The legal regime of the Caspian Sea: Any changes in the positions of Iran?

by Bahman Aghai Diba

The position of Iran regarding the legal regime of the Caspian Sea was originally a kind of condominium. The idea of condominium was based on the interpretations from the previous agreements of Iran and the Russians (1921, and 1940 treaties) when no other country existed in the coastal lines of the Caspian Sea. (1)
Although the idea of a condominium in the Caspian Sea looked difficult to swallow for many expert and inexpert persons inside and outside the region, and it was criticized by some sources as building castles in the skies, but in the era of integration, cohabitation and globalisation, it was a kind of civilized and modern option based on the common respect and recognition of the ability of several neighbouring countries with deep cultural affinity and common historical backgrounds for management of a shared property.

Perhaps the idea was too soon for a region full of newly independent states, which were very sensitive to be "independent!" The four new countries were not ready to trust each other and Iran up to such extent as welcoming common management of the common closed body of water, in the way the common waterways like great international rivers of the Europe are run. They were so suspicious for any kind of common arrangements with Iran that they even rejected the proposal of Iran for establishment of the Caspian States Cooperation Organization.
The suspicion was fuelled by possibility of Iran’s interference in the internal affairs of the new countries with intention of supporting Islamic elements. Although actually Iran did not do anything considerable to instigate or support such groups, and in cases like Chechens, preferred to ignore them totally, the irresponsible statement by the irresponsible persons and unofficial figures who had proved to be more powerful than the officials in Iran and diversity in the centres for decision making in the foreign policy, led to the deep suspicions.

Later, Iran proposed a new option without giving up the condominium idea. Iran reduced its insistence on the condominium only when it was left lonely in the scene. The desire of Iran for the common management of the Caspian Sea was so great that it welcomed the Russian tricks and pretensions for having similar positions as Iran for more than one decade after the collapse of the USSR. The new option was that if the condominium (a kind of joint management of the Caspian sea affairs) is not acceptable to the other states, then the whole Caspian Sea must be divided into 20 % sections for the five littoral states. This meant that Iran still preferred the idea of condominium for the common administration of the Caspian Sea but for practical purposes and due to the dissatisfaction of others, it was ready to accept the new option. In fact, the new position was the reaction of Iran to the wasting of Iran’s time and energy by the Russian Federation for more than a decade. (2)

The Russian Federation for its turn was busy imposing the idea called MML (Modified Median line)to the other states in the Caspian Sea. According to this idea, the seabed of the Caspian Sea is divided between the concerned states on the basis of a median line, which is the extension of the coastal points, and the superjacent waters are left for " free use" of the states. On the basis of this formula, agreements have been reached between the Russian Federation, and Kazakhstan, Russian Federation and Azerbaijan, and Kazakhstan and Azerbaijan.
The Russians are busy exerting pressures on Iran and Turkmenistan to accept the MML. Sometimes they do it by words and some other times by acting. The last year Russian military manoeuvres in the Caspian Sea which was the biggest manoeuvre in the post-Soviet era and the next military manoeuvre which will be in near future are partly to demonstrate the power of the Russian Federation to the political leaders of the area, including and especially Iran.

The new approach of Iran
What is new in the Iranian position regarding the Caspian Sea is:
A- Demand for division of the whole Caspian Sea according to justice and equity.
B- Secrecy in dealing with Caspian Sea issues
What is recently tabled indirectly and tacitly as the new approach by the Iranian authorities (3) is that the Caspian Sea must be divided according to principles of justice, fairness, equality and equity.
What is meant from justice and equity by Iran in the Caspian Sea is very simple: Iran wants to discard the MML as the basis of the division because it does not bring justice and it proposes new criteria for creating a just and equitable condition in the Caspian Sea. The division must make note of many other considerations (4) in addition to the length of the coastal area in the Caspian, and especially the historical rights of states. This is of course, very close to the idea of dividing the whole sea into five equal sections. On the other side, it is opposed to the MML in the notion of the dividing of the whole sea not only the seabed.

Another issue, which is new in the Iranian approach, is secrecy in dealings about the Caspian Sea. The secrecy in this field has been so extensive as to exclude the Iranian parliamentarians from the process of negotiations. The main reason for such secrecy is that the people of Iran believe that their government has failed to achieve Iran’s rights in the Caspian Sea due to the lack of international prestige, bad relations with key states, and corruption. It is widespread belief that the real ruling circles in Iran have no respect for national interests and they act only on the basis of the preservation of the ruling clique.
The lack of democracy in Iran has led to the distancing of people and government in Iran. Therefore, the government is trying to follow a secret diplomacy in all cases. The Caspian Sea had turned into a clear symbol of the Iranian regime’s inefficiency in the conduct of foreign policy and materialization of the national rights and interests in the international arena. However, the facts in this case are so obvious that secrecy does not work. The states in the Caspian Sea region are misusing the opportunity created by lack of good diplomacy in Iran and ignoring Iran’s rights.

What are the achievements of the MML?
The formula of MML (Modified Median Line), as far as the coastal states of the Caspian Sea are concerned, means: Dividing the seabed of the Caspian Sea, according to a median or equidistance line (depending on the division between opposite or adjacent countries) from the shorelines of the concerned countries on the basis of the land borders with the sea. Therefore, longer shores means bigger share of the sea.
Also, changing (or modifying) the line of demarcation slightly, according to the position of selected natural elements, such as seabed elevations and man-made elements, such as established installations and leaving the superjacent waters free for navigation by all littoral countries of the Caspian Sea, without distinction between military and commercial fleets. Also, leaving the airspace over the Caspian Seaopen for navigation activities of the littoral states, without distinction for military or commercial operations.

The effects of using MML formula for defining the legal regime of the Caspian Sea, as far as the Russian Federation is concerned are:
A- Removing the actual problem of a new legal regime of the Caspian sea and therefore, opening the way to concentrate on the issue of turning the oil and gas resources of the Caspian Sea into much needed hard cash.
B- Proving the leadership of the Russians in the Caspian Sea as the state, which defines who gets what in the Caspian Sea. This will be a good precedence for the Russians.
C- The most important of all, leaving the water over the seabed of the Caspian Sea as common area for free navigation. Taking into consideration that the other countries around the Caspian Sea, including Iran, do not have any considerable naval units or commercial ships to navigate in the Caspian seas, the formula means to give the highly equipped fishing ships of the Russians permission to go all over the Caspian Sea for fishing activities all the year round, while the other states are catching fish with the old dated, and even primitive methods of fishing in the areas near to the shore. Also, the naval fleet of the Russians in the Caspian Sea that are now equipped with new advanced units can navigate all over the Caspian sea.
D- Flying all over the Caspian Sea (except may be over the ten mile exclusive economic zone, out a courtesy not a legal obligation).
E- The MML gives the Russians the possibility of keeping their maritime boundary with Iran. Iran does not have a land border with the Russian Federation, and if the Caspian sea is divided into national sectors (which includes the waters) then there will be no maritime bolder too. As far as Iran is concerned, having a "Buffer Zone" with a great power is a positive point.
F- The formula of MML gives the Russians the possibility of preserving their maritime link with Turkmenistan. Although the republics in thesouth of the former USSR are apparently independent now, they are still considered as a security and influence parameters by the Russians, and keeping such border links is important for the Russians.
G- The Russians will get almost 20 % of the Caspian Sea seabed.

As far as the Republic of Azerbaijan is concerned, the MML means:
A - Azerbaijan gets Almost 21 % of the Caspian seabed according to the MML. The area is one of the places known to have vast oil resources and the Azerbaijan Republic and before that, the Russians were exploiting the resources in the last century.
B - "Under the MML approach, Azerbaijan would control access to 4 bn tons of reserves, twice Russia’s allotment and more than four times Iran’s share."
C - If Iran Agrees with the MML, then even the disputed oil fields of Alborz will be placed in the Azerbaijan’s territory.
D - If Turkmenistan accepts the MML, and then the important oil fields of Sardar/Kapaz will be in the Azerbaijan’s territory.

As far as Kazakhstan is concerned, it means:
A - Almost 29.50 % of the Caspian seabed will be allotted to Kazakhstan. This is the biggest share of the Caspian Sea for a country with less than 15 mm population.
B - Taking into consideration the commitment of Kazakhstan for using Baku-Ceyhan pipeline (5) for the export of its oil through the said pipeline, the issue becomes more meaningful.

As far as Turkmenistan is concerned:
A - Turkmenistan will get around 17 % of the Caspian seabed by MML.
B - It will lose the disputed oil fields of Sardar/Kapaz to Azerbaijan, which is very important for Turkmenistan.

As far as Iran is concerned, the MML means:
A- Iran will be limited to 13-14 % of the seabed of the Caspian Sea.
B - The Iranian section in the Caspian Sea is free from any known oil and gas fields so far.
C - The Iranian side of the Caspian Sea is very deep (some parts of the southern Caspian sea are 900 meters deep, while in the north, it is only a few meters deep), and any exploration and exploitation of resources in the seabed in this Area is more difficult than the shallow parts of the northern Caspian Sea.
D- The Russians ships can come close to the Iranian shores any time. If one remembers that one of the articles of 1921 treaty of Iran and former USSR, gives the right to Russians to intervene in Iran, then, this freedom will mean more than it looks. Of course, the Iranian governments before and after the revolution (1979) have repeatedly declared that the article 5 of the 1921 treaty is null and void. Iran has been arguing that the subject of the Article 5 was the White Russians, and the issue was dead. The Russians have never accepted the Iranian interpretation of that article. In fact, one of the reasons that Russians keep mentioning that 1921 and 1940 treaties are still valid, although they are actually violating them, is the same point.

It is clear that the MML does not work for Iran. Iranian authorities in different levels, have called the bilateral treaties ofthe Russian Federation with Kazakhstan and Azerbaijan, and between Azerbaijan and Kazakhstan with themselves, and even the recent preliminary agreements of Kazakhstan and Turkmenistan for using the same formula, as null and void because they were contrary to the previous agreements of all concerned countries to make decisions regarding the new legal regime of the Caspian sea by consensus (agreement of all five countries) in several occasions.

International Law and MML
In the case of delimitation of maritime boundaries, the international law has proposed the equidistance as a basic way but it is not compulsory to use it and at the same time the aim from using it getting an equitable situation. Therefore, if the MML is not providing an equitable situation in the Caspian Sea, there is no need to accept it.
The delimitation of maritime areas has been done according to several methods. But the main idea in all those methods is the satisfaction of the parties. The median line and equidistance method are well known methods but no country is obliged to use it exclusively. The MML is based on the equidistance principle for division of maritime boundaries. But according to international law of the seas, although equidistance is a major approach used for delimitation of maritime boundaries (such as the territorial sea, continental shelf and exclusive economic or fishing zones), is not the aim, it is in fact a means "in order to achieve an equitable solution".

R.R. Churchill and A.V. Lowe in their prestigious book "The Law of the Sea" (Manchester University Press, UK, 1985) refer to the following points:
"To delimit the EEZ of opposite and adjacent States. Article 74(1) of the Law of the Sea Convention provides that such delimitation 'shall be effected by agreement on the basis of international law, as referred to in Article 38 of the Statute of the International Court of Justice, in order to achieve an equitable solution'. If no such agreement can be reached within a 'reasonable period of time', the Statesconcerned are to resort to the procedures for the settlement of disputes provided by the Convention. These provisions are the same, mutatis mutandis, as the provisions of the Convention governing delimitation of the continental shelf. " (P.118)
Also: "The delimitation of the continental shelf between States with opposite or adjacent coasts shall be effected by agreement on the basis of international law, as referred to in Article 38 of the Statute of the International Court of Justice, in order to achieve an equitable solution." (P.126)

Also, the AALCO (Asian-African Legal Consultative Organization which was AALCC previously) has made studies regarding the delimitation of the maritime boundaries (exclusive economic zone and continental shelf) in 1985-86 (at that time, the late Dr Mostafa Ranjbaran was the Deputy Secretary General of the AALCC) during its 24th and 25th sessions at the request of several states, and the conclusion of the research was that although the equidistance and median line was a widespread method of limitation, the usage of the method was meant to achieve the just and equitable division.

It is also noteworthy that the MML has left many problems in the Caspian Sea as unsolved. Some of these are:
-- The common oil and gas fields.
-- The mutually claimed fields.
-- The distinction in the military and commercial navigation.
-- The situation of the navigation for other countries (except than the littoral states).
-- Over-flight in the Caspian airspace.
-- Responsibility for pollution.
-- Passage from Volga-Don, and Volga-Baltic waterways.

At the same time, Convention for protection of the Caspian environment, which was signed among the littoral states of the Caspian Sea (Turkmenistan signed it later) at 11/05/03, but it did not solve the issue of responsibilities. It only says: the littoral states are committed to take necessary steps individually or collectively to reduce and control the pollution.
It does not make clear the responsibility of states,especially Russia which produces 80 % of the pollution in the Caspian sea, for observing all international documents that it has sighed regarding pollution control especially for the marine pollution by oil (accidental or unintentional and intention or operational pollutions).

Corruption and tyranny as a regional sickness
One of the obstacles for reaching a meaningful formula in the legal regime of the Caspian Seas is the autocratic and corrupt government all around the Caspian Sea. It’s like a club of despotic regimes. Corruption and tyranny is a regional sickness in the Caspian Sea. The Russian Federation is deeply enslaved by the new Mafia who is willing to deal everything with hard currencies. Azerbaijan, Kazakhstan and Turkmenistan are ruled by the remnants of the older Soviet officials. Iran is in the hand of despotic mullahs. They are openly undemocratic and corrupt.
Recently the Open Society Institute has published an interesting report. The report (6) has good points for all oil exporting states, including Iran but it is addressed to the Azerbaijan and Kazakhstan. The reason for choosing them is the good position of these states in oil and gas reserves and increasing reliance of the West on them.

Josef E. Stiglitz, Noble Prize winner in economics, has pointed out in the forward to the report: " …the most fundamental problems that many resource-rich nations face are political. Control over natural resources wealth provides leaders with little incentive to share power and gives leaders the means to buy legitimacy rather than earn it through elections… the desire by government leaders to control wealth generated by natural resources often discourage the development of democracy and promote violent conflicts and resistance by those who have not benefited from, the resources and who feel shut out of centralized, undemocratic political systems."
Also, On January 27 of 2004, the council of Europe’s Parliamentary Assembly (PACE) examined Baku’s compliance with the organization’s human rights standard. HRW [Human Rights Watch] representative urged PACE to express stronger concern about conditions in Azerbaijan. According to the report of the CE’s website, PACE members termed Azerbaijan’s rights record far from satisfactory. Another potential source of insatiability in Azerbaijan, according to the same report was a criminal case in the US Federal Court in which top Azerbaijani leaders have been implicated in corrupt practices concerning oil and gas deals. (7)

Conclusion
The Caspian Sea is not so peaceful as it looks. The region has potential for turning into the point of confrontation and conflict. The littoral states of the Caspian Sea have not solved their problems and they have taken steps in line with militarisation of the region, while issuing declarations to the contrary. The division of the Caspian Sea still remains a thorny problem in the relations of the littoral states.
The Caspian region will remain an important place for the world in the foreseeable future (8) and the movement of the NATO bases towards the Central Asia and Caucasus, along with more reliance on the Caspian oil has created new attention to the situation of the region.

The Russian formula of MML has not solved the problems of the Caspian Sea states, even between those who have used the formula. Iran is demanding the division of the whole Caspian Sea on the basis of justice and equity, whether in the context of the principles of the international law, or "body of principles constituting what is fair and right" in the general practice of the legal affairs. (9)
Iranians believe this helps to establish sustainable political stability and peace in the situations like the Caspian Sea. Otherwise the situation in the Caspian Sea will be what Alfred Noble, founder of the Noble prizes (contrary to public belief, he made his fortunes from the wooden oil pipeline that he made from Baku in Azerbaijan) predicted for the Caspian region: "I smell oil, blood, and politics."

Notes and references
(1) For further discussions in this regards, and also the text of the relevant parts of the 1921 and 1940 treaties, please refer to: Bahman A. Diba, the Law and Politics of the Caspian Sea in the 21st Century, Ibex Pub. 2000. Maryland, USA.
(2) Some experts believe that the historical rights should be regarded. The case of "historical bays" in the 1982 UNO Convention on the Law of the Sea might be useful for a start. Also, the arguments regarding the historical rights of Iran should start from the point that following the demise of the USSR, the inheritors of the dead man should divide their own share and Iran must get 50 % of the Caspian Sea. The size of population of littoral countries and the degree of dependence of local population to the Caspian Sea must be taken into consideration.
(3) http://www.eurasianet.org/deparments/business/articles/eav092502.shtml)
(4) Regarding the game that the Russian Federation played in this field please refer to: Law and Politics of the Caspian Sea, Ibid. PP 20-33
(5) A syndicate of international lenders signed a landmark agreement on Feb. 6, 2004 committing $ 2.6 bn in loans to the Baku-Tbilisi- Ceyhan oil pipeline. The pipeline is due to start exporting oil by 2005 with capacity of 1 mm bpd. This pipeline is the symbol of Iran’s failure in the pipeline diplomacy of the Caspian Area.
(6) Svetlana Tsaliok, Caspian Oil Windfalls: Who will benefit?" Caspian Revenue Watch, Central Eurasia Project, Open Society Institute, 2003, NY, NY.
(7) Azerbaijan shrugs off criticism of its human rights practices, http://www.caspiansea.com/p/cf/ef53c501d67785.html?id=WNATb1708ec522859cc98126
(8) Matthew Reimer, Http://www.caspiancenter.org/29-01-2004-al.html
(9) Back Law Dictionary, Bryan A. Garner, West Group, St Paul, Minnesota, 2000. P. 443

Bahman Aghai Diba is Consultant in International Law to the WRC (World Resources Company) in the Washington, DC.