Part XI mandates forced technology transfer.
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Part XI entails possible discrimination against qualified mining applicants.
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Part XI creates discrimination in favor of the Enterprise, the operation mining arm of the International Seabed Authority.
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Part XI would impose undue financial and regulatory burdens on industrialized countries and private mining entities.
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Part XI creates a system of unequal sharing of revenues from mining.
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Under Part XI a review conference would have the power to impose treaty amendments on the United States and other nations without their consent;
Are these concerns ameliorated by the 1994 Agreement?
At the heart of the international seabed mining regime is the International Sea bed Authority (ISA), which is located in Kingston, Jamaica. (See UNCLOS Articles 156 to 158). The ISA is an autonomous international organization established to organize and control all mineral development activities in the Area, defined in UNCLOS Article 1 (1) as the seabed, the ocean floor and subsoil beyond the limits of national jurisdiction, the geographical area underlying most of the world's oceans. The tasks of the ISA are set out in UNCLOS Part XI. Note that Article 136 of UNCLOS states that the resources of the Area are the common heritage of mankind, which means that they are vested in mankind as a whole, on whose behalf the ISA is empowered to act. The ISA has four main functions:
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To administer the mineral resources of the Area;
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To adopt rules, regulations and procedures for the conduct of mining activitiesprospecting, exploration and exploitation---of the Area;
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To promote marine scientific research in the Area (to this end the ISA administers an International Seabed Authority Endowment Fund); and
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To protect and conserve the natural resources of the area, and to prevent damage to the flora and fauna of the marine environment.
The principal organs of the ISA are an Assembly, a Council, and a Secretariat, headed by a Secretary-General. Under UNCLOS Article 163, the ISA was to have two subsidiary organs, an Economic Planning Commission and a Legal and Technical Commission. At present the function of the former Commission are being handled by the legal and Technical Commission. In addition, the 1994 Agreement established a Finance Committee in the ISA.
The Assembly is the supreme organ of the ISA; it meets annually and in such special sessions as may be called by the Assembly. (UNCLOS, Article 159-160). Each member of the Assembly has one vote, and decisions are taken by consensus, but in the absence of consensus, decisions on matters of substance may be taken by two-thirds vote. The powers and functions of the Assembly are set out in UNCLOS Article 160.
The Council is the executive organ of the ISA (UNCLOS Articles 161-165). The Council initiates policies with respect to seabed mining and both promotes and regulates exploration and exploitation of seabed resources. The Council's task is to approve contract applications, draw up contracts, oversee their implementation, and to establish environmental and other regulatory standards. The Council is adopting a Mining Code that will provide a comprehensive regulatory regime for seabed mining. Key provisions of the ongoing Mining Code include a Regulation on Prospecting and Exploration for Polymetallic Nodules in the Area (13 J uly 2000); a Regulation on Prospecting and Exploration for Polymetallic Sulphides in the Area (7 May 2010); and a Regulation on Prospecting and Exploration for Cobalt-Rich Crusts in the Area (27 July 2012). The entire Mining Code may be found at http://www.isa.org/j m/en/mcode. The Council will have additional responsibilities once sea bed mining exploitation commences. The Council will oversee compliance with mining regulations and will monitor the economic effects of sea bed production. The Council will also issue directives to the Enterprise and will establish a staff of inspectors to check compliance with regulations.
The Council consists of 36 members of the JSA elected by the Assembly organized into five chambers as follows:
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Four states that are major consumers of seabed minerals including the state having the largest economy;
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Four states with the largest investment in seabed activities;
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Six developing countries with special interests (land-locked states; major importer states );
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Four states among parties that are major exporters of seabed minerals; and
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Eighteen members elected to ensure overall geographical balance.
So far the Council has taken all major decisions by consensus. If voting is necessary, procedural votes may be taken by simple majority, while decisions of substance require either a two-thirds or three-fourths majority vote.
A major feature of UNCLOS Part XI is the creation of the Enterprise (Artide 1 70} as the operational mining entity of the ISA. Under UNCLOS Article 153, the Enterprise has the capacity to carry out mining activities as well as the transporting, processing and marketing of minerals recovered from the Area. The Statute of the Enterprise is contained in Annex IV of UNCLOS, Articles 1-13.
The regime for sea bed mining as specified in UNCLOS Article 153 is a so-called parallel system which involves either a state-owned mining company or a state-sponsored private natural or juridical person, on the one hand; and the Enterprise on the other. Each application by an entity operated or sponsored by a state party must designate a section of the Area large enough to accommodate two mining operations of approximately equal commercial value. If the application is approved, the ISA allocates one part to the applicant and the other part is designated as a reserved area, a site banking scheme to reserve areas for the future conduct of mining by the Enterprise.
At this writing the ISA has entered into 15 year exploration contracts with 13 contractors, either state-owned companies or state-sponsored contractors; another four contracts are in process. No production of seabed minerals has actually occurred under the ISA regime.
The United States is the only major industrial country that has not ratified UNCLOS. The U.S. has promulgated an alternative national legal regime for the mining of seabed minerals, the Deep Sea bed Hard Mineral Resources Act, 30 USC sees. 1401 et seq. This act is implemented by regulations issued by the US Department of Commerce, National Oceanic and Atmospheric Administration (NOAA), 15 CFR Part 970. NOAA has issued several exploration licenses to companies under this regulatory regime.
Suppose you are the CEO of a company interested in conducting sea bed mining. Which regime would you apply to, the ISA or the US?
PROBLEM 7-5
Mining the Riches of the Sea
The ABC Nautilus Mining Company is a Canadian corporation with long experience mining and processing minerals in mountain areas of North America. ABC has contacted the government of Cook Islands in the South Pacific about sponsoring ABC to carry out prospecting and exploration activities in the sea bed and subsoil of the South Pacific Ocean. ABC has obtained information that an area of about 100 square kilometers ranging from 150 to 300 kilometers off the coast of the northern Cook Islands would be an ideal area to mine polymetallic nodules and polymetallic sulphides. ABC, after exploration, may exploit this area using unmanned remote cutting machines which can be operated from a surface shi p. The ore that is removed will then be conveyed to the surface by a continuous line bucket system to a processing ship which will separate the ore from valuable minerals. The rock resulting from the separation process will then be dumped back into the sea. Scientists and experts with whom ABC has consulted have stated that this mining process is safe and will have little impact on the environment. There may be some temporary disruption of the benthic layer and the undersea ecosystem and some temporary pollution resulting from an increase in the turbidity and toxicity of the water column above the mining site, but considering that the site is in the middle of the ocean far from inhabited lands and in deep waters, the impact on the marine environment will be limited and not long-lasting. ABC sees no need to use cleaner technology such as enclosed cutting tools and hydraulic suction casing to convey the ores to the surface. ABC also sees no need to replace the spent rock more carefully on the sea floor instead of jettisoning it overboard.
The government of Cook Islands has no experience is administering seabed mining ventures and is leaving the legality of this operation up to the experts of the ISA. The CEO of ABC has told the Prime Minister of Cook Islands that there is no need for him to introduce legislation or administrative regulations to govern the exploration or mining activities as everything can be covered by contract. The CEO of ABC has also stated that there is no danger of extraordinary liability on the part of Cook Islands under international law. The worst-case accident that may occur is a ship collision or fire aboard one of ABC’s vessels. ABC will have insurance to cover such a casualty so Cook Islands should not worry; any such casualty will also be far from any inhabited area so there is no chance of damages.
Under the ISA 's standard contract provisions, the contract with ABC will contain the following provisions:
Section 15
Safety, labour and health standards
15.1 The Contractor shall comply with the generally accepted international rules and standards established by competent international organizations or general diplomatic conferences concerning the safety of life at sea, and the prevention of collisions and such rules, regulations and procedures as may be adopted by the Authority relating to safety at sea. Each vessel used for carrying out activities in the Area shall possess current valid certificates required by and issued pursuant to such international rules and standards.
15.2 The Contractor shall, in carrying out exploration under this contract, observe and comply with such rules, regulations and procedures as may be adopted by the Authority relating to protection against discrimination in employment, occupational safety and health, labour relations, social security, employment security and living conditions at the work site. Such rules, regulations and procedures shall take into account conventions and recommendations of the International Labour Organization and other competent international organizations.
Section 16
Responsibility and liability
16.1 The Contractor shall be liable for the actual amount of any damage, including damage to the marine environment, arising out of its wrongful acts or omissions, and those of its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct of its operations under this contract, including the costs of reasonable measures to prevent or limit damage to the marine environment, account being taken of any contributory acts or omissions by the Authority.
16.2 The Contractor shall indemnify the Authority, its employees, subcontractors and agents against all claims and liabilities of any third party arising out of any wrongful acts or omissions of the Contractor and its employees, agents and subcontractors, and all persons engaged in working or acting for them in the conduct of its operations under this contract.
16.3 The Authority shall be liable for the actual amount of any damage to the Contractor arising out of its wrongful acts in the exercise of its powers and functions, including violations under article 168, paragraph 2, of the Convention, account being taken of contributory acts or omissions by the Contractor, its employees, agents and subcontractors, and all persons engaged in working or acting for them in the conduct of its operations under this contract.
16.4 The Authority shall indemnify the Contractor, its employees, subcontractors, agents and all persons engaged in working or acting for them in the conduct of its operations under this contract, against all claims and liabilities of any third party arising out of any wrongful acts or omissions in the exercise of its powers and functions hereunder, including violations under article 168, paragraph 2, of the Convention.
Is the assessment of ABC that Cook Islands need not worry about liability under international law correct? Consider the Advisory Opinion of the Sea bed Disputes Chamber below.
As to the potential environmental impacts of ABC's mining activities, a Workshop held by the ISA in collaboration with the government of Fiji in 2011, has recommended that every contract for prospecting and exploration of the seabed mineral resources should require the contractor to prepare an Environmental Impact Assessment (EIA). According to the published workshop results: Environmental Management Needs for Exploration and Exploitation of Deep Sea Minerals, ISA Technical Study No. 10, the content and process of preparing the EIA should be as follows:
Content of the Environmental Impact Statement
The applicant should provide detailed responses to all areas below that are relevant to the development proposal.
Executive summary
One of the main objectives of this section is to provide an explanation of the project for non-technical readers. Information provided on the executive summary should briefly describe:
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the proposed development activity and its objectives;
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anticipated bio-physical and socio-economic impacts (direct/indirect, reversible/irreversible) of the activity;
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details of remedial actions that are proposed;
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the benefits to be derived from the project;
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details of the consultation programme undertaken by the applicant, including degree of public interest; and
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end-use plans for the development activity.
The summary should not be more than 15 pages in length and in English. Appendices should be attached, as appropriate, to the EIS in order to provide complete information on the development proposal. These should cover the following points:
I. The Project
This should include a brief description of the deposit discovery and the exploration and test mining activities conducted to date.
Project proponent
This section should summarize the credentials of the Contractor proposing the development, including major shareholders.
Purpose of and justification for the development
The purpose of this section is to ensure that only development activities that are in line with the Authority's goals and objectives are considered for approval. This section should provide information on the viability of the proposed development activity. These details should include, but not limited to, the following:
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the capital cost associated with the development;
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the proponent's technological expertise and resources;
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results of any feasibility investigations that have been carried out;
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the extent of landowner and/or resource owner support, including a copy of the formal written approval of their consent;
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the anticipated lifespan and development phases of the project.
II. Policy, legal and administrative framework
This section should provide information on relevant legislation, agreements or policies that are applicable to the proposed mining operation. It is separated into four sections, each covering a different aspect of the legal framework.
Applicable mining and environmental legislation, policy and agreements
The applicant should note any legislation, regulation or guidelines that apply to the management, or regulation of mining, or the environment in the Area, or any other relevant (existing or proposed) jurisdiction. This should include a note on how the proposed operation will comply with these requirements,
Other legislation, policy and regulations
Description of any other legislation, policy or regulations that do not apply specifically to mining or environment, but may be relevant to the proposal (e.g. shipping regulations, offshore mining certificates, and potentially many more inside jurisdictional boundaries).
Relevant international agreements
This subsection describes other more general international agreements that could be applicable to the operation, such as UNCLOS, CBD regulations and UNGA resolutions.
International standards, principles and guidelines
Any other non-legal standards or guidelines that may apply to best practice in the operation, e.g. Equator Principles.
III. Stakeholder consultation
This section describes any consultation(s) that may have taken place with interested parties and stakeholders with an interest in the OSM application in the period leading up to the application.
Relevant jurisdiction consultation requirements
This outlines any international or jurisdictional consultation obligations.
Stakeholders
List any relevant stakeholders or other interested parties that have been consulted.
Public consultation and disclosure programme
Description of the goals and consultation workshop!! meetings that have occurred prior to the preparation of the report.
IV. Description of the proposed development
All relevant details on the proposed development activity required under this section should be provided where applicable to the proposal. Details to be provided under this section may include the headings listed below.
Location
This section should include detailed location maps (drawn to scale), site layout, etc.
Associated activities
This section should include a description of any supporting activities and infrastructure required (e.g. ports, barges, transportation corridors, crew transfers, etc.)
Project components
This section should provide background information to the proposal, technologies to be employed, etc. For polymetallic nodule exploitation;, Contractors should refer to Section IV C of the Recommendations for the guidance of contractors for the: assessment of the possible environmental impacts arising from exploration for polymetallic nodules in the Area (ISBA/161 LTC/7). This section should include information on methods of exploitation site selection including alternatives investigated; relevant diagrams and drawings;
Mineral resource
This section should include the type of resource proposed for extraction (e. g; nodules, polymetallic sulphides, cobalt-rich crusts or other mineral); the type of commodity, the grade and volume. Estimates of inferred and indicated resource should be provided.
Offshore mining and support equipment
This section should include descriptions of the offshore mining and support equipment (including vessels) required to carry out the activity.
Mining
Mine plan
General mining sequence
Hazardous materials management
Description of hazardous materials
Transportation
Storage; handling and disposal
Workforce
Workforce description·
Employment policy
Capacity-building objectives and commitments
Construction and operating standards
This section should outline the design codes to which the equipment will be built, as well as the health and safety standards that will be applied.
Design codes
Health and safety
Decommissioning and closure
Offshore infrastructure
Onshore facilities
V. Development timetable (Detailed schedule)
This should include the major phases of the operation, as well as the milestone dates on which relevant tasks are expected to be completed. Information on the development timetable provided under this section should clearly communicate the different phases in the development proposal. For reasons of clarity, a Flow chart, Gantt or PERT chart should be used where appropriate. Information provided in this section should include, but not b e limited to, the following:
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The funding arrangement for proposed activity or if availability of funds is subject to this or other approvals being granted;
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Pre-construction activities:
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Construction schedule; staging, etc.;
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Commissioning and operational schedules;
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Infrastructure development schedule; and
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Closure schedule.
VI. Description of the existing offshore environment
In this section, the applicant is to give a detailed account of knowledge of the environmental conditions at the site. It provides the baseline description of geological, oceanographic and biological conditions against which impacts will be measured and assessed.
Regional overview
Provide a general description of the environmental conditions in the broad region of the site, including major oceanographic, geological and biological setting.
Studies completed
Special considerations for site
Description of any notable characteristics of the site, whether geological, oceanographic or biological, such as hydrothermal venting, seamounts, high-surface productivity, eddies and endemic fauna.
Meteorology and air quality
Geological setting
Description of the general geologica/landscape and topographic features of the site.
Physical oceanographic setting
Description of oceanographic aspects such as currents, sedimentation rates.
Water quality
Description of water mass characteristics at the site at various depths, including nutrients, particle loads, temperature and dissolved gas profiles, etc.
Sediment characteristics
Description of substrate composition with special reference to sediment composition, pore water profiles, and grain size.
Biological environment
This section is divided by depth regime into a description of the various biological components and communities that are present in or utilize the water column and seabed in the region of the site.
Pelagic
From the surface down to 200m. This includes plankton, surface/near surface fish, such as tunas, but also utilization by seabirds and marine mammals.
Midwater
Open water from a depth of 200m down to the seafloor. This includes zooplankton, mesopelagic and bathypelagic fishes and deep-diving mammals.
Benthic
Benthic invertebrate communities, including infauna and demersal fish. This should include
considerations of species richness, biodiversity, faunal densities and community structures.
Natural hazards
Description of volcanism, seismic activity, etc.
Noise
Description of ambient noise if any, influence of ongoing exploration and maritime activity.
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