David Moss, partner, Lovells
Opinion: The future of the Falklands: could it be compromise?
14 March 2010 | Updated: 15 March 2010 9:23 am
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The potential exploitation of valuable natural resources in the region surrounding the Falkland Islands recently brought a long-running territorial dispute back into the public spotlight.
The potential exploitation of valuable natural resources in the region surrounding the Falkland Islands recently brought a long-running territorial dispute back into the public spotlight. When UK company Desire Petroleum began exploratory drilling, the UK and Argentine governments once again squared up over sovereignty of the islands and the surrounding Continental Shelf.
Both Argentina and the UK assert their sovereignty on the basis of historic title. Argentina argues that the drilling violates previous UN General Assembly resolutions urging the two nations to negotiate a peaceful solution. It has gained the backing of Latin American governments and has sought to involve the UN Secretary-General, Ban Ki-moon, to pressure the UK to cease drilling.
In addition to its historic sovereignty claims, the UK maintains that the drilling does not breach international law because the islanders have a right to determine their own economic and political future. Although the Falklands have not yet held a referendum on this issue, polls suggest that if a vote were held, the result would be overwhelmingly in favour of remaining a UK overseas territory. Such a result, together with recognition by the international community of the Falkland Islands as a UK overseas territory, would strengthen the UK’s claim to sovereignty.
The right of peoples to self-determination is enshrined in the first article of both the UN Charter and the International Covenant on Civil and Political Rights. The International Court of Justice (ICJ) has held that this right is ’irreproachable’.
However, the Falklands case does highlight a contentious and potentially problematic facet of international law.
To begin with, the precise scope of the right and the definition of ’peoples’ is a developing legal area. In the past, indigenous peoples in island states such as Nauru (population of 12,000) and Tuvalu (population of 11,000) have been recognised as exercising a bona fide right of self-determination. However, the population of the Falkland Islands is only 3,000 and Argentina would likely contend that the right to self-determine does not apply because the islanders are descendants of British settlers. This raises the issue of what are the limits of the right to self-determination. For example, would the UK argument hold true if the population of Jersey voted to become independent of the UK or part of France?
These issues are likely to come under the microscope again when the ICJ issues its advisory opinion on Kosovo. Argentina and the UK have both put in written submissions to the ICJ in the Kosovo case, which centres on a dispute over the status of Kosovo’s declaration of independence. Predictably, Argentina emphasised the importance of territorial integrity and the UK emphasised the right of self-determination.
Perhaps the most palatable option for ending the current stand-off is for the parties to create a joint development zone. Such a zone, created by treaty, would allow for revenue-sharing between the two states and be administered by a joint authority. This would give investors and operating companies the comfort of a stable legal framework to enable investment. These zones have been successful in other disputed areas such as in the Gulf of Thailand and the Timor Sea.
One thing that is clear is that investors will need greater certainty about the legal status of disputed areas before investing substantial sums in exploration and production activities. In the case of the Falklands, unilateral action is, therefore, not a viable option in the long term. In such hotly contested areas, investors and operating companies may be unwilling to take the legal, political and commercial risks of developing natural resources. The potential for blockades, sanctions and potential loss of rights in a disputed area would be too great, and in the end it will be international development (and particularly the development of the disputing parties) that suffers as a result.
Senior associate Nathan Searle assisted with this article