect to demarcating, asserting sovereign jurisdiction over continental shelf, that is ongoing. countries are doing that, as has been already said, we stand to gain more than any country in the world and we have not done so. going beyond the extended continental shelf, which is of

great importance to us, are the rules on deep sea bed mining. that will influence whether a number of the supporters of the treaty, senator kerry mentioned one, lockheed martin, who are interested in the rare earth minerals, can participate. because in the absence of setting the right rules and then being party to the treaty, it may or may not be advantageous to us, as it should be. we have a seat on that body and we are not filling it. so, we will really only have ourselves to hold responsible if the bodies that are now gearing up and working under this convention begin to make decisions that are not in our interest. and i think secretary panetta made a great comment. you know, we like to use our military power to promote our

national security. we have a lot of economic interests at stake here that will be very hard for us to exercise even with the largest, most professional military in the world if we don't get in under the convention's rules. we have the chance, still, to shape those rules. >> normally on these international treaties and organizations, the u.s. participation is looked upon internationally with great importance because it adds to the comprehensive nature of the organization. and you mentioned the arctic area, without having the united states you're missing one of the key players of the arctic. i know that there is strong international interest for us to become party to the treaty. but i would suspect that there is some interest in other countries that are say iing, it

gives our companies a better edge and puts them in a stronger position as it effects u.s. operations. am i correct? i assume there's strong support in international but i'm sure some are saying if you don't want to take advantage, we'll fill the void. >> the united states was one of the small number of nations that led to the treaty in the first place and then to make sure that nothing in the treaty would be adverse to our interests and so we have a lot at stake. we've already invested a lot in it. i think most of the world wants to see us accede. they know as a principle driver of the a rules-based

international system, our being inside, helping to devise and execute those rules is in their interest as well. but i have to agree with you, senator, that there are nations who would be perfectly happy to be in the driver's seat instead of us. and we're letting them be in the driver's seat by our failure to be party to the convention. >> we just had the nato summit in chicago and one of the issues that was raised pretty vocally by this committee is we want our nato partners to carry out their responsibility. the responsibility for international security should be addressed with all of our partners not principally one country, the united states. secretary panetta, it seems to me that our allies have to have some concern about the u.s. participation in this treaty as it relates to the coordination of our security issues, as it relates to the sea.

>> that's absolutely correct. we sit down with these countries. we develop strategies. we develop plans. we develop military operations. we develop naval operations, working with them as well. and if we are not operating based on the same rules, it puts us at a disadvantage. i'm sure this is true for secretary clinton, but i can't tell you. i've been in meetings with both those that are considered allies as well as those that are considered our competitors. and make the argument with regards to navigational rights. make the argument with regards to our ability to exercise rights in the open seas. and they have said in these meetings, how can you even assert that when you are not

even -- have acceacceded to the treaty? >> that does make our arguments that much more difficult, particularly when as you all pointed out, it's hard to defend an argument as to why we've taken so long and why we have not, in fact, ratified the treaty. thank you very much, chairman. >> thank you very much, senator. senator rich? >> thank you very much, chairman. senator -- excuse me, secretary clinton. your opening statement, you addressed the people who oppose the ratification of the treaty. and particularly spoke to the ideology and the philosophical opposition that some people have

to this. i hope you weren't scoffing at us. i'm one of those that fall into that category because i have deep-seated reservations on that basis. in fact, most wars we've fought have been fought over ideology and philosophy. indeed, our country was founded on that because we had a difference with great britain over that. so i consider that an important point. and to get this down even narrower, my problem is with sovereignty. there's 288 pages here. and as you read it, there's some good stuff in here. but if we give up one cintentce of sovereignty that our citizens

have fought for, then i can't vote for t with all due respect, you defended the opposition -- you challenged the opposition and said there's nothing in here that requires that we do certain things regarding the kyoto protocols and environmental things. you look at article 222. i'm going to quote from that article that says the signators to the treaty, quote, shall adopt and take other measures to implement applicable international rules established to competent international organizations or diplomatic conference to prevent, reduce and control pollution of the marine environment from or through the atmosphere. that's got kyoto written all over it. what it has written all over it is any time the u.n. call ace conference or what have you, they all get together, they all sign on to it. even though we disagree, by

adopting this treaty, we have said that we will adopt it, even though we don't agree with that particular treaty. so, with all due respect, the legal interpretations you say you've had -- i've read thousands of pieces of legislation. this is written in plain english and i don't know how you can argue that after this is implemented or adopted by congress or the senate, if it is, how we're going to get around the fact that we have agreed that we will adopt these laws and regulations. >> well, senator, i join you in being absolutely 100% supportive and protective of american sovereignty. i have spent. of my adult life, in whatever role i have found myself in, defending and arguing on behalf of our country and our rights

and will continue to do so. but i would strongly argue that, number one, our sovereignty will be considerably enhanced by joining this treaty. and, number two, with the specific question you asked, our reading of that -- and the information about the meaning of it goes back to the beginning of the treaty because we've had negotiators at the table from the very beginning. there is nothing in what you read that requires any particular standards. there is nothing that requires any subject that is going to be put to dispute settlement. it calls on parties to participate in discussions.

for the record, i will give you a longer written response because i really do want to put your mind at ease as much as i'm able to. i believe so vehementally that ac accedeing to the treaty is in america's interest or i wouldn't be sitting here. >> i tell you, this language is so black and white and so straightforward that says america shall adopt laws and regulations that are in conformance with anything adopted by a common international organization. let's turn to another provision i have real difficulty with. as i understand it, since 1776,

we've never acceded our sovereignty. you read article 82, subsection 4 -- well, article 82 starts with us taxing or requiring a tax of these companies that operate out in the waters, mining or pumping or what have you. section 4 says the payments or contribution contributions shall be made through the authority with state's parties of the convention on the basis of equitable sharing criteria, taking into account the interest and needs of the united states, particularly the least developed in land locked among them. why, oh, why, oh, why as we, as americans, give up our taxing authority, handing money over to the united nations to develop some kind of a formula that we have no idea what it's going to say, and allowing them to

distribute our tax money according to some formula that is very vaguely set out here? why would we do that? >> senator, we're not doing it. i can tell you that without fear of contradiction. it does not provide for or authorize taxation of individuals, corporations or otherwise. there is a royalty arrangement that kicks in after five years of drilling and extraction from the ocean. payments that would be related to the continental shelf beyond 200 nautical miles, go through not to one of the convention bodies, the sea bed authority. they're held there until agreement is reached on disbursement of the funds, if agreement is ever reached. the distribution formula has to

be agreed to by the united states with its permanent state would have to agree to it. and the payments would mean that we were actually extracting valuable resources from the extended continental shelf. this is supported by the american oil and gas industry. because it only applies to such areas beyond 200 nautical miles. and i would note, too, senator, there is nothing unprecedented about payment being made under treaties for various benefits because here the benefit is being absolutely legally assured of sovereign rights over a vast area of common ocean and the legal certainty that comes with that. and we already make payments to the international telecommunications union, for example, because it helps to regulate the use of associated orbital slots to protect u.s.

radio communications from harmful interference. so, there are precedence that demonstrate why this is in our interest. nothing is agreed to unless everybody in the convention agrees to it. now, standing on the outside, there may be something that we don't like that we could veto if we were on the inside. >> i find very little comfort in taking a seat, as secretary panetta talks about, in a group of 16 0 countries. most of whom don't like us, many of whom hate us. and us having one vote amongst 160, i think we'll have a tough time. thank you. >> but, senator, it's a consensus, which means it has to be unanimous. our one vote counts as much as 159 other votes and not every country will be represented on this body, but the united states will be. >> on this particular provision, but there's others in here where

we don't have a veto throughout everything that the conference does. >> the point is, senator, there's a veto with respect to the distribution of any money whatsoever. i think as we go forward in this, we will have the legal ex precisely how that works, but i think, you know, you'll come to see -- >> i look forward to that. >> the other thing i was going to say is, the application of the section that you raised with respect to the shell ply is only with respect to, if you have already signed up to an international law that applies rp to that. so, in fact, it's not an ad hoc provision that says you've got to go out and adopt this. if if you've already signed and international agreement and we haven't. >> that's not what it says, mr. -- >> again, i will have a panel of experts who will come in and clearly define that, because it's very important, and we

obviously want you to -- >> no question. >> and we want you to be satisfied with respect to that and i believe you will be. >> but i think it's important to have that done that way. senator boxer is back. thank you. >> thank you. forgive me, please. i had to go deal with the transportation bill. and that's moving ahead very well, i will tell me colleagues on both sides. well, mr. chairman, and senator lugar, thank you so much for this important hearing and i want to say to the panel what an honor it is to be in the same room with you all. you give every day to your country, 24/7, and we all appreciate it so much. this is a very important issue, and i thank the chairman privately, because we are just late in the game with this and we need to make up for lost time. and senator lugar went through the history. i well remember in '07 when we voted 17-4 to report the convention to the full senate

and as rightly pointed out, it wasn't taken up because there were threats of filibuster, and everything else. when you're the majority leader you want to go to something you can get done. so i am hopeful this time we're going to get it done. because of everything that was said. the convention has the unequivocal support of our national security community. the business community. the tech community. the oil and gas companies, and environmental groups. now, i'll tell ya, it's tough to find that type of coalition. but we've got it here. and here's the puzzling part to me, i say to my colleagues, that this convention should bring us together, not tear us apart. my chairman has said his best opinion that we go for this after the election. so be it. but i find that kind of shocking, since, again, i'm con

founded after so much support senators consider this so controversial. u.s. secession would help give the u.s. navy navigational rights in dangerous world protect u.s. rights in the arctic, afford greater flexibility to companies to lay fiber optic cables under the sea. the convention providing mechanisms for a peaceful resolution of dispute. so the law of the sea protects u.s. national interests and joining is the right thing to do and it brings me to me question for you, madam secretary, and it has to do with china. and we have a little map here, if people will bear with me, it tells the story. china has made aggressive claims to a massive portion of the south china sea. one of the world's busiest shipping lanes. the blue lines show a 200 nautical mile maritime area that each respective country such as

vietnam or the philippines is entimgtsed to under the law of the sea convention. it's calmed as was referred to the exclusive economy zone. the red line shows what china is claiming for itself. as you see, it goes far beyond china's only 200 mile exclusive economic zone. it reaches far into other nation zones, a significant territorial grab that comes very close to the land borders of countries in the region. now, this dispute has already led to confrontation on more than one occasion. in fact, just last month the chinese navy sent surveillance ships to block the efforts of a pill fein coast guard cutter trying to stop activities of chinese fishermen who were within 200 mime miles of the philippine coastline. now, secretary clinton, i understand you have been personally involved in trying to resolve territorial disputes within the south china sea and i would ask you this question --

has the u.s. failure to join the convention had an impact on your efforts to resolve disputes in the south china sea, and if you could explain to us why and how, and i thank you, and you did a great job over there. >> yes. well, thank you very much, senator boxer, for raising this issue, because you're right. i am personally engaged in many bilateral and multilateral discussions on south china sea issues, and the claims that china have made, and i'm not saying anything other than what i have said repeatedly to the chinese themselves, ouare, in o view what is permitted under the law of the seas and we are working to try and help resolve these disputes peacefully and particularly to give a support to the countries threatened by these claims, yet as a non-party

to the convention, we are forced to advance our interests from a position of weakness, not strength. as a non-party, we seed the legal high ground to china. we put ourselves on the defensive. we are not as strong an advocate for our friends and allies in the region as i would like us to be, and i don't think that's any place for the world's preeminent maritime power to find ourselves. so the -- the common thread, and this is something that secretary panetta stressed, is, when i make an argument to the chinese about resolving these disputes, i premise it on a rules-based order in the region. that they cannot have a chinese rule. they have to be bound by the treaty obligations and the legal framework set forth in the convention, and our credibility

and our strategic position would be strengthened were we a member. >> thank you. >> my last question, i would give to secretary panetta, and i know you spoke about iranian threats to close the straits of hormuz. you alluded to that, but i had a specific question. apr according to the u.s. energy administration they said "hormuz is by far the world's most important choke point due to its daily oil flow with approximately 20% of the world's oil traveling through the strait. furthermore, energy analysts say even a partial blokage of the strait could raise the world price of oil by $50 a barrel within days." so would you elaborate more on how you as a session to the law of the sea convention could help us address such threats from iran? >> senator, those that have not

had the a chance to look at the straits of hormuz, it's a very tight area that is located there, and it is under law of the seas. there is an international passageway that is allowed so that ships can carry oil through the straits. and it is -- it gives us the argument that we absolutely have to have the, which is that we need, in order to protect the world's oil supply, which goes through the straits of hormuz, we have to do it based on the international rules provided through the law of the seas that allows for transit in that area. and if iran were to engage in efforts to block the straits of hormuz, that's the very reason we have made clear that that is a red line that we would not

tolerate. we have to keep those straits open. >> thank you. >> thank you very much, senator boxer. as i recognize senator inhofe may i just say, mention to senator ritsch. we want to work closely with senators inhofe and other whose may have questions or reserveations about this, to specifically adopt in the resolution of ratification appropriate reservations and/or understandings and declarations, and we're working on some of them now, and i think as this hearing process goes on and things are flushed out where there may be those issues, we're ready to work with you to do that. senator inhofe. >> thank you, mr. chairman, and also thank you for our conversation we had on the floor a couple days ago where you did agree to hold a hearing with those who are in opposition to the ratification of the law of the sea treaty, which i am. so i appreciate that very much, and i remember so well back