Bottom Line
Joint development in disputed off-shore areas
COASTAL states have to delimit their sea boundaries with neighbouring states. Maritime delimitation law is complex and evolving. The law is largely composed of the relevant provisions of the 1982 UN Convention on the Law of the Sea (UNCLOS), and jurisprudence as gleaned from judgments of the International Court of Justice (ICJ) and other international tribunals.
The UNCLOS accords top priority to conclusion of bilateral agreements on maritime delimitation based on the principles of fairness and justice.
One crucial point must be made clear; the method applicable in delimiting the maritime boundary between opposite states (India-Sri Lanka) is not relevant to lateral or adjacent states (Bangladesh-India or Bangladesh-Myanmar). An unfair agreement does not last long, and exacerbates tension between the countries concerned.
What to do with disputed or overlapping off-shore areas?
Ordinarily, the delimitation of a maritime boundary takes a long time. If there is an issue of overlapping maritime areas that are disputed and unresolved, the question is whether they should remain unexplored or whether they should be jointly explored until the area is finally delimited. According to Blake and Swarbick (1996), there are only 136 maritime boundaries wholly or partially agreed, out of 379 in the world, as of 1996. In other words, there still remain hundreds of potential maritime boundaries yet to be delimited. The experience and lessons of many states are of adherence to a provisional agreement of joint development and exploration of resources in overlapping or disputed off-shore areas. Joint development
The idea of joint development of off-shore oil and gas is not new, dating back to the judgment of the International Court of Justice in the North Sea Continental Shelf of 1969. At that time, the Court referred to the possibility of parties deciding on "a regime of joint jurisdiction, use or exploitation for the zones of overlap or any part thereof." Joint development is merely an alternative to a situation where maritime boundary agreement is yet to be delimited. Once interested states feel the need to explore or exploit a resource in off-shore areas, which lie in overlapping or disputed areas, there are two practical choices: one is to determine the definite boundary and the other to share the resource until an agreement is concluded. In the case of joint development, both parties put aside their contested positions, meaning that status quo of the area is preserved or undisturbed. Both sides generally make concessions on a reciprocal basis concerning the principles and methods to be applied as the basis for delimitation of exclusive economic zones/continental shelf. Such reciprocal concessions are made without prejudice to the official position of the respective parties on the question of maritime delimitation. Another noteworthy, though incidental, point is that it can have a by-product of defusing tension between the agreeing states, while they remain unable to agree on boundary delimitation because of their adherence to their respective positions. A joint development agreement will generate revenue for them, which may last for a certain period of time until the area is delimited. Examples of joint development agreements
Saudi Arabia-Bahrain Agreement of 1958, Kuwait-Saudi Arabia Agreement of 1965, Iran-Sharjah Agreement of 1971, Japan-South Korea Agreement of 1974, France-Spain Agreement of 1974, Iceland-Norway Agreement of 1974, Saudi Arabia-Sudan Agreement of 1974, Australia-Papua New Guinea Agreement of 1978, Malaysia-Thailand Agreement of 1990, and Thailand-Vietnam Agreement of 1992 on Joint Development Zones, are some of the instances in point. Among the texts of joint development agreements, the most detailed is the Timor Gap Treaty of 1989 between Australia and Indonesia. The Malaysia-Thailand Agreement, like the Australia-Indonesia Treaty, establishes a very powerful joint authority, which assumes the rights and responsibilities of the parties in the described zone of cooperation. This Authority is an international organisation with legal personality, which manages the aggregate of activities in the area, including the terms of contracts. The settlement of disputes is to be undertaken only by means of consultation and negotiation; the latter Treaty, however, provides for binding commercial arbitration for production-sharing contracts. In 2006, China and Vietnam agreed to increase joint oil and gas exploration efforts in the Gulf of Tonkin, and would continue talks about disputed maritime areas further south. "Both sides ... agree to step up the speed of cooperation in cross-border prospecting for oil and gas in the Beibu Gulf," state newspapers said, citing a joint declaration from the official Xinhua news agency (Beibu Gulf is the Chinese name for the Gulf of Tonkin, an area of sea between northern Vietnam, southern China and the Chinese island province of Hainan). It is reported that on June 18th, Japan and China struck a landmark deal to jointly develop gas fields in the East China Sea, resolving a spat that has been a thorn in ties between the two major energy importers. Another quite different approach is one which entrusts an international organisation or commission with the basic decisions relating to exploration and exploitation. Saudi Arabia and Sudan have established one such commission for the exploitation of metalliferous deposits in the Indian Ocean, which grants licences and concessions, supervises exploitation, and determines the applicable law. Joint development and management zones have thus far played a useful role in relation to the exploration and exploitation of deposits connected with boundaries between states, in the process of agreeing on a delimitation of the sea boundary, and in situations where delimitation is pending. There is a trend here which is likely to continue in view of the fact that such arrangements provide a management tool in situations which otherwise would lead to disputes and confrontations. Although such zones have been mainly devised in relation to no-living resources, there is no reason to prevent their utilisation with respect to other uses of the sea. In point of fact, some of the most recent agreements have included clauses on cooperation regarding living resources, the environment, scientific research, search and rescue, and other issues. This may well be an area of expansion for such zones in the near future. Both the law and the practice discussed in the foregoing paragraphs reveal that there is ample ground for cooperation and understanding in the context of agreed joint regimes, even in situations of disputed claims. Given the days of energy short-fall and extraordinarily rising prices of oil and gas, exploration of maritime areas in the Bay of Bengal has become more urgent than it was in the past Against the background of joint developments in off-shore areas across the world, it is argued that Bangladesh and its neighbours -- India and Myanmar -- may seriously consider discussing and concluding joint development agreements until final maritime boundary delimitation in the Bay of Bengal is agreed upon. The decisive issue is whether Bangladesh and the neighbouring states are willing to conclude such arrangements for their benefit. If neighbouring states in other parts of the world could do it, one may ask why Bangladesh-India-Myanmar can't agree to a similar agreement of joint development in disputed off-shore area.
Ordinarily, the delimitation of a maritime boundary takes a long time. If there is an issue of overlapping maritime areas that are disputed and unresolved, the question is whether they should remain unexplored or whether they should be jointly explored until the area is finally delimited. According to Blake and Swarbick (1996), there are only 136 maritime boundaries wholly or partially agreed, out of 379 in the world, as of 1996. In other words, there still remain hundreds of potential maritime boundaries yet to be delimited. The experience and lessons of many states are of adherence to a provisional agreement of joint development and exploration of resources in overlapping or disputed off-shore areas. Joint development
The idea of joint development of off-shore oil and gas is not new, dating back to the judgment of the International Court of Justice in the North Sea Continental Shelf of 1969. At that time, the Court referred to the possibility of parties deciding on "a regime of joint jurisdiction, use or exploitation for the zones of overlap or any part thereof." Joint development is merely an alternative to a situation where maritime boundary agreement is yet to be delimited. Once interested states feel the need to explore or exploit a resource in off-shore areas, which lie in overlapping or disputed areas, there are two practical choices: one is to determine the definite boundary and the other to share the resource until an agreement is concluded. In the case of joint development, both parties put aside their contested positions, meaning that status quo of the area is preserved or undisturbed. Both sides generally make concessions on a reciprocal basis concerning the principles and methods to be applied as the basis for delimitation of exclusive economic zones/continental shelf. Such reciprocal concessions are made without prejudice to the official position of the respective parties on the question of maritime delimitation. Another noteworthy, though incidental, point is that it can have a by-product of defusing tension between the agreeing states, while they remain unable to agree on boundary delimitation because of their adherence to their respective positions. A joint development agreement will generate revenue for them, which may last for a certain period of time until the area is delimited. Examples of joint development agreements
Saudi Arabia-Bahrain Agreement of 1958, Kuwait-Saudi Arabia Agreement of 1965, Iran-Sharjah Agreement of 1971, Japan-South Korea Agreement of 1974, France-Spain Agreement of 1974, Iceland-Norway Agreement of 1974, Saudi Arabia-Sudan Agreement of 1974, Australia-Papua New Guinea Agreement of 1978, Malaysia-Thailand Agreement of 1990, and Thailand-Vietnam Agreement of 1992 on Joint Development Zones, are some of the instances in point. Among the texts of joint development agreements, the most detailed is the Timor Gap Treaty of 1989 between Australia and Indonesia. The Malaysia-Thailand Agreement, like the Australia-Indonesia Treaty, establishes a very powerful joint authority, which assumes the rights and responsibilities of the parties in the described zone of cooperation. This Authority is an international organisation with legal personality, which manages the aggregate of activities in the area, including the terms of contracts. The settlement of disputes is to be undertaken only by means of consultation and negotiation; the latter Treaty, however, provides for binding commercial arbitration for production-sharing contracts. In 2006, China and Vietnam agreed to increase joint oil and gas exploration efforts in the Gulf of Tonkin, and would continue talks about disputed maritime areas further south. "Both sides ... agree to step up the speed of cooperation in cross-border prospecting for oil and gas in the Beibu Gulf," state newspapers said, citing a joint declaration from the official Xinhua news agency (Beibu Gulf is the Chinese name for the Gulf of Tonkin, an area of sea between northern Vietnam, southern China and the Chinese island province of Hainan). It is reported that on June 18th, Japan and China struck a landmark deal to jointly develop gas fields in the East China Sea, resolving a spat that has been a thorn in ties between the two major energy importers. Another quite different approach is one which entrusts an international organisation or commission with the basic decisions relating to exploration and exploitation. Saudi Arabia and Sudan have established one such commission for the exploitation of metalliferous deposits in the Indian Ocean, which grants licences and concessions, supervises exploitation, and determines the applicable law. Joint development and management zones have thus far played a useful role in relation to the exploration and exploitation of deposits connected with boundaries between states, in the process of agreeing on a delimitation of the sea boundary, and in situations where delimitation is pending. There is a trend here which is likely to continue in view of the fact that such arrangements provide a management tool in situations which otherwise would lead to disputes and confrontations. Although such zones have been mainly devised in relation to no-living resources, there is no reason to prevent their utilisation with respect to other uses of the sea. In point of fact, some of the most recent agreements have included clauses on cooperation regarding living resources, the environment, scientific research, search and rescue, and other issues. This may well be an area of expansion for such zones in the near future. Both the law and the practice discussed in the foregoing paragraphs reveal that there is ample ground for cooperation and understanding in the context of agreed joint regimes, even in situations of disputed claims. Given the days of energy short-fall and extraordinarily rising prices of oil and gas, exploration of maritime areas in the Bay of Bengal has become more urgent than it was in the past Against the background of joint developments in off-shore areas across the world, it is argued that Bangladesh and its neighbours -- India and Myanmar -- may seriously consider discussing and concluding joint development agreements until final maritime boundary delimitation in the Bay of Bengal is agreed upon. The decisive issue is whether Bangladesh and the neighbouring states are willing to conclude such arrangements for their benefit. If neighbouring states in other parts of the world could do it, one may ask why Bangladesh-India-Myanmar can't agree to a similar agreement of joint development in disputed off-shore area.
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