unitex@rubbs.fidonet.org (unitex) (08/24/89)
SPECIAL COMMISSION ON SEA-BED MINING CODE
CONTINUES DISCUSSION OF QUESTION OF PRODUCTION CONTROL AND
AUTHORIZATION
The Special Commission charged with preparing rules, regulations and
procedures for the exploration and exploitation of the deep sea-bed -- Special
Commission 3 -- this morning began general debate on draft articles prepared
by the Secretariat on production control formulas and authorizations.
The Secretariat working paper on draft regulations on prospecting,
exploration and exploitation of polymetallic nodules in the deep sea-bed Area
includes procedures for application to mine the sea-bed and for approval and
issuance of production authorizations by the projected International Sea-Bed
Authority.
When it meets again at l0 a.m. on Monday, 21 August, the Commission will
continue the general debate and then begin detailed examination of the
articles of the draft regulations.
Statements
The first speaker this morning, the representative of Canada, said his
Government was opposed to subsidization of sea-bed mining. Metal producers
with comparative advantage would in the short run be penalized as a result of
such subsidies, and in the longer term, all consumers and producers alike
would suffer the consequences. Canada also believed that unrestricted access
to the deep sea-bed and the potential for unrestricted production from the
deep sea-bed opened up the possibility of a ruinous and inefficient
boom-and-bust cycle.
It considered the production control formula and the production
authorization allocation process to be a weak instrument for the realization
of goals mutually advantageous to consumers and producers. The formula would
be more effective in controlling entry into sea-bed mining operation than in
controlling actual production and could be more generous than the market
warranted it. Nonetheless Canada accepted and would support the system of
production authorization based on a production control formula. Together they
constituted a modest check-point which hopefully would encourage investors to
consider whether the markets could absorb the production from their deep
sea-bed mine sites while still providing them with a return sufficient to meet
their financial obligations to the Authority and to justify their investments.
The representative of Brazil said the production authorizations were a
means through which the Authority would implement the policies relating to
activities in the sea-bed mining Area and the production policies set forth in
articles l50 and l51 of the Law of the Sea Convention. The policies for the
development of the resources of the Area had been based on three types of
measures: commodity agreements, financial compensation for States whose
economies or export earnings were adversely affected by activities in the Area
and a limitation on the production of minerals in the Area. The principal
objectives of those measures were to minimize the disruption that an increased
supply of minerals resulting from deep sea-bed mining would produce in the
world markets for those minerals. Such a disruption would be detrimental to
the interests of both land-based and sea-bed producers, as well as to
consumers worldwide. The Commission should not lose sight of the fact that
the protection of developing countries from adverse effects on their economies
resulting from activities in the sea-bed Area, as envisaged in article l50 (h)
of the Convention, would be subject to consensus decision-making of the
Council of the Authority, as provided for in paragraph 8 (d) of article l6l of
the Convention.
He said the mathematical and statistical method used in devising the
production formula was standard practice in the business world for similar or
analogous purposes.
The representative of the European Economic Community (EEC) said the
* Origin: UNITEX --> Toward a United Species (1:107/501)
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Patt Haring | UNITEX : United Nations
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