Section 166p. 166

PUBLIC INTERNATIONAL LAW COMPENDIUM VOLUME I

construction of mining equipment for the area and the

design

and

construction

of

small

and

medium-size

processing plants for the purpose of testing mining and

processing systems;

(iii) The duration of exploitation should be related to the

economic

life

of

the

mining

project,

taking

into

consideration such factors as the depletion of the ore, the

useful life of mining equipment and processing facilities

and

commercial

viability.

Exploitation

should

be

of

sufficient duration to permit commercial extraction of

minerals of the area and should include a reasonable

time period for construction of commercial-scale mining

and processing systems, during which period commercial

production should not be required. The total duration of

exploitation, however, should also be short enough to

give the Authority an opportunity to amend the terms

and conditions of the plan of work at the time it considers

renewal

in

accordance

with

rules,

regulations

and

procedures

which

it

has

adopted

subsequent

to

approving the plan of work.

(c) Performance requirements:

The Authority shall require that during the exploration

stage periodic expenditures be made by the operator

which are reasonably related to the size of the area

covered by the plan of work and the expenditures which

would be expected of a bona fide operator who intended

to bring the area into commercial production within the

time-limits established by the Authority. The required

expenditures should not be established at a level which

would discourage prospective operators with less costly

technology than is prevalently in use. The Authority shall

establish a maximum time interval, after the exploration

stage is completed and the exploitation stage begins, to

achieve

commercial

production.

To

determine

this

interval, the Authority should take into consideration that

construction

of

large-scale

mining

and

processing

systems cannot be initiated until after the termination of

the exploration stage and the commencement of the

exploitation stage. Accordingly, the interval to bring an

area

into

commercial

production

should

take

into

account the time necessary for this construction after the

completion

of the exploration stage and reasonable

allowance should be made for unavoidable delays in the

construction schedule. Once commercial production is

achieved, the Authority shall within reasonable limits and

taking into consideration all relevant factors require the

operator to maintain commercial production throughout

the period of the plan of work.

(d) Categories of resources:

In determining the category of resources in respect of

which a plan of work may be approved, the Authority

shall

give

emphasis

inter

alia

to

the

following

characteristics:

(i) that certain resources require the use of similar mining

methods; and

(ii) that some resources can be developed simultaneously

without

undue

interference

between

operators

developing different resources in the same area.

Nothing

in

this

subparagraph

shall

preclude

the

Authority from approving a plan of work with respect to

more than one category of resources in the same area to

the same applicant.

(e) Renunciation of areas:

The operator shall have the right at any time to renounce

without penalty the whole or part of his rights in the area

covered by a plan of work.

(f) Protection of the marine environment:

Rules, regulations and procedures shall be drawn up in

order

to

secure

effective

protection

of

the

marine

environment from harmful effects directly resulting from

activities

in

the

Area or from shipboard processing

immediately above a mine site of minerals derived from

that mine site, taking into account the extent to which

such harmful effects may directly result from drilling,

dredging,

coring

and

excavation and from disposal,

dumping and discharge into the marine environment of

sediment, wastes or other effluents.

(g) Commercial production:

Commercial production shall be deemed to have begun if

an operator engages in sustained large-scale recovery

operations which yield a quantity of materials sufficient

to indicate clearly that the principal purpose is large-scale

production

rather

than

production

intended

for

information

gathering,

analysis

or

the

testing

of

equipment or plant.

Article 18. Penalties

1.

A

contractor's

rights

under the contract may be

suspended or terminated only in the following cases:

(a) if, in spite of warnings by the Authority, the contractor

has conducted his activities in such a way as to result in

serious,

persistent

and

wilful

violations

of

the

fundamental terms of the contract, Part XI and the rules,

regulations and procedures of the Authority; or

(b) if the contractor has failed to comply with a final

binding

decision

of

the

dispute

settlement

body

applicable to him.

2. In the case of any violation of the contract not covered

by paragraph 1(a), or in lieu of suspension or termination

under paragraph 1(a), the Authority may impose upon the

contractor

monetary

penalties

proportionate

to

the

seriousness of the violation.

3.

Except

for

emergency

orders

under

article

162,

paragraph 2(w), the Authority may not execute a decision

involving monetary penalties, suspension or termination

until the contractor has been accorded a reasonable

opportunity to exhaust the judicial remedies available to

him pursuant to Part XI, section 5.

Article 19. Revision of contract

1. When circumstances have arisen or are likely to arise

which, in the opinion of either party, would render the

contract

inequitable

or

make

it

impracticable

or

impossible to achieve the objectives set out in the

contract

or

in

Part

XI,

the

parties

shall enter into

negotiations to revise it accordingly.

2. Any contract entered into in accordance with article 153,

paragraph 3, may be revised only with the consent of the

parties.

Article 20. Transfer of rights and obligations

The rights and obligations arising under a contract may

be transferred only with the consent of the Authority, and

in accordance with its rules, regulations and procedures.

The Authority shall not unreasonably withhold consent to

the transfer if the proposed transferee is in all respects a

qualified applicant and assumes all of the obligations of

the transferor and if the transfer does not confer to the

transferee a plan of work, the approval of which would be

forbidden by article 6, paragraph 3(c), of this Annex.

Article 21. Applicable law

1. The contract shall be governed by the terms of the

contract, the rules, regulations and procedures of the

Authority, Part XI and other rules of international law not

incompatible with this Convention.

2. Any final decision rendered by a court or tribunal

having jurisdiction under this Convention relating to the

rights

and

obligations

of

the

Authority

and of the

contractor shall be enforceable in the territory of each

State Party.

3. No State Party may impose conditions on a contractor

that

are

inconsistent

with

Part

XI.

However,

the

application by a State Party to contractors sponsored by

it, or to ships flying its flag, of environmental or other laws

and regulations more stringent than those in the rules,

regulations and procedures of the Authority adopted

pursuant to article 17, paragraph 2(f), of this Annex shall

not be deemed inconsistent with Part XI.

© Compiled by RGL

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