Italy: The Legal Status Of The Caspian Sea And Its Exploitation Regime

Last Updated: 9 January 2002
Article by Tito Ballarino

Notwithstanding many physical similarities with maritime basins (among which its salt water and the existence of a continental shelf), the Caspian Sea is under a juridical point of view an international lake. As a matter of fact, it hasn't the direct connection with the oceans necessary for the application of the international law of the sea.

According to international law the main difference between seas and lakes lies in the fact that, while sea waters surround the continents, keeping distinct, lake waters are surrounded by States territories in a way that they are attracted by those territories in the sovereignty of the respective States. This distinction is based on the fact that the real purpose of international law is not so much the ruling of spaces in them, rather than of the possible activities in the same spaces.

Hence, as for the seas the predominant principles are the freedom of international traffic and of the exploitation of the high sea resources, common heritage of the human race. To enforce these principles the maritime spaces delimitation systems set strong limits to the sovereign claims of coastal States. The recognition of a territorial water belt is therefore an exception due to their accessory nature in respect of the littoral territory.

On the contrary, the same attention for human activities implies that in lakes prevail the exigencies of territorial security and self-preservation. The consequence is that in lakes the accessory nature extends to the entire basin. So, if there is more than one littoral State, as it is in the case of the Caspian Sea, the problem is to reconcile the concurrent interests of those States.

Unlike the international law of the sea, however, there isn't any general codification regarding specifically the lakes surrounded by more States. At the same time, there isn't a uniform States practice on the delimitation and on the exploitation of such lakes. The extreme peculiarity of any single lake involves that the legal regime differs consistently from lake to lake, being based above all upon specific treaties between the littoral countries. In particular, on the delimitation have a great influence the existence of historical titles, the political relationships between the coastal States and the economic needs. Nevertheless, among the many treaties signed by the littoral States of international lakes, we can identify, if not yet rules of general international law, at least some tendencies to which it would be suitable to conform the new legal regime of the Caspian Sea.

As for the boundary delimitation is concerned, the actual States practice is clearly turned to the recognition of the right of each littoral State to have full sovereignty over a part of the lake. As a matter of fact, almost all international lakes have been divided by treaty between the littoral States. Even if we can still discuss on the consolidation of the opinio juris regarding the practice of dividing up international lakes, it is certain that there aren't explicit approvals of the condominium statute, without a specific agreement in that sense. Furthermore, while the lack of agreement about the method of delimitation keeps latent the claims of the neighbouring States, as it happens now for the Caspian Sea, the creation of a condominium makes difficult to determine the rights and duties of each coastal State. So, both the situations represent dangerous threats to international peace and security. Nowadays, States practice is in fact favourable to the conclusion of treaties on the common and co-ordinate enhancement of lake basins, made necessary by the strong unitariness of such spaces, respecting, in any case, the territorial sovereignty of the littoral countries over them.

The unitariness of lakes, at the same time, calls for mutual sovereignty restraint to make the exercise of the traditional lacustrine activities possible, i. e. navigation and fishing. In this connection, the majority of conventions grant freedom of navigation over the whole lake, even if in different ways, to the citizens of the coastal States. This freedom is rendered effective through the application of the equal treatment principle. The only substantial limit is the reservation of cabotage in favour of the ships of each interested State. Furthermore, the actual tendencies opt for granting freedom of navigation also to the citizens of third States when the lake is connected with a river system of international importance, in order to favour international trade and traffic. This is in fact the case of the Caspian Sea, connected with the open sea through the Volga River system, completed by some artificial canals. As for fishing is concerned, instead, States practice is divided between a general regime of freedom and a regime limiting fishing rights to one's own respective national sector. The second solution is, however, more followed than the first, both in the absence of agreement and in the treaty practice. In any case, the big dimensions of a stagnant water basin, such as the Caspian Sea, create a unitary and independent geographic environment asking for common actions in order to preserve fish resources.

The exploitation regime of international lakes is now complicated by the new activities introduced by industrialisation, among which the production of electric energy, irrigation, and, in the case of the Caspian Sea, above all the drilling of liquid minerals. The plurality of uses creates the competition between them, requiring compromise solutions that have to satisfy the particular economic and political situation of the States involved. If this remark is true for watercourses in general, it is even more valid for international lakes where the stagnant character of their waters amplifies the negative effects of the littoral States competitive exploitation. This happens in particular for pollution: the uniformity of lakes waters involves that the negative consequences of pollution are suffered by the responsible State too, so favouring co-operation between the littoral countries.

As a matter of fact, the only existing rule of customary international law about the exploitation of international lakes obliges the coastal States to co-operate. This duty is realised negotiating in good faith the activities that involve the interests of several States; it doesn't compel littoral States to reach an agreement before starting any activity in the part of the basin subject to their sovereignty. As we said, in lacustrine spaces, dependent on surrounding territories, the right to self-preservation and consequently to territorial sovereignty prevail. In the case of lack of specific treaties or of regional customs, the only applicable general rules, beside the duty to negotiate, are nothing more than general principles concerning the co-existence of the littoral States sovereignty. Among those principles the more relevant are, above all, the duty to use the basin without causing significant harm to the other littoral States, and the duty of mutual information about the possible transboundary negative effects of their activities.

On the other hand, an effective co-operation between States going beyond the mere negotiation is just possible in a peaceful political reality. In fact, in this situation only an international regime looses the character of a threat to the littoral States sovereignty. Hence, it has been supposed that a State will more easily agree to the internationalisation of the basin as a way of transport than to share its natural resources.

This is clearly demonstrated by the actual dispute between the coastal States of the Caspian Sea. Its object is indeed formally the boundary delimitation of the basin, but in reality it concerns the possibility to exploit the rich oil mines of its sub-soil. So, these States agree on the freedom of navigation for their citizens over the entire basin, even if limited in the intention of the new littoral Republics to commercial ships. Besides, they agree on the freedom of fishing, with the exception of a coastal belt. As for the size of this belt, however, we notice the first differences of opinions. The two traditional littoral States, the Russian Federation and Iran, claim the persistent validity of the 1921 and 1940 Treaties, concluded between the RSFSR/URSS and Persia/Iran. Hence, as it is provided for in the second convention, the extension of the national fishing zone is of 10 nautical miles. The concession to enlarge the coastal zones till the limit of 20 nautical miles, however, hasn't satisfied the other ancient soviet Republics. These countries, on the contrary, support the extinction of the two treaties, above all to stop the further pretension of the Russian Federation and of Iran to enforce the common exploitation regime, established by those treaties, also for the exploration and exploitation of mineral resources. Setting aside the fact that the two treaties do not absolutely rule the subject of the mineral resources exploitation in the Caspian Sea, the claiming of their extinction is legally correct. As a matter of fact, the 1921 and 1940 treaties have a personal character, being the first one a treaty of friendship, and the second one essentially a commercial treaty. According to general international law, this kind of agreements, which create mutual rights and duties between the contracting Governments, can survive only in the particular political and administrative context of the contracting States. The few norms about the Caspian Sea present in those treaties, prima facie territorial provisions, haven't a real distinct character, to be submitted to a separate interpretation and enforcement. Those provisions are affected by the strong political nature of the two treaties, in which they are included: here the reasons of the basin reservation and closure prevail on the regime of freedom of navigation for the littoral citizens. Furthermore, the establishment of national zones of fishing tends in reality to limit, in extension and content, an inherent right of the coastal States, determined by the natural accessory relationship existing between the lake waters and their surrounding territories. On the other hand, these considerations cannot be invalidated claiming the vague obligations assumed by the ancient soviet Republics, after the break-up of the USSR, to enforce the treaties ratified by the Union. Those obligations have in fact not a juridical but a political nature: so, even if they aren't implemented, they don't give rise to any State international responsibility. The political and economical changes that follow a detachment of territories affect inevitably the implementation of the international agreements concluded by the predecessor State. The centralised management of the foreign policy in the USSR has implied that the new States have affirmed their willingness to respect the soviet international obligations without knowing exactly their contents. This is particularly true for the less important treaties, such as those regarding the Caspian Sea.

The new littoral States, with a weak economy, need to be able of exploiting at least a part of the basin resources. The rich oil mines found offshore represent an important factor of economic self-determination, necessary premise of their effective political self-determination. The exploration and exploitation of these resources can't be hindered claiming vague rights of navigation and fishing, either trying to argue the territorial nature of the respective treaty dispositions, or the legal character of the declarations subsequent to the break-up of the USSR: first, because the break-up of the Soviet Union produced a radical change of political and economical circumstances upon which the norms on the Caspian Sea bear, determining in any case their extinction; second, because, even if one wanted to deny the existence of that change, the validity of those rules would be nevertheless affected by the hierarchy of the international law sources, where the principle of self-determination has acquired the status of a jus cogens norm.

Furthermore, we cannot neglect that the common utilisation regime created by the 1921 and 1940 Treaties, even if for the purposes of navigation and fishing only, had already ceased to exist before the break-up of the Soviet Union. The then two littoral States changed indeed the conventional regime by custom. They delimited the basin de facto, using the straight lines method, that is to say joining the extremities of their territorial borders. Observing the two distinct sovereign zones, the activities of navigation and fishing in the sector of the neighbouring State were respectively submitted to a regime of permissions and concessions. On the contrary, the exploration and exploitation of mineral resources limited to their proper part of the basin were conducted independently, without any previous mutual consultation.

In 1970, the USSR Minister of Energy divided the soviet part of the basin between the caspian federal Republics. That was a formal division, established for oil drilling activities. As a matter of fact, it just derived from the accessory relationship between the lake and its surrounding territories, which implied the assimilation of the lake waters to the land territory. Upon this territory, in the limits of their respective administrative borders, each soviet Republic had an independent jus imperii: this was provided for in the Constitution of the Soviet Union.

Nowadays, the ancient soviet Republics are compelled to respect that delimitation, laid down with the median line method, because of the uti possidetis principle. According to this principle, in fact, the administrative borders of States become, in case of detachment, their international borders. Iran too must accept now the same borders, even if because of the duty to respect the other States territorial integrity. This same principle imposes as well to the ancient soviet Republics to observe the de facto delimitation created between the USSR and Iran.

At all events, the contemporary presence in the same lake of two different methods of delimitation is perfectly in conformity with international practice. Due to the particular structure of these land-locked water basins, complicated by the existence of several littoral States, the achievement of a satisfying delimitation calls often for the adoption of a main method together with one or more accessory systems. However, the delimitation of the soviet part of the basin according to the median line method has suffered, in certain points, some alterations, to meet the exigencies of the USSR economy, based on the strict distribution of competencies. These alterations have created conflicts between the ancient soviet Republics regarding, on the one hand, the rights of exploiting the areas that go beyond the strict application of the median line, and, on the other hand, the right of exploiting the fields lying across the delimitation line. As for the last ones is concerned, general international law obliges the States sharing the same deposit - as it is, we said, for the other activities in the same basin involving the interests of more littoral States - to negotiate in good faith the respective rights and duties, and the conditions of exploration and exploitation. In fact, the fluidity and mobility of liquid minerals imply that their exploitation, even if carried on in the State's own sovereign area, changes the conditions of exploitation of the whole deposit. Hence, the duty to co-operate arises both from the need to protect the one's own territorial integrity, and from the obligation to respect the inviolability of the other States sovereignty. The most diffused solution in international practice consists in the creation of different forms of common exploitation, generally through the activity of concessionaires, keeping distinct the respective areas of jurisdiction. By the way, this is the same solution adopted vaguely in the mineral clause included in the Agreement for the division of the northern part of the Caspian Sea soil and sub-soil, signed by the Russian Federation and Kazakhstan, on July the 6th 1998. Furthermore, the principle of good faith implies for the involved States the duty of mutual information about their respective knowledge on the common deposit. This duty is indeed a necessary premise of any serious negotiation. It concerns, above all, just the discoveries of liquid minerals extending in the territory of a neighbouring State. From the integration of the principle of good faith with the principle of the inviolability of the other States sovereignty we can infer the extent of the duty of mutual information. As a matter of fact, according to those principles the information has to permit to the interested States the protection of their territories against the unlawful consequences of the other States activities. Nevertheless, general international law doesn't compel States sharing a liquid mineral deposit neither to reach an agreement, nor to obtain the consent of the other interested States, for being able to start their activities of exploration and exploitation in the part of the deposit under their sovereignty.

On the contrary, the duty to reach an agreement exists for deposits lying in disputed areas, where, till the resolution of the controversy, it isn't possible to determinate a range of lawful activities. At the end of the dispute, unilateral actions could reveal indeed carried on in violation of the other involved States sovereign rights, so giving rise to the responsibility of the author for the international illicit and for the damages caused to the neighbouring countries. Hence, in case of irreparable breakdown in negotiations the only alternative to stalemate is to submit the decision of the controversy to an impartial judge. In our opinion, this is the logic consequence of the duty, imposed by general international law, to negotiate in good faith the agreement concerning the exploitation of the natural resources claimed by more States.

Nevertheless, the dispute on the exploitation of the Caspian Sea oil deposits is not limited to the ancient soviet Republics but concerns Iran too. The Islamic Republic would enforce the median line method of delimitation in the entire Caspian Sea, so that each littoral State would have right to an equal part of the basin. To support this claim, Iran argues the equity of such a delimitation. In reality, according to general international law the meaning of equity applied to territorial delimitation doesn't consist in a distribution of territories based on equality, but rather on proportionality. As it was argued by the International Court of Justice, equity acts above all as an impartial and reasoned balance of interests that, to keep correct, could require different treatments in presence of different conditions. With this meaning equity is quoted also in the 1998 Agreement between the Russian Federation and Kazakhstan, as a criterion to justify the changes made in the delimitation of the northern part of the Caspian Sea soil and sub-soil following the median line system. In the famous case on the North Sea continental shelf delimitation, the International Court of Justice stated also that there aren't juridical limits for the conditions to evaluate, in order to reach a proportional partition. On this subject, for example, the 1998 Agreement associates physical criteria (such as the presence of islands and of geological formations) with economic standards (such as the costs for geological researches). The problem created by the use of equity, in the sense of proportionality, for territorial delimitation, consists in fact in the selection of the equitable parameters. In the case of lack of precise norms establishing such parameters, the solution according to equity blurs with a compromise, being rather subjective. The examples evidenced by the International Court of Justice in its jurisprudence on the delimitation of the continental shelf under the sea (such as the coasts length, their general configuration, or the unity of mineral deposits), can be useful references in an eventual new delimitation of the Caspian Sea. This lake has indeed strong physical analogies with maritime basins, in particular with semi-enclosed seas. Among them, above all, the presence of the continental shelf, the frontal and lateral delimitation of which create problems similar to those existing for States bordering semi-enclosed seas. However, unlike these last ones, States bordering lake basins have full sovereignty either on the soil, either on the waters, and not mere sovereign rights of exploitation as it is in maritime spaces. On the consequence, lacking specific norms, such as articles 74 and 83 of the 1982 United Nations Convention on the law of the sea, the States practice about territorial delimitation assumes a dominant role in the new delimitation of the Caspian Sea. In that practice, equity in the sense of proportionality is not the fundamental rule, as it happens instead in the semi-enclosed seas delimitation. It has only a subsidiary character in respect of the existence of precise legal rights to the attribution of certain areas, among which, especially, the uti possidetis or the presence of historical titles. Azerbaijan argues indeed to have historical titles for the exclusive exploitation of certain oil fields, claimed at the same time by other littoral Republics. If it should prove the legitimacy of them, the ancient soviet Republic would have a privileged entitlement, compared with the circumstances invoked by the other littoral States. In particular, for territorial delimitation extra-juridical arguments have importance only as natural considerations in the political debate of the negotiating Parties, or if a third judge should be asked to decide the controversy ex aequo et bono.

Nevertheless, the littoral States of the Caspian Sea seem to be firmly contrary to any judicial or arbitral solution of the dispute, because they consider it as an essentially regional question. Waiting for the establishment of a new and complete legal statute of the Caspian Sea, thought necessary by all the littoral States, they go on through the conclusion of several bilateral agreements. This practice is not unlawful if each convention concerns only the parts of the basin under the sovereignty of the contracting Parties. In any case, this way of moving, on the one hand, gives rise to the risk of contradictions in the regime of the whole lake, so making the bilateral treaties substantially inapplicable. On the other hand, it doesn't take care of the regionalism characterising any single lake basin, as the great majority of semi-enclosed seas. The separated nature of both these kinds of water bodies often involves indeed, beside the strong geological and ecological unity, the singleness of these spaces. This singleness calls for a particular attention in the ruling of their resources exploitation, both biological and mineral, for the protection and preservation of their ecosystem, and for scientific research. In particular, as for the Caspian Sea in concerned, its several physical characteristics bring it near, at the same time, to the category of seas and to that of lakes: so an equitable regime would require an appropriate combination of the norms of the international law of the sea, and of the norms of the law of international lakes, this last one being above all a conventional law. Furthermore, the peculiarities of the basin create a strong cohesion between the economic and political interests of the littoral States, which involves the necessity of establishing an agreed and co-ordinated regime in order to conciliate all those interests in a lasting way.

Considering the greater unity of lake basins determined by the stagnant and massive nature of their waters, the littoral States practice is indeed now turned to a global development of the lake, through a single and co-ordinated regulation of the different possible activities. The most recent multilateral conventions bear upon the incessant worry of the littoral countries to preserve and improve the natural equilibrium of lake basins. Hence, the actual intention of the Caspian Sea coastal States to go ahead through the conclusion of a general convention on the legal status of the basin, completed by several treaties on the regulation of the many forms of its utilisation, including the exploitation of the mineral resources, should be perhaps re-examined. This is recommended above all by the very bad ecological situation, increased by the competing exploitation of the basin resources, as the caspian States themselves, however, remark persistently in their official declarations.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

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