Section 161p. 161

PUBLIC INTERNATIONAL LAW COMPENDIUM VOLUME I

4.

Disputes

concerning

undertakings

required

by

paragraph 3, like other provisions of the contracts, shall

be subject to compulsory settlement in accordance with

Part XI and, in cases of violation of these undertakings,

suspension or termination of the contract or monetary

penalties may be ordered in accordance with article 18 of

this Annex. Disputes as to whether offers made by the

contractor are within the range of fair and reasonable

commercial terms and conditions may be submitted by

either

party

to

binding

commercial

arbitration

in

accordance with the UNCITRAL Arbitration Rules or such

other arbitration rules as may be prescribed in the rules,

regulations and procedures of the Authority. If the finding

is that the offer made by the contractor is not within the

range of fair and reasonable commercial terms and

conditions, the contractor shall be given 45 days to revise

his offer to bring it within that range before the Authority

takes any action in accordance with article 18 of this

Annex.

5. If the Enterprise is unable to obtain on fair and

reasonable commercial terms and conditions appropriate

technology to enable it to commence in a timely manner

the recovery and processing of minerals from the Area,

either the Council or the Assembly may convene a group

of States Parties composed of those which are engaged

in activities in the Area, those which have sponsored

entities which are engaged in activities in the Area and

other States Parties having access to such technology.

This group shall consult together and shall take effective

measures

to

ensure

that

such

technology

is made

available

to

the

Enterprise

on

fair

and

reasonable

commercial terms and conditions. Each such State Party

shall take all feasible measures to this end within its own

legal system.

6. In the case of joint ventures with the Enterprise,

transfer of technology will be in accordance with the

terms of the joint venture agreement.

7. The undertakings required by paragraph 3 shall be

included in each contract for the carrying out of activities

in the Area until 10 years after the commencement of

commercial production by the Enterprise, and may be

invoked during that period.

8. For the purposes of this article, "technology" means the

specialized

equipment

and

technical

know-how,

including

manuals,

designs,

operating

instructions,

training and technical advice and assistance, necessary to

assemble, maintain and operate a viable system and the

legal right to use these items for that purpose on a

non-exclusive basis.

Article 6. Approval of plans of work

1. Six months after the entry into force of this Convention,

and thereafter each fourth month, the Authority shall

take up for consideration proposed plans of work.

2. When considering an application for approval of a plan

of work in the form of a contract, the Authority shall first

ascertain whether:

(a) the applicant has complied with the procedures

established for applications in accordance with article 4

of

this

Annex

and

has

given

the

Authority

the

undertakings and assurances required by that article. In

cases of non-compliance with these procedures or in the

absence of any of these undertakings and assurances, the

applicant shall be given 45 days to remedy these defects;

(b) the applicant possesses the requisite qualifications

provided for in article 4 of this Annex.

3. All proposed plans of work shall be taken up in the

order in which they are received. The proposed plans of

work shall comply with and be governed by the relevant

provisions of this Convention and the rules, regulations

and procedures of the Authority, including those on

operational requirements, financial contributions and the

undertakings concerning the transfer of technology. If

the

proposed

plans

of

work

conform

to

these

requirements, the Authority shall approve them provided

that

they

are

in

accordance with the uniform and

non-discriminatory requirements set forth in the rules,

regulations and procedures of the Authority, unless:

(a) part or all of the area covered by the proposed plan of

work is included in an approved plan of work or a

previously submitted proposed plan of work which has

not yet been finally acted on by the Authority;

(b) part or all of the area covered by the proposed plan of

work is disapproved by the Authority pursuant to article

162, paragraph 2(x); or

(c) the proposed plan of work has been submitted or

sponsored by a State Party which already holds:

(i) plans of work for exploration and exploitation of

polymetallic nodules in non-reserved areas that, together

with either part of the area covered by the application for

a plan of work, exceed in size 30 per cent of a circular area

of 400,000 square kilometres surrounding the centre of

either part of the area covered by the proposed plan of

work;

(ii) plans of work for the exploration and exploitation of

polymetallic nodules in non-reserved areas which, taken

together, constitute 2 per cent of the total seabed area

which is not reserved or disapproved for exploitation

pursuant to article 162, paragraph (2)(x).

4. For the purpose of the standard set forth in paragraph

3(c), a plan of work submitted by a partnership or

consortium shall be counted on a pro rata basis among

the sponsoring States Parties involved in accordance with

article 4, paragraph 3, of this Annex. The Authority may

approve plans of work covered by paragraph 3(c) if it

determines that such approval would not permit a State

Party or entities sponsored by it to monopolize the

conduct of activities in the Area or to preclude other

States Parties from activities in the Area.

5. Notwithstanding paragraph 3(a), after the end of the

interim period specified in article 151, paragraph 3, the

Authority may adopt by means of rules, regulations and

procedures other procedures and criteria consistent with

this Convention for deciding which applicants shall have

plans of work approved in cases of selection among

applicants for a proposed area. These procedures and

criteria shall ensure approval of plans of work on an

equitable and non-discriminatory basis.

Article 7. Selection among applicants for production

authorizations

1. Six months after the entry into force of this Convention,

and thereafter each fourth month, the Authority shall

take up for consideration applications for production

authorizations

submitted

during

the

immediately

preceding

period.

The

Authority

shall

issue

the

authorizations applied for if all such applications can be

approved without exceeding the production limitation or

contravening the obligations of the Authority under a

commodity agreement or arrangement to which it has

become a party, as provided in article 151.

2. When a selection must be made among applicants for

production authorizations because of the production

limitation set forth in article 151, paragraphs 2 to 7, or

because of the obligations of the Authority under a

commodity agreement or arrangement to which it has

become a party, as provided for in article 151, paragraph 1,

the Authority shall make the selection on the basis of

objective and non-discriminatory standards set forth in its

rules, regulations and procedures.

3. In the application of paragraph 2, the Authority shall

give priority to those applicants which:

(a) give better assurance of performance, taking into

account their financial and technical qualifications and

their performance, if any, under previously approved

plans of work;

(b) provide earlier prospective financial benefits to the

Authority,

taking

into

account

when

commercial

production is scheduled to begin;

© Compiled by RGL

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