CYIL vol. 8 (2017)

JAN ONDŘEJ

CYIL 8 ȍ2017Ȏ

2.2 Exploitation According to Article 9 Section 1 of the Annex of the Agreement relating to the implementation of Part XI of the UN Convention of 1994, upon the expiration of a plan of work for exploration, the contractor shall apply for a plan of work for exploitation unless the contractor has already done so or has obtained an extension for the plan of work for exploration. As to the term exploitation which is mentioned in Article 153 and other regulations of the United Nations Convention on the Law of the Sea, the Agreement of 1994, in Annex III of the Convention and elsewhere, it is not defined either. The term exploitation is contained in Regulations on prospecting and exploration for polymetallic sulphides in the Area. Exploration is defined as recovery for commercial purposes of the resources in the Area and the extraction of minerals therefrom, including the construction and operation of mining, processing and transportation systems, for the production and marketing of metals. Considering the doctrine, Haanappel 28 means that prospecting does not include profit criterion while exploitation does . However, it is not always possible to distinguish between prospecting and exploration. Prospecting can also bring profit but it should not be the primary objective of this activity. Another question is whether experimental exploration is for prospecting or exploration. According to Haanappel, exploration is “the usage which puts profit or commercial profit as its main objective: Whenever profit is reached only occasionally it is not exploitation but rather prospecting as a form of usage”. 29 The objective of exploitation is to reach profit. This is confirmed by the Regulations on prospecting and exploration which explicitly mention commercial purposes of the resources in the Area. The original precise regulations set in the UN Convention on the Law of the Sea referring to commercial exploitation including the production and financial conditions of contracts were amended by the Agreement relating to the implementation of Part XI of 1994. The Agreement of 1994 contains a list of rules meant to be the general basis which shall be used by the Authority for the drawing up of precise rules and regulations referring to commercial exploitation. These basic rules are contained in Sections 6, 7, and 8 of the Annex to the Agreement. Production policy of the Authority is among other things based on the idea that the development of the Area is ruled by sound commercial principles. There shall be no discrimination between minerals derived from the Area and from other sources. There shall be no preferential access to markets for such minerals or for imports of commodities produced from such minerals . The plan of work for exploitation approved by the Authority in respect of each mining area shall indicate an anticipated production schedule which shall include the estimated maximum amounts of minerals that would be produced per year under the plan of work. Important is Section 8 Paragraph 1 about the financial terms of contracts. According to these rules, the system of payments to the Authority shall be fair both to the contractor and to the Authority and shall provide adequate means of determining compliance by the contractor with such. The rates of payments under the system shall be within the range of those prevailing in respect of land-based mining of the same or similar minerals in order to avoid giving deep seabed miners an artificial competitive advantage or imposing on them a competitive disadvantage . The system should not be complicated and 28 HAANAPPEL, P. C., Article XI of The Moon Treaty, XXIIIth Coll, on the Law of Outer Space , Tokio, 1980, p. 29. 29 Ibid.

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