Section 165p. 165

PUBLIC INTERNATIONAL LAW COMPENDIUM VOLUME I

Authority for the purpose of carrying out auditing in

compliance with those rules, regulations and procedures.

10.

The

contractor

shall

make

available

to

the

accountants,

in

accordance

with the financial rules,

regulations

and

procedures

of

the

Authority,

such

financial data as are required to determine compliance

with this article.

11. All costs, expenditures, proceeds and revenues, and all

prices and values referred to in this article, shall be

determined in accordance with generally recognized

accounting principles and the financial rules, regulations

and procedures of the Authority.

12. Payments to the Authority under paragraphs 5 and 6

shall be made in freely usable currencies or currencies

which are freely available and effectively usable on the

major foreign exchange markets or, at the contractor's

option, in the equivalents of processed metals at market

value.

The

market

value

shall

be

determined

in

accordance

with

paragraph

5(b).

The

freely

usable

currencies and currencies which are freely available and

effectively usable on the major foreign exchange markets

shall be defined in the rules, regulations and procedures

of

the

Authority

in

accordance

with

prevailing

international monetary practice.

13. All financial obligations of the contractor to the

Authority, as well as all his fees, costs, expenditures,

proceeds and revenues referred to in this article, shall be

adjusted by expressing them in constant terms relative to

a base year.

14.

The

Authority

may,

taking

into

account

any

recommendations

of

the

Economic

Planning

Commission and the Legal and Technical Commission,

adopt rules, regulations and procedures that provide for

incentives, on a uniform and non-discriminatory basis, to

contractors to further the objectives set out in paragraph

1.

15. In the event of a dispute between the Authority and a

contractor over the interpretation or application of the

financial terms of a contract, either party may submit the

dispute to binding commercial arbitration, unless both

parties agree to settle the dispute by other means, in

accordance with article 188, paragraph 2.

Article 14. Transfer of data

1.

The

operator

shall

transfer

to

the

Authority,

in

accordance with its rules, regulations and procedures and

the terms and conditions of the plan of work, at time

intervals determined by the Authority all data which are

both necessary for and relevant to the effective exercise

of the powers and functions of the principal organs of the

Authority in respect of the area covered by the plan of

work.

2. Transferred data in respect of the area covered by the

plan of work, deemed proprietary, may only be used for

the purposes set forth in this article. Data necessary for

the formulation by the Authority of rules, regulations and

procedures

concerning

protection

of

the

marine

environment and safety, other than equipment design

data, shall not be deemed proprietary.

3.

Data

transferred to the Authority by prospectors,

applicants

for

contracts

or

contractors,

deemed

proprietary, shall not be disclosed by the Authority to the

Enterprise or to anyone external to the Authority, but data

on the reserved areas may be disclosed to the Enterprise.

Such data transferred by such persons to the Enterprise

shall not be disclosed by the Enterprise to the Authority

or to anyone external to the Authority.

Article 15. Training programmes

The contractor shall draw up practical programmes for

the training of personnel of the Authority and developing

States, including the participation of such personnel in all

activities in the Area which are covered by the contract, in

accordance with article 144, paragraph 2.

Article 16. Exclusive right to explore and exploit

The Authority shall, pursuant to Part XI and its rules,

regulations and procedures, accord the operator the

exclusive right to explore and exploit the area covered by

the plan of work in respect of a specified category of

resources and shall ensure that no other entity operates

in the same area for a different category of resources in a

manner which might interfere with the operations of the

operator. The operator shall have security of tenure in

accordance with article 153, paragraph 6.

Article

17.

Rules, regulations and procedures of the

Authority

1. The Authority shall adopt and uniformly apply rules,

regulations and procedures in accordance with article

160, paragraph 2(f)(ii), and article 162, paragraph 2(o)(ii), for

the exercise of its functions as set forth in Part XI on, inter

alia , the following matters:

(a) administrative procedures relating to prospecting,

exploration and exploitation in the Area;

(b) operations:

(i) size of area;

(ii) duration of operations;

(iii)

performance

requirements

including

assurances

pursuant to article 4, paragraph 6(c), of this Annex;

(iv) categories of resources;

(v) renunciation of areas;

(vi) progress reports;

(vii) submission of data;

(viii) inspection and supervision of operations;

(ix) prevention of interference with other activities in the

marine environment;

(x) transfer of rights and obligations by a contractor;

(xi) procedures for transfer of technology to developing

States in accordance with article 144 and for their direct

participation;

(xii) mining standards and practices, including those

relating

to

operational

safety,

conservation

of

the

resources and the protection of the marine environment;

(xiii) definition of commercial production;

(xiv) qualification standards for applicants;

(c) financial matters:

(i)

establishment

of

uniform

and

non-discriminatory

costing

and

accounting

rules

and

the

method

of

selection of auditors;

(ii) apportionment of proceeds of operations;

(iii) the incentives referred to in article 13 of this Annex;

(d) implementation of decisions taken pursuant to article

151, paragraph 10, and article 164, paragraph 2(d).

2. Rules, regulations and procedures on the following

items shall fully reflect the objective criteria set out below:

(a) Size of areas:

The Authority shall determine the appropriate size of

areas for exploration which may be up to twice as large as

those

for

exploitation

in

order

to

permit

intensive

exploration operations. The size of area shall be calculated

to satisfy the requirements of article 8 of this Annex on

reservation

of

areas

as

well

as

stated

production

requirements consistent with article 151 in accordance

with the terms of the contract taking into account the

state of the art of technology then available for seabed

mining and the relevant physical characteristics of the

areas. Areas shall be neither smaller nor larger than are

necessary to satisfy this objective.

(b) Duration of operations:

(i) Prospecting shall be without time-limit;

(ii) Exploration should be of sufficient duration to permit a

thorough survey of the specific area, the design and

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