SEABED COUNCIL DISCUSSES REGULATIONS FOR EXPLORATION CONTRACTS

Press Release
SEA/1603

SEABED COUNCIL DISCUSSES REGULATIONS FOR EXPLORATION CONTRACTS

KINGSTON, 26 August (International Seabed Authority) -- The Council of the International Seabed Authority today continued deliberations on the seabed mining code, with a number of delegations proposing amendments to regulations 20 and 21, dealing with contracts for exploration.

The Council has been meeting in informal sessions to allow the full membership of the Authority to participate in consideration of the draft mining code, regulation-by-regulation.

One representative suggested changes to paragraphs 3 and 5 of regulation 20, concerning rights of contractors, and proposed that these paragraphs be made part of a separate regulation on contractors' rights.

There was extensive debate on paragraph 5 of regulation 20, which refers to the priority given to contractors holding approved plans of work for exploration over other applicants submitting plans of work for exploitation of the same area or resources. One representative referred to the paragraph's provision for withdrawal of priority if a contractor fails to comply with requirements of the work plan within a specified time. The delegate insisted that contractors be given more protection than is proposed in that regulation, and suggested an amendment as follows:

"The contractor shall be afforded an opportunity to be heard before a withdrawal of such a priority became final. The Authority shall provide the reasons for the proposed action and shall consider any contractor response. Its decision shall take account of that response and shall be based on substantial evidence."

A representative suggested that the fact that so much time was being spent on this paragraph indicated that there were some serious problems to be resolved. Secretary-General Satya N. Nandan said that while a plan of work must be approved before a contract can be established, the regulation was not clear on exactly how this was to be carried out.

Regulation 21 deals with the total area allocated to the contractor, the requirements of relinquishment of a part of the allocated area, and the schedule of such relinquishment. This attracted differing views, with some

delegations calling for flexibility in the schedule of relinquishment of portions of the area allocated in the contract, and others suggesting a time limit.

The Secretary-General, in providing the Council with background on the formulation of regulation 21, said experience showed that after the pioneers were registered by the Preparatory Commission, some could not meet the time- frame given. He said the regulation was written to allow for flexibility, practicality and to encourage exploration. Some contractors were still not able, after five years, to give an account of their activities.

One delegate pointed out that regulation 21 was of particular importance because it involved a decision to be taken on matters not addressed in the Convention and the Agreement. He said that as the regulation stood now, contractors might be obliged to work for five years whether or not it was economically viable for them to do so, and this would not create a favourable situation for potential applicants. Exceptional circumstances, such as accidents at sea, could delay the work of a contractor, he added.

Several delegations supported an earlier call for the "exceptional circumstances" mentioned in paragraph 4 of regulation 21 to be more specifically defined. [The paragraph states that in exceptional circumstances, the Council may defer the relinquishment schedule for a period not more than two years.] The Council President, Joachim Koch (Germany), said it would be up to the Council and not the contractor to decide on the interpretation of the term "exceptional circumstances". Some members felt it would be useful to establish a linkage between regulation 21 and regulation 24, concerning the periodic review of the programme of work of the contractor every five years.

Also this morning, the Assembly approved the report of the Credentials Committee, introduced by Helmut Turk (Austria). Credentials were accepted from 66 States and the European Community.

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