SEABED COUNCIL DISCUSSES LIABILITY FOR DAMAGE CAUSED BY MINERAL EXPLORATION

Press Release
SEA/1659

SEABED COUNCIL DISCUSSES LIABILITY FOR DAMAGE CAUSED BY MINERAL EXPLORATION

(Received from the International Seabed Authority.)

KINGSTON, 21 March -- The responsibility and liability of seabed contractors for damage to the environment and the possible consequences of violating confidentiality agreements were among the topics discussed at this morning's informal meeting of the Council of the International Seabed Authority, in Kingston.

Resuming its consideration of the draft regulations governing exploration and exploitation for polymetallic nodules in the deep seabed (the mining code), the Council examined the final three regulations contained in the core section of the text, part IV, dealing with contracts for exploration.

The Council began by concluding the discussion it had started yesterday afternoon, 20 March, on regulation 28, relating to periodic reviews by the Authority of contractors' programmes of work. Such reviews will allow the Authority to keep tabs on activities by seabed operators searching for minerals in the deep seabed. The regulation would require such reviews by the Authority's Secretary-General every five years, with the Council to be advised of the results in a report to its Legal and Technical Commission.

Discussion of this regulation centred on a proposed addition reading: "The report of the Secretary-General shall include the observations, if any, transmitted to him by the States Parties covering the manner in which the contractor has discharged his obligation to protect and preserve the environment." (This represents a modification of the suggestion made by another speaker at yesterday's meeting.) No objections were raised against including this insertion. However, one delegation reserved its position, remarking that it seemed unclear how States would access information on the manner in which the contractor had discharged its obligations.

Still on regulation 28, the Secretary-General was asked to clarify the distinction between a contractor's plan of work and a programme of work. He explained that a plan of work was a broad framework outlined on the basis of a 15- year period, while the programme of work fell within the framework of the long-term plan, and set out the proposed activities of the contractor over a 5-year span. The distinction had been drawn so that contractors would not be wedded to detailed 15- year plans, but could extend or change their programmes every 5 years in keeping with changing technology and development.

The Council then turned to regulation 30, dealing with the contractor's responsibility and liability for any damage arising out of wrongful acts in the

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conduct of its operations. The text also speaks of the Authority's liability for any damage arising out of the wrongful exercise of its powers and functions. The regulation closely follows language incorporated in the 1982 United Nations Convention on the Law of the Sea.

One speaker felt that the regulation should clearly state how long the contractor would be responsible for damage. He wanted the following paragraph added as part of the regulation or as 30 bis (provisional translation): "The contractor shall maintain responsibility for damage to the environment after the completion of the exploration stage. If the contractor for whatever reason does not continue or pursue his exploration and does not request a contract for exploitation, before he withdraws from the area of exploration he will have to give notice in writing about the situation to the Secretary-General. The Secretary- General shall send and the contractor shall receive and supply the required facilities to one or more inspectors as the case may be so that they may certify that the commitments undertaken by the contractor to protect and preserve the environment have been fully complied with".

While some delegations supported this addition, others felt that it contradicted annex III of the Law of the Sea Convention on basic conditions of prospecting, exploration and exploitation, or that the regulation was superfluous as it merely repeated articles of the Convention.

Secretary-General Satya N. Nandan expressed a number of concerns regarding the implications of some parts of the proposal. While he recognized that the requirement for contractors to give notice before abandoning a site constituted a legitimate demand, he recalled that a cost was involved in providing inspectors to certify contractors. Moreover, inspections would have to be carried out over a period of time to assess delayed environmental damage. If the Authority certified a site too hastily, thus exonerating a contractor from any future responsibility, the Authority would be placed in a vulnerable position in the event damage was discovered years afterwards.

He also noted that while article 168 of the Convention provided for sanctions when staff of the Authority breached confidentiality, no such consequences were mentioned for similar breaches by members of the Legal and Technical Commission. He felt a need to clarify provisions on this issue.

Stressing that the issue deserved closer examination, the Secretary-General observed that future mining activities might involve billions of dollars in liability. States should consider whether they would be prepared to meet such costs if the Authority were implicated, or whether an insurance scheme should be introduced.

Some delegations also expressed concern about the financial implications of enforcing the regulation. One delegation suggested adding a paragraph at the end of the document in the form of a general regulation to address the financial obligations of the code.

One delegation wanted clarification of the phrase making contractors responsible for "any damage" arising from their wrongful acts. It felt the regulation should limit their liability to damage of an extensive nature that had a truly significant impact on the environment. Other speakers sought clarification of the term "wrongful acts". Some were of the view that liability would have to be examined again when the Council discussed the environmental part of the draft.

Finally this morning the Council took up regulation 31, providing that no State might impose conditions on a contractor inconsistent with the seabed provisions of the Convention or the Authority's regulations. The discussion focused on the relevance of its inclusion in the mining code. A number of delegations argued that issues in this regulation were already covered in annex III of the Convention.

Secretary-General Nandan recalled that the matter had been considered in the Preparatory Commission for the International Seabed Authority and the International Tribunal for the Law of the Sea and by the Legal and Technical Commission. He said the general view was that relevant provisions of the Convention should be included in the mining code in order to provide a comprehensive document to help those applying for exploration contracts.

Many delegations supported the incorporation of Convention clauses in the code but several insisted that if regulation 31 was retained it should incorporate the precise wording contained in the Convention, or a reference to annex III.

Having completed its second reading of the section on contracts for exploration, the Council will meet again informally at 3 p.m. today to take up part V of the draft regulations, on protection and preservation of the marine environment.

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