unitex@rubbs.fidonet.org (unitex) (08/29/89)
States parties would be notified by the Enterprise, through the Authority, of
their respective shares of such expenses, and the Enterprise would encash such
amounts of the promissory notes as would be required. Upon notification,
States parties would make their respective shares of debt guarantees available
to the Enterprise.
Paragraph 5 would provide that, if the Enterprise so requests, States
parties might provide additional debt guarantees, in accordance with the scale
referred to in paragraph 2. In lieu of debt guarantees, a State party might
make a voluntary contribution to the Enterprise in an amount equivalent to the
portion of debt which it would otherwise be liable to guarantee.
Paragraph 6 would provide that repayment of interest-bearing loans would
have priority over repayment of interest-free loans. The latter loans would
be repaid in accordance with a schedule adopted by the Assembly, upon the
recommendation of the Council, with the advice of the Governing Board. That
advice would be guided by the rules, regulations and procedures of the
Authority and would take into account the importance of ensuring the effective
functioning and financial independence of the Enterprise.
Paragraph 7 would provide that funds made available to the Enterprise be
in freely usable currencies, or currencies which were freely available and
effectively usable in the major foreign exchange markets.
The Chairman recalled that the Commission had decided to deal with the
definition of "debt guarantee" when it discussed Article 28.
Beginning discussion of paragraph 1 which concerns the provision of funds
for the Enterpise to explore and exploit one mine site, the representative of
the German Democratic Republic said the financing of a mine site presupposed a
clear definition of the object of such financing. The question was, what was
known about the mine site, what its size was, what the mineral content was,
and what was the expected duration of mining operations. Further, what was
the profitability of such a venture and how one could determine the amount of
financing. Those were some of the aspects that should form part of the
discussion of the subject.
He said his attitude was influenced by the profitability parameters. It
was advisable to keep an open mind. Perhaps the term "first mining operation"
should be used instead of first mine site.
The representative of Senegal asked for a clarification of the
distinction between the term "first mining site" and "initial mining
operation".
The representative of the Soviet Union said it was difficult to decide on
the size of the required funds even for the initial activities of the future
Enterprise given the considerable changes of the conditions of work on the
sea-bed. On the other hand, work would depend on the size of the funds
available. In 25 years there would be new technology and the amount of funds
required would be completely different. The question should be deferred until
the Commission discussed setting up the basic Enterprise.
Recalling discussions that had taken place on the issue when drawing up
the Law of the Sea Convention, the representative of India said the acceptance
of the parallel system by the Group of 77 developing countries had been based
on the acceptance by the industrialized countries of certain conditions. The
Enterprise would be provided with the necessary funds to start operations at
the same time as others in the field. Without such a guarantee, the
Enterprise would not be able to start. Money alone, however, was not
sufficient. There should also be a transfer of technology.
Moreover, he said, there had been a minimum cut-off for the grade of the
metal. Article 151 paragraph 5 of the Law of the Sea Convention reflected the
size, stating that the Enterprise shall reserve for its initial production a
quantity of 38,000 metric tonnes of nickel. One view during the drafting of
the Convention had been that an amount should be stipulated for the entire
project. Another group felt the total funds required could not be
realistically estimated. The compromise had been that the Preparatory
Commission would be in a better position to make a determination at a time
nearer to the beginning of operations. That was how the decision had come to
the Commission.
The representative of the German Democratic Republic said he had paid
attention to uncertainties about such things as the parameters of mine sites.
If such a mining operation was to be financed, there must be more
* Origin: UNITEX --> Toward a United Species (1:107/501)
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Patt Haring | UNITEX : United Nations
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