Economic Factors as a RELEVANT CIRCUMSTANCES in delimitation process in law of the sea and customary international law

Economic factors may include the existence of natural resources, such as oil, gas and fish, and socio-economic factors, such as States’ economic dependency on natural resources and national economic wealth. In international adjudication, States often invoke these two types of economic factors jointly, for they are interrelated. In a general way the influence of economic factors remains modest in jurisprudence relating to maritime delimitation. The ICJ, in the Cameroon/Nigeria case, stated:
It follows from the jurisprudence that, although the existence of an express or tacit agreement between the parties on the siting of their respective oil concessions may indicate a consensus on the maritime areas to which they are entitled, oil concessions and oil wells are not in themselves to be considered as relevant circumstances justifying the adjustment or shifting of the provisional delimitation line. Only if they are based on express or tacit agreement between the parties may they be taken into account.
In fact, apart from the Greenland/Jan Mayen case, no judgment concerning the delimitation of the continental shelf or single maritime boundaries has taken the presence of natural resources into account, at least at the operational stage.
In some cases, economic factors re-entered at the verification stage as a test of the equitableness of the boundaries drawn. In the Gulf of Maine case, for instance, the Chamber of the ICJ in effect verified whether the result would be ‘radically inequitable’ or entail catastrophic repercussions for the livelihood and economic well-being of the population of the countries concerned’, and came up with negative answers. The Court of Arbitration in the St. Pierre and Miquelon case applied the ‘radically inequitable’ test which was formulated by the Gulf of Maine judgment, and concluded that the proposed delimitation line would not have a radical impact on existing fishing patterns in the area. In any event, these elements played merely a secondary role in testing whether the established boundaries produced ‘radically inequitable’ results.
In common with the jurisprudence in this field, the actual State practice appears to show that normally economic factors have not directly affected the location of boundaries of either continental shelves or single maritime boundaries. Instead, in some agreements, States have resolved economic questions flexibly by inserting common deposit clauses or by establishing regimes of joint development.
The ‘common deposit clause’ or ‘mineral deposit clause’ relates to transboundary mineral resources, including petroleum. When a party exploits a single petroleum reservoir, such exploitation will interfere with the neighboring State’s right to the petroleum in the reservoir by causing it to flow from one side of the boundary to the other. The ‘common deposit clause’ or ‘mineral deposit clause’ seeks to avoid such situations. The validity of common mineral deposit clauses was confirmed in the 1999 Eritrea/Yemen Arbitration (Second Phase).
While the concept of ‘joint development’ has not been uniformly understood, this concept may be considered as an intergovernmental agreement that aims to establish joint exploration and/or exploitation of living or non-living resources in a designated zone.
Joint development schemes may be provisional or permanent, and can be divided into two categories. The first category involves areas where maritime delimitation lines are being established. In such areas, a joint development zone is to be established, straddling a delimitation line. Concerning mineral resources, a typical example of a joint development zone may be the 1981 Agreement between Norway and Iceland. The joint development zone straddling the single maritime boundary between the parties was established on the basis of the recommendation of the Conciliation Commission in 1981. Concerning fisheries resources, the 1978 Agreement on the Delimitation of Marine and Submarine Areas and Maritime Cooperation between the Dominican Republic and Colombia established a common scientific research and fishing zone, bisected by a single maritime boundary.
The second category of joint development schemes concerns areas where delimitation was not or could not be effected. An illustrative example is the joint development zone created in the 1974 Agreement between Japan and South Korea. In the East China Sea, the claims of the parties over the continental shelf overlapped considerably. In search of a breakthrough, both parties agreed to establish a joint development zone in the overlapping area. Other examples of treaties which established the second category of a joint development zone include the 1974 Agreement between Saudi Arabia and Sudan, the 1979 Memorandum of Understanding (MOU) between Malaysia and Thailand in the Gulf of Thailand, the 1992 MOU between Malaysia and Vietnam, and the 1993 Agreement between Colombia and Jamaica.

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