Sea Law Commission registers India as first pioneer investor: three other states to be registered by end of 1987.

Sea Law Commission registers India as first pioneer investor

Three other States to be registered by end of 1987

THE PREPARATORY COMMISSION for the International Sea-Bed Authority and for the International Tribunal for the Law of the Sea, at its resumed fifth regular session (27 July-21 August, New York), registered India as the first pioneer investor in sea-bed mining, thus taking the first step towards implementation of the sea-bed mining regime as elaborated in the 1982 United Nations Convention on the Law of the Sea.

The Commission also continued work on rules of procedure for the Assembly, Council and the other organs of the International Sea-Bed Authority, the deep sea-bed mining code, the rules of the International Tribunal for Law of the Sea and other matters related to its establishment.

Jose Luis Jesus of Cape Verde was elected as the new Commission Chairman to replace Prime Minister of the United Republic of Tanzania Joseph Warioba. Mr. Jesus said he would spare no effort in tackling the difficult tasks ahead, and would be guided by the need to find a balance of the interests of all delegations with a view to reaching generally acceptable solutions.

The registration of India gives that country exclusive rights to explore an area of 150,000 square kilometres in the Indian Ocean. The decision also reserves for the Enterprise--the mining arm of the Authority--an area of equal commercial value in the same region.

Satya N. Nandan, Under-Secretary-General, Special Representative of the Secretary-General for the Law of the Sea Office for Ocean Affairs and the Law of the Sea, described India's registration as an "historic event' for the United Nations. He said it is the first time under the Organization's auspices that an area in the international deep sea-bed has been allocated exclusively to one nation for the purpose of development of its mineral resources.

The Commission also agreed to a timetable by which the three other applicants for pioneer investor status--France, Japan and the USSR--would be registered by the end of 1987.

Secretary-General Javier Perez de Cuellar called the agreement "one of the most significant developments in the Law of the Sea since the adoption of the Convention'.

The registration of pioneer investors was delayed for three years because of the overlapping claims of France, Japan and the Soviet Union in the northern Pacific Ocean, and because of conflicts in the claims between the Soviet Union and four potential applicants--international consortia in which companies from Belgium, Canada, Italy and the Netherlands (States signatories to the Convention) and some other non-signatory States have interests.

Simultaneous with the work being done in the Commission to resolve the conflicting claims, bilateral and multilateral negotiations were being pursued on the resolution of those conflicting claims. The agreement announced during the session signalled the resolution of all conflicting claims.

The settlement had not been easy, as account had to be taken of the substantial financial expenditure incurred by each party and the considerable commercial interest they had in mine sites claimed.

All concerned, he concluded, had "displayed a constructive spirit of compromise and co-operation', and the Commission had exhibited patience and wisdom in dealing with the "difficult and delicate matter'.

The agreement, the Secretary-General said, not only resolved the immediate specific problem of overlaps, but "bodes well for the future of the Convention and paves the way towards reconciliation in respect of those matters relating to the regime for deep sea-bed mining which have prevented a number of States from signing the Convention'.

The United States, the United Kingdom and the Federal Republic of Germany did not sign the Convention because of concerns over the sea-bed mining regime. The Convention has been signed by 159 States, and ratified or acceded to by 34 States. It will come into force with 60 ratifications or accessions.

The procedure for the registration of the four applicants for pioneer investor status was agreed to by the Commission after hearing a report from its Acting Chairman, Rabah Kerouaz of Algeria, in which he indicated that the four applicants and the group of Potential Applicants had reached a comprehensive settlement of all practical problems, paving the way for the registration of the first group of applicants. The practical problems involved overlapping claims in the north-eastern Pacific Ocean.

Since the agreement reached among the four applicants and the group of Potential Applicants would require technical changes in some of the applications, the Commission agreed that the revised applications of the Soviet Union, France and Japan would be examined by a group of technical experts beginning on 23 November. The Commission's General Committee would meet on 7 December to review the applications and the recommendations of the group of technical experts, with a view to registration not later than 30 December.

The United Kingdom and the Federal Republic of Germany, observers in the Preparatory Commission, in letters to the Commission Chairman, welcomed the successful outcome of the negotiations concerning the conflicting claims and associated themselves with the settlement reached.

Brazil, speaking on behalf of the Group of 77 developing countries, said the agreement reached "by signatory and non-signatory States on overlapping claims cannot be construed as . . . condoning (by the Commission) of any mining activity conducted outside the Convention'.

Canada, speaking on behalf of the Group of Potential Applicants, said the agreement it had reached with the Soviet Union was the most important development in the Commission's five-year history. The Commission should consider the "political and economic realities' in efforts to finalize a universally acceptable sea-bed mining regime.

In recognition of investments already made in exploration, research and development work relating to sea-bed mining, the Third United Nations Conference on the Law of the Sea (1973-1982) decided by its Resolution II to establish a special regime to govern "pioneer activities' by States or entities which would be registered by the Commission as "pioneer investors'. Resolution II ensured that pioneer investors would receive mining contracts from the Authority.

Resolution II identified the potential pioneer investors as a group of four States or their enterprises (France, India, Japan and the Soviet Union) and a second group of four consortia whose components came from one or more of a list of eight States (Belgium, Canada, Federal Republic of Germany, Italy, Japan, Netherlands, United Kingdom and United States).

Special Commissions meet

During the July/August session, the preparatory body's four Special Commissions concerned with specific issues met.

Land-based producer States: Special Commission 1 is concerned with the adverse effects that sea-bed mining might have on the developing land-based producer States, and with the question of remedial measures for those whose export earnings or economies are seriously affected. The Law of the Sea Convention envisages a system of compensation or other measures of economic adjustment assistance.

The session was marked by a preliminary exchange of views on the question of subsidization of sea-bed mining, an issue to be considered further at the next session, as will the question of projections of demand for copper, nickel, cobalt and manganese, ways of categorizing adverse effects of sea-bed mining and of identifying those likely to be affected, and remedial or compensatory measures. Other issues to be reviewed include the role of bilateral agreements in mineral trade and how to isolate the effects of sea-bed mining from those of other factors.

Enterprise: Special Commission 2 is concerned with preparations for the early entry into effective operation of the Enterprise. One priority has been the study of training needs associated with meeting the manpower requirements of the Enterprise.

Structural questions were discussed at the session. Most delegates accepted the need for preparatory functions for a nucleus or pre-operational Enterprise when the Convention comes into force but before sea-bed mining gets under way. For the interim phase--before the Convention takes effect--the group of developing States suggested that a nucleus group of experts should give technical advice to the Commission on matters relating to implementation of Resolution II.

Mining code: Special Commission 3 is mandated to prepare a mining code--rules, regulations and procedures for exploring and exploiting the international sea-bed area. The Commission has been considering draft regulations dealing with: notification to the Authority of intentions to engage in prospecting, application for approval of a plan of work for exploration and/or exploitation of polymetallic nodules; consideration of applications; approval of the plan of work; and execution of contracts.

Special Commission 3 continued examining draft regulations dealing with the financial terms of sea-bed mining contracts. These regulations involve complex procedures for determining payments by a contractor to the Authority.

Also considered was a paper introduced by the secretariat on financial incentives. Some delegations maintained that financial incentives should be considered an integral part of the financial rules and that clear criteria and non-discriminatory procedures should be established to provide for automatic application and to avoid discretionary decisions by the Authority.

Other delegations took the position that the availability of incentives should not become a general rule but should only be awarded at the discretion of the Authority. It was also stated that the provision of incentives should not amount to subsidization of sea-bed mining, especially to the detriment of land-based mining.

Tribunal: Special Commission 4 is making all arrangements for establishment of the Law of the Sea Tribunal which is to deal with disputes relating to all aspects of the Law of the Sea.

The Commission further examined draft rules of the Tribunal and began consideration of a draft headquarters agreement to be entered into between the Tribunal and the Federal Republic of Germany.

The Convention has designated Hamburg as the seat of the Tribunal, but questions have arisen because the Federal Republic of Germany has not so far acceded to the Convention.

Under the Final Act of the Third United Nations Conference on the Law of the Sea, countries hosting facilities and institutions of the Law of the Sea are required to be parties to the Convention when it enters into force.

The next regular session of the Commission will be held at Kingston, from 14 March to 8 April.

Photo: The Sea Law Convention aims to place the resources of international areas of the world's oceans at the disposal of all humankind.

Photo: Satya N. Nandan Under-Secretary-General for Ocean Affairs and Law of the Sea