SEABED COUNCIL TAKES UP SAFEGUARDS FOR CONFIDENTIAL DATA

Press Release
SEA/1665

SEABED COUNCIL TAKES UP SAFEGUARDS FOR CONFIDENTIAL DATA

(Received from International Seabed Authority.)

KINGSTON, 23 March -- The Council of the International Seabed Authority, at its informal consultations in Kingston this afternoon, began discussing ways to safeguard confidential data and information given to the Authority by seabed operators, as it continued its second reading of the draft code for polymetallic nodule exploration in the deep seabed.

Delegates debated the issues of what material should be regarded as confidential, who should determine what is confidential and how long confidentiality should be maintained.

Towards the end of today's discussion, which will continue at 10 a.m. tomorrow, 24 March, Council President Sakiusa S. Rabuka (Fiji) suggested that participants consider how to resolve differences among some five or six proposals and suggestions introduced at the meeting.

Before examining the regulation, the 36-member Council heard a concern expressed on behalf of one regional group about the length of term of the member whom the Council elected yesterday morning, 22 March, to the Legal and Technical Commission (see Press Release SEA/1661). The representative understood the election to have been for a full five-year term rather than for the remainder of the current term of the other members, which expires in 2001.

Responding, Secretary-General Satya N. Nandan reminded the Council of its decision last August to elect a candidate from the Latin American and Caribbean Group who would serve the rest of the current term without prejudice to future elections to the Commission or future discussions about the number of its members. In any case, he noted, members could stand for re-election.

Confidentiality

Regulation 36 of the draft mining code (ISBA/5/C/4/Rev.1), on confidentiality, provides that data and information "of commercial value" given to the Authority by a seabed contractor shall be considered confidential. This rule would not apply, however, to material generally known or publicly available elsewhere, previously given to others by the owner without an obligation of confidentiality, already possessed by the Authority with no such obligation, or relating to protection and preservation of the marine environment and safety, other than equipment design.

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The Secretary-General would be required to develop measures to protect confidentiality, such as secure facilities and procedures, and a log and inventory system. Material would remain confidential for 10 years after an exploration contract expired, but would retain that status if an exploitation contract followed. The Authority's staff and members of the Legal and Technical Commission would be bound, even after they left its service, not to disclose any such material coming to their knowledge by reason of their duties for the Authority.

In the discussion, one speaker proposed that the term "commercial value" be removed as being inconsistent with articles 163 and 168 of the 1982 United Nations Convention on the Law of the Sea. These articles outline the responsibilities of members of the Legal and Technical Commission, the Secretary-General and his staff in the treatment of industrial secrets and proprietary data transferred to the Authority. In support of this argument, another delegation observed that other conventions dealt adequately with intellectual property rights, making it unnecessary for the issue to be covered in the mining code.

Some delegations found the term "commercial value" too vague and thought it could enable contractors to raise extraneous issues, as they would be left to determine what material held such value and, therefore, was confidential.

Other speakers, who supported the right of contractors to determine the types of information that should be of commercial value, cited the high capital outlay required of contractors in the exploration stage as they gathered data and conducted pilot tests before deciding whether to mine.

The clause setting a confidentiality period of 10 years after the end of an exploration contract was the subject of much debate. One delegation felt that 10 years was a very short time in the context of the seabed mining industry; there should be no time limit on confidentiality unless the owner of the data decided otherwise. Supporting this view, another speaker remarked that limiting confidentiality in any way would be detrimental to the investor and render its contract pointless.

Others warned that the question had to be resolved in a way so as not to discourage potential investors, who, given the capital-intensive nature of the industry, needed every assurance that confidentiality would be maintained.

Taking the opposing viewpoint, several delegations remarked that, in the spirit of the Convention, exploration of the deep seabed should be viewed as an activity to be pursued in the interest of mankind. Maintaining confidentiality for an indefinite period would restrict the benefits of exploration to a single entity. Indefinite confidentiality after a contractor had left an area would also prevent potential newcomers to the industry from accessing valuable information. One member saw this as being at odds with the letter and spirit of Convention provisions on promoting the development and transfer of marine technology.

One participant circulated a series of amendments to regulation 36. This proposal contained the following points, among others:

-- Deletion of the clause whereby information relating to protection and preservation of the marine environment and safety, other than equipment design

data, would not be considered confidential. The rationale cited for this change was that the clause was inconsistent with the Convention.

-- Addition of a new element requiring any person having access to confidential data to sign a declaration acknowledging a legal obligation, waiving privileges and immunities in this connection and recognizing that sanctions would be attached to any violation of this obligation.

-- Deletion of the 10-year limit on confidentiality, on the ground that, in commercial practice, trade secrets and proprietary data were not subject to a time limit.

-- Inclusion in contracts of the condition that data identified by the contractor as confidential should not be released until the contractor had had an opportunity to seek dispute resolution.

As a way to resolve the impasse over confidentiality, one delegation suggested that a procedure might be instituted for establishing whether data identified as confidential by the contractor actually warranted that status. Another procedure suggested would allow the contractor to request that data not be released if the entity would suffer severe losses by its disclosure.

Responding to points raised in the discussion, Secretary-General Nandan stated that in drafting regulation 36 the Legal and Technical Commission had attempted to give practical effect to the Convention's provisions on confidentiality. He said the Commission had added the exceptions to the general confidentiality rule because it felt there should be provisions to limit the types of information that contractors might deem confidential.

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