unitex@rubbs.fidonet.org (unitex) (08/29/89)
SPECIAL COMMISSIONFOR SEA-BED MINING ENTERPRISE
PROVISIONS FOR FINANCING FIRST MINE SITE DISCUSSED IN SPECIAL COMMISSION
FOR SEA-BED MINING ENTERPRISE
The Special Commission on the Enterprise -- the mining arm of the
International Sea-Bed Authority -- yesterday afternoon resumed consideration
of a Secretariat working paper on the structure and organization of the
Enterprise, dwelling in particular on provisions for financing the first mine
site and initial administrative expenses.
The Commission, also known as Special Commission 2, is charged with
preparing for the operation of the Enterprise.
Following a review of the question of accounting procedures, the
Commission discussed the financing of the Enterprise's initial activities; the
provision of long-term interest-free loans and loan guarantees by States
parties; measures to be taken in the event of default by States parties of
their obligations; and provisions governing the deposit of promissory notes
and determination of funding requirements.
When the Commission meets next at 3:30 p.m. on Monday, 28 August, it will
continue consideration of the financing of the first mine site.
Establishment of Accounting Procedures
Opening the meeting, the Chairman, LENNOX F. BALLAH (Trinidad and Tobago)
said that, at its last meeting, the Commission had decided to consider a
compromise redraft of paragraph 2 (e) of article 15, which deals with the
powers of the Governing Board to establish accounting and internal audit
procedures. The proposal, made by India, would replace the existing
subparagraph with new subparagraphs (e) and (f). The proposed text would
state that the Governing Board would "(e) establish accounting procedures in
accordance with generally recognized accounting principles"; and "(f)
establish internal audit procedures".
The representative of Japan said that, if the Governing Board had the
power to establish accounting procedures, when the Council of the Sea-Bed
Authority considered the annual report of the Enterprise, it would not be able
to direct the Enterprise to change its accounting procedures. But there were
no explicit provisions in the Convention stating that the Governing Board had
the right to establish accounting procedures. Time was needed to consider how
the matter was treated by the Conference on the Law of the Sea. The
Commission should return to the question at a second reading.
The representative of Senegal said it might be wise to come back to
question at a later time.
The representative of France said the proposal of India ought to be
studied in greater depth, in order to determine its compatibility with the
Convention. It would be a new rule, but nothing prohibited the Commission
from creating new rules, as long as they did not conflict with the spirit of
the Convention. The Commission's report should reflect the seriousness of its
debate on this subject, and that debate should continue at the Commission's
next session.
The CHAIRMAN said that the Commission would again take up the matter at a
second reading, after having an opportunity to refer back to the Convention.
Article 28
Article 28 deals with financing of the first mine site and initial
administrative expenses.
Paragraph 1 of the article states that the Enterprise would be provided
with the funds needed to explore and exploit one mine site; process and market
the nickel, copper, cobalt and manganese obtained; and to meet its initial
administrative expenses.
By paragraph 2 of the article, all States parties would make available
half of the funds needed to carry out those activities, through the provision
of long-term interest-free loans in accordance with the scale of assessment
for the regular budget of the United Nations in force at the time. Debt
incurred by the Enterprise in raising the other half of the funds needed would
be guaranteed by all States parties in accordance with the same scale.
Paragraph 3 would provide that, in the event of a shortfall in States
parties' contributions, the Assembly of the Sea-Bed Authority would have the
power to determine its extent and adopt consensus measures for dealing with it
Paragraph 4 would provide that each State party deposit with the
Enterprise, within a specified time period, irrevocable, non-negotiable,
non-interest-bearing promissory notes in the amount of its share, as
determined above. The Governing board would prepare, at regular intervals, a
schedule of the magnitude and timing of funding requirements for
administrative expenses and for activities carried out by the Enterprise.
* Origin: UNITEX --> Toward a United Species (1:107/501)
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Patt Haring | UNITEX : United Nations
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