Case Description

Loading map...

Geolocation:	40° 8' 3.3573", 51° 23' 45.9705"
Total Population	1000000010,000,000,000,000 millionmillion
Total Area	400000400,000 km² 154,440 mi² km²

Predominent Land Use Descriptors	industrial use
Important Uses of Water	Agriculture or Irrigation, Fisheries - wild, Industry - consumptive use

Summary

Natural, Historic, Economic, Regional, and Political Framework

Issues and Stakeholders

Lega lStatus of the Caspian

The dispute: Timeline : Prior to 1813- Control of the Caspian shifts between the two major players in the region, Russia and Persia. 1813+1828- Gulistan Treaty and Turkmenchai Treaty - Giving the full rights of the waters to the Russian Empire. 1921- Russia and Persia sign a new treaty, granting Persia with its legitimate maritime access and water rights to the Caspian. 1922- After the formation of the Soviet Union in 1922, some provisions to the treaty were necessary, however the formation a new treaty is delayed. 1934- A secret Soviet directive draws an unofficial borderline between Astara and Hasankuli, which in essence becomes the border on the ground. 1940 - WWII pressures the Soviets and Iran to ensure their equal rights to the Caspian. The 1940 treaty grants both countries with a 10-mile fishing zone and the rest of the Caspian is considered common with exclusive rights for navigation. Both countries violate the 10-mile fishing zone occasionally with no real consequences, but vessels of neither country ever cross the unofficial borderline, except for during WWII. Neither this treaty nor any of the former ones ever addresses the issues of whether the Caspian is a Lake or a Sea, nor were the water and seabed boundaries determined. 1958- The concept of ‘continental shelf’ only comes to life. 1982- Conclusion of the Convention of the Law of the Seas in 1982, also introduces the concepts of EEZ, coastal jurisdiction and obligations to ecological norms. 1991- Following the collapse of the Soviet Union, three new countries are introduced to the Caspian: Azerbaijan, Turkmenistan and Kazakhstan. A new understanding and agreement on the Caspian’s boundaries is mandated between the five littoral states. 1996- Four of the five states, excluding Azerbaijan, agree that each has the right to exploit the Caspian and its resources 45 miles from its coast. They also agree that the sea beyond the 45 miles provision will be shared jointly. Azerbaijan, objects this agreement, as some of its oil wells are far beyond 45 miles from its coast. The agreement does not discuss the legal status of the Caspian, and the dispute remains unresolved. 1997- Kazakhstan and Azerbaijan bilaterally agree to adhere to the borders of the sectors along the median line. Kazakhstan and Turkmenistan sign a communiqué following median line. 1998- Russia and Kazakhstan agree to follow media line concept until a permanent solution for the legal status of the Caspian is found 2001- Russia and Azerbaijan agree to follow media line concept until a permanent solution for the legal status of the Caspian is found. 2003- All five littoral states sign the Framework for the Protection of the Marine Environment of the Caspian Sea (Tehran Convention). First legally binding regional agreement signed by all five states. 2007,2008, 2011,2012,2014- Meetings of ‘Conference of the Parties’. In the mean time a status quo regime, which involves bilateral treaties around the North part of the Caspian Sea, and disputed boundaries around the South part of the Caspian.

The current situation: Main issues of conflict between the five littoral states: 1. Demarcation of the Caspian’s waters and seabed 2. Access to mineral resources (oil and natural gas) 3. Access to fishing and navigational rights 4. Access to international water, mainly through canals connecting Russia’s Volga River to the Black and Baltic Sea. 5. Environmental responsibility and protection of the Caspian basin. At the basis of the argument is the fact that depending on interpretation, legally the Caspian Sea can be labeled as either a Lake or a Sea, each has different implications : • The Caspian labeled as a Sea, will be recognized in international law under the United Nations Convention of the Law of the Seas (UNCLOS). An important criteria to determine the Caspian as a Sea is access to an ocean, or the existence of a “narrow passage” linking the body of water to the other sea or ocean. For those who support labeling the Caspian as a Sea, its connection with the Black Sea via the Volga-Don canal and the Baltic Sea via the Volga-Baltic canal is sufficient to comply with the criteria. If the Caspian is labeled as a Sea, each littoral state is entitled to 12 nautical mile of territorial sea as determined from its maritime coastal baseline, with water beyond that point considered international waters. UNCLOS also recognizes a 200 nm Exclusive Economic Zone (EEC) that recognizes a sovereign’s right to resources, but does not grant sovereignty of the water. • The Caspian labeled as a Lake or internal water, is not subject to UNCLOS. Under international law, the territories of internal waters are determined similarly to those of land boundaries, through bilateral/multilateral treaties and agreements between the bordering states. Each legal status implies different strategic impacts on each of the five littoral states; as a result each holds a different position on the matter that favors its own interests : Iran: Wants the Caspian to be labeled as a Lake and take the condominium approach, since if it is considered a Sea Iran’s rights will be limited proportionally to the length of their seashore, which will consequently grant it with a smaller share. Iran insists on defining the Caspian as a Lake and splitting the water into 5 equal parts, granting 20% of the water and seabed to each of the littoral states. Kazakhstan and Azerbaijan insist that if it is labeled as a Lake, then Iran can only get a 13% share proportionally to the length of its seashore. Russia: While the three landlocked states, Azerbaijan, Kazakhstan and Turkmenistan, find it vital to gain access to the Volga River, Russia opposes the use of its inland waterways to foreign vessels. If the Caspian were defined as a sea, then there would be stronger legal demands for Russia to grant access to foreign vessels into its Volga River. Azerbaijan and Kazakhstan: the two countries holding the highest deposits of oil in the Caspian region advocate that the Caspian should be considered a Sea. If it considered a Lake, then Iran’s claim to split the rights 5 way, means they will be getting a lesser share. In addition, labeling the Caspian as a Sea strengthens their argument regarding their right to use the Volga-Don canal. Azerbaijan, objects the 1996 understanding between the other 4 countries regarding the 45 NM rights as some of its oil wells are far beyond 45 miles from its coast. Turkmenistan: With a slight tilt towards defining the Caspian as a Lake, seems to be changing its preference periodically. Caspian Sea Optional divisions

Stakeholders Assessment Summary:

The littoral States : All five states are suffering from environmental damage and pollution, endangering the ecological system in their area of the Caspian as well as the health of their population. Although some states are suffering more than others in terms of environmental damage, all seem to put the environmental issue second in priority to their rights to the Caspian resources. • Iran – Holds the fourth largest proven oil reserves in the world, and the second-largest natural gas reserves. However, international sanctions are greatly impacting the Iranian energy sector, and it requires further foreign investment to bring it to its full capacity. Iran has an important strategic access to the Strait of Hormuz, an important oil export route. • Russia – The second largest producer of natural gas in the world, and third largest producer of liquid fuels in the world. Russia’s economy is highly depended on its energy sector, with oil and gas making more than 50% of its federal budget revenue. • Turkmenistan - The least developed of the Caspian countries, holding some of the largest natural gas reserves in the world. However, its geographical position, far from end-user, together with harsh competition from other energy-rich states in the region, which are more developed and attract more foreign investment and its rigid economic structure, are making it difficult for Turkmenistan to become a stronger player in the energy market. • Kazakhstan - Holds the second largest oil reserves and oil production among the former Soviet republics after Russia. • Azerbaijan – Wholly located within the Caspian Sea basin. With 90% of the Country’s export accounted for oil and gas exports (according to IMF data), the development and exports of oil and gas are essential for its economy. Azerbaijan serves as one of the region’s important strategic opening to the west. In addition: • Global and regional environmental bodies and NGOs -Including the UNEP, are seeing the enormous ecological damage to the Caspian Sea, due to a long list of misuse of its resources. However, in the current status quo situation it is difficult to determine the states’ jurisdictions and responsibility for the damage, the repair or the required changes in conduct.

• International energy companies together with the US and Europe Concerned with shortening access to the energy reserves in the region. Each of these stakeholders is interested in an agreement that will favor its preferable partner in the region.

Openning New Oil Export Routes

Additional contention in the region: Oil export routes- with the discovery of new oil and gas reserves, the question of what route an oil pipeline would travel out of Caspian, and eventually out of the Caspian Sea, has become a contentious dispute. In this regard three main options are being discussed: 1. The Northern option (Russian) 2. The Central option (Caucasus) 3. The southern option (Iranian)

Obviously, each state wants the pipeline to pass through its territories in order to gain financial benefits. External international players with strong interests, such as the US and Europe, concerned with global energy stability, and therefore want to open a route that bypasses Russia in order to diversify the location of pipes. The southern (Iranian route) is also one the US would like to avoid since it has diplomatic relations with Iran.

Analysis, Synthesis, and Insight

What is an ASI?

Individuals may add their own Analysis, Synthesis, and Insight (ASI) to a case. ASI sub-articles are protected, so that each contributor retains authorship and control of their own content. Edit the case to add your own ASI.

Learn more