SEABED AUTHORITY BEGINS WORK ON SCHEME TO REGULATE POLYMETALLIC SULPHIDES AND COBALT-RICH CRUSTS

Round-up

SEABED AUTHORITY BEGINS WORK ON SCHEME TO REGULATE

POLYMETALLIC SULPHIDES AND COBALT-RICH CRUSTS

(Reissued as received.)

KINGSTON, 15 August (International Seabed Authority) -- The intricacies of writing rules to cover two recently discovered categories of deep-sea mineral deposits were highlighted at the eighth session of the International Seabed Authority, which met from 5 to 15 August in Kingston, Jamaica.

The 36-member Council of the Authority held a preliminary discussion of issues relating to polymetallic massive sulphides and cobalt-rich ferromanganese crusts, two sources of economically valuable metals and other minerals.  Looking towards a future scheme to regulate prospecting and exploration for these deposits, the Council agreed to continue its work on the topic next year.  Just before the Council resumes, the Legal and Technical Commission is to study the details of a regulatory system, with the aid of a revised draft to be submitted by the secretariat.

The two intergovernmental bodies of the Authority, Assembly and Council, are scheduled to meet at its headquarters in Kingston from 28 July to 8 August 2003.

During the two-week session just ended, the Assembly adopted a $10.5 million budget to finance the Authority's work in 2003-04.  Much of this work, as outlined by the Authority's Secretary-General, Satya N. Nandan, involves the promotion of marine scientific research relating to seabed resources, and the collection and dissemination of information on deep-sea deposits.

For the first time, the Legal and Technical Commission, a 24-member body of experts that reports to the Council, examined annual reports submitted by contractors authorized by the Authority to prospect and explore for polymetallic nodules in specified areas of the international seabed.  These nodules, containing manganese and other metals, have been subject to the Authority's regulation since 2000, under contracts signed in 2001 with seven entities interested in potential mining sites in the Central Pacific and Indian Oceans.

As it does every second year, the Assembly renewed the membership of the Council - executive body of the Authority -- by electing half of its members for a term from 2003 through 2006.  The Assembly also authorized the Authority's emblem and flag, depicting scales of justice surmounting ocean waves.

All decisions during the session were taken without objection.

During the week before the session, from 29 July to 2 August, a workshop consisting of scientists, contractors' representatives, and members of the Legal and Technical Commission identified four priority topics for future research pertaining to the deep-seabed environment and the potential effects of mining its resources.  The research is to be pursued by interested scientists, scientific bodies and contractors, with encouragement from the Authority.

The International Seabed Authority, with a current membership of 138, was established under the 1982 United Nations Convention on the Law of the Sea, as modified by the 1994 Agreement relating to the Implementation of Part XI (seabed provisions) of the Convention.  Its task, as set out in the Convention, is to organize and control all resource-related activities in the seabed area beyond the jurisdiction of any State, an area underlying most of the world's oceans.  The Convention defines this deep-seabed area and its resources as "the common heritage of mankind".  In existence since 1994, the Authority is an autonomous international agency having a relationship agreement with the United Nations.

Sulphides and Crusts

The Council's discussions, in both formal and informal meetings, brought out divergent approaches to the issues surrounding polymetallic sulphides and cobalt-rich crusts.  This topic was placed before the Authority by the Russian Federation in 1998, with a request that it develop rules, regulations and procedures relating to these resources.  The Council agreed in July 2001 to begin consideration of the subject this year, making use of a partial set of model clauses prepared by the secretariat in 2001 (ISBA/7/C/2).

In the Council this year, several delegations stressed the differences between these resources and polymetallic nodules, for which the Authority devised regulations in 2000, as well as between the two types of resources themselves.  While nodules are scattered loosely over the sea floor, crusts are fused to the underlying rock and sulphides occur around hydrothermal vents sprouting from volcanic areas of the seabed.  Thus, different techniques will be needed to explore for and mine the deposits.  Consequently, the drafters of regulations would have to decide whether to begin by modifying the nodule rules or, alternatively, to start from scratch.  To avoid this problem, some speakers argued that the Authority should devise a general scheme applicable to all kinds of seabed resources, while others favoured a separate set of rules for each category.

Delving into more specific areas, some speakers doubted that the parallel system devised in the Law of the Sea Convention could be applied to the new resources in the same way that it was used for nodules.  This system calls for dividing areas of equal commercial value between contractors and the Authority, but it would be difficult to split up the much smaller patches around hydrothermal vents - a factor that would also affect the size of the areas allocated to prospectors.  The idea of forming joint ventures between the Authority and contractors was discussed as an alternative.

Many speakers urged action, possibly through interim measures, to safeguard the marine environment -- especially around hydrothermal vents, with their fragile and unique ecosystems.  Others, however, citing the paucity of scientific knowledge, urged a cautious approach to the development of regulations.

Summarizing the Council's discussion, its President stated:  "The Council noted the need for a flexible approach to the formulation of regulations for prospecting and exploration, particularly in view of the lack of scientific knowledge relating to deep-sea ecosystems.  It was also clear that polymetallic sulphides and cobalt-rich crusts were different from polymetallic nodules as well as distinct from one another.  Particular ecological considerations arose with respect to polymetallic sulphides located at active hydrothermal vents.  At the same time, it was noted that any regulations must be consistent with the overall scheme contained in the Convention, the Agreement and the existing regulations relating to polymetallic nodules.  From the point of view of potential investors, the most difficult issue would be how to determine the size of the area for exploration so as to make exploration commercially viable while avoiding monopoly situations.  The system for the [international seabed] area also had to be competitive with regimes established for areas within national jurisdiction."

Before the Council discussion, the Legal and Technical Commission spent two days in a preliminary consideration of some of the issues involved in regulating exploration for these resources.  In its report to the Council (ISBA/8/C/6), it urged caution in the development of regulations and, given the uncertainties surrounding the topic, it suggested that any scheme be subject to review after an initial period.  It stressed the need to encourage exploration by providing prospectors with rights over particular areas and priority in applying for contracts, as well as to ensure that the Authority received adequate information, particularly with regard to environmental protection. 

The Commission asked the secretariat for a report next year on the potential environmental consequences of mining these deposits, and also asked it to prepare a revised set of draft regulations.  It identified three issues in particular that it would take up next year:  a progressive fee system in place of the existing system for polymetallic nodules whereby half of the area initially assigned to a contractor would be relinquished to the Authority; the geographical grid system for licensing, and continued development of the parallel system (which provides for a division of resources between a contractor and the Authority). 

The Commission agreed to meet for two weeks in 2003, with the first week to be devoted to four working groups on the following topics:  environmental impacts of exploration activities; the size of exploration areas and a system for relinquishing parts of them to the Authority; the form of applicants' work plans, detailing their intentions; and the type of arrangements between contractors and the Authority, whether a parallel system, joint ventures between contractors and the Authority or some other formula.

To clarify some of the scientific issues involved, delegates attended a daylong seminar on 7 August at which five marine geologists and biologists presented the latest findings about these resources and their environment.  The geologists described the rich concentrations of valuable metallic ores in these deposits, adding that mining was likely to start in shallower waters within national jurisdiction.  A biologist told of the exotic animals living exclusively in the sulphur-rich waters around underwater hot springs - unique life forms that might provide not only proteins for new medicines and industrial products but also give clues to the origins of life on earth.  The scientists made audio-visual presentations and submitted a summary paper (ISBA/8/A/1 and Corr.1).

Polymetallic sulphides are deposits of sulphur-containing minerals formed by hydrothermal activity - that is, by an upwelling of hot volcanic magma and superheated seawater from beneath the ocean floor.  They are found along an active submerged volcanic mountain range that extends through all the world's ocean basins, as well as around volcanic island chains such as those along the western edge of the Pacific Ocean.

Cobalt crusts are oxidized deposits of cobalt-rich iron and manganese layers formed by the precipitation of minerals from cold seawater onto hard seabed surfaces.  They cover the submerged flanks of inactive underwater volcanoes throughout the oceans, on ridges and other seafloor elevations where currents sweep the rock floor clear of sediments; best mining prospects are in the equatorial part of the central Pacific.

In addition to the cobalt found in both types of deposit, sulphides also contain manganese, iron, other metals and rare earth elements, while crusts include copper, lead, nickel, zinc, gold and silver.

Polymetallic Nodules

The Legal and Technical Commission reviewed the first annual reports of seabed contractors authorized by the Authority to prospect and explore for polymetallic nodules in assigned areas of the deep seabed.  The Commission found that, while all had made efforts to comply with the reporting requirements under their contracts, the reports "needed to be completed to enable the Commission to be properly informed".  It made specific recommendations in relation to each contractor (ISBA/8/LTC/2).  To improve its future consideration of these reports, it appointed a three-member sub-committee to help the secretariat in their evaluation and established a standardized format for them.

The provision for annual reporting by contractors to the Authority on their activities in their exploration areas is set out in the Regulations on Prospecting and Exploration for Polymetallic Nodules in the [international seabed] Area, approved by the Authority in 2000.  The reports, which are not public documents, were examined by the Commission in closed session.

Marine Scientific Research

During the week before the Authority's session (29 July to 2 August), the Authority convened the Workshop on Prospects for International Collaboration in Marine Environmental Research to Enhance Understanding of the Deep-Sea Environment.  The Workshop, with the participation of marine scientists, seabed contractors, and members of the Legal and Technical Commission, identified four priority areas for research to be conducted by interested institutions. 

These topics are:  biodiversity, species ranges and rates of gene flow in the nodule areas; burial sensitivity of deep-sea animals and their response to the type of disturbance caused when nodules are scraped from the sea floor, as well as the recovery of animal communities in space and time; impacts on ocean waters above a mine site caused by unwanted materials from a mining operation, and natural variability in deep-ocean ecosystems over space and time.

Several among the 45 participants in the Workshop are to pursue efforts to organize research along these lines, with the backing of the Authority.

Next year's workshop is to be on the development of a geologic model for the main nodule-bearing zone in the Central Pacific Ocean.

Finances

On 14 August the Assembly adopted a $10,509,700 budget to finance the work of the Authority in 2003-04 and authorized a scale of assessments payable by member States, based as customary on the United Nations scale with adjustments for differences in membership (decision in ISBA/8/A/11).

The budget (ISBA/8/A/6-ISBA/8/C/2), providing for expenditures of $5,221,900 in 2003 and $5,287,800 in 2004, will pay for a secretariat remaining at the current level of 37 posts, whose main tasks will continue to be monitoring activities by contractors exploring the deep sea-bed for polymetallic nodules, building a database on seabed minerals and promoting international cooperation in marine scientific research relating to the seabed.  The emphasis on research will be carried forward in annual technical workshops.  Staff costs of $7,532,600 will continue to be the main component of expenditures, with lesser amounts for conference servicing ($1,115,100) and for goods and services such as furniture and communications ($1,012,000).

In proposing the budget, the Secretary-General noted that it was less than 1 per cent above the approved level of $10,506,400 for 2001-02, adopted by the Assembly two years ago.

The Assembly approved the budget on the recommendation of the Council, taken on 13 August (ISBA/8/C/5), in the amount proposed by the Secretary-General.  The budget had been endorsed by the Finance Committee (ISBA/8/A/7/Rev.1-ISBA/8/C/3/Rev.1), which considered it during four closed meetings on 6 and 8 August.

In its consensus on the budget, the Council resolved in informal negotiations two contentious financial issues relating to the scale of assessments and the financing of developing country participation in the Authority's two subsidiary bodies - the Finance Committee and the Legal and Technical Commission.

Regarding assessments, it left intact the Finance Committee's recommendation that the Authority's scale be based on the United Nations scale, taking into account a maximum rate of 22 per cent.  However, the Council added a call to review the scale in 2004 when considering the 2005-06 budget.

In the discussion, Japan - to which the maximum rate would apply as the Authority's largest budgetary contributor - expressed the view that its rate should already have been reduced for 2002, in line with the decision by the United Nations General Assembly, taken in 2000, to lower that organization's maximum rate (applicable to the United States) from 25 to 22 per cent.  However, spokesmen for the African Group and the Group of Latin American and Caribbean States objected to any decision that would raise the rates of their members, as would happen when the 3 per cent cut from the ceiling rate was distributed among other members.

The other element in the negotiated consensus was a call for the creation, "as an interim measure", of an extrabudgetary trust fund, to be financed on a voluntary basis by member States and others, to defray the travel and subsistence expenses of expert members from developing countries attending the annual meetings of the Finance Committee and the Legal and Technical Commission.  Further, the Assembly decided to review ways of financing such participation, including the possibility of using the Authority's budget, and it asked the Finance Committee to consider the matter further next year.  That Committee had recommended that the establishment of a trust fund be kept under review.

In other provisions of the financial decision as proposed by the Finance Committee, the Assembly asked that surpluses of previous years be used to reduce assessments in the next budget period.  These savings amount to $1,695,000, lowering assessments to $8,814,700.  As a result, no member will pay more in dollar terms next year than under its current assessment, despite the rate increases for some.

The Assembly asked that the budget be adjusted to take account of any agreement reached between the Authority and the Government of Jamaica regarding expenses for the use of the Authority's headquarters office space in Kingston.  The two sides have for three years been negotiating the share that the Authority should pay for maintenance costs, and Secretary-General Nandan informed the Assembly that considerable progress had recently been made in the talks.

Finally, the Assembly appealed to States in arrears to pay their contributions as soon as possible.  The Secretary-General has reported that 65 members and 4 former provisional members were in arrears for this and/or prior years.  For the two years of the current budget period, arrears amounted to 4 per cent for 2001 and 53 per cent for 2002.

Emblem and Flag

The Assembly, acting without discussion on 14 August, approved an official design for the emblem and flag of the Authority, and recommended that member States act to protect the design and name of the Authority from unauthorized use for commercial or other purposes (decision in ISBA/8/A/12).  The design consists of an oval within which stylized scales of justice surmount a pattern of waves representing the sea, bracketed between the twin olive branches used in the emblems of the United Nations and many related intergovernmental organizations.  The name "International Seabed Authority" encircles the central oval.  The flag incorporates the design in yellow on a dark blue background.

Variants of this configuration, adapted from a design originally used for the Third United Nations Conference on the Law of the Sea, have been used on the Authority's flag and documents since its inception, without formal sanction.  Endorsement by the Assembly had been requested by the Secretary-General (ISBA/8/A/4).  

Elections and Officers

On 14 August the Assembly elected 17 members to the Council for a four-year term from 2003 through 2006. The election, based on lists drawn up by the various groups represented on the Council, was uncontested.

The Council membership is drawn from five groups of States members of the Authority.  Four of these have special interests in aspects of seabed mining and the fifth is a group chosen to ensure equitable geographical balance in the Council as a whole. 

As a result of this election, the breakdown of the Council membership by groups will be as follows:

Group A (4 States from among the largest consumers or net importers of minerals to be derived from seabed mining):  Italy and the Russian Federation (re-elected) will join Japan and the United Kingdom.  Repeating an understanding first reached at the last Council election in 2000, Italy will relinquish its seat to the United States if that country joins the Authority.

Group B (4 States from those with the largest investment in seabed mining):  France (newly elected) and Germany (re-elected) will join China and India, while the Netherlands will leave.

Group C (4 States that are major land-based net exporters of the minerals also found on the deep seabed):  Australia and Indonesia (re-elected) will join Portugal and Zambia.  Zambia will come to the Council under a prior arrangement by which it will occupy in 2003 the seat to which South Africa was elected the last time.  In 2004, Gabon will replace Zambia in this group; also, under a new understanding within the African Group, Gabon is to be replaced in 2005 by the election of South Africa.

Group D (6 developing States representing special interests, including those with large populations, the land-locked or geographically disadvantaged, islands, major mineral importers or potential producers, and the least developed):  Egypt, Fiji and Jamaica (re-elected) will join Brazil, Papua New Guinea and Sudan.

Group E (18 States for geographical balance as well as a balance between developed and developing States):  Cote d'Ivoire, Honduras and Myanmar (newly elected), along with Cameroon, Chile, Nigeria, Republic of Korea and Saudi Arabia (re-elected), will join Argentina, Czech Republic, Gabon (in 2003 only, after which it shifts to Group C and is replaced in 2004 by South Africa), Guyana, Malta (which has temporarily relinquished its seat during 2002), Namibia, Poland, Senegal, Spain, and Trinidad and Tobago.  Algeria is to relinquish its seat in 2003 and Myanmar in 2004, under an arrangement by which regional groups give up one seat each on a rotating basis for a year at a time. 

In the only election to a subsidiary body, Michael C. Wood (United Kingdom) was chosen to replace his compatriot Paul McKell on the 15-member Finance Committee for the remainder of a five-year term ending in 2006 (biographical data in ISBA/8/A/3).

The President of the Assembly at its 2002 session was Martin Belinga-Eboutou (Cameroon).  The President of the Council was Fernando Pardo Huerta (Chile).

Membership and Attendance

Of the Authority's 138 members, 62 were recorded as attending the session. The membership of the Authority consists of all parties to the Law of the Sea Convention. The members are listed below, with an asterisk (*) marking those participating in the session.

Algeria, *Angola, Antigua and Barbuda, *Argentina, *Australia, Austria, *Bahamas, Bahrain, Bangladesh, *Barbados, Belgium, Belize, Benin, Bolivia, Bosnia and Herzegovina, Botswana, *Brazil, Brunei Darussalam, Bulgaria, *Cameroon, Cape Verde, *Chile, *China, Comoros, Cook Islands, *Costa Rica, *Côte d'Ivoire, Croatia, Cuba, Cyprus, *Czech Republic, Democratic Republic of the Congo, Djibouti, *Dominica, *Egypt, Equatorial Guinea, *European Community, *Fiji, *Finland, *France, *Gabon, Gambia, Georgia, *Germany, *Ghana, *Greece, Grenada, Guatemala, Guinea, Guinea-Bissau, *Guyana, *Haiti, *Honduras, Hungary, Iceland, *India, *Indonesia, *Iraq, *Ireland, *Italy, *Jamaica, *Japan, Jordan, *Kenya, *Kuwait, Lao People's Democratic Republic, Lebanon, Luxembourg, Madagascar, *Malaysia, Maldives, Mali, *Malta, Marshall Islands, Mauritania, Mauritius,

*Mexico, Micronesia (Federated States of), Monaco, Mongolia, *Mozambique, *Myanmar.

Also *Namibia, Nauru, Nepal, *Netherlands, *New Zealand, Nicaragua, *Nigeria, *Norway, *Oman, Pakistan, Palau, *Panama, *Papua New Guinea, Paraguay, Philippines, *Poland, *Portugal, *Republic of Korea, Romania, *Russian Federation, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, Sao Tome and Principe, *Saudi Arabia, *Senegal, Seychelles, Sierra Leone, Singapore, *Slovakia, Slovenia, Solomon Islands, Somalia, *South Africa, *Spain, Sri Lanka, *Sudan, Suriname, *Sweden, The Former Yugoslav Republic of Macedonia, Togo, Tonga, *Trinidad and Tobago, Tunisia, *Uganda, Ukraine, *United Kingdom, United Republic of Tanzania, Uruguay, Vanuatu, *Viet Nam, Yemen, Yugoslavia, Zambia and Zimbabwe.

Seven non-member States recorded their presence as observers: Azerbaijan, Colombia, Dominican Republic, Holy See, Peru, United States and Venezuela. Observers may take part in all deliberations, without the right to vote.

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