OFFSHORE MINING: INTERNATIONAL, EXCLUSIVE ECONOMIC ZONE AND TERRITORIAL WATERS - AN INTERNATIONAL PERSPECTIVE

• Jurisdiction: Derecho Internacional

International Mining Law and Investment in Latin America and the Caribbean
(Apr 005)
CHAPTER 16E
OFFSHORE MINING: INTERNATIONAL, EXCLUSIVE ECONOMIC ZONE AND TERRITORIAL WATERS - AN INTERNATIONAL PERSPECTIVE
Ambassador Satya N. Nandan, C.F., C.B.E.
Secretary-General, International Seabed Authority
Kingston, Jamaica

Ambassador Satya N. Nandan, C.F., C.B.E., is the Secretary-General of the International Seabed Authority since March 1996. He has earlier served as Secretary for Foreign Affairs of Fiji and as Under-Secretary-General of the United Nations and Special Representative of the Secretary-General for the Law of the Sea. Ambassador Nandan was among the leaders of the third UN Conference on the Law of the Sea and Chairman of the negotiating groups on a number of key issues before the Conference. As Special Representative of the Secretary-General for the Law of the Sea, he lead the consultations on outstanding issues relating to the regime for deep seabed mining which had prevented the industrial countries from accepting the 1982 United Nations Convention on the Law of the Sea. The consultations resulted in the 1994 Agreement to implement the provisions of Part XI of the UN Convention which opened the door to universal participation in the 1982 Convention.

He served as the Chairman of the UN Conference on Straddling Fish Stocks and Highly Migratory Fish Stocks which resulted in the 1996 UN Fish Stocks Agreement.

Ambassador Nandan has written extensively on the Law of the Sea, the United Nations, and related matters. He serves as general editor of the Law of the Sea commentary series, consisting of six volumes published by the University of Virginia Center for Ocean Law and Policy.

I am very honoured by your invitation to participate in this Conference on International Mining Law and Investment in Latin American and the Caribbean. It gives me an opportunity to speak on one of the newest and potentially very significant initiatives relating to the mining sector in recent years.

Before I speak on the international perspective of offshore mining, it is perhaps useful to recall the various maritime zones established by the 1982 United Nations Convention on the Law of the Sea ("the Convention"). ¹ The Convention establishes a comprehensive legal order for the world's oceans and seas setting forth the rights and duties of States in the various zones of sovereignty and jurisdiction and covers all ocean-related activities. Under the Convention, a coastal State is entitled to a territorial sea, of up to 12 nm over which it exercises sovereignty, ² subject to the right of innocent passage for international navigations; a contiguous zone of up to 24 nm in which it can enforce its customs, fiscal and sanitary laws; ³ an exclusive economic zone up to 200 nm in which it has sovereign rights to the living and non-living resources and jurisdiction over the marine environment; ⁴ and where a continental shelf extends beyond 200 nm, sovereign rights to the resources of the shelf up to the continental margin as defined in the Convention. ⁵ Beyond the zones of national jurisdiction there exists under the Convention the international seabed area which comprises the seabed and ocean floor and subsoil thereof beyond the limits of national jurisdiction referred to in the Convention as the "Area". ⁶ The 1982 United Nations Convention established three new institutions to give effect to its provisions. These institutions are the International Seabed Authority, the Commission on the Outer Limits of the Continental Shelf and the International Tribunal for the Law of the Sea.

The International Seabed Authority is an autonomous international organization. It is the organization through which States organize and control activities in the Area, particularly with a view to administering the resources of the Area. ⁷ The Area and its resources are the common heritage of mankind, and all rights in the resources of the Area are vested in mankind as a whole on whose behalf the Authority acts. ⁸

At the time of the adoption of the Convention in 1982 there was controversy over the Convention due mainly to some of the provisions in Part XI of the Convention which contains the regime for the mining of minerals in the international seabed area. For a number of reasons, the regime was not acceptable to major industrialized states, such as Germany, the United Kingdom and the United States, who sought changes to Part XI before they could become parties to the Convention. Some of the main objections to the regime included those relating to the decision-making procedures in the governing bodies of the Authority, the provisions on mandatory transfer of technology to developing countries and to the Enterprise (the operating arm of the Authority), the subsidization of the Enterprise and the system of taxation and production limitation policy to protect land-based mining.

In 1990, the then Secretary-General of the United Nations, Javier Perez de Cuellar, convened the first in a series of informal consultations on outstanding issues with respect to Part XI of the Convention. ⁹ The objective was to try to find ways of addressing the concerns of the industrialized States with a view to achieving universal participation in the Convention as a whole. The result of the Secretary-General's consultations was the adoption by the UN General Assembly, in July 1994, of the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea. ¹⁰ This Agreement satisfactorily resolved all outstanding issues. Its adoption was supported widely and included all major industrialized countries including the United States.

The Agreement now forms an integral part of the Convention. ¹¹ Its effect is to remove the troublesome elements of the seabed mining regime. It also introduced a more functional approach towards the establishment of the administrative institutions ¹² under Part XI and by taking a more market-oriented approach to mining, ¹³ it provides for a stable and secure environment for potential investors. The Agreement guarantees access to the resources of the seabed to all qualified investors and in order not to give an unfair advantage over land-based producers, it also provides for the establishment of a system of taxation, with preference for a royalty system, which is within the range applied for land-based mining. The system should be fair to miners and to the Authority so that the international community as a whole may benefit; ¹⁴ it also makes provision for assistance from the proceeds of mining to developing land-based producers of minerals whose economies may be affected as a consequence of deep seabed mining. ¹⁵ As a result of this Agreement, the regime for the mining of minerals from the deep seabed contained in the Convention has been considerably modified, streamlined and simplified. ¹⁶

The adoption of the Agreement removed the impediments to ratification of or accession to the Convention for the industrialized States. The Convention entered into force on the 16%gth%g November 1994. It currently has 148 Parties which includes all major industrialized countries except for the United States. However, the United States supports the Convention and in practice applies its provisions. The Bush Administration has submitted the Convention for the approval of the Senate and awaits Senate action.

Organs of the Authority

The principal organs of the Authority are an Assembly, a Council and a Secretariat. ¹⁷ Its subsidiary bodies are the Legal and Technical Commission and the Finance Committee.

The Assembly, which consists of all members ¹⁸ of the Authority, is the organ to which other principle organs are accountable as provided in the Convention. It has powers to establish general policies in conformity with the general provisions of the Convention on any question or matter within the competence of the Authority. ¹⁹ It elects members of the Council, ²⁰ the Secretary-General ²¹ and members of the Finance Committee. ²² Upon the recommendation of the Council, it adopts the budget of the Authority ²³ and the regulations, rules and procedures relating to prospecting, exploration and exploitation of the resources of the area. ²⁴

The 36-member Council ²⁵ is the executive organ of the Authority and plays a central role in the Authority. It is mandated to establish specific policies on matters within the competence of the Authority. ²⁶ It has powers inter alia to adopt and apply provisionally the regulations, rules and procedures of the Authority taking into account the recommendations of the Legal and Technical Commission. ²⁷ An important function of the Council is to approve, upon the recommendation of the Legal and Technical Commission, applications for mining contracts or licenses submitted to it in the form of plans of work for exploration or exploitation. ²⁸ The Council is divided into four "chambers" representing the various interest groups concerned with the mining of minerals from the deep ocean. ²⁹ These are the largest consumers of minerals to be produced from the seabed including the State with the largest economy at the date of entry into force of the Convention, the largest investors in deep seabed mining activities, land-based producers of minerals similar to those produced from the seabed and those from developing countries not included in the first three chambers. As an assurance to all interest groups that their interest would be fairly taken into account, the Agreement provides that "If all efforts to reach a decision by consensus have been exhausted, decisions by voting in the Council on questions of procedure shall be taken by a majority of members present and voting, and decisions on questions of substance, except where the Convention provides for decisions by consensus in the Council, shall be taken by a two-thirds majority of members present and voting, provided that such decisions are...