John Denton, secretary general of the International Chamber of Commerce (ICC), believes the breakthrough may lie in a proven model. After helping broker the Black Sea Grain Initiative in the wake of Russia’s invasion of Ukraine in 2022, the ICC, which represents more than 170 countries, has helped develop a similar neutral framework for the Gulf.
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The proposed mechanism establishes a practical framework for the registration, monitoring, verification and reporting of vessel movements through the Strait, with an initial focus on fertilisers and related raw materials.
“This is not the first time we’ve been involved in coming up with a mechanism which can reopen a trade route in the midst of conflict,” Denton told Fortune.
“The logic behind that deal was an exchange of incentives; Ukraine gained the ability to move wheat and sunflower products, while Russia gained the ability to move fertiliser. Whereas, at the moment, what we’re seeing with the Iran conflict is that the only way of exchanging incentives is escalation, which is not going to get us to a peaceful reopening of Hormuz. And that’s where we think our neutral governance mechanism could prove decisive.”
The mechanism, as currently proposed, would have a dedicated task force led by the Executive Director of the United Nations Office for Project Services (UNOPS), Jorge Moreira da Silva. It would include representatives from the UN Conference on Trade and Development (UNCTAD) and the International Maritime Organization (IMO).
Once in place, a Joint Co-ordination Center (JCC) would facilitate secure shipping corridors, oversee the loading of fertilizer and related raw materials, verify and monitor participating vessels, and publish weekly reports detailing its activities.
The JCC would be located in Salalah on the coast of the Arabian Sea in southern Oman and its members would meet daily to review incoming, verified requests from vessels and provide deconflicted routes through the Strait for inbound and outbound vessels.
“People have had a habit during this horrible dispute of announcing the strait is open, the strait is closed, or that there’s a partial opening,” said Denton.
“But, ultimately, we actually have to ensure that the trade route functions. That means engaging the full economic ecosystem—shipowners, seafarers, insurers, port handlers, commodity traders, and financiers—all of whom need certainty before they’ll move goods again.
“What we’ve strived to do in building this mechanism is to ensure that it will be acceptable and usable by that economic ecosystem. And that requires obviously deconfliction of the area. It requires then a commitment to the neutral governance of the area in terms of the ability to inspect, etc., but at scale and frequently, not once every two weeks.”
While vessel inspections are not compulsory, member states can request a secondary inspection of a vessel in line with specified criteria. These inspections would be conducted by Oman’s Salalah Port Authority, observed by UN monitors, with the results shared amongst Joint Coordination Center members before the vessel proceeds.
The proposed mechanism, like its Black Sea predecessor, would be time-bound and explicitly would not “derogate from any freedom of navigation rights … under customary or conventional international law,” explained Denton, who previously served as head of the Australian legal giant Corrs Chambers Westgarth.
The mechanism does not indicate a timeframe, but the idea is that it would offer up a neutrally administered bridging solution until a more permanent plan is agreed.
Denton said the mechanism is ready to be deployed in a matter of weeks, if not sooner, but acknowledged that a workable trade corridor can’t simply be declared into existence. He added that he didn’t know whether Iran would agree to the mechanism, but that they’re aware of it.
It took three years to negotiate the Malacca mechanism covering the straits in East Asia that is often cited as a reference point for Hormuz.
“This isn’t something we can impose. Its implementation depends on the parties to the conflict reaching the view that it is a worthwhile initiative and agreeing to move ahead,” he said.
While the Black Sea Grain Initiative involved resolving a dispute between two parties—Ukraine and Russia—the Strait of Hormuz involves a web of states with competing territorial claims and significant international legal issues.
Article 5 of the U.S.-Iran Memorandum of Understanding was intended as a confidence-building measure to restore commercial shipping through the Strait of Hormuz but has instead emerged as the primary sticking point. Its vague wording has led to conflicting interpretations of control, competing shipping routes,and confusion overthe 60-day fee waiver limit
Iranian President Masoud Pezeshkian said on Sunday that the MoU that Iran signed in June with the U.S. would become the “cornerstone” of Tehran’s future foreign relations.
Denton pointed to the MoU’s legal ambiguity as a genuine weak point: “Article 5 is a challenge because the Iranians have clearly taken from Article 5 that they’ve been given the right to develop an administrative mechanism for the conduct of shipping through the Strait of Hormuz, a reading that the U.S. disputes.”
Denton also expressed concern over the ongoing talks taking place in the region.
“If an agreement were to be signed between Iran and Oman, can it actually hold?” he said.
“Aren’t you going to need to have the U.S. involved with that as well? And then, if the U.S. is to be involved, then how do the parties have confidence because no one currently trusts anyone. The only institution they trust at the moment, to a level that makes things work, may well be the United Nations.”
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