Research On The Protection Of Contractor's Rights In The Draft Regulations On Exploitation Of Mineral Resources In The Area

As an important legal instrument implementing the principle that the Area and its resources are the common heritage of mankind,the Exploitation Regulations should clearly and explicitly define the rights,obligations and responsibilities of various parties involved in the exploitation activities in the Area,and ensure that the respective rights,obligations and responsibilities of the Authority,States Parties and Contractors are in line with the Convention and the Implementing Agreement,and keep the balance of the Contractor's rights and obligations.The exploitation regulations should be intended to encourage,promote and guide the activities of exploitation of mineral resources in the Area so as to truly accomplish the value of the "common heritage of mankind" and protect the marine environment from damage.The draft regulations make detailed provisions on contractor's obligations,but reveal a lack of efforts to encourage and promote the development and utilization of resources.Particularly,the protection of developers' rights are not guaranteed.Considering that deep sea mining is far much costlier and challenging than traditional land-based mining,The Authority should not make the Regulations overly burdensome for contractors.For it will weaken the attractiveness of deep sea mining and hinder the contractor's activities in the Area.We believe that the regulatory framework must provide a stable,transparent and predictable regulatory environment in which Contractors and investors can make long-term decisions with confidence and certainty.So the study of the protection of contractor's rights have both theoretical value and practical significance.This thesis is divided into six chapters,the viewpoint of each chapter can be summarized as follows:The first chapter combs the five stages of the principle of the common heritage of mankind and discusses the protection of contractor's right.The principle of the common heritage of mankind has gone through five stages,including the principle proposal period(from the late 1960 s to the early 1970s),the principle confirmation period(from the early 1970 s to the early 1980s),the principle establishment period(1982),the principle development period(1983 to 2013)and the implementation period of the principle(2013-present).The development of the draft of the exploitation regulations indicate that the principle of the common heritage of mankind may actually be realized.But the contractors are the key to the initiation,implementation and effective operation of the principle of the common heritage of mankind,and theyare also the risk-taker of whether the principle can be realized.Therefore,the draft of the exploitation regulations should protect the contractor's rights from institutionally,thereby encouraging the contractors to move from the exploration phase to the exploitation phase.However,the draft exploitation regulations are not sufficient in the financial system,the exclusive and priority exploitation rights,the implementation of reasonable consideration and the identification of confidential information of the contractor.The second chapter mainly analyzes the financial amount that the contractors need to pay according to the draft exploitation regulations.The goal of the Authority to establish a financial charging system whinch should be: First,to ensure optimum revenues for the Authority from the proceeds of commercial production;Second,to attract investments and technology to the exploration and exploitation of the Area;Third,the payment system is fair to both the contractor and the Authority;Fourth,the balance of interests between the States,the Authority and contractors.The matters that the Authority needs to consider when developing the financial system are included: First,the fiscal system should encourage rather than inhibit the contractor from moving to the exploitation stage;Second,the financial mechanism should encourage the first movers;Third,inter-generational equity and sustainable development should be considered;Fourth,the issue of double payment by contractors.According to the draft exploitation regulations,the first kind of fee the contractors need to pay is the royalties.The land royalties mainly include the amount,the ad valorem,the profit sharing mechanism,the resource rent tax and the hybrid system.Which royalties is used for deep sea mining is still under study.The second kind of fee that the contractor is required to pay is a fixed annual fee.The Authority is required to clarify the purpose and amount of the fixed annual fee and what the fixed annual fee can be deducted.The third kind of fee that the contractors need to pay is the environmental performance guarantee.The purpose of setting up the environmental performance guarantee is to encourage the contractors to comply with environmental regulations and fully fulfill the responsibility of protecting the environment.The fourth cost of the contractor is insurance.However,the Authority needs to clarify the type of insurance,the object of insurance and the scope of compensation.In addition,the contractors also have to pay a lot of other fees.The third chapter focuses on the contractor's priority exploitation rights and exclusive exploration and exploitation rights.The priority exploitation rights usuallyhave two meanings:First,the contractors are given priority to the mining rights of mineral resources in the exploration area;Second,the contractors are given priority to the mining rights of newly discovered minerals in the exploration area.There are three reasons to set up the contractor's priority exploitation rights,including the separation of exploration activities and exploitation activities are the institutional basis for the contractor's priority rights,the principle of fairness is the theoretical basis for setting the priority of contractors and protecting the enthusiasm of contractors for exploitation activities is a realistic requirement for setting priorities.The protection of the contractor's pritority rights in the draft of exploitation regulatons has problems ssuch as the unclear nature of the priority,the deadlines and the procedural requirements are not clear.The improvement measures mainly include clarifying the nature of the contractor's exploitation priority rights,determining the exercise period of the priority rights,clarifying the exploitation priority rights for newly discovered minerals,and clarifying the notification obligations and time limits of the ISA.The exclusive exploration and exploitation right of the contractor means that the existence of other similar mining rights is not allowed within the same mining area,but the existence of heterogeneous exploitation rights is allowed.In practice,the method of mining operations does not hinder each other and obtain the consent of the original mining owners is used in the application of heterogeneous mining rights.The shortcomings of the exploitation regulations including the procedures for a third parties to establish heterogeneous mining rights in the contractor's contract area is unclear,the standard to judge whether the third party's activities will have an impact on the contractor's activities and whether the contractor can raise objections are not clearly defined.Therefore,the ISA will need to notify the contractor while adopting the “without prejudice” judgment,and the contractor can raise his own objection.The fourth chapter analyzes the fulfillment of the “due regard” obligations between the contractor's activities in the Area and other activities in the marine environment.“Due regard” means that a country is exercising its own rights while taking into account the rights of another country and cannot realize its rights in a way that harms the rights of other countries.A due regard includes two substantive elements: the first is notification and the second is negotiation.There are four procedural requirements for the implement of due regard obligations: first,prior notification and negotiation obligations,Including designated contact personnel,helping the owner of the cable locate the location of submarine cables,notifying whenand where to work,providing working copies.Second,the obligation to notify when the work is about to begin and leave an emergency contact.Third,keep the duty of notification in the operation,and if necessary,they can send personnel to supervise each other's activities.Fourth,the obligation to notify after the completion of the work.The essential elements and procedural requirements of due regard apply to all subjects with reasonable consideration obligations,including but not limited to navigation,laying of submarine cables and pipelines,fishing and marine science research under Article 87 of the Convention.The fifth chapter mainly analyzes the protection of the contractor's confidential information.Confidential information refers to any information or knowledge of the enterprise that has been valued by the right holder for confidentiality.Once disclosed to a third party in an uncontrolled manner,it will lose its commercial value.The constituent elements of confidential information include secrecy,value,and confidentiality.The scope of protection of confidential information includes technical information,business information and other valuable information.The important goal of the confidential information management system is to ensure the confidentiality of data and information submitted by contractors while ensuring that there are sufficient data and information available for activities in the Area.The identification of confidential information under exploitation regulations must also meet the requirements of secrecy,value and confidentiality.The term of protection of confidential information shall be consistent with the exploration regulations and as long as the duration of the exploitation contract.The Authority has obligation to protect the contractor's confidential information.As the custodian of confidential information,the Secretary-General needs to take strict measures to protect confidential information.At the same time,the Authority is responsible for damages caused by the disclosure of confidential information.The sixth chapter analyzes China's position in the formation of the international seabed's exploration and exploitation system and China's future participation strategy in the Area.China's participation in the Area can be divided into three phases:The first phase was during the Third United Nations Conference on the Law of the Sea(1973-1982),China's main position is that it resolutely supported the Area and its resources were the common heritage of mankind,agreed to establish a specialized agency to manage activities in the Area,and compromised from the single exploitation system to the parallel exploitation system.The second phase was duringthe work of the Seabed Preparatory Committee(1983-1994),China's main work included opposing unilateral legislative actions on the Area by the developed countries such as the United States,becoming a pioneer investor in the international seabed area,actively participating in the consultations on Part XI of the Convention.The third stage is between China and the International Seabed Authority(from 1995 to present),The main work of China during this period included actively participating in the construction of the Authority,Participation in the development of exploration regulations in the Area and obtained four deep seabed exploration areas.China should make efforts to actively participate in the development of exploitation regulations,focuse on protecting the interests of contractors,seek opportunities to getting new exploration areas while exploring existing mining areas,develope deep sea technology,Cultivate talents,Strengthen regional cooperation,boost companies to invest in deep sea mineral exploitation activities,handle good relations with developing and developed countries and improve the ability to resolve disputes in the future.