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Environment & Poverty Times No. 5

Extending the maritime rights of states to battle poverty

By Karen Landmark, GRID-Arendal

Imagine living in – or being leader of – a country with a stagnant economy, coping with severe poverty and general chaos. Yet your country has wealth potential: it has an extended coast line and, under the sea surface, a seabed and a continental shelf. According to international law, it could be possible to extend rights over that area, thus giving your country access to valuable resources like oil, gas and minerals and, if managed in a sustainable way, these could then offer the potential of boosting the economy and lifting hundreds of thousands of people out of poverty. The big problem is that the process involved in gaining these rights is a costly business – also submissions on establishing the outer limits of such continental shelves have to be put forward by May 2009.

Today, this is the reality for many coastal developing states and so-called Small Island Developing States (SIDS). While some countries have already handed in their claims or are in the process of doing so, many will struggle to meet the 2009 deadline and therefore end up with their rights over potential resources undefined, missing the chance of radically changing their economic circumstances.

Extending rights on a continental shelf can have a huge impact on a state. At present the most immediately attractive natural resources for coastal states are oil and gas. With recent developments in offshore exploration and extraction technology, exploitation of deep marine hydrocarbon reserves is becoming economically viable, says Morten Sørensen, Manager of

UNEP’s Shelf Programme. The Shelf Programme, coordinated by GRID-Arendal in Norway, was established specifically to help SIDS complete the various tasks required in order to delineate the outer limits of their continental shelves and meet the 2009 application deadline.

In addition to hydrocarbons, marine minerals and metals including gold, silver and diamonds, as well as industrial minerals, are also becoming an important source of revenue for coastal states, says Sørensen.

Sørensen says science is only just beginning to discover the extent of living resources that exist both on the continental shelf and on the deep ocean floor – resources which can be used to provide considerable economic benefits. Apart from the fisheries potential of shallower waters, the biodiversity present in cold waters of the deep ocean and its hydrothermal systems may also become vital economic resources in the future. Such resources might include valuable ingredients for the pharmaceutical and manufacturing industries. The science and technology for extracting benefits from these resources is now in its infancy but before too long their worth might be proven remarkable.

Working for an environmentally-focused organization, Sørensen points to the importance of sustainable management of any resources found.

Protecting the environment by properly managing sustainable development can lead to economic benefits in its own right. Mitigating and preventing maritime pollution on sensitive ecosystems is also of vital importance. Marine Protected Areas (MPA) are an excellent example of the way in which economic benefits can be gained through protection measures. MPAs are becoming increasingly common around the world and serve to both promote eco-tourism and help lead to productive ecosystem recovery. MPAs that exist on a state’s extended continental shelf can influence the health and productivity of fishing grounds within a state’s jurisdiction.

The process of delineating the outer limits of a country’s continental shelf comes under the jurisdiction of The United Nations Convention on the Law of the Sea (UNCLOS). Article 76 of UNCLOS deals specifically with the rights of coastal nations and island states over the seabed and sub-seabed beyond their 200 nautical mile exclusive economic zones.

Perhaps the most important factor in delineating the outer limits of the continental shelf relates simply to a state’s sovereignty. Article 76 has mechanisms that allow states to define the full extent of their maritime jurisdiction and responsibilities. Regardless of the resource potential of the continental shelf, a state has an obligation to ensure all its territorial rights are secured for future generations. The right to actively manage both the environment and natural resources is an inherent component of statehood that extends from land to marine territory.

World Poverty Distribution

Sørensen concludes that the Article 76 process of delineating the outer limits of the continental shelf is of profound historical significance: it strives to be inclusive of all coastal and island states, seeking in the process to offer much needed assistance to often poverty-bound and economically stagnant countries.

Forthcoming: Natural Resources and Pro-Poor Growth

Natural capital constitutes a quarter of total wealth in low-income countries. For the poorest in these countries – notably those living in rural areas – soil, water, fisheries, forests and minerals are the principal sources of income. Thus, to achieve pro-poor economic growth, low-income countries should build on the natural resource assets of the poor.

Natural Resources and Pro-Poor Growth, forthcoming under the DAC Guidelines and Reference Series, demonstrates that the management of natural resources is critical to poverty reduction and highlights the contributions of natural resources to growth, employment, exports and fiscal revenues.

It is divided into two parts: Part I provides an overview of the economics and politics of natural resources. It describes the unique features of natural resources and resulting management challenges, the role of sustainable natural resource management in supporting pro poor growth, and the politics and governance of natural resources. It then offers recommendations for policy makers on how to support the approaches advocated in the paper. Part II examines these issues with respect to seven specific natural resource sectors: fisheries, forests, wildlife and nature based tourism, soil productivity, water security, minerals, and renewable energy.

Natural Resources and Pro-Poor Growth is of interest to a wide audience and is specifically tailored for policy makers and economic decision-makers from development co-operation agencies and ministries of finance and planning in partner countries. It highlights the importance of policies encouraging the sustainable management of these resources. Moreover, it emphasises the need to address the political challenges of natural resource management for long-term pro-poor economic growth.


The economy of legal wildlife trade

Managed wildlife trade can be beneficial to species and habitat conservation, as well as contributing towards livelihoods and social development.

While the effect of trade in wild species upon local economies can be substantial and can increase significantly to rural incomes, the high value of wildlife products and derivatives can also provide positive economic incentives to provide an alternative to other land use options for the local people – to protect wild species and their habitats, and to maintain the resource for sustainable and profitable use in the medium and long term.

Legal international wildlife trade, according to one estimate, was worth around EUR 240 billion (USD 300 billion) in 2005, most of it accounted for by timber and fisheries. Illegal trade is big business too. By its nature, the scale of illegal wildlife trade is impossible to know precisely. One guess puts the value of illegal caviar trade at many times that of legal commerce – itself worth EUR 244 million.

International trade restrictions such as CITES – the Convention of International Trade in Endangered Species of Wild Fauna and Flora – seem to be insufficient to address the harmful forms of wildlife trade. A better understanding of the trade dynamics, the incentives for better management of wildlife under threat and the engagement of stakeholders at all levels and places are needed to avoid people, previously dependent on the trade, deciding to trade wildlife illegally in order to maintain their income.