Michael Strauss: Territorial leasing and boundary conflicts

Interview

Territorial leasing: definition, frameworks and its limits

What is territorial leasing?

Territorial leasing at the level of states has never been a clearly defined activity in either international relations or international law, but defining it is necessary for understanding it. I consider a territorial lease to be an agreement – usually a treaty – that creates sovereign-like rights for one state on the territory of another through an arrangement that generally emulates a lease in private law. The rights established by a territorial lease comprise a servitude that limits how the lessor state displays its sovereignty in the area involved, while it extends the geographic area in which the lessee state can exercise aspects of sovereignty.

What are the main features of a territorial leasing framework?

In general, a state-to-state lease will contain three main elements: a transfer of rights from the lessor state to the lessee state, a duration aspect and a compensation aspect. The latter two may not always be present, however, because states are not the same as property owners and leases between states involve political considerations that differ from the commercial motives of private-law leases.

The rights that are transferred usually can be divided into two types – rights associated with the objective of the lease, and jurisdictional rights that are meant to facilitate the lease’s implementation. The rights tied to the lease’s objective can be narrow, such as the right to exploit a particular natural resource, or they can be comprehensive, to the point where the lessee state has full control of the leased territory and the lessor holds a residual sovereignty that may be largely empty but remains a legal fact.

The duration aspect can take various forms. A lease can have a fixed term, or it can have an initial term with automatic continuation if neither state does anything to terminate it when that term is reached. A territorial lease can also be for an indefinite period, for example with an end point based on a geopolitical event, or it can be made in perpetuity.

As for compensation, this can range from a rent that reflects the actual value of the territory to a token rent that simply acts as the lessee state’s periodic acknowledgment of the lessor state’s sovereignty. Sometimes no rent at all is paid, but it is important to keep in mind that both states involved in a lease get some kind of benefit from it – one gets the use of the territory, and the compensation for the other may be a sought-after improvement in political or economic relations.

What are the disadvantages and limits of territorial leasing?

Territorial leasing can have disadvantages for the lessor state if the transfer of rights is so comprehensive that the lessee state is tempted to claim sovereignty over the territory after a period of controlling it. Sovereignty over leased territories has occasionally been transferred this way, causing some scholars a century ago to refer to territorial leases as “disguised cessions.” Yet this is far from the rule, since leased territories have also been returned to the lessor states upon termination of the leases – modern examples being Hong Kong, which reverted back to China, and the Panama Canal, which reverted back to Panama.

That said, problems that arise with territorial leases are usually the result of the specific terms contained in the lease. Cuba’s lease of Guantanamo Bay gave the United States “complete jurisdiction and control” over the territory, which prompted Cuba’s Supreme Court to rule that Cuba had to consider the area as foreign for legal purposes, even though Cuba retained “ultimate sovereignty.” That left Cuba with no active authority on this piece of its sovereign territory.

There is also the danger that the lessee state may not leave, and if it’s a strong state the lessor may not be able to kick it out. Guantanamo Bay is an example of this, too. Cuba has called on the United States to go home ever since the Cuban revolution in 1959, but the United States has argued that the lease is a valid agreement that allows it to remain there. A problem of this nature is currently brewing between Ukraine and Russia over the port that Russia leases for its Black Sea Fleet of naval ships at Sevastopol. Ukraine says it won’t renew the lease when it expires in 2017, but Russia seems intent on staying, at least until it has an alternative port ready at some later point.

Territorial leasing and border disputes

How can territorial leasing help in solving boundary issues?

Boundaries are normally fixed when states are created, but states and their populations and economies continue to evolve after that point – and so do their perceived territorial needs. Territorial leasing is a mechanism by which states sometimes address these evolving interests without resorting to formal boundary changes. A lease essentially reallocates sovereign-like rights in a way that can be less dramatic or definitive than a cession of territory by one state to the other. If a lease can satisfy the interests of both states, it can sometimes be an alternative to war – it can transform a conflict from being about sovereignty into being about specific rights and obligations associated with sovereignty, and this opens up new options for resolving the issue. A lease normally requires administration, and if this involves both states it can become a confidence-building activity that can, if all goes well, enhance bilateral relations more broadly.

Why have territorial leasing frameworks been used so rarely to solve boundary disputes so far?

There are six known cases in which territorial leases have been used successfully to resolve boundary disputes, and no known cases in which a lease concluded for that purpose failed to achieve its goal. But each time, the lease involved a very small area and information about it was poorly disseminated, so none of these leases ever became a model that other states copied. The result was that the wheel kept being reinvented – while territorial leasing has been widely used for economic and military purposes, it was considered an original idea each time it was used for resolving a sovereignty dispute. This indicates that a degree of diplomatic creativity was necessary, and creativity is the exception rather than the rule.

My research into leases that settled sovereignty disputes led me to produce a matrix of the various terms they have employed – the rights transferred, the duration and the compensation – to alleviate the creativity requirement and allow the leasing option to be considered more routinely when circumstances suggest it may be viable. Identifying those circumstances can be a challenge, but disputes that share a critical mass of characteristics with those that have been resolved this way are potential candidates. Among other factors, the territories involved in these cases were small, with few if any inhabitants and with limited natural resources, while the disputes were of low intensity at the time the leasing arrangements were negotiated.

It is likely that at least some disputes with other features, for example territories with larger populations or significant natural resources, might be amenable to resolution this way. It is also probable that some disputes may simply not lend themselves to the leasing option. It is unknown where its limits lie, although one thing is clear – each case will have a number of factors that are specific to that dispute and these will have to be considered.

Which boundary disputes have been solved by means of a territorial leasing agreement?

The earliest was one between Spain and France in 1856, in the Basque region of the Pyrenees mountains. The lease in this case involved an area called the Quinto Real Norte (Pays Quint Septentrional), where Spain retained sovereignty but France was given exclusive rights in exchange for an annual rent that is still being paid today. In the 1890s there were two cases involving colonial spheres of influence – in one, China leased a small area to Great Britain in what was then British-ruled Burma; in the other, Great Britain leased two small areas along the Niger River (in what is now Nigeria) to France. Both of these leases have now ended.

More recent examples include a 1992 lease involving an area called Tin Bigha in India, where Bangladesh obtained rights; twin leases in which Israel obtained certain rights on two small parcels of Jordanian territory as part of their 1994 peace treaty; and a 1998 lease in which Ecuador secured rights to a small area in Peru called Tiwintza.

Which current boundary disputes could be solved by a territorial leasing agreement?

There are a number of conflicts in which territorial leasing may be worth considering as an option, based on the characteristics of the territories and of the conflicts themselves. Some examples include the dispute over the Shab’a (Shebaa) Farms, a small area where Israel, Syria and Lebanon converge; a dispute between Bolivia and Chile over part of the Atacama Desert; and a conflict between Egypt and Sudan over an area called the Hala’ib Triangle. The viability of a territorial lease in each case would depend on a number of circumstances, but the initial profiles of these and other disputes suggest that carefully negotiated leases might be successful in alleviating or resolving them.