United Nations Convention on the Law of the Sea 7

United Nations Convention on the Law of the Sea

 

SECTION 3. DEVELOPMENT OF RESOURCES
OF THE AREA

Article 150
Policies relating to activities in the Area

Activities in the Area shall, as specifically provided for in this Part, be
carried out in such a manner as to foster healthy development of the world
economy and balanced growth of international trade, and to promote
international cooperation for the over-all development of all countries,
especially developing States, and with a view to ensuring:

(a) the development of the resources of the Area;
(b) orderly, safe and rational management of the resources of the Area,
including the efficient conduct of activities in the Area and, in
accordance with sound principles of conservation, the avoidance of
unnecessary waste;
(c) the expansion of opportunities for participation in such activities
consistent in particular with articles 144 and 148;
(d) participation in revenues by the Authority and the transfer of
technology to the Enterprise and developing States as provided for in
this Convention;
(e) increased availability of the minerals derived from the Area as
needed in conjunction with minerals derived from other sources, to
ensure supplies to consumers of such minerals;
(f) the promotion of just and stable prices remunerative to producers and
fair to consumers for minerals derived both from the Area and from
other sources, and the promotion of long-term equilibrium between
supply and demand;
(g) the enhancement of opportunities for all States Parties, irrespective
of their social and economic systems or geographical location, to
participate in the development of the resources of the Area and the
prevention of monopolization of activities in the Area;
(h) the protection of developing countries from adverse effects on their
economies or on their export earnings resulting from a reduction in
the price of an affected mineral, or in the volume of exports of that
mineral, to the extent that such reduction is caused by activities in
the Area, as provided in article 151;
(i) the development of the common heritage for the benefit of mankind as
a whole; and
(j) conditions of access to markets for the imports of minerals produced
from the resources of the Area and for imports of commodities
produced from such minerals shall not be more favourable than the
most favourable applied to imports from other sources.

Article 151
Production policies

1. (a) Without prejudice to the objectives set forth in article 150 and
for the purpose of implementing subparagraph (h) of that article, the
Authority, acting through existing forums or such new arrangements or
agreements as may be appropriate, in which all interested parties,
including both producers and consumers, participate, shall take
measures necessary to promote the growth, efficiency and stability of
markets for those commodities produced from the minerals derived from
the Area, at prices remunerative to producers and fair to consumers.
All States Parties shall co-operate to this end.
(b) The Authority shall have the right to participate in any commodity
conference dealing with those commodities and in which all interested
parties including both producers and consumers participate. The
Authority shall have the right to become a party to any arrangement
or agreement resulting from such conferences. Participation of the
Authority in any organs established under those arrangements or
agreements shall be in respect of production in the Area and in
accordance with the relevant rules of those organs.
(c) The Authority shall carry out its obligations under the arrangements
or agreements referred to in this paragraph in a manner which assures
a uniform and non-discriminatory implementation in respect of all
production in the Area of the minerals concerned. In doing so, the
Authority shall act in a manner consistent with the terms of existing
contracts and approved plans of work of the Enterprise.

2. (a) During the interim period specified in paragraph 3, commercial
production shall not be undertaken pursuant to an approved plan of
work until the operator has applied for and has been issued a
production authorization by the Authority. Such production
authorizations may not be applied for or issued more than five years
prior to the planned commencement of commercial production under the
plan of work unless, having regard to the nature and timing of
project development, the rules, regulations and procedures of the
Authority prescribe another period.
(b) In the application for the production authorization, the operator
shall specify the annual quantity of nickel expected to be recovered
under the approved plan of work. The application shall include a
schedule of expenditures to be made by the operator after he has
received the authorization which are reasonably calculated to allow
him to begin commercial production on the date planned.
(c) For the purposes of subparagraphs (a) and (b), the Authority shall
establish appropriate performance requirements in accordance with
Annex III, article 17.
(d) The Authority shall issue a production authorization for the level of
production applied for unless the sum of that level and the levels
already authorized exceeds the nickel production ceiling, as
calculated pursuant to paragraph 4 in the year of issuance of the
authorization, during any year of planned production falling within
the interim period.
(e) When issued, the production authorization and approved application
shall become a part of the approved plan of work.
(f) If the operator’s application for a production authorization is
denied pursuant to subparagraph (d), the operator may apply again to
the Authority at any time.

3. The interim period shall begin five years prior to 1 January of the year
in which the earliest commercial production is planned to commence under an
approved plan of work. If the earliest commercial production is delayed
beyond the year originally planned, the beginning of the interim period and
the production ceiling originally calculated shall be adjusted accordingly.
The interim period shall last 25 years or until the end of the Review
Conference referred to in article 155 or until the day when such new
arrangements or agreements as are referred to in paragraph 1 enter into
force, whichever is earliest. The Authority shall resume the power provided
in this article for the remainder of the interim period if the said
arrangements or agreements should lapse or become ineffective for any
reason whatsoever.

4. (a) The production ceiling for any year of the interim period shall
be the sum of:
(i) the difference between the trend line values for nickel
consumption as calculated pursuant to subparagraph (b), for the year
immediately prior to the year of the earliest commercial production
and the year immediately prior to the commencement of the interim
period; and
(ii) sixty per cent of the difference between the trend line values
for nickel consumption, as calculated pursuant to subparagraph (b),
for the year for which the production authorization is being applied
for and the year immediately prior to the year of the earliest
commercial production.
(b) For the purposes of subparagraph (a):
(i) trend line values used for computing the nickel production
ceiling shall be those annual nickel consumption values on a trend
line computed during the year in which a production authorization is
issued. The trend line shall be derived from a linear regression of
the logarithms of actual nickel consumption for the most recent
15-year period for which such data are available, time being the
independent variable. This trend line shall be referred to as the
original trend line;
(ii) if the annual rate of increase of the original trend line is
less than 3 per cent, then the trend line used to determine the
quantities referred to in subparagraph (a) shall instead be one
passing through the original trend line at the value for the first
year of the relevant 15-year period, and increasing at 3 per cent
annually; provided however that the production ceiling established
for any year of the interim period may not in any case exceed the
difference between the original trend line value for that year and
the original trend line value for the year immediately prior to the
commencement of the interim period.

5. The Authority shall reserve to the Enterprise for its initial production
a quantity of 38,000 metric tonnes of nickel from the available production
ceiling calculated pursuant to paragraph 4.

6. (a) An operator may in any year produce less than or up to 8 per cent
more than the level of annual production of minerals from
polymetallic nodules specified in his production authorization,
provided that the over-all amount of production shall not exceed that
specified in the authorization. Any excess over 8 per cent and up to
20 per cent in any year, or any excess in the first and subsequent
years following two consecutive years in which excesses occur, shall
be negotiated with the Authority, which may require the operator to
obtain a supplementary production authorization to cover additional
production.
(b) Applications for such supplementary production authorizations shall
be considered by the Authority only after all pending applications by
operators who have not yet received production authorizations have
been acted upon and due account has been taken of other likely
applicants. The Authority shall be guided by the principle of not
exceeding the total production allowed under the production ceiling
in any year of the interim period. It shall not authorize the
production under any plan of work of a quantity in excess of 46,500
metric tonnes of nickel per year.

7. The levels of production of other metals such as copper, cobalt and
manganese extracted from the polymetallic nodules that are recovered
pursuant to a production authorization should not be higher than those
which would have been produced had the operator produced the maximum level
of nickel from those nodules pursuant to this article. The Authority shall
establish rules, regulations and procedures pursuant to Annex III, article
17, to implement this paragraph.

8. Rights and obligations relating to unfair economic practices under
relevant multilateral trade agreements shall apply to the exploration for
and exploitation of minerals from the Area. In the Settlement of Disputes
arising under this provision, States Parties which are Parties to such
multilateral trade agreements shall have recourse to the dispute settlement
procedures of such agreements.

9. The Authority shall have the power to limit the level of production of
minerals from the Area, other than minerals from polymetallic nodules,
under such conditions and applying such methods as may be appropriate by
adopting regulations in accordance with article 161, paragraph 8.

10. Upon the recommendation of the Council on the basis of advice from the
Economic Planning Commission, the Assembly shall establish a system of
compensation or take other measures of economic adjustment assistance
including co-operation with specialized agencies and other international
organizations to assist developing countries which suffer serious adverse
effects on their export earnings or economies resulting from a reduction in
the price of an affected mineral or in the volume of exports of that
mineral, to the extent that such reduction is caused by activities in the
Area. The Authority on request shall initiate studies on the problems of
those States which are likely to be most seriously affected with a view to
minimizing their difficulties and assisting them in their economic
adjustment.

 

 

Conclusion

Notes

See Also

References and Further Reading

About the Author/s and Reviewer/s

Author: international


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