(The following is a summary of a panel discussion held at The Middle East Institute on September 19, 2001. The principal speakers were Dr. Elmar Mamedyarov, Chargé d’Affaires, Embassy of the Republic of Azerbaijan and Dr. Bahman Diba, a former Iranian diplomat, now a consultant and specialist on international and legal affairs. Dr. Michael Collins Dunn, editor of The Middle East Journal, served as moderator.)

In his introductory remarks, Michael Dunn recounted the circumstances and significance of the July 23^rd confrontation between an Iranian military vessel and an Azerbaijani ship conducting geophysical studies in disputed waters of the Caspian Sea. This incident, Dunn asserted, was a stark reminder that the apportioning of offshore rights has not yet been resolved to the satisfaction of the five Caspian littoral states. Dunn noted that the principal documents pertaining to the legal status of the Caspian are treaties signed by Iran and the Soviet Union in 1921 and 1940. Iran has insisted that the provisions of these treaties still apply, while the positions of the other littoral states (i.e., Azerbaijan, Kazakhstan, Russia, and Turkmenistan) have varied. Dunn pointed out that the dispute has not deterred the parties from pursuing exploration, signing contracts, or entering bilateral pacts on how to divide the Caspian. Yet, at the same time, the continuation of the status quo runs the risk of repeated incidents and heightened tensions of the kind that occurred this past July.

Elmar Mamedyarov discussed Azerbaijan’s interpretation of the legal status of the Caspian in the broader context of the country’s altered position in the region and in the world since its declaration of independence from the Soviet Union in 1991. He emphasized that Azerbaijan’s growing "visibility in the international arena" — largely attributable to the country’s considerable oil/gas resources — has been a "burden," requiring that the Azerbaijan leadership formulate a "clear and elaborate system of external relations." The question of how to keep relations with Iran on an even keel has proven to be one of Azerbaijan’s major foreign policy challenges.

The relationship between Azerbaijan and Iran, in spite of their historical and cultural affinities, has been neither predictable nor easy to manage. Iran waited until the collapse of the USSR to recognize Azerbaijan’s independence. Thereafter, Tehran kept a relatively low profile, emphasizing economic cooperation and the renewal of cultural ties with Azerbaijan. Yet, in the conflict over Nagorno-Karabakh, Tehran supported Armenia. More to the point, with respect to the Caspian, Iran has challenged projects undertaken by some of the littoral states, especially those pursued by Azerbaijan and Kazakhstan.

Mamedyarov emphasized that the course and contours of Azerbaijan-Iran relations have been shaped by regional and international politics. In Mamedyarov’s opinion, the dispute between Azerbaijan and Iran regarding the legal status of the Caspian is a "component of the tension that has arisen in the region" Furthermore, the increasing US presence and influence in the region, coupled with the continuing rift between Washington and Iran, has further complicated intra-regional relations, including the disposition of the "Caspian question."

According to Mamedyarov, the Government of Azerbaijan takes the position that the 1921 and 1940 treaties governing the Caspian are still valid, and that assertions to the contrary are unsubstantiated. Azerbaijan also takes the position that the threat or use of force by any of the littoral states to advance its claims in the Caspian Sea constitutes an indisputable violation of international law. Finally, Azerbaijan favors reducing the military presence in the Caspian. Mamedyarov stated that the stability and prosperity of Azerbaijan and of other countries in the region hinge on a peaceful, equitable, and expeditious resolution of the Caspian dispute. Azerbaijan is committed to finding ways to cooperate with its neighbors, including Iran, to make this possible.

Like Mamedyarov, Bahman Diba maintained that the dispute over the legal status of the Caspian Sea is the core issue in Azerbaijan-Iran, and in intra-regional relations. Diba asserted that, in fact, a legal regime governing the use of the Caspian already exists, and that it is based on the law of treaties, on countless documents and memoranda, and most importantly, on the Soviet-Iranian treaties of 1921 and 1941. Furthermore, all of the littoral states have, until now, observed this regime. Yet, Diba conceded, the "ideas and aspirations" of the five littoral states diverge concerning the status of the Caspian.

According to Diba’s interpretation of the existing legal regime, the Caspian Sea is a condominium — common property — except beyond a 10-mile exclusive fishing zone. The denial of rights of usage during the Cold War, Diba contended, did not nullify those rights. Indeed, Iran paid, and continues to pay, a steep price for having aligned with the West during the Cold War in the form of extensive pollution of the Caspian Sea, itself, and its shoreline.

If the Caspian Sea legal regime is to be revised by dividing its waters into national sectors, as some have advocated, then, Diba argued, Iran is entitled to an equal share. In redefining the status of the Caspian through negotiations, it is prudent to act while the window of opportunity to do so remains open (i.e., while Iranian moderates can still withstand the pressure from their conservative opponents).

Diba identified several alternative formulas for reapportioning the Caspian among the five littoral states: dividing the whole of the Caspian; dividing the seabed only; dividing the Caspian according to the terms of the 1982 UN Convention of the Law of the Sea; establishing a modified medial line; and dividing the Caspian first north-south, and then sub-dividing the two "halves". Diba insisted that all unilateral acts are void, and that bilateral pacts create no obligations for others. They create, instead, unnecessary risks and dangers. It is therefore incumbent upon all of the littoral states to exercise restraint and to seek a negotiated settlement of the Caspian dispute.

• What should be the instrumentality for reaching an agreement?

Both speakers emphasized the necessity of negotiation and compromise. Mamedyarov noted that experts’ meetings to find common ground are ongoing. Diba suggested that the disputing parties should explore all international channels for resolving their dispute. He stated that medial-line approaches tend to be crude devices, which leave Iran with only 12-13% of the Caspian. He indicated that a modified medial-line approach (presumably one that is more generous toward Iran) might be viewed favorably in Tehran.

• Are Azerbaijan, Kazakhstan, and Russia wedded to a strict medial-line approach that gives Iran just 12-13%?

According to Mamedyarov, it may be difficult for Azerbaijan to accede to an arrangement that yields 20% of the Caspian to Iran. But in any case, Mamedyarov stated, it is important to remember that this is not a bilateral dispute between Azerbaijan and Iran, and that any disposition of the Caspian question will require the assent of all five littoral states.

• Is the Caspian dispute, in actual fact, merely a matter of differing interpretations of legal principles and how to apply them?

The speakers agreed that the character and dynamics of the Caspian dispute are affected by domestic political and geopolitical factors. Iran, for example, objects to the participation of US companies in Caspian energy projects from which Iranian companies have been excluded due to American pressure. Still, all parties to the dispute appear willing to strike a deal. Legal principles provide guidance and a level playing field upon which to explore a negotiated settlement.

• Is there a sense in Azerbaijan or in Iran that resolving the Caspian dispute is urgently necessary?

Azerbaijan is working hard to complete the gas supply line to Georgia and to move the Baku-Ceyhan pipeline project along. The country’s economic future and political independence are at stake. In contrast, Iran has time on its side. Iran has proven energy resources, including recent new discoveries, in the Persian Gulf and elsewhere on Iranian territory. For this reason, it is less urgent for Iran than for Azerbaijan to settle the Caspian dispute.

This summary was prepared by MEI scholar-in-residence, Dr. John Calabrese.