Winnipeg Free Press

Winnipeg Free Press (Newspaper) - April 23, 1981, Winnipeg, Manitoba Winnipeg free press thursday april 7 focus Nixon str unrestricted passage for warships is critically important to the . A by Nicholas Burnett Washington Post second of two parts Washington 1976, while serv ing As Secretary of state in the Republican administration of Gerald Ford Henry Kissinger Laid out the Basic conditions under which the United states would participate in writing a new United nations sea Law treaty. He told the United nations that the United states would finance the enter prise a proposed new in Agency to control seabed mining development and make sure it got deep sea mining technology. The Carter administration appointed Elliot Richardson a prominent As its chief negotiator. George Aldrich a career civil ser vant became acting head of the delegation when Richardson resigned last year after almost four years on the Job. All the permanent Heads of the . Delegation have been republicans. Lee Kimball consultant to the United meth Odist Law of the sea project pointed this out last dec. 1 in a letter to the Reagan transition team. The Confer ence she wrote has been a negotiation entered into by a Republican administration conducted throughout by Republican leaders and whose major avenues of Compromise were deter mined by Republican policy experts and put Forward by Republican spokes yet it is a Republican administration that has deliberately capsized . Policy. How did this happen the Reliance of new . Delegation chief James Malone on Washington attorney Leigh Ratiner is one recent Factor. It is not the first time that the ambitious Malone who was general counsel of the arms control and disarmament Agency Acda during 1973 76, has made a controversial appoint ment. Indeed his own Job has raised questions. Democratic sen. John Glenn of Ohio held up his Senate confirmation citing a possible conflict of interest Between Malone s representation of japanese and taiwanese Power companies As a lawyer during the Carter years and his state department responsibilities today which include overseeing nuclear nonproliferation policy. While head of Reagan s transition team for Acda Malone hired an intelligence analyst named David Sulli Van. The Cia forced Sullivan to resign in 1978 after he admitted breaching the Agency s Security rules. He had shown highly classified material dealing with soviet missiles to Richard Perle then an aide to democratic sen. Henry Jackson of Washington. Yet during the transition Malone authorized Sulli Van s Access to information of the very senator Henry Jackson Type he had passed on to Perle in 1978. Admiral Stansfield Turner outgoing Cia chief was furious and Shock Waves rippled through the National Security Community. Sullivan remains at Acda. Still the change in . Policy has deeper origins than Malone s judgment of individuals. The mining Industry has Long worried about some draft treaty provisions. Thus before the dramatic events of Early March . Policy was to tighten up the mining clauses. In particular the delegation sought to protect mining operations started after the conference concludes but before the treaty enters into effect. It is important to note however that the majority of the mining consortia Only wanted the terms of the treaty changed. Most still want a treaty rather than no treaty. Without one they would not have secure title to their mines. And no Bank is Likely to lend them investment funds for 30-year projects like deep sea mines unless there is guaranteed title. Also behind the changed american policy is growing apprehension in Rea Gan s defence and Interior departments that excessive concern with one key aspect of National Security navigation rights has deflected attention from the equally important question of the Supply of essential raw materials a question Given new emphasis by the March 13 announcement of renewed purchasing for . Strategic Mineral stockpiles for the first time in 20 years the Navy for example needs to be Able to sail through Straits without surfacing its submarines it also needs special steel alloys for their hulls. The alloys require minerals like Cobalt that Are today supplied by potentially unstable places like Southern Africa but tomorrow could come from the seabed. Yet this argument goes on the third world might control the critical Ocean Henry Kissinger drafted the Nixon administration sea Law conference position now under review by president Reagan. Minerals through the Enterprise. This denial of assumed Access could jeopardize . Security. This View does not go unchallenged. It is not Clear its critics contend that Mineral supplies from say Southern Africa would be Cut off even if that simmering cauldron does boil Over. Gulf Oil has continued to produce Oil in Angola throughout its civil War and with the Blessing of its marxist govern ment. Nor is there any reason to think that Ocean mines Are any More secure than those on land. If it wanted an unfriendly country a terrorist group could surely disrupt product Ion at a facility in the Middle of the Pacific. The Reagan administration with its Strong support of free Enterprise has also Lent a sympathetic ear to those who complain that the United states has let the group of 77 the developing countries get away with too much in various multilateral negotiations who contend that America has been too soft. Among this group is senator Jackson who approves the decision to review the treaty. He told the Senate on March 10 one of the main forces in the Law of the sea negotiation is the third world drive toward the establishment of the new International economic order. This concept. Is calculated to make a fundamental redistribution of global wealth and Power from the nations of the industrialized North to the coun tries of the less developed the Enterprise the mandatory Transfer of mining technology and the controls on seabed Mineral production Are All seen by these critics As part of a soviet inspired Model of Central planning. Another alleged fault the Reagan transition teams identified in the Law of the sea delegation was that it had become too Independent its members were thought spent so Many years on the conference that they had acquired a vested interest in obtaining a final treaty. This it was Felt had clouded their judgment of the Over All . Interest. The delegation had to be made More responsive to its political masters. Thus the administration considered replacing Aldrich when it took office an action Long favored by some of the mining companies. Taking soundings on Capitol Hill the administration was told that Aldrich himself was not the problem. Delegation s instructions were too Loose and too much written by Aldrich s own office known in state department Acron Mese As a los. Even so the administration did not really focus on the Law of the sea conference until the March 2 meeting of a senior inter Agency group held at Deputy Secretary level chaired by Dep Uty Secretary of state William Clark and orchestrated by Malone according to state department sources. The meeting s outcome was never in doubt it would opt for delaying a final treaty beyond the current conference session pending a review. Yet the vehemence of those who opposed the treaty came As a Surprise. So did the Strong argument of the Deputy Secre tary of defence c. Fred Ikle head of Acda when Malone was general coun Sel that the mining clauses did affect National Security. The representative of the joint chiefs of staff however held to the traditional defence department View that navigation rights Are the principal . Strategic concern and so the treaty should be concluded quickly. A final Surprise was Clark s decision to announce the review at once. The . Delegation had no time to warn its allies or indeed key delegates from unfriendly countries. Clark had become annoyed at leaks from other inter gency meetings. So he preempted a leak for this one. Apparently he had no intention of upsetting other countries. Yet that was the result the . Delegation in new York later in the week for preparatory meet Ings was in a difficult position. The press announcement put me on the spot with other said one senior member. The wholesale firings Over the weekend added to foreign dismay at the United states. The allies Are upset at the Lack of prior notification. Some have registered Strong protests with the administration inquiring pointedly about the value of past . Assurances. The administration is no longer prepared to assure other countries that it remains committed to the parallel mining sys tem to the principle of common Heri or indeed to having a treaty at All. There is now a real possibility that the treaty a Compromise As we have seen will collapse. The group of 77 is furious because Many of its members genuinely believe they have made important concessions Over navigation rights. If the United states decides As a result of the review that it will reopen the mining sections of the treaty the third world May very Well reopen navigation and overflight rights. Did this have to happen if the administration had decided earlier what it wanted it could probably have avoided the mess it has created. With better planning with forethought the United states could have preserved the diplomatic capital amassed Over seven Long years Only to be thrown away in five Short Days. I had the says demo cratic rep. Berkley Bedell of Iowa a congressional adviser to the delegation who was in new York for the first week of the conference and spoke to a num ber of other delegations that if the administration had gone up to the ses Sion and said look we really want to see a treaty and to get it ratified but Well have trouble with the Senate unless there Are some then other nations would have been recep Tive and would have tried to see if they could do instead there is now the administration will Promise nothing except that it is across the Board and will be completed As rapidly As possible certainly this Calendar Malone told the Senate foreign relations committee. As the review proceeds this Republican administration will do Well to remember a prominent Republican s testimony before the House for eign affairs committee on dec. 19, 1979. It must be recognized that any treaty that has any Prospect of wide spread acceptance will have costs As Well As said Elliot Richard son. Its measure is not whether it is better than the Law As we would write it if we could. The measure is whether it is better than the situations most Likely to evolve without Nicholas Burnett is a Washington based free Lance writer on economics and International affairs. Alcan Hydro demand raises some questions with the tories preening in the Back ground Don Craik presented the latest chapter in the Mega project Saga. The negotiations Between the Provin Cial government and the aluminium company of Canada had progressed beyond the in due course chapter and reached the letter of intent stage. Like Many tales there were numer Ous plots within the government Sce Nario but All had a common theme. Somewhere Over the Rainbow was the pot of Gold where projects would be developed new Prosperity would come to the province and everyone would live happily Ever after. As everyone knows those projects included the Western Power Grid additional capital investment in Manitoba Forest industries Complex a Potash mine at St. Lazare the aluminium smelter and ultimately Hydro expansion. Each of those plans had been part of the scheme enunciated in almost every throne speech and budget address. While the government originally talked primarily about stimulating the private sector it has become increasingly aware of the need for some Public participation. Certainly the introduction in 1979 of the five year Hydro rate freeze was an indication of that approach. As the 1980 throne speech noted a under the dome Arlene Billinkoff program of measures was needed to stimulate and encourage stable Long term economic growth. At the heart of that strategy lies the sound and orderly development of our Hydro electric the most recent throne speech went into More detail. The Power Grid would be moving before too capital refinancing of Man for was not too far in the and an interesting announcement was expected on the Potash development. And the Alcan project it was bound to Hydro. Because the government in tended to use electrical Power to create Industrial development it was at tempting to lure the company into establishing a primary aluminium production and processing capacity in the province. Not Only would such a project create More than 700 jobs it would require the expansion of Hydro generating capacity. Construction of the billion Limestone Plant would begin almost immediately after a final agreement was reached with Alcan and additional plants would be needed if the Western Power Grid became a reality. With that thought the government prepared its own study and then approached Alcan in july 1979. While the work had been very preliminary the rumours became so rampant it was necessary to Clear the air and in octo ber 1980, the first formal announce ment was made. Nothing was definite stated officials on both sides. Alcan was not desperate for the Manitoba site since it was already working or planning work in Quebec and British Columbia As Well As in other countries throughout the world. Manitoba with a disadvantage because of its distance from Ocean ports had one major at traction Low priced Hydro electric Power. Alcan required about 400 megawatts 24 hours a Day and the Hydro Price seemed right. But was the Price right enough the Alcan officials said the company needed a massive Supply of cheap Power guaranteed for at least half a Century before building the smelter in order to offset the heavy costs of transportation. Without Long term Power arrange ments we cannot risk the invest an official said. With a projected construction Cost of million it was understandable Why the company did not jump into the scheme. In fact it was not even willing to proceed with a full scale feasibility study until there was some Assurance of a constant Supply of Power. That Assurance was Given this week in a manner which appalled the opposition. According to the letter of intent Alcan will require a minority undivided ownership interest in a Power Sta Tion to establish a firm Power base and by virtue of that interest the company would be granted a water licence for 35 years with renewal provi Sions for further terms of 15 years each. Should a government give equity ownership in a Public Utility to a private company asked Sidney Green privatization set a bad precedent noted Howard Pawley. The concept was abhorrent to them but the government was proud of its accomplishment. As Craik explained it was a two Way Deal. In Exchange for a minority share Alcan would assume its full share of the Cost for a Power station including construction costs interest and other expenditures thus providing enormous Cost savings to Hydro rate payers. With the company spending almost billion the minister believed this arrangement would Best ensure that the rates would be kept As Low As possible. It was the proper step. At least a step had been taken but it should be noted that it was merely one More step in a very Long journey. The letter of intent states that if by july 1, 1982, a mutually satisfactory agree ment is not reached either party May terminate the agreement for the moment Alcan was about to begin a million feasibility study and while the company president Patrick Rich said this step was an indication that Alcan was hopeful about the eco nomic viability of the project i must underline that no matter How optimistic we Are at this Point a feasibility study does not mean we have already decided to build a the Saga will continue to unfold. In july 1982, the government will learn if the Alcan episode will have a Happy ending. Doonesbury a6e, Surprise of those Noo survival. urn. Wats accurate k 6keat where and nine can i 6stw inches. I ;