we need to be able to play any card at our disposal, and we think we will have more cards, if we're a member, than if we're not a member. >> thanks. thank you, mr. chairman. >> thank you, senator, and i just would point out to the senator, we'll go into this further, but the -- the -- veto, you are yecorrect, is not withi the assembly, but there is a restriction specifically defined within the treaty as to what it could go to the assembly, and the royalties are specifically reserved to the council to send, and that has to be by consensus. and consensus is specifically defined as requiring any formal objection. so -- >> i'd like to get into that,

because it begs two questions. first of you a, sudan is on the council. if we have a veto, they have a veto. their interests is very different than ours. is there a question about whether they're on the council or not? >> they are a member -- they've exceeded to the convention. >> uh-huh. >> and they're on the council of the -- >> well, you know, a lot of member states and 160 of them are technically within an all-member body, but all the important decisions are made by the council, and there is absolutely nothing in this convention which says that -- >> i'm speaking of the council. looking at the list of members right now and sudan is on it. and so if we have a veto, they have a veto. it's just something we need to look into. again, the devil's in the details. we've talked about some theoretical advantages that might address some navigation issue, but that only assumes if

other countries are playing by the rules, there's very little indication within the treaty convention of the members already that that's happening. or that we can count on it in the international community as we go forward. but, again, i want to thank awful the -- >> let me just say to the senator, for the period of time that sudan is on the council, it is possible, hypothetically, that they could be doing something and therefore wind up with gridlock and they would look like the united states senate, or congress. but the fact is they're not a permanent member of the council. >> uh-huh. >> we are. and as a permanent member of council, in fact, i think we're the only permanent member. and so we stand in a very special status that we are not currently able to exercise, and i think with respect to the senator's fears, and other fears, what you're trying to protect is something that would

go against the interests of our country. that's what we need to be able to protect. if sudan votes to do something or blocks us from doing something that we're interested in doing, then there are plenty of other avenues of recourse for that, too. >> uh-huh. >> but if you're dealing with the oceans and dealing with this question of royalties and other things, the fact that we would preserve the right to protect our interests, i think what the senator and others have raised as an issue is, they don't want money going to dictators. they don't want money going to bad actor countries. we can block that. we can block that until the cows come home. and so i think we can be protected. so, again, we'll go into that, and while the veto word is not used, also not used, incidentally, in the constitution of the united states, but nobody doubts the president has it. so we have the ability to be able to do it through the language that is there, and that will become, i think, more clear as we go forward. senator kuhncoons.

>> thank you. i appreciate you all being leer. senator webb and i send senator kerry and senator lugar urging to move forward and i'm grateful for your broad and searching and supportive testimony here today. when i was brandied to the senate, one of the earlier meetings i took was with the then outgoing chief of naval operations admiral gary roughen. when i asked him what is the single most important thing we could do to ep help the navy over the next decade, without hesitation, ratified the law of the sea treaty. ip was taken aback. as it turned out, admiral ruffin's estimation is shared by every living naval chief of operations, every living

secretary of state and secretary of defense, supported by you today. i note that former senator warner, forman chairman of the armed services committee, former secretary of the navy is with us today and i have a copy of a letter he submitted to then chairman biden and ranking member lugar commenting on incoming chief of navalmiral rud given support of this. my concern, mr. chairman, members of the panel, is that this is the treaty that time forgot nap we are locked in a debate that is literally decades out of date, and i understand some of the concerns raised by members of this committee. there william some flaws and issue as in this treaty when first negotiated in '82. many of them hammered out, resolved by '94 by amendments. certainly by the time this was previously considered several times by this committee during your service here, senator, now

secretary, i believe it is well past the time when the questions and concerns raised here today were compelling, and if i have to face questions about whether this is a critical firefight in the defense of american sovereignty, or a self-inflicted wound in a rapidly emerging global theater where our competitors are taking advantage of our absence, that empty seat at the table, then i would rather take my naval strategic advice from the chief of naval operations and chairman of the joint chiefs of staff and secretary of the navy thannen from the editorial pages of the "washington times." frankly, if i could, i have a few questions i'd like to ask you, but i think what you've laid out here today is an overwhelming response to the question, is the ratification of this treaty in the best interests of the united states? senator menendez before me asked in rapid force succession a series of questions. does it any any way put the united states in the threat? kprap mize the sovereignty of

the united states, compromise intelligence gathering ability. my recollection is, you all said no. let me put it in the opposite. does failure to rat phi this treaty, general dempsey, compromise united states the project force around the world and meet the threats within the con straights we have in a balancened and responsible way? are we are at risk at a result of failure to ratify this treaty? >> based on customary international law we will, of course, assert or sovereignty pab ability to navigate. it won't deteriorate. our ability to project force will not deteriorate. what could cause, if we do not ratify over time what could happen is that we put ourselves at risk of confrontation with others who are interpreting customary international law to their benefit. so the risk of confrontation

goes up. our ability to project power is unaffected. >> so failure to ratify puts us as some greater risk of conflict. you are confident we continue to the have the resources to meet that, but we are as it were, unilaterally choosing not to use one potential tool for our national defense? >> i would agree with that phraseology. >> and secretary panetta. >> if i might -- >> senator, let me justic ma the point. didn't does put us at risk and the risk is this. that if we face a situation that involves navigational rights, if we are not a party to this treaty, and can't deal with it at the table, then we have to deal with it at sea with our naval power. and once that happens, you clearly increase the risk of confrontation. >> well, and if i might, secretary panetta, given the pacific pivot, given the

aggressive expansion action others referred to in the south china sea by china and others, in your view, does this put our allies at any risk in terms of their confidence about our willingness and ability to fight for their territorial issue, to fight for their freedom of navigation of the seas? >> well, you know -- the majority of our allies are signatories. they've exceeded to this convention. they're a part of it, and they have a difficult time understanding why we aren't there at the table alongside of them. making the arguments we need to make. sure, you know, they know we're a strong naval power. they know we can exert ourselves militarily wherever we want to, but they also know that in today's world, they are dealing at the table trying to negotiate resolutions to conflicts be in a rules-based manner. that's the way to deal with issues like that.

and somehow they're concerned, and i think rightly so, that a great power like the united states is not there alongside them. >> secretary clinton, if i might, in 2007 during a previous consideration or debate over this treaty, senator murkowski voted for tconvention. then governor sarah palin. it would extend our reach and provide predictability for investment for oil and gas extraction, for transoceanic cable, sea bit lining a whole variety of things that are newly emergent opportunities, and in the arctic, if we remain the only arctic nation to not ratify the treaty, puts us at some risk, both in terms of defending shipping lanes and commercial opportunities for our own country. what challenges is the state department facing in protecting u.s. 2re69s in the northwest passage in the arctic and in your view are we at some risk fb we fail to rat phi the treaty?

>> one of the reasons there has been strong bipartisan support coming from alaska over the last decades is because they are truly on the front lines. we know there are natural resources that are likely to be exploitable, if we have the opportunity to do so. and so i think, senator, the -- you know, the fact that we are an arctic nation. the only arctic nation has not taken the step of exceeding to the convention, and thereby being able to demarcate our continental shelf and our extended continental shelf is seen in alaska as a missed opportunity, and a strategic disadvantage that is increasingly going to make us vulnerable as the waters and the weather warms, and there are going to be ships from all over the world, exploring, exploiting, fishing, taking

advantage of what rightly should be american sovereign territory. and you know, nobody wants to see that happen. >> madam secretary, mr. secretary, and mr. chairman joint chiefs, i am grateful for your testimony today and instruct mr. chairman in listening to the testimony, reading the background materials and reflecting on it how a fight over some of the details of this treaty that was largely resolved in our favor, in '94, remains frozen in time. and i conclude from what i've heard so far today that the real risk we face is that we are letting others draw boundaries. letting others set rules. we are leaving our economic interests out of the fight and we are putting our national security interests at risk by failing to ratify this treaty. thank you, mr. chairman. >> thank you very much, senator. appreciate it. senator lee? >> thank you, mr. chairman. i thank each of witnesses for joining us today. i am one of the people who has concerns with this treaty, and i assure you that my concerns are rooted in something more than

mythology. they're rooted in something more than an editorial page. they are rooted first and foremost in america's national sovereignty and i think that is not something that is to be discounted here. one of the exchanges that i've appreciated during the course of our discussion this morning has surrounded the, what has been described at times as the veto on the council. i want to drill down on that issue a little and make sure i understand it correctly. my reading of article 158 of the treatsy that it creates three basic bodies. it creates the assembly, it creates the counce il and the secretariat, as outlined in section 1 of article 158. now, in article 160, we have a basic definition of the purpose of the assembly, and it describes that purpose as follows -- it says that the assembly shall be considered the supreme organ

of the authority. meaning the international sea bed authority based in kingston, jamaica. then we move to article 162, which describes the purpose of the council. this is the body, the 36-member body, not to be confused with the 160-plus member body that is the assembly. the council, as i understand it, is empowered to do a number of things, including to exercise the power outlined in section 2 of article 162, subsection "o" 1. which is to recommend to the assembly rooms, regulations and procedures on the equitable sharing of financial and other equitable financial areas and payment and contributions made pursuant to article 82. these are the royalties. the escalating royalties that begin at 1% five years into the

operation of the treaty, escalate gradually up until they get to 7% where they remain thereafter, once they achieve that level. it appears to me based and my reading of article 162, that the power of the council, this body in which the united states has a seat and has what you've described as veto power, is a recommending body. and it appears also to me as i look back at 160, section 160, subsection 2g, that it is up to the assembly and not to the council to decide upon the equitable sharing of financial and other economic benefits from activities in the area. so secretary clinton, i was wondering if you could help me understand. is my reading correct or am i missing something? >> senator, the assembly cannot take up an issue unless

recommended by the council. any decision that would impose any obligations on the united states or otherwise deal with substance must go through the council. the secretariat has no decision-making authority. so in effect, the practical consequences of this is that the united states would have the right to reject or in our parlance, veto, any decisions that would result in a substantive obligation on the united states or that would have financial and budgetary implications, and that is duf due to the fact is u.s. is unique in having a seat on the council, on the main decision-making body, and that important decisions must be made by consensus. so it is our very strong conviction that as a party, the u.s. would have an unprecedented

ability to influence the deep sea bed mining activities worldwide. there is no other international organization that gives one country and one country only a permanent membership on the key decision-making body. so as examples of decisions, subject to u.s. approval, would be any room, regulations or procedures, implementing the sea bed mining regime or amendments thereto, any decisions relating to the distribution of payments for oil and gas production on the continental shelf beyond 200 nautical miles, adoption of any amendments to the sea bed mining regime and finally, you know, i think it is worth saying, and this really echoes something that the chairman said. royalties under this convention are not a net loss to the united states, but a net gain, because companies will not drill that far out. so there is no money that would

be coming to the treasury or to the profit of the companies, and if we're a party, we gain from both domestic royalties and oil production. so you know, i know that there is with any written document, and i am a recovering lawyer. so i have been in this position in my past life. there is a way to you know, raise questions about where the comma is placed or where the, you know, the parentheses occurs, but this debate over this convention has now gone on fore for 20 years, and when you look at the people from jim baker to condi rice to george shultz, stephen hadley who supported this in both administrations, republican and democratic, i just don't think we're all missing something, senator. i think that we are trying our best to make a case that the

united states will be advantaged and that in fact our sovereignty advanced. >> thank you, secretary clinton and i appreciate your analysis on that. the fact that is your position, that it is the position of the administration. as i read -- as i, too, am a recovering lawyer, we have to call ourselves recovering rather than cured or ex-lawyer, as i read this, i see the fact that the assembly shall be considered the supreme organ and i also see that the assembly and not the council has ultimate power to decide upon the equitable sharing of financial and other benefits. and so that causes me to ask the question, what if those who serve on the assembly disagree with your interpretation? i understand it's your interpretation and that of the administration and i also understand it's your interpretation and that of the administration and that of the united states of america, you could say, that the treaty does not, as you point out, adopt any

framework to tie the united states into a climate change controlled regime or any kind of system that could limit the emission of greenhouse gases, but in that context, the climate change context and in this but in that contech, the climate change context and this contech, what happens if we take a different position. the context could not be assembled, reach another conclusion, read several provisions of the treaty, including articles 207 and 212 coupled with the dispute resolution provisions of annex six. could it not take that interpretation and conclude differently from the conclusions you've reached today? >> well, we do not believe that they could on either the plain reading or the intent of the convention but we also believe,

senator, that concerns such as these are not only going to be properly vetted in the series of hearings but certainly can be taken into account with the resolution and ratification. there is no obligation that the united states in the area of climate change would be forced to accept or adopt by anything done by the assembly under the convention on the law of the seas. but in an abundance of caution, that could certainly be clarified and insisted upon in ratification resolution language. >> i see my time has expired, mr. chairman. as i close i point out not just the assembly. we could get hauled into a tribunal called for under the annex. at that point, if this is a ratified treaty, arguably our courts would be bound to enforce the judgments of an international tribunal convened under the authority. thank you.

>> certainly. i'm just checking in on that. it's my understanding we would not be subject to that because we would be able to choose arbitration and the arbitration is actually limited. but i see you're ready to leave? >> well, yes, so arbitration. we get two arbitrators and the other side gets to choose two. if we can't come to an agreement as to the fifth, then that person is chosen, i believe, by the secretary-general. >> but limited to what it is. we're going to go through this. we'll go through it and clarify. as the secretary said, we're not going to subject ourselves -- this exercise is not to diminish our sovereignty, it's to grow

our sovereignty. we believe this treaty in its whole will grow sovereignty. we hope we can persuade you of that in the end. so we have the ability, through the ratification process to be able to clarify some of that. secondly i believe it will be clarified. i think even your initial question, if you look at the -- i think it's 160 g that you referred to about the rules and regulations. they are only able to make that decision in the assembly, quote, consistent with the convention and the rules and regulations and procedures of the authority. the rules and regulations and procedures of the authority are specifically set by the council. that is how it works and how it does work. in the end the authority is simply implementing what is put forward and we have a veto over what that rule or regulation

will be that they are implementing. again, this will be clarified appropriately and we'll have experts that will make that clear. i'd like to ask. i think it will be helpful, madam secretary and mr. secretary if your legal teams will put their heads together. i'm going to leave the record open for a week. if you could submit your formal understanding of that to answer the senator's questions, i think that will be particularly helpful to the record. >> we'll be happy to, senator. >> senator lugar, do you have any questions? on that basis i'll thank all of you. i think this has been a terrific opening engagement. i appreciate, obviously, the focus of everybody on it. i'm confident these questions will be answered going forward. there's going to be plenty of opportunity. we will have more of the active commanders of each of the areas of concern who will speak to

their experience in the field. we will have businesses themselves come forward. we'll have some other groups and entities who are concerned and have plenty of opportunity to v vet this as we go forward. this is a terrific beginning to the process. we're going to build the most extensive, exhaustive record ever built on this and provide colleagues in the senate with ample opportunity to be able to make a sound decision. with that we thank you very, very much for joining us today, and we thank you for the jobs you are doing all of you. appreciate it very much. we stand adjourned.

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