Section 160p. 160

PUBLIC INTERNATIONAL LAW COMPENDIUM VOLUME I

(a) be in conformity with this Convention and the rules,

regulations and procedures of the Authority;

(b) provide for control by the Authority of activities in the

Area in accordance with article 153, paragraph 4;

(c) confer on the operator, in accordance with the rules,

regulations and procedures of the Authority, the exclusive

right to explore for and exploit the specified categories of

resources in the area covered by the plan of work. If,

however, the applicant presents for approval a plan of

work covering only the stage of exploration or the stage

of exploitation, the approved plan of work shall confer

such exclusive right with respect to that stage only.

5. Upon its approval by the Authority, every plan of work,

except those presented by the Enterprise, shall be in the

form of a contract concluded between the Authority and

the applicant or applicants.

Article 4. Qualifications of applicants

1. Applicants, other than the Enterprise, shall be qualified

if they have the nationality or control and sponsorship

required by article 153, paragraph 2(b), and if they follow

the procedures and meet the qualification standards set

forth in the rules, regulations and procedures of the

Authority.

2. Except as provided in paragraph 6, such qualification

standards shall relate to the financial and technical

capabilities of the applicant and his performance under

any previous contracts with the Authority.

3. Each applicant shall be sponsored by the State Party of

which it is a national unless the applicant has more than

one

nationality,

as

in the case of a partnership or

consortium of entities from several States, in which event

all States Parties involved shall sponsor the application, or

unless the applicant is effectively controlled by another

State Party or its nationals, in which event both States

Parties shall sponsor the application. The criteria and

procedures

for

implementation

of

the

sponsorship

requirements shall be set forth in the rules, regulations

and procedures of the Authority.

4. The sponsoring State or States shall, pursuant to article

139, have the responsibility to ensure, within their legal

systems, that a contractor so sponsored shall carry out

activities in the Area in conformity with the terms of its

contract and its obligations under this Convention. A

sponsoring State shall not, however, be liable for damage

caused by any failure of a contractor sponsored by it to

comply with its obligations if that State Party has adopted

laws and regulations and taken administrative measures

which are, within the framework of its legal system,

reasonably

appropriate

for

securing

compliance

by

persons under its jurisdiction.

5. The procedures for assessing the qualifications of

States

Parties

which

are

applicants

shall

take

into

account their character as States.

6. The qualification standards shall require that every

applicant,

without

exception,

shall

as

part

of

his

application undertake:

(a)

to

accept

as

enforceable

and

comply

with

the

applicable obligations created by the provisions of Part XI,

the rules, regulations and procedures of the Authority, the

decisions of the organs of the Authority and terms of his

contracts with the Authority;

(b) to accept control by the Authority of activities in the

Area, as authorized by this Convention;

(c) to provide the Authority with a written assurance that

his obligations under the contract will be fulfilled in good

faith;

(d) to comply with the provisions on the transfer of

technology set forth in article 5 of this Annex.

Article 5. Transfer of technology

1. When submitting a plan of work, every applicant shall

make available to the Authority a general description of

the equipment and methods to be used in carrying out

activities in the Area, and other relevant non-proprietary

information about the characteristics of such technology

and information as to where such technology is available.

2. Every operator shall inform the Authority of revisions in

the description and information made available pursuant

to paragraph 1 whenever a substantial technological

change or innovation is introduced.

3. Every contract for carrying out activities in the Area

shall

contain

the

following

undertakings

by

the

contractor:

(a) to make available to the Enterprise on fair and

reasonable commercial terms and conditions, whenever

the Authority so requests, the technology which he uses

in carrying out activities in the Area under the contract,

which the contractor is legally entitled to transfer. This

shall be done by means of licences or other appropriate

arrangements which the contractor shall negotiate with

the Enterprise and which shall be set forth in a specific

agreement

supplementary

to

the

contract.

This

undertaking may be invoked only if the Enterprise finds

that it is unable to obtain the same or equally efficient

and useful technology on the open market on fair and

reasonable commercial terms and conditions;

(b) to obtain a written assurance from the owner of any

technology used in carrying out activities in the Area

under the contract, which is not generally available on

the

open

market

and

which

is

not

covered

by

subparagraph (a), that the owner will, whenever the

Authority so requests, make that technology available to

the

Enterprise

under

licence

or

other

appropriate

arrangements and on fair and reasonable commercial

terms and conditions, to the same extent as made

available

to

the

contractor.

If this assurance is not

obtained, the technology in question shall not be used by

the contractor in carrying out activities in the Area;

(c) to acquire from the owner by means of an enforceable

contract, upon the request of the Enterprise and if it is

possible

to

do

so

without

substantial

cost

to

the

contractor, the legal right to transfer to the Enterprise any

technology

used

by

the

contractor,

in carrying out

activities in the Area under the contract, which the

contractor is otherwise not legally entitled to transfer and

which is not generally available on the open market. In

cases where there is a substantial corporate relationship

between the contractor and the owner of the technology,

the closeness of this relationship and the degree of

control or influence shall be relevant to the determination

whether all feasible measures have been taken to acquire

such a right. In cases where the contractor exercises

effective control over the owner, failure to acquire from

the owner the legal right shall be considered relevant to

the

contractor's

qualification

for

any

subsequent

application for approval of a plan of work;

(d) to facilitate, upon the request of the Enterprise, the

acquisition by the Enterprise of any technology covered

by subparagraph (b), under licence or other appropriate

arrangements and on fair and reasonable commercial

terms

and

conditions,

if

the

Enterprise

decides

to

negotiate directly with the owner of the technology;

(e) to take the same measures as are prescribed in

subparagraphs (a), (b), (c) and (d) for the benefit of a

developing State or group of developing States which has

applied for a contract under article 9 of this Annex,

provided that these measures shall be limited to the

exploitation of the part of the area proposed by the

contractor which has been reserved pursuant to article 8

of this Annex and provided that activities under the

contract sought by the developing State or group of

developing

States

would

not

involve

transfer

of

technology to a third State or the nationals of a third

State. The obligation under this provision shall only apply

with respect to any given contractor where technology

has not been requested by the Enterprise or transferred

by that contractor to the Enterprise.

© Compiled by RGL

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