Sea-Bed Commission condemns issuing of licenses for exploration of international area.

Sea-Bed Commission condemns issuing of licences for exploration of international area

Deploring the fact that the United Kingdom and the Federal Republic of Germany had issued licences for exploration of parts of the International Sea-Bed Area, the Preparatory Commission for the International Sea-Bed Authority and for the International Tribunal for the Law of the Sea reiterated its rejection of any such claim, agreement, or action undertaken outside the Commission. In a declaration adopted at the end of its first session for 1986 (Kingston, 17 March-11 April), the Commission called such activities "wholly illegal and devoid of any basis for creating legal rights'.

The text, submitted by the Group of 77, was approved by a vote of 59 in favour to 7 against (Belgium, Canada, France, Italy, Japan. Luxembourg, Netherlands), with 10 abstentions.

During its session, the Preparatory Commission, set up by the Third United Nations Conference on the Law of the Sea in 1982, continued working on arrangements for the two major institutions to be established once the Convention on the Law of the Sea enters into force. Through its four Special Commissions, the Commission continued work on rules governing deep sea-bed mining and resolution of disputes among sea-bed miners; discussed the Enterprise, the Authority's sea-bed mining arm; and considered ways to alleviate problems sea-bed mining might pose for developing countries whose economies are dependent on land-based mineral production.

In addition, Acting Chairman I.G. Jhingram (India) conducted informal consultations aimed at resolving overlapping claims of potential "pioneer investors' in the International Sea-Bed Area.

Mr. Jhingran, who presided in the absence of Chairman Joseph Warioba (United Republic of Tanzania), characterized the session as "productive', affirming that Commission members had worked hard and "made progress'. Because of the United Nations financial crisis, the Commission is to hold its summer session, normally scheduled for Geneva, in New York, from 11 August to 5 September.

Declaration: The Group of 77 text was adopted after Commission members failed to agree on an amended version that would have deleted specific references to the United Kingdom and the Federal Republic of Germany and the notion of "purported' issuing of licenses. The Group continued to maintain the position that the Law of the Sea Convention was the only universally negotiated instrument for an international regime for exploration and exploitation of the Area and its resources.

Speaking on the Group's behalf, Cape Verde said the granting of licenses and enactment of national legislation for exploration outside the Convention was a "dangerous path' that could lead only to confusion and open conflict. The Eastern European States and China supported the Group of 77 view.

The United Kingdom and the Federal Republic of Germany argued, however, that at present there was no generally accepted international sea-bed regime, and that until then, it was legal to take interim steps. Both said their national legislation and licences envisaged repeal with the achievement of an international regime.

Several Western European countries said the Preparatory Commission should not judge the legality of any State's behaviour. The declaration was "divisive', they felt, and unlikely to persuade countries which had not signed the Convention to become parties to it.

The Law of the Sea Convention received 159 signatures by the closing date for signature on 9 December 1984. It has to date received 29 ratifications.

Pioneer investors: Problems relating to "pioneer investors' in the sea-bed area continued to be of major interest to the Commission. The Law of the Sea Conference, in its resolution II, decided to establish a special regime to regulate preparatory investment in "pioneer activities' in response to concerns of some Western industrialized countries whose consortia had undertaken exploration, research and development work relating to ploymetallic nodules.

States registered as "pioneer investors' would be entitled to explore, but not commercially exploit, a selected expanse of international sea-bed area until the Convention comes into force. Once commercial production from the sea-bed began, pioneer States would be guaranteed priority over all other applicants together with the Enterprise. Applicants for pioneer investment status would be required to propose an area large enough for two commercial mining operations--one for the pioneer investor, the other as a reserve site for the Enterprise.

It was agreed that four States (France, India, Japan and the Soviet Union) would be eligible to register as pioneer investors and that each would have a site allocated to it. In addition, four consortia whose components come from one or more of eight States (Belgium, Canada, Federal Republic of Germany, Italy, Japan, Netherlands, United Kingdom and United States) would be entitled to the same arrangements so long as they had spent at least $30 million on sea-bed activities by 1 January 1983. Developing countries had until 1 January 1985 to qualify under the same terms.

To be registered as a pioneer investor, a consortium must be represented by a "certifying State' which has signed the Law of the Sea Convention. To date, all four States in the first group have signed; in the second group, the Federal Republic of Germany, the United Kingdom and the United States have not signed.

Under resolution II, States or certifying States applying for pioneer investor status are required to ensure that none of the area in their applications overlap. At present, overlaps exist between the application sites of Japan and the Soviet Union and those of the Soviet Union and France. All are located in the north-east Pacific Ocean. (Indian's application site is in the Indian Ocean.)

Acting Chairman Jhingran, reporting on his consultations with Commission members, said that most supported--as a good basis for reconciling the interests of the Authority and the first investors--the "Arusha Understanding' that emerged from February 1986 talks between Commission Chairman Warioba and the first group of investors, held at Arusha, United Republic of Tanzania. At that time, France, India, Japan and the Soviet Union reached an agreement on resolving overlapping claims through equal sharing. Difficulties in conforming to the requirement that applicants reserve for the Enterprise an area exactly equal in commercial value to the one they intended to mine were also taken into account.

Cape Verde said the Group of 77 supported the understanding as a basis for further work on the subject, and suggested that a "substantial part' of the Commission's next session be devoted to studying problems associated with the registration of pioneer investors. France felt the understanding was an imperfect but well-balanced text and could enter into force if all commission members supported it. It agreed that the next session should focus on the issue.

The German Democratic Republic, on behalf of the Eastern European States, called on the Commission to approve the "Arusha Understanding' at the outset of its next session, then proceed immediately to the registration of pioneer investors.

The USSR, however, objected to what it saw as the "surprising tolerance' of the Preparatory Commission towards countries such as the United States which had not signed the Convention and which were doing "everything possible' to impede the first group of pioneer investment applicants by trying to set up their own separate regime for exploring and exploiting the international sea-bed area. Active steps should be taken to counter such attempts to undermine the Convention, the Soviet Union said.

China felt that additional information, including maps and technical data, was needed to evaluate the "Arusha Understanding'.

Sea-bed Authority: The Preparatory Commission, which is entrusted with preparing rules of procedure for both the Assembly and the Council of the International Sea-Bed Authority, completed the first reading of the Council's rules.

As the Authority's executive body, the 36-member Council will approve work plans for deep sea-bed mining and control activities in the sea-bed area. Its membership is to represent all regional groups and major interests. The Assembly comprising all parties to the Convention, as the Authority's "supreme organ', will be its chief policy-making arm.

Discussions on the Council's rules of procedure focused on election of members, and financial and budgetary questions. The Commission postponed decisions on distribution of seats and representation in two of the Council's subsidiary bodies--the Economic Planning Commission and the Legal and Technical Commission.

The Law of the Sea Convention calls for elections, based on "dquitable geographical distribution' giving "due account to special interests'. Eastern European States introduced amendments that would require "equal', rather than "equitable', geographical distribution in the subsidiary bodies. Some Western European States and Japan proposed that 8 of the 15 members of each organ be chosen from candidates nominated by the eight States parties most substantially engaged in deep sea-bed mining.

The Commission postponed consideration of a proposal to establish a finance committee. An amendment by several Western European States and Japan called for filling 8 of the 15 seats on the Finance Committee with candidates nominated by States that are among the 15 largest contributors.

Special Commissions

Land-based producer States: Special Commission 1--on land-based producer States--continued discussing ways to alleviate problems that sea-bed mining might pose for developing countries with economies dependent on land-based production of one or more of the four minerals (copper, nickel, cobalt and manganese) likely to be derived from the deep sea-bed area. Among the remedial measures being considered is the establishment of a compensation fund.

The Eastern European States opposed the idea of a universal system of compensation, including a compensation fund, contending that non-Parties to the Convention would gain from it, while Convention Parties would lose. Their alternate proposal calls for bilateral compensation agreements between land-based mineral producers and States involved in deep sea-bed mining, under the auspices of the Sea-Bed Authority.

The United Kingdom and Australia took issue with the basic assumption that commercial sea-bed mining would adversely affect land-based producer States. "Subsidized mining is the real threat', Australia said, asserting that the compensation-fund idea should be rejected because "market forces' would ultimately decide which producers remained viable.

The Special Commission reviewed a paper outlining methods devised by intergovernmental organizations to assist land-based producer countries in overcoming a shortfall in exports or economic adjustments, and concluded that the activities described therein could be useful to its future work. Chairman Hasjim Djalal (Indonesia) recommended that at the next session Special Commission 1 begin drafting recommendations to be submitted to the Authority.

Enterprise: Special Commission 2--concerned with preparations for the early entry into operation of the Enterprise--devoted most of its time to the question of training. Chairman Lennox Ballah (Trinidad and Tobago) reported there was now sufficient material to begin formulating basic guidelines for a training programme, including a study of manpower requirements. Since the Special Commission's work was linked to that of registered pioneer investors, he said, the programme could not proceed unless pioneers were registered soon.

(Under resolution II of the Sea Law Conference, registered pioneer investors must provide special training to ensure availability of skilled managerial manpower to guide the Enterprise's mining operations.)

The Commission postponed action on a draft resolution, sponsored by Malta and 15 other countries, on seabed training programmes offered by the Malta-based International Ocean Institute. The Chairman welcomed the information provided on such programmes, however, and encouraged submission of similar proposals.

An Australian study on economic viability of deep sea-bed mining, containing information on operating costs, technology and metal-price forecasts, was introduced at the session. In it, it was argued that sea-bed mining by the Enterprise could operate only on sound commercial principles.

The Special Commission agreed that at its next session it should examine assumptions on which operational options for sea-bed mining might be based, and invited delegations with expertise in that regard to provide information and calculations.

Mining code: Special Commission 3 completed a preliminary review of the "mining code'--draft regulations on prospecting, exploration and exploitation of polymetallic nodules in the international sea-bed. These deal with such issues as: procedures for States to notify the Authority of their intention to engage in prospecting; applications for approval of work plans for exploring and exploiting deep seabed resources; fees; and contracts.

Chairman Jaap A. Walkate (Netherlands), said that informal consultations were held during the session on a question that remained controversial: whether a State's application for designation of a mining area and approval of a work plan should be submitted in one or two stages. He was "encouraged' by the constructive atmosphere of the talks and recommended they continue at the next session to facilitate drafting a universally acceptable text.

Sea Law Tribunal: Special Commission 4--for the International Tribunal for the Law of the Sea-- completed the first reading of a set of rules of procedure, approving provisions on secrecy of confidential information heard by the Chamber, and requests for advisory opinions. A provision specifying that special knowledge, expertise or previous experience should be taken into account in selecting members of the Sea-Bed Disputes Chamber was deleted from an article calling for equitable geographical distribution and representation of the world's principal legal systems.

Questions relating to the Tribunal's site were a major focus of the session. Although the Law of the Sea Convention stipulates that the Tribunal should be located in Hamburg, Federal Republic of Germany, a number of countries asked that the question of venue be reopened in view of the Federal Republic of Germany's failure so far to sign or accede to the Convention. In that connection, the Special Commission examined a Secretariat report on the experience of international courts and tribunals regarding establishment of their headquarters, particularly the amount of time needed to design and construct facilities.

The Commission, chaired by Gunter Goerner (German Democratic Republic), decided to continue discussions on the venue question at its next session, requesting the Secretariat to continue consultations with the Federal Republic of Germany and report on facilities planned and progress made. It also decided to begin consideration of a draft headquarters agreement.