Convention on the Regulation of Antarctic Mineral Resource Activities

Chapter 3

The Convention on the Regulationof Antarctic Mineral Resource

Activities

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CONTENTSPage

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . .GENERAL PRINCIPLES . . . . . . . . . . . . . . . . . . . .INSTITUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Commission . . . . . . . . . . . . . . . . . . . . . . . . . .Regulatory Committees . . . . . . . . . . . . . . . . . . . .The Scientific, Technical, and EnvironmentalThe Arbitral Tribunal . . . . . . . . . . . . . . . . . . . . . .The Secretariat . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Advisory. . . . . . . . .

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committee . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Special Meeting of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .DECISION MAKING AND COMPROMISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A FRAMEWORK REGIME AND UNCERTAINTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .THE RESOURCE MANAGEMENT PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prospecting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Identification of an Area for Exploration and Development . . . . . . . . . . . . . . . . . . . . . . . .Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUSPENSION, MODIFICATION, CANCELLATION, AND PENALTIES . . . . . . . . . . .BUDGET AND REVENUE CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .OPERATORS AND SPONSOR STATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .LIABILITY AND RESPONSE ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ENVIRONMENTAL PROTECTION AND THE MINERALS CONVENTION . . . . . . . .DISPUTE SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5758596262626464646565676868717479848485868789

FiguresFigure Page3-1. Prospecting: Articles 37 and 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 693-2. Opening an Area: Articles 39-41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .723-3. Exploration: Articles 4 and 43-51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763-4. Development: Articles 53 and 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Table3-1. What Must Occur

Antarctica . . . . . . .Before Exploration. . . . . . . . . . . . . . . . . .

and+.. .

Development Can Take Place in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

3-2. The Institutions of the Convention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-3. Prospecting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-4. Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-5. Blocking Power on a Regulatory Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-6. Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-7. Dispute Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Chapter 3

The Convention on the Regulation ofAntarctic Mineral Resource Activities

SUMMARYThe Convention on the Regulation of Antarctic

Mineral Resource Activities creates the means fordetermining the acceptability of resource activitiesand for regulating any activities determined to beacceptable. It is a compromise agreement. Its finalform is due in large part to the fact that seven claimshave been made to parts of Antarctica, but that noother states accept the validity of those claims. It isalso a result of the need to find a way to balance theinterest of many countries in protecting Antarcticasenvironment, yet still allow for the possibility ofminerals development in and around the continent.The attempt to balance competing interests is key tounderstanding the composition, voting procedures,decision-making authority, and other checks andbalances established by the Minerals Convention. Itis also key to understanding provisions for regulat-ing resource activities and protecting the environ-ment. The Convention is not intended to promoteresource development: it seeks to be neutral, neitherpromoting nor prohibiting development.

The Minerals Convention is intended to be anintegral part of the Antarctic Treaty System (ATS).It compensates for the fact that the Antarctic Treatydoes not address mineral resource questions. If leftunaddressed, the Treaty Parties believe this omis-sion could lead to instability and possibly a break-down of the ATS. Such a breakdown is not in theinterest of the United States: on the contrary, theUnited States has long held the ATS as a model ofeffective international cooperation.

The Minerals Convention is a framework regime.It does not contain a detailed mining code but relieson general guidelines and some specific require-ments and prohibitions, much as a general statutedelegating authority to an administrative agencymight do. The Parties avoided detail because of thedifficulty of anticipating all regulatory require-ments. The institutions created in the MineralsConvention, in particular the Commission and theRegulatory Committee(s), will be responsible forestablishing details of the regime.

The Minerals Convention contains potentiallystrong environmental protection provisions. Forinstance, binding dispute settlement procedures willapply to all measures related to environmentalprotection. The principal uncertainties regardingenvironmental protection are how well the compli-ance and enforcement provisions of the Conventionwill work in practice and what terms such asadequate and significant mean in relation toenvironmental measures.

The hurdles a potential minerals developer wouldhave to clear before a proposed development couldproceed are demanding. Initiating exploration anddevelopment under the terms of the Convention willbe difficult. However, commercial enterprises rec-ognize that they are better off with a mineralsagreement than without one.

Minerals prospecting, exploration, and develop-ment must be sponsored by a Party to the Conven-tion. Sponsoring states must evaluate Operators theysponsor and oversee their activities. Sponsors mustalso be prepared to support and defend the interestsof their Operators in institution meetings.

One of the most difficult issues the AntarcticTreaty Consultative Parties (ATCPs) faced was theissue of liability for activities that result in damageto the Antarctic environment. The Minerals Conven-tion contains general liability provisions, but theATCPs must negotiate a separate Liability Protocolbefore any exploration and development can beconsidered in Antarctica. Prospecting may proceed,subject to the general liability provisions of theConvention.

Ratification of the Minerals Convention wouldadvance important U.S. environmental, scientific,economic, and political and strategic interests inAntarctica. For different reasons, development-minded and environmental groups see the Conven-tions lack of detail as a shortcoming. In the long run,this concern may be less important than whether theConvention helps to maintain peace and stability inthe region.

3 l

58 l Polar Prospects: A Minerals Treaty for Antarctica

INTRODUCTIONThe Antarctic Treaty Consultative Parties (ATCPs)

recognized in the 1970s that an agreement aboutpotential minerals activities in Antarctica eventuallywould be needed. They perceived that knowledgeabout Antarcticas geology was steadily increasing,that the technical feasibility of developing anymineral resources that might be found in Antarcticawas improving, and that a major resource discoveryin the absence of an agreed regime for managingminerals activities could lead to a weakening of theAntarctic Treaty System. A formal agreement toestablish an Antarctic minerals regime was made atthe ATCPs 1981 Buenos Aires meeting. It was notimmediately apparent, however, that a mutuallyacceptable agreement could be reached. While theATCPs were generally agreed that the ATS must bepreserved and that the Antarctic environment mustbe protected, not all Treaty parties had the same viewabout how to accomplish these and other ends. Howwould the interests of claimant and nonclaimantstates be balanced without compromising the juridi-cal positions of either? Could Antarcticas environ-ment be adequately protected (and if so, how)without banning all minerals development there?How were revenues derived from any permittedminerals activities to be divided? Who would pay(and how much) in the event of an accident such asan oil spill? The Convention on the Regulation ofAntarctic Mineral Resource Activities addressesthese and other issues. This chapter describes andevaluates this new treaty.

The Minerals Convention was adopted on June 2,1988, after 6 years of negotiations. It applies to thesame area as the Antarctic Treaty, or all land, iceshelves, islands, and continental shelves south of 60s.

1 The Convention creates the means for determin-ing the acceptability of mineral resource activitiesand for regulating any activities determined to beacceptable. The 67 main articles and 12 annexarticles of the Minerals Convention establish thegeneral principles, specify the legal obligations ofthe Parties, and create the institutions and proce-dures necessary for decisionmaking. In effect,Parties to the Convention have said that in somecircumstances Antarctica% resources may bedeveloped, but only if significant environmental

impacts are unlikely to result from developmentand only if established uses of Antarctica are notjeopardized.

The Minerals Convention does not automaticallyopen Antarctica to resource development activities.Although the Convention does not prohibit thepossibility of developing any mineral resourcesdiscovered in Antarctica, neither is it intended topromote development. Indeed, certain standards andprocedures established by the Convention imposestringent requirements on resource developmentconsidered acceptable. Second, the Minerals Conven-tion does not automatically close all of Antarctica toresource development, While development of thoseparts of Antarctica designated as Specially ProtectedAreas (SPAs) or Sites of Special Scientific Interest(SSSIs) is automatically prohibited, all other areasmay be considered for development activities. Manyof the areas considered for resource developmentwill be eliminated, however, if it is determined thatdevelopment would have significant adverse effectson the environment or on scientific or historicvalues. Obviously, the Minerals Convention doesnot completely satisfy those intent on preserving allof Antarctica in a pristine state, nor does it com-pletely satisfy potential developers, who wouldbenefit from a less restrictive regime regulatingaccess to the continent. Third, the Minerals Conven-tion is not intended to be a detailed mining code,specifying how all possible situations are to behandled and eliminating all uncertainty. It is in-tended, rather, that more detailed rules and regula-tions will be developed when and if necessary by theinstitutions established by the Convention. Thus, itis a framework regime, to be considered as anotherstep forwardnot the final step-in the evolution ofthe Antarctic Treaty System.

The Minerals Convention is a carefully craftedcompromise. Negotiators had the difficult task ofdealing with the differing juridical positions ofclaimants and nonclaimants and of balancing theinterests of developed and developing states, ofstates with free market and centrally planned econo-mies, and of states with varying attitudes about theenvironment. The relative importance of competinguses of Antarctica-minerals development, sci-ence, tourism, pristine wilderness, etc.also had to

1~ exW@on is ~nti~n~ SheIVCS south of 60 S. which extend from islands north of 60 S.

Chapter 3The Convention on the Regulation of Antarctic Mineral Resource Activities l 59

be considered. As a result, the Minerals Conventionis a complicated agreement, despite its frameworknature. Like similar multilateral agreements, it wasnegotiated as a package deal. That is, the UnitedStates and other participants in the negotiations mustnow either accept the Convention as it is or reject allof it. Changes in the Convention will not beconsidered. Table 3-1 indicates what must occurbefore minerals development can commence inAntarctica.

An explicit hierarchy of actors with a stake inAntarctic minerals issues exists. At the top of thishierarchy are the Antarctic Treaty ConsultativeParties or ATCPs. The ATCPs are the most influen-tial set of Antarctic actors and the only group withrights to participate in decisionmaking under theterms of the Antarctic Treaty. ATCPs, as of Novem-ber 25, 1988, are automatically accorded decision-making status under the Minerals Convention.2 Atpresent, there are 22 ATCPS.3 They are the original12 signatories of the 1959 Antarctic Treaty and the10 additional states that have subsequently demon-strated a special interest in Antarctica through theconduct of substantial scientific research there.Seventeen other Parties to the Antarctic Treaty donot have Consultative Party status. However, anyParty to the Antarctic Treaty, in addition to ATCPs,may become a Party to the Minerals Convention(and any member of the United Nations may becomea Party to the Antarctic Treaty). On June 2, 1988, 13of the then 16 non-ATCP Parties to the AntarcticTreaty adopted the Minerals Convention along withthe ATCPs. All Parties to the Minerals Conventionmay participate in the Scientific, Technical, andEnvironmental Advisory Committee and in theSpecial Meeting of Parties, but these institutions donot have any decisionmaking authority. Any Party tothe Minerals Convention, which undertakes substan-tial minerals-related research or which sponsorsexploration or development, may participate in thedecisionmaking organs of the Convention while it iscarrying out these activities. Observer status to theCommission and Advisory Committee establishedby the Minerals Convention is open to any Party tothe Antarctic Treaty not participating in the MineralsConvention and may be accorded, as appropriate, in

the Commission, the Advisory Committee, and theSpecial Meeting of Parties to international organiza-tions, including non-governmental organizations,with special interests in Antarctica. Only otherParties to the Minerals Convention may send ob-servers to Regulatory Committee meetings,

Two other types of actors play significant roles inthe Convention. A Sponsoring Stateone sponsor-ing resource activities-may be any Party to theMinerals Convention, regardless of ATCP status.Operatorsthose undertaking resource activitiesmust be sponsored and may be a Party, an agency ofa Party, a juridical person established under the lawof a Party (e.g., a corporation), or a joint ventureconsisting of any combination of these entities.

GENERAL PRINCIPLESSeveral important general principles are estab-

lished in chapter 1 of the Convention. Among themost important is that the Convention is an integralpart of the Antarctic Treaty System, in effect fillinga gap in it. As part of the ATS, Parties strove to makethe Convention consistent with other agreements ofthe system, including the Antarctic Treaty and theConvention on the Conservation of Antarctic Ma-rine Living Resources (art. 10). Parties consideredit especially important that their positions onterritorial claims continue to be protected, andthus article 9 of the new treaty essentially repeatsarticle 4 of the Antarctic Treaty, the modus vivendiemployed to sidestep the claims issue. The MineralsConvention, thus, does not resolve conflicts overclaims, but provides the means by which resourcesmay be developed (or at least considered fordevelopment) despite differences. If the Conventionis successfully implemented, it would be unneces-sary to resolve the claims issue, which may beunsolvable in any case, and the unique jurisdictionalarrangement in Antarctica would continue as before.

One important way in which the Minerals Con-vention is directly tied to the Antarctic Treaty is thatthose Parties to the Minerals Convention that werealso Consultative Parties to the Antarctic Treaty onthe date the Convention was opened for signature(20 of the current 22) are automatically entitled to

2New AT~~ *1]] & ~rd~ ~lslom~lng status In tic co~lsslon ~less one-third of commission mcmbcrs obj~(. Ar_t, ] 8(4).s~gentina, Aus~~ia, Bel~um, Br~il, Chl]e, China, Federal Rcpubilc of Germany, France, German Democrauc RCPUIIC, ~dw 1t~Y~ Japm, New

Zealand, Norway, Poland, South Africa, Spain, Swden, Union of Soviet Socialist Republics, United Kingdom, United States, and Uruguay.


Table 3-l-What Must Occur Before Exploration and Development Can Take Place In Antarctica1. The Minerals Convention must be formally signed.

Signature may take place during a l-year period beginning Nov.25, 1988,n The 20 Antarctic Treaty Consultative Parties (ATCPs)and 13 Non-Consultative Parties (NCPs) that participated in thelast session, where the Convention was adopted by consensus,are eligible to sign. The United States signed the Convention onNOV. 30, 1988.

2. The Minerals Convention must be ratified by 16 of the 20ATCPs that adopted it. Among the 16 must be 11 developed and5 developing ATCPs. Also among this group must be all 7 of theATCP claimant countries; the United States and the Soviet Union(the 2 non-claimants that reserve the right to make a claim); andat least an additional 7 non-claimant ATCPs, 3 of which must bedeveloping nations. This configuration assures participation byall of the states necessary to meet the membership requirementsof ail of the Conventions institutions. The ratification processcould take several years.b

3. A Protocol to the Minerals Convention elaborating additionalrules and procedures regarding liability must be negotiated andratified in the same manner as the Minerals Convention. Negotia-tions to complete the Protocol could begin in 1989 or 1990. Theymay take several years.c

4. The Commission must consider adopting additional meas-ures related to, inter alia; a) protection of the Antarctic environ-ment; b) safe and effective expiration and development tech-niques; c) prospecting; d) the availability and confidentiality ofdata; e) maximum block sizes; f) the circumstances under whichManagement Schemes may be suspended, modified, or can-celed; g) financial regulations; h) fees payable for applications;and 1) levies payable by Operators engaged in exploration anddevelopment. d

5. Prospecting would likely take place. Some prospecting mayoccur before the Liability Protocol is completed. It can be done

without prior authorization by the institutions established by theConvention and is subject to the same standards of acceptabilityas expiration and development.

6. On behalf of an Operator, a Party to the Convention mustpropose a specific geographic area of Antarctica to be openedfor expiration and development. This would be expected tooccur once some prospecting had been done by one or moreOperators and areas of interest had been identified.f

7. Once an area is proposed, a consensus decision to openthe area must be made by the Commission. Supporting informa-tion, including a detailed environmental impact assessment,must accompany a request to open an area. Information ade-quate to enable informed judgments must be available. TheCommission must elaborate opportunities for joint ventures orother forms of participating.g

8. The environmental assessment must conclude that theactivity will not result in any significant adverse environmentalimpacts; that technology and procedures are available for safeoperations and for compliance with environmental regulations;that the capacity exists to monitor key environmental parametersand ecosystem components; and that the capacity exists torespond effectively to accidents.h

9. Following the Commission decision to open an area, andbefore any specific applications to conduct exploration/development may be considered, the Regulatory Committee forthe particular geographic area must be established. The Commit-tee must draft general requirements governing applications andterms and conditions, giving effect to the standards in Article 4.I

10. Inspection procedures must be provided for each areaidentified for possible expiration and possible development.]

%rt. 60.b~t 62 ~d thg Fln~ ~cArt. 8(7).ht. 21.e~t. 37Art, 39,gkt. 39 and 41.W . 4 .Art. 43(3).JArt, 12(8).SOURCE: OffI- of Technology Assessment, 1989.

membership on the Commission established by theConvention. Membership is also granted non-ATCPParties currently sponsoring exploration or develop-ment or currently engaged in research related to theConvention (art. 18(2)). Only these ATCPs haveautomatic voting privileges and the right to partici-pate in many key decisions.

To further promote consistency with other ele-ments of the Antarctic Treaty System the Partiesspecified that all decisions should take intoaccount the need to respect other established usesof Antarctica, including scientific research, longthe most important activity there; the conservation-including rational use-of marine living re-

sources; and tourism, an important and rapidlygrowing activity. The Convention makes clear thatthe Parties must consider possibly conflicting estab-lished uses in determining whether to open an areato exploration and development (art. 41(lb)). TheConvention grants inspectors designated accordingto rules established in the 1959 Antarctic Treatyrights to inspect all stations, installations, equip-ment, etc. related to minerals activity in the Antarc-tic Treaty area. It also provides for the designationof inspectors by each member of the Commissionand by the Commission as a group. Thus, consis-tency with the inspection provisions of the AntarcticTreaty is also promoted.


Photo credlt US. Geological Survey

Looking north along the western side of the Sentinel Range. Located near the base of the Antarctic Peninsula, the highest mountainsin Antarctica are found here.

Another important general principle is that no opposite of the exploitation principle established forexploration or development may take place un- the marine living resources of Antarctica under theless specifically authorized. The standards and Convention on the Conservation of Antarctic Ma-process for authorizing exploration and development rine Living Resources (CCAMLR), wherein fishingtake up much of the Convention. This principle is the activities are deemed acceptable unless specifically


prohibited. The prohibition of resource activitiesunless authorized would not affect activities bycountries that are not party to the Minerals Conven-tion. While in theory this could be a problem, inpractice virtually all countries that have the capa-bility to exploit resources in Antarctica were in-volved in negotiating the Convention. Moreover, aslong as the Convention retains its legitimacy, anyattempt to exploit resources outside the MineralsConvention would be looked on with disfavor by theParties and would probably not succeed. Pros-pecting, unlike exploration and development, doesnot require specific authorization.

As a general rule, authorization for a specificproject depends on a finding that the project willnot cause significant adverse effects on atmos-pheric, terrestrial, or marine environments, in-cluding significant effects on:

l air and water quality;. species of flora or fauna;l endangered or threatened species; andl biological, scientific, historic, aesthetic, or

wilderness areas of special significance (art. 4).Cumulative effects are also to be taken into account,as are activities that could cause significant adverseeffects on global or regional climate or weatherpatterns. Interpretation of the term significantimpacts is left up to the Commission or RegulatoryCommittee members, as the case may be, withadvice from the Advisory Committee. Authori-zation for an activity also depends on the exis-tence of adequate technology, the ability tomonitor key environmental parameters, and theability to respond effectively to accidents.

INSTITUTIONSThe Minerals Convention provides for the estab-

lishment of five institutions (i.e., a Commission,Regulatory Committee(s), an Advisory Committee,an Arbitral Tribunal, and a Secretariat) and a SpecialMeeting of Parties. Table 3-2 identifies membership,decisionmaking authority, voting procedures (ifapplicable), and key functions for each of theseinstitutions.

The CommissionThe Commission is one of the two decisionmak-

ing institutions established by the Minerals Con-

vention and the only one to which all of the Partieseligible to participate in making decisions belong.Unlike the Regulatory Committees, which wieldauthority only within designated areas of Antarctica,the authority of the Commission extends to all of thearea covered by the Minerals Convention. TheCommission has broad authority for establishinggeneral rules and procedures applicable to allprospecting, exploration, and development, and todispute settlement. Many of the details for theseprocesses have not yet been elaborated, so theCommission will have much important work to doif the Minerals Convention is ratified. The Com-mission is also charged with determining the compo-sition of Regulatory Committees and with reviewingsome of their actions. One of the Commissions mostimportant responsibilities is to determine, by aconsensus vote, whether or not to identify an area forpossible exploration and development for a particu-lar resource. An affirmative decision would triggerthe process that could ultimately result in developinga deposit.

Regulatory CommitteesIf the Commission decides to identify (open)

apart of Antarctica for exploration and development,a Regulatory Committee will be appointed by theCommission for that area. Regulatory Committeemembers are chosen from the Commission and thusform a subset of Commission members. This subsetis selected to include Parties with knowledge of theparticular area and to achieve a political balance,particularly between claimants and nonclaimantsand between developed and developing countries.Each Regulatory Committee is responsible forformulating detailed requirements for explorationand development within its area consistent with thegeneral guidelines established by the Commission.The Regulatory Committees, therefore, and not theCommission, will be the primary managers of anyexploration and development that may occur withinthe identified area.

As the primary managing bodies, RegulatoryCommittees will have the power, among otherthings, to set general requirements for the conduct ofexploration and development within the designatedarea, to issue or deny exploration and developmentpermits, to devise Management Schemes (con-tracts), and to suspend, modify, or cancel Manage-

Chapter 3The Convention on the Regulation of Antarctic Mineral Resource Activities . 63

Table 3-2The Institutions of the ConventionThe CommissionMembership: 1 ) All Antarctic Treaty Consultative Partiesthereare 22-as of Nov. 25, 1988; 2) Any other Party that undertakessubstantial research relevant to decisions about mineral activities;3) Any Party that sponsors exploration or development during theperiod that the relevant Management Scheme for the explorationor development is in force. Art. 18.Decsionmaking authority Yes.Voting Procedures Consensus voting on the decision to identifyan area for exploration and development, on budgetary matters,and on elaboration of the principle of non-discrimination; three-quarters majority of the members present and voting on mattersof substance; a simple majority of members present and voting onprocedural matters. Art. 22.Key functions:l

l

l

l

l

l

l

l

l

l

l

ll

l

To designate areas in which resource activities shall beprohibited or restricted. Arts. 13(2) and 21 (lb).To adopt measures for the protection of the Antarctic environ-ment. Art. 21(c).To determine whether or not to identify (open) an area forpossible exploration and development. Arts. 21 (Id), 41, andTo adopt general measures relating to prospecting. Arts. 21 (1 e)and 37(13).To establish and determine the composition of RegulatoryCommittees. Arts. 21(1 k) and 29.To review the actions of Regulatory Committees, in particular,decisions to approve Management Schemes or to issuedevelopment permits. Arts. 21(1 1) and 49.To adopt measures related to international participation andjoint ventures, especially with developing country Parties. Arts.6, 21(1 m), and 41 (id).To adopt general measures relating to the circumstances underwhich Management Schemes may be suspended, modified, orcanceled. Arts. 21(1 n) and 51(6).To make decisions on budgetary matters and to adopt financialregulations. Arts. 21(1 o) and 35.To adopt measures regarding fees and levies payable byOperators. Arts. 21 (1p) and 21 (1q).To draw attention to activities by Parties that affect compliancewith Convention obligations. Arts. 7(7) and 21(1 s).To determine the disposition of revenues. Art. 21 (r).To establish additional procedures for third-party disputesettlement. Arts. 21(v) and 59.To adopt measures on availability and confidentiality of dataand information. Arts. 16 and 21(1 h).

Regulatory CommitteesMembership: 1 ) Each Committee to consist of 10 membersselected from the group of Commision members, 4 of which mustbe claimants and 6 of which must be non-claimants. Included onall Committees formed must be: a) the member(s) that have madeclaims in the area being considered; and b) the United States andthe Soviet Union, neither of which have made claims but both ofwhich assert a basis of claim in Antarctica. Three of the tenmembers must be developing countries. In addition to the basic10: 2) the Commission member that proposed opening the areaIf that member is not otherwise a member of the Committee, untilsuch time as an application for an exploration permit is lodged; 3)Parties that lodge exploration permits during the period theapplication is being considered; and 4) Parties whose applicationsresult in approved Management Schemes for as long as theManagement Scheme is in force, Art. 29.

Decisionmaking authority YesVoting procedures: A two-thirds majority of those present andvoting for key votes (i.e., approval of Management Schemes or ofmodifications to Management Schemes), the two-thirds majorityto include both a simple majority of the claimants and a simplemajority of non-claimants on the Committee; a similar cham-bered two-thirds majority, with at least half from each chamberfor decisions concerning adoption or revisions of general guide-lines for exploration and development; a simple two-thirdsmajority on other matters of substance; a simple majority of thosepresent and voting on procedural matters. Art. 32.Key functions:l Subject to general measures adopted by the Commission, to

prepare for managing the area for which it was formed, i.e., todivide the area into blocks, to establish fees and procedures forhandling applications, and to determine a method of resolvingcompeting applications. Arts. 31(a) and 43(2).

l To adopt general guidelines for exploration and development,Arts. 21 (la), 43(3), and 43(5).

l To consider applications for exploration and development. Art.31 (lb).

. To issue exploration permits and approve ManagementSchemes, the specific terms and conditions for exploration anddevelopment. Arts. 31(1c) and 44-48.

l To issue development permits. Art. 54(5).l To monitor exploration and development activities. Art. 31(d).. To suspend, modify, or cancel Management Schemes if it is

determined that unanticipated and/or unacceptable impactshave resulted or are about to result. Arts. 31(1 e), 51, and 54.

The Scientific, Technical, and Environmental AdvisoryCommitteeMembership: All Parties to the Convention. Art. 23.Decisionmaking authority No.Key functions:l

l

l

To provide advice on scientific, technical, and environmentalissues to the Commission and Regulatory Committees. Arts.26(2), 26(3), 27, 40(1 ), 43(6), 45(3), 51(2), 52, and 54(6),To evaluate environmental and technical assessments to assistdecisions by the Commission and Regulatory Committees. Art.26(4).To provide advice to interested developing country Parties andother Parties on issues within its competence, including trainingprograms related to scientific, technical, and environmentalmatters bearing on Antarctic mineral resource activities andopportunities for cooperation among Parties in these programs.Art. 26(6).

The Arbitral TribunalMembership: One arbitrator from the Party commencing thedispute proceedings; one arbitrator from the other Party to thedispute; a third arbitrator chosen jointly by the parties to thedispute (from a list of arbitrators composed of representativesfrom each Party to the Convention, as are the other two) andunconnected to either of the Parties. Where there are more thantwo parties to the dispute, the Parties having the same interestappoint one arbitrator. Annex Art. 3.Decisionmaking authority: Yes--for those disputes referred to it.Voting procedure: All decisions in areas within its competence bymajority vote; all arbitrators must vote. Annex Art. 12.Key functions: To resolve disputes between two or more parties.Annex Art. 10.

Continued on next page


Table 3-2-The Institutions of the Convention-ContinuedThe Secretariat Comment The Special Meeting of Parties gives an opportunity toKey function: To serve the Institutions of the Convention. all Parties-not just those who have qualified to participate in theSpecial Meeting of parties decision-making institutions-to express their opinions aboutMembership: All Parties to the Convention, Art. 28(2). whether exploration and development in areas being consideredDecisionmaking authority No. for identification would be consistent with the principles of theKey function: Convention.. To consider whether identification of an area for exploration and

possible development by the Commission is consistent with theConvention, Arts. 28 and 40(3).

SOURCE: Office of Technology Assessment, 1989

ment Schemes. Some of the decisions of theRegulatory Committees are subject to review by theCommission, but the Commission is limited in itsability to require Regulatory Committees to alterdecisions. Other Regulatory Committee decisionsare subject to binding dispute settlement.

The Scientific Technical, and EnvironmentalAdvisory Committee

This committee, to be composed of representa-tives with relevant specialized expertise, was estab-lished to give expert advice to the Commission andRegulatory Committees on all scientific, technical,and environmental aspects of minerals resourceactivities. The Committee also provides a forum forconsultation and cooperation for the collection,exchange, and evaluation of information. One of themost important functions of the Advisory Commit-tee is to evaluate comprehensive environmental andtechnical assessments of proposals to open areas toexploration and development and of exploration anddevelopment plans (art, 26(4)). Membership is opento all Parties-that is, to Convention signatorieswithout voting rights as well as to Commissionmembers-to the Minerals Convention, but theAdvisory Committee has no independent deci-sionmaking power. The reports of the AdvisoryCommittee must reflect the conclusions reached atits meetings and all views expressed by members ofthe Committee. While lacking decisionmaking author-ity, the advice of the Advisory Committee isnevertheless likely to be taken seriously by theCommission and Regulatory Committees, for sub-stantive and political reasons.

There has been some concern that Parties desig-nated representatives on the Advisory Committeemay be subject to pressures to ignore their techni-cal role and provide opinions that reflect politicaldecisions taken within their countries. There appearsto be no way to prevent this; it can only be guardedagainst by the sunshine provisions in the regime(open meetings and reports) and by the internationaland public pressure likely to result from abuse oftheir technical function.4

The Arbitral TribunalParties to disputes arising out of the interpretation

or application of the Minerals Convention areencouraged to try to resolve them on their own.When this cannot be accomplished within 12months, a three-person Arbitral Tribunal may beestablished or the dispute may be submitted to theInternational Court of Justice (art. 56(1)), Disputesrelated to the discretionary powers of the Commis-sion or Regulatory Committees are not subject to theauthority of the Arbitral Tribunal, and other limita-tions to the types of disputes that maybe decided bythe Tribunal apply. However, for those disputessubmitted to the Tribunal, decisions are intended tobe final and binding. Tribunals will consist of onearbitrator from each of the two disputing parties (orgroup of parties with a similar interest) and a thirdarbitrator acceptable to both disputants,

The SecretariatThe Commission may establish a Secretariat staff,

as necessary, to support the work of the otherinstitutions of the Minerals Convention. Parties tothe Convention on the Conservation on AntarcticMarine Living Resources (CCAMLR) found it

4LA Kimb~], l%e Antarctic Minerals Convention, Special Report, International Imtitute for Environment and Development-NorthAmerica, July 1988, p. 29.


necessary to establish a Secretariat to support livingresources activities; however, a secretariat has yet tobe established to support Antarctic Treaty activities.At issue is whether the establishment of a perma-nent, central staff will prejudice the juridical posi-tions of countries. Some claimant states, in particu-lar, have been opposed to creating a permanentsecretariat for the Antarctic Treaty meetings, pre-ferring instead to continue the current practice ofrotating secretariat functions.

Special Meeting of PartiesLike the Advisory Committee, the Special Meet-

ing of Parties is composed of representatives of allParties to the Convention but has no independentdecisionmaking authority. The sole function of thisbody is to advise the Commission on whetheridentification of an area for exploration and develop-ment is consistent with provisions of the Conven-tion. The Special Meeting of Parties is designed toafford some opportunity for all Parties to participatein the institutions of the Minerals Convention.Although the Special Meeting of Parties lacks anyformal power, it maybe difficult for the Commissionto ignore an opinion that development in a specificarea would be inconsistent with the Convention.

DECISIONMAKING ANDCOMPROMISE

The decisionmaking systems of the Convention,like most voting systems in international organi-zations, proceed on the assumption that each statecasts one vote.5 They attempt to accommodate stateswith more substantial interests by using two basictechniques, often in combination. The first is toconfine some or all decisions to organs with smallmembership, thereby maximizing the affirmativeand negative voting power of the small group ofmembers, some of whom may be guaranteed perma-nent membership. This is true of the Commissionand especially of Regulatory Committees. Thesecond is to maximize protection for negativeinterests by requiring more than a simple majority

for some or all decisions, running the gamut from atwo-thirds majority to consensus, and possiblyincluding concurrent votes of certain states orgroups of states. Under the Convention, the Com-mission requires three-quarters majority votes orconsensus for decisions, while the Regulatory Com-mittees utilize simple two-thirds majorities for lessimportant matters of substance and concurrenttwo-thirds majorities of its constituent groups (claim-ants and nonclaimants) for the most importantmatters.

This system has an unavoidable trade-off. Themore a state seeks to enhance its own blockingpower, the more it is compelled to grant similarpower to at least some other states, thereby makingan affirmative decision more difficult. b It is possibleto convert negative power into affirmative power byinsisting on approval of ones affirmative agenda asa condition for allowing approval of someone elsesaffirmative agenda. The difficulty is that every stateor group of states with negative power can do thesame thing.

The question of U.S. influence concerns not onlythe direct voting power of the United States, but thevoting power of states likely to share U.S. interestsor otherwise inclined to accommodate those inter-ests. Where underlying interests are complex, sup-port can be difficult to predict. Some governmentswith which the United States has very good bilateralrelations attach considerable importance to theirrelations with Third World leaders or other votingblocs in international organizations. Some majorindustrial states and U.S. political and military alliesare territorial claimants in Antarctica. U.S. interestsand theirs might diverge on matters affecting theclaims. At least juridically, the Soviet Unionsapproach to Antarctica is similar to that of the UnitedStates, yet its behavior in decisionmaking for a couldbe influenced by the general state of U.S.-Sovietrelations and divergent political, economic, or stra-tegic interests.

The Parties had to balance the interests ofclaimants, nonclaimants, and other cross-cutting

5We1@t~ Otlng, in ~hlch each s~te is accord~ a different number of voux in accordance with a fOITnu]a designed tO reflWt relative inkrest Orcontribution, is uwd in some commodity arrangements and funding institutions.

%e virtues and problems of negative voting power are amply dcmonsLrated by the voting system in the UN. Security Council. According a vetoto each of the five permanent members tends 10 assure adequate suppon from the major powers for deasions with Important international securityimplications, and seines to protect each of them and their allies from adverse dwislons. At the same tune, the veto power cam substantially limit theresponsiveness of the Council to situations in which affu-matlve deciswns are deemed useful by the United States or others.


interest groups in order to achieve an agreement. Thechecks and balances embodied in the responsibili-ties, decisionmaking authority, voting procedures,and composition of each institution try to achievethis political compromise. A certain amount ofhorse-trading by the claimant and nonclaimantgroups and by market and centrally planned countieswas necessary in order to obtain a mutually accept-able result.

Some will see the compromises made in theMinerals Convention as going too far and preju-dicing the legal positions of either claimant ornonclaimant groups or of surrendering too much toeither environmental protection or of development.The Minerals Convention is the first Antarcticagreement in which any special rights areaccorded to the seven claimant States as claim-ants. In no other ATS agreement has a claimant beengiven an express right to a special position by virtueof being a claimant, or been accorded any expressright to a special role with respect to the particulararea it claims. The Convention explicitly establishesa decisionmaking structure for Regulatory Commit-tees that divides claimants and nonclaimants intoseparate groups. Moreover, a state with a territorialclaim to a particular area has, by virtue of that claimto that particular area:

l

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l

a right to serve on a Regulatory Committeeestablished for an area that includes the area itclaims (art. 29);a right to influence which of the other territorialclaimants will sit on that Regulatory Commit-tee (art. 29);a right to demand that the Regulatory Commit-tee have recourse to it in considering anapplication for an exploration permit and therelated Management Scheme (art. 46);a possible argument that its interests are enti-tled to special respect in any disposition ofsurplus revenues from the area it claims (art.35); anda possible argument that it has a duty to takemeasures in the area it claims to ensurecompliance with the Convention (art. 7).

On the other hand, if claimants ratify this Conven-tion, they will forgo ever having exclusive rights to

any resources found in their claimed territory(although in return they will gain access to allAntarctic resources and a role in all Commissiondecisions). While claimant States expectation ofexclusive rights to resources in their areas mayhave been unrealistic, it might be argued that theConvention is the latest and most serious erosion ofclaimant rights in Antarctica, beginning with theAntarctic Treaty, and despite treaty language statingthat preexisting judicial positions will not be af-fected by it.

The special interest of the United States and theSoviet Union as states having a basis for a claim inAntarctica is also specifically recognized in theConvention. The United States and Soviet Unionmust be represented on all Regulatory Committees,and, hence, have been accorded many of the samespecial rights as claimant states. Arguments aboutwhether claimants or nonclaimants benefit morefrom the Convention will probably remain incon-clusive.

Even though some states will have a larger voicein the Regulatory Committees, the general interestsof all Antarctic Treaty Consultative Parties areprotected by the functions of the Commission. AllParties also may express their concerns in theAdvisory Committee and Special Meeting of Par-ties.

Claimants wanted the Regulatory Committee tohave more discretionary powers because they werewary of the nonclaimant majority on the Com-mission, But many nonclaimants wanted the Com-mission to be strong and to review RegulatoryCommittee actions.7 In the end, the Commission wasgiven power to set parameters for rulemaking by theRegulatory Committees and to review certain Regu-latory Committee actions. Hence, neither the claim-ant nor the sponsoring state within the RegulatoryCommittee, nor the Committee itself, have blanketdiscretion. Each is limited by the functions assignedto the Commission and subject to the advice of theAdvisory Committee on technical and environ-mental issues.8 Although the United States hadpreferred all decisions to be made by less thanunanimous votes, so that no single state would havea veto, U.S. negotiators went along with the consen-


sus rule for the trigger decision on whether toopen an area-so long as less than unanimous voteswere used in the Regulatory Committees afterinvestments had begun.

Some environmental groups criticize this divisionof authority, which gives Regulatory Committeesimportant independent power. They argue that theCommission should have the ultimate authority toapprove or deny all key decisions.9 Env ironmentalistsfear the smaller Regulatory Committees are likely tobe composed of states seeking to cut a deal topromote development, and thereby will sacrificeenvironmental safeguards. Although the Commis-sion may review Regulatory Committee actions,they argue, it will not have the power to overturndecisions that could harm the environment. While aCommission with the authority to overturn Regula-tory Committee decisions might be more responsiveto environmental concerns, there is no guarantee thatit would be. Also, a Regulatory Committee wouldhave difficulty ignoring the Commissions guide-lines when developing a Management Scheme, aswell as later suggestions made by the Commission,the advice of the Advisory Committee, or the viewsof individual States with strong environmentalconcerns.

Finally, since the Commission has the responsi-bility to open areas to exploration and developmentand to designate members of the Regulatory Commit-tee for each area, it can assure a balance ofdevelopment and environmentally inclined states ineach Regulatory Committee. Given the diversity ofinterests of the Parties, it is difficult to see how anagreement could have been reached that vested allimportant power in just one of the institutions.A FRAMEWORK REGIMEAND

UNCERTAINTYThe Minerals Resource Convention has been

termed a framework regime. It does not contain adetailed mining code or regulations. Rather it relieson general guidelines and some specific requirementsand prohibitions, much as a general statute dele-gating authority to an administrative agency mightdo. The details of many of the elements of the new

regime have not yet been specified and will not bespecified until it is necessary to do so. With respectto exploration and development, most of the regula-tory system will be put into place for each area ofAntarctica when that area is identified (opened) bythe Commission for receipt of applications forexploration and development. Some of the condi-tions and guidelines will be specified by theCommission at the time it identifies the area. Theremainder will be determined by the RegulatoryCommittee established for the particular area, eitherby general regulation or in the context of theManagement Scheme applicable to a particularOperator in a particular block within the larger areafor which the particular Regulatory Committee iscompetent. Even though many details remain to beworked out, the Convention is still elaborate and byfar the lengthiest of the ATS agreements.

The flexibility of this system is an advantage tothe Parties to the Minerals Convention. Too muchdetail is probably not desirable now since it isimpossible to anticipate all requirements the Con-vention must meet. On the other hand, the gapsremaining in the regime may be seen by potentialOperators as disadvantages.

Some of the regimes lack of detail (and inseveral cases ambiguity) is seen as a shortcomingby both development-minded and environmentalgroups. 10 For example, investors in resource devel-opment generally want to know the rules of thegame early so that, before making substantialinvestments, they can decide if the expected returnsare worth the risks. The Convention does not specifywhat levies Operators will have to pay to support theConvention or the amount of *payments in thenature of, and similar to taxes, royalties, andpayments in kind. Also unknown are the Opera-tors specific liabilities. However, much uncertaintyshould be resolved in a Management Scheme priorto the time an Operator must commit substantialcapital to an operation, and uncertainty at theprospecting stage would not be costly.

Security and predictability are also important toinvestors, especially once a Regulatory Committeeapproves a Management Scheme and issues an

9AIKUCUC and Soutiem (lean (hhtion, Analysis of the ConventIon on the Regulation of Antarctic Mineral Resource Activities, ASOCInformation Paper 19884 October 1988, p. 6.

1OS= ~tuc~c @ sou~cm ~~ c~l[ion, ibid,; ~~, QTA w~rk~~p on tic An[~Cti~ ~lnerii]s Coil}cllllon, ~, 15, 1~~~,


exploration permit (see below). Can development bestopped even after significant investments in explo-ration have been made and performance criteria havebeen met? Article 54, discussed in more detailbelow, is ambiguous on how this decision would bemade.

Similarly, environmental groups are concernedthat some aspects of uncertainty and ambiguity inthe Convention may work to the disadvantage ofenvironmental protection. For instance, the MineralsConvention requires that information adequate toenable informed judgments be available beforemajor decisions (such as opening an area) can bemade (art. 4(1 )). Also, no minerals activity is to takeplace unless it would not cause significantadverse effects on air and water quality (art. 4(2a)).Although words such as significant and ade-quate are subjective, it would have been difficult totie the Parties down to more specific terms and stillreach agreement. These terms will be defined inmore detail by the institutions as necessary.

THE RESOURCE MANAGEMENTPROCESS

The Convention divides resource activity intoprospecting, exploration, and development (tables3-3, 3-4, and 3-6).

ProspectingProspecting is the first phase in the resource

exploitation process (figure 3-1 and table 3-3). Itconsists of those methods and techniques that helpminers determine targets for more intensive explora-tion. Successful prospecting may lead to explorationand development if economic conditions warrantand if the environment would not be significantlyharmed.

The methods used in prospecting are not easilydistinguishable from those methods scientists em-ploy in acquiring basic geophysical, geochemical,and geologic knowledge, nor are the results. Also,the geophysical research of some countries inAntarctica is carried out by the same organizationsthat would conduct prospecting activities. Thedifference between scientific research and prospect-

ing is largely a matter of intent. The distinction isrelevant because the Minerals Convention allowsprospecting data to be held as proprietary whereas,under terms of the Antarctic Treaty, the results ofscientific research must be made freely available toall.

Exploration and development, as defined in theMinerals Convention, have not yet commenced inAntarctica. This is due in large part to the fact thatthere is little current interest in such activities. In1977 the Antarctic Treaty Parties formally agreed torefrain from exploration and exploitation in Antarc-tica pending progress toward a regime governingthese activities.11 But geophysical and other surveyshave been conducted as scientific research-thoughthey may produce information of potential commer-cial value-and thus, have not been subject to thevoluntary restraint agreement on exploration. Unfortu-nately, the data from some past research surveyshave not been released yet, thus raising speculationabout whether these data were collected for researchor for commercial purposes. Moreover, there havebeen varying interpretations of when data should bereleased.

The Minerals Convention clearly distinguishesbetween prospecting and exploration. The Final Actof the Convention extends the policy of voluntaryrestraint the Parties adopted in 1977 pending entryinto force of the Minerals Convention. The policynow specifically applies to prospecting as well as toexploration and development. Geophysical and othersurveys may still be carried out as scientific re-search, but as research, the results must be madefreely available. One result may be that fewergeophysical surveys will be undertaken until theConvention enters into force. Potential prospectorsare unlikely to run the risk of engaging in anyquestionable scientific research that may beviewed as prospecting prior to entry into force of theMinerals Convention, for they could lose theirproprietary rights to this data.12

Prospecting under the Minerals Convention issubject to much less oversight by the Conventionsinstitutions than exploration and development. Itmay be undertaken prior to the opening of an area tothese activities, Explicit authorization is not re-

I IR~omm~&on IX- 1, 9th ATCM, Lmdon, 1977.lzwb~], op. cit., footnoted, p. 4.


Potential operatorsubmits relevantdata to Sponsor.

Sponsor notifiesCommission ofOperator plans, trans-mits environmentaland other information.

Figure 3-lProspecting: Articles 37 and 38

Sponsor on behalf of Commission meets tooperator, provide take appropriateclarification. action.

No

NoSponsor responsible Ifor ensuring Operatormodifies plans oractivities.

Yes

I

11 No

Prospecting notallowed or canceled.

Data released.

SOURCE: Offio@ of Technology Asaeasment, 19S9.

quired because prospecting activities are expected to prospecting may be prohibited or canceled or planshave no greater impact than similar scientific may be altered if Commission members haveresearch. Thus, for the most part, prospecting sufficient concerns about planned or ongoing activi-activities are expected to be of short duration and to ties.leave little trace behind. Prospectors are subject tothe same general requirements and obligations set Prospectors may hold data they obtain as proprie-forth in the Convention, however, including those tary for at least 10 years if it has commercial value,meant to safeguard the Antarctic environment. And but significantly, prospecting confers no special


Table 33-ProspectingDefinition: Activities, including logistic support, aimed at identi-fying areas of mineral resource potential for possible explorationand development, including geological, geochemical, and geo-physical investigations and field observations, the use of remotesensing techniques, and collection of surface, seafloor, andsubice samples. Such activities do not include dredging orexcavations, except to obtain small-scale samples, or drilling,except shallow drilling not to exceed 25 meters. Art. 1(8).General provisions:

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Does not confer upon any Operator any right to Antarcticmineral resources. Art. 37(1 ).Does not require authorization by the institutions of theConvention. Art. 37(2).Data of commercial value may be retained, as long as theSponsoring State certifies that they continue to have commer-cial value. Art. 37(10).Notification of prospecting by Sponsoring State must beaccompanied by fees (yet to be established) and by: a)identification of the general area for prospecting, b) identifica-tion of the mineral resource(s) under investigation, c) adescription of the methods to be used and the general workprogram, d) an assessment of the possible environmentalimpacts of the prospecting, e) measures to be used to avoidand/or to mitigate any harmful impacts, and f) proof that theOperator has a substantial and genuine link with the Sponsor-ing State and is financially and technically qualified to carry outthe prospecting. Art. 37(7a-f).

Institutional oversightl Minimal, but if a Commission member is concerned that

prospecting is not being conducted in a manner consistent withthe Convention or that planned prospecting would not beconsistent with it, the member may ask for a clarification. If it isstill concerned, in concert with at least five other Commissionmembers, it may call a meeting to take appropriate action. Art.38.

SOURCE: Offkx of Technology ksiewment, 19S9.

rights to an area. Exclusive rights to explore anddevelop an area may be obtained only after therelevant area has been opened, competing applica-tions to explore the same parts of the area have beenresolved, and an exploration permit has been issued.It does not appear that this uncertainty will operateas a significant deterrent to the oil and gas industryin prospecting. This industry is generally used to asystem under which investments in prospecting willnot necessarily entitle them to exclusive rights toexplore or exploit in the area in which theyconducted prospecting. The mining industry, on theother hand, neither has the financial resources thatthe oil and gas industry has for prospecting andexploration nor is as used to spending large sumswithout the certainty that it will acquire rights to itsdiscoveries.

. The Commission may adopt additional general measuresconcerning prospecting applicable to all operators. Arts. 37 and38.

l As appropriate, the Advisory Committee provides advice to theCommission. Art. 26(2a).

Key sponsor obligations:l

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l

To notify the Commission on behalf of its Operator at least 9months before planned prospecting, the notification to includethe information listed above. (Presumably, in cases whereOperators and Sponsors are independent of each other, theOperator will supply this information to the Sponsor, who will inturn certify it and forward it to the Commission.) Art. 37.To ensure that Operators are qualified to undertake pros-pecting in conformance with the Convention, and especiallythat they have the appropriate financial and technical means torespond to threats to the environment. Art. 37.To ensure that Operators have the financial capacity to meetliability standards, Art. 37.To ensure that Operators conduct themselves with due regardto the rights of other Operators in the area. Art. 37.Where modifications to a proposed prospecting plan or toongoing prospecting are deemed necessary, to ensure that theplan or activity of the Operator is modified. Art. 38.To ensure that response action is taken in the event that theOperator fails to do so. Art. (37(3a)).

Operator obligationsl Maintain the financial and technical means to conduct all

activities in compliance with the Convention. Art. 37.. Maintain a substantial and genuine link with the Sponsoring

State. Art. 37.l Conduct all activities with due regard to other Operators rights.

Art. 37.. Unless waived, remove all installations and equipment after

prospecting ceases and rehabilitate the site. Art. 37.

Some prospecting is likely to occur at arelatively early date if the Minerals Convention isratified and enters into force--even if near-terminterest in developing Antarcticas resourcesremains slight. Companies and nations that take along view about exploiting Antarcticas re-sources may wish to be in a position to evaluate theeconomic and technical feasibility of resource ex-ploitation, anticipating that prices will eventually behigher. 13 Prospecting may not lead immediately toexploration and development, however, in partbecause the economics of development may notwarrant proceeding beyond the prospecting phase.For this reason, when the United States considersimplementing legislation for the Minerals Conven-tion, it may wish to devote somewhat more effort todeveloping regulations applicable to domestic pros-

31bid., p. 4,


pectors. There is likely to be additional time inwhich to formulate domestic implementing legisla-tion for exploration and development of Antarcticasresources,

Identification of an Area forExploration and Development

One of the most important decisions specified bythe Convention is how an area of Antarctica isopened for exploration and development. If aprospector determined that there was sufficientincentive to proceed with intensive exploration of aparticular site, the prospector would request that itsSponsor ask the Commission to identify (open) thearea in question (figure 3-2). The Commissionsdecision to open an area must be made byconsensus. This is the decision that triggers theformation of a Regulatory Committee, considerationof exploration and development permits, develop-ment of a Management Scheme, and, in general,greatly increased activity. The Commission mustdecide whether identifying all or part of the area isconsistent with Convention standards, and, in the-ory, Commission members will base their vote on allrelevant information submitted by the requestingParty, other interested Parties, the Advisory Com-mittee, and the Special Meeting of [All] Parties.

To the extent that the United States is reluctantfor any reason, such as environmental concerns, toallow an area of Antarctica to be opened toexploration, the consensus voting requirement en-sures that opening the area can be blocked. However,if the United States wants an area opened, any othermember of the Commission could block its request.Since some state member might oppose opening anarea on environmental or other grounds or seek toimpose conditions which effectively do the samething, the U.S. interest might be thwarted. Anenvironmental groups opposition, if based on plau-sible evidence, might serve as the pretext for a statesnegative vote.

It is not clear what financial, temporal, or otherdisincentives to proceeding with exploration mightdeter a state or company from seeking to have anarea opened to exploration applications relativelyearly. While OTA predicts that actual developmentis unlikely absent a very valuable find and extremelyfavorable projected market conditions, it is less clear

how far in advance a serious effort would be madeto trigger the system by seeking to open an area.One of the biggest deterrents to opening an area islikely to be the need for adequate information, Oneincentive for early application to open areas toexploration and development is the provision thatprospecting data must be made public after 10 years,although there are also provisions to extend the10-year protection of such data (art. 37).

It is likely that the more important an area is likelyto be to consumers, the greater will be the pressureon the Commission members to approve a request toopen it. The nightmare scenario of a Westerncountry, in desperate need of oil, being frustrated byCommission vetoes is improbable. If the situationwere that critical to the West, a threat to denouncethe Convention would presumably be real. In thatcase the possible collapse of the Convention (andlikely the entire Antarctic Treaty System along withit) would be viewed by all Parties with alarm.

The Commission includes some oil exportingstates (e.g., the United Kingdom and Norway). Nonehas thus far associated itself with a cartel, However,it is possible the consensus requirement couldinspire a member of OPEC (the Organization ofPetroleum Exporting Countries) to invest in theAntarctic research necessary to join the Commis-sion, so as to gain a veto over the decision to openAntarctica to oil exploration and development.However, an economically motivated move by an oilexporter to restrain Antarctic production wouldlikely unite the existing group of states active inAntarctica, in part because most are consumers andin part because they perceived that their system wasbeing manipulated for outside ends. In such anatmosphere, it is not likely that the attempt to blockconsensus would long survive. The same argumentis likely to be true for hard minerals exporters.

Would the presence of the Soviet Union on theCommission likely be a problem for the UnitedStates? The Soviet Union is certainly capable ofusing its veto for purely political ends. Whether, inparticular circumstances, it would do so is anothermatter. If the question arose at a time when theSoviet Union was seeking better relations with theWest or more Western capital and investment, thechances of a veto are reduced. If the question aroseat a time of high tension, the Soviet Union would


Figure 3-2-Opening an Area: Articlea 3941

Special meeting ofStates Parties toadvise Commission. Advisory

CommitteeadvisesCommission.

i

Commission considers o m m i a - all relevant informationsion to identify an area submitted by request-for exploration and ing Party, other Parties,development of a Advisory Committee,particular resource and Special Meeting of

States Parties

Yes t

Area size adjusted

Sea exploration off limits part notflow chart. considered further.

Adjustments made.

Yes

No further No4action.

Yes

IArea Opened forexploration anddevelopment.

Yes

No

SOURCE: Office of Technology Asewment, 1989.

Chapter 3The Convention on (he Regulation of Antarctic Mineral Resource Activities l 73

nevertheless have to consider its interests in main-taining the stability of the Antarctic system and itsinterests as a consumer of the commodity concerned.The Soviets would also have to consider whetherthey have an interest in developing Antarctic min-eral resources themselves. If that country considersundertaking mineral development, it might be de-terred from vetoing a U.S. request so as not to triggera U.S. veto of its own request.

While these scenarios are unsettling, they are notvery likely. Two other scenarios are likely to be ofmore concern: 1) when there is genuine disagree-ment about the environmental hazards of opening anarea, and 2) when other states demand to participatein a proposed minerals activity, whether the UnitedStates or some other state sponsors the activity.

Genuine Disagreement Over Environmental Haz-ardsThis situation may be less unsettling for theUnited States because U.S. interests include aninterest in protecting the environment, because theUnited States is already among the more environ-mentally concerned Commission members, andbecause U.S. companies have substantial experiencein working with environmental constraints andbearing their added costs. Any proposed develop-ment that is likely to survive our domestic politicalprocess is unlikely to attract strong and genuineforeign opposition on environmental grounds. Thisis particularly true since U.S. environmental proce-dures and standards are likely to apply to anydecision by the U.S. Government to propose theopening of an area or to sponsor an applicant. At thesame time, any environmental organizations thatactively oppose opening an area can be expected tofocus lobbying efforts on those countries most likelyto cast a dissenting vote,

Demands for Participate---Intemational partici-pation, especially by developing country Parties, isencouraged by the Convention (art. 6). Demands forparticipation could come from a variety of sourcesand for political or economic reasons. A territorialclaimant, for instance, might demand to participatein a venture in order to establish the principle thatexploitation in its area requires its participation,thereby guaranteeing de facto accommodation of itsclaims. Alternatively, developing countries mightdemand to participate for ideological reasons (one

could find the economic interests of a state or ofprivate companies in one or more proto-industrialstates behind the ideological rhetoric),

A foreign states demand to participate mayincrease the cost of the venture to the Operator. Onthe other hand, development of Antarctic resourcesis likely to be so expensive that investors will mostlikely spread the risk by forming joint ventures (app.A presents a scenario of how a joint venture mightwork).

The Convention limits the role of the Commissionto elaborating opportunities for joint ventures ordifferent forms of participation (art.41 ( Id)). Thereis also helpful interpretive language in the Final Actconcerning the freedom of choice of an investorregarding partners in a joint venture, including termsof their partnership. Nevertheless, there will beample opportunity for bargaining. Potential inves-tors will have to consider that even if a veto in theCommission can be avoided, both the Soviet Unionand a territorial claimant over the area in questionwill wind up on the relevant Regulatory Committee,and would thus be in a position to influence futuredecisions if their interests are not accommodated.

It is also possible that one or more Commissionmembers will demand a price for their cooperationin supporting a decision to open an area. Such pricemay be unrelated to the Antarctic minerals regime,in which firm diplomacy may contain Antarcticbargaining to Antarctic issues. However, if the priceof support is relevant to the Antarctic mineralsregime or other Antarctic diplomacy, then log-rolling, a time-honored characteristic of collectivedecisionmaking bodies, is likely.

The Conventions provisions for opening an areafor exploration and development:

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guarantees that no area will be opened over theobjections of the United States;comes close to guaranteeing that no area will beopened for development over well-foundedenvironmental objections;does not assure that any area of Antarctica willbe opened; andsubjects states that seek to open an area to avariety of demands that may have to beaccommodated to open the area.


The consensus requirement supplies a great dealof protection for U.S. environmental and scientificinterests, but little protection for potential U.S.economic interests. It protects U.S. interests instability in Antarctica by guaranteeing the consent ofall substantially interested states before explorationand development is undertaken. If, however, signifi-cant concessions to territorial claimants are made asthe price of a decision to open an area, the consensusrequirement may prejudice the long-term stability ofthe current Antarctic system, and long-term U.S.political, legal, economic, and environmental inter-ests.

From the point of view of the petroleum andmining industries, the number of sovereign statesinvolved in the decisionmaking process, as exempli-fied by the requirement for a consensus decision toopen an area, is worrisome. United States interna-tional oil companies are accustomed to, and adept at,negotiating with all sorts of governments on anindividual basis. But to have to satisfy a large groupof countries, each with somewhat different interests,is daunting, even if the Sponsor is the more directlyinvolved party in the process.14 Private companies,whether domestic or foreign, might indeed preferdealing with a single sovereign power in Antarcticaif such an option were possible.

ExplorationOnce an area has been opened for exploration and

development, Operators may seek approval forexploration (figure 3-3 and table 3-4).

Application ProceduresThe Regulatory Committee must initially estab-

lish procedures for receipt of applications forexploration or development permits. Subject to anydecisions by the Commission regarding maximumblock size and application fees, the RegulatoryCommittee will then divide the area into blocks andset the relevant application fees.

The Regulatory Committee will also establishprocedures for resolving competing applications forthe same block where the applicants have notresolved the matter themselves. Those procedures

must include priority for the application with thebroadest participation among interested Parties,including developing countries in particular.

These decisions require a two-thirds majority ofthe states present and voting, that is 7 out of thenormal 10 votes. (States that abstain are normallynot considered to be voting. Four negative voteswould be necessary to block a decision if there wereno abstentions or only one abstention. If there weretwo to four abstentions, three votes would besufficient to block (table 3-5).

To the extent that an issue arises that relates to adifference in principle with the territorial claimants,four claimants, if united, will be able to block anydecision favored by six nonclaimants.

To the extent that an issue arises that relates to thegeneral interests of Western consumer nations, theUnited States should not normally find it toodifficult to find three additional negative votes (ortwo additional negative votes and two abstentions)to block adverse decisions. The four territorialclaimants on the Committee will come from amongthe following group of seven: Argentina, Australia,Chile, France, Norway, New Zealand, and theUnited Kingdom. At least two of the four mightnormally be expected to share many of the sameinterests as the United States, or at least favoraccommodation of substantial United States con-cerns. In that case, the United States would need topersuade only one of the five other nonclaimants ofits point of view. It is probable that the nonclaimantgroup will include at least one additional Westernstate, for example an European Economic Commu-nit y member or Japan, particularly if the fourclaimants include only two Western states.

The Regulatory Committee can, if it wishes,establish a limit on the number of blocks that may beaccorded to any given Party (art. 43(2)). A block sizelimitation could pose a problem for Operators, whodesire as much assurance as possible that the area inwhich they are granted exclusive rights will be largeenough to contain the size deposits necessary foreconomic development. If individual blocks arelarge enough in the first place, the potential problemcan be avoided. Moreover, given the multinationalnature of the oil and mining industries, and their

14j.N. G~~, me Anwctlc wer~s Regime: A pe~ole~ Industry perspective, OTA contractor report, November 1988.


capacity to establish subsidiaries with substantialand genuine links to foreign states, the extent towhich the risk of an adverse decision on this pointshould give rise to serious underlying economicconcerns is unclear.Guidelines

The Regulatory Committee is required to adoptguidelines identifying the general requirements forexploration and development in the area of itscompetence. These will cover the detailed itemsnormally associated with mining regulations.

The adoption of such guidelines requires, inaddition to a two-thirds majority, the votes of halfthe claimants and half the nonclaimants present andvoting. Blocking power is thereby increased. Aterritorial claimant, including the state with aterritorial claim in the area in question, would needto persuade only two other claimants of its point ofview in order to block a decision, even if there are noabstentions. Under this formula, the United States oranother nonclaimant would need to persuade at leastthree other states to vote no in order to block adecision in the absence of abstentions.

An impact of this formula is to increase the powerof the claimants in general, and of the claimantsmaking claims within the area in question inparticular. It could therefore strengthen their abilityto extract practical or legal concessions to theterritorial claims. An extreme but unlikely examplewould be a demand that the guidelines conform insignificant respects to the mining laws of the statethat claims sovereignty in the area.The Application for an Exploration Permit

Subsequent to the preparatory work undertakenby the Regulatory Committee, the Sponsoring State,on behalf of the Operator, may submit an applicationfor an exploration permit. The application must beaccompanied by the fees established by the Regula-tory Committee and, according to article 44, contain:

. A detailed description of the Operator, itsstructure, financial composition, and resourcesand technical expertise. If the Operator consistsof a group of countries, i.e., a joint venture, theapplication must include a detailed descriptionof the degree (including equity composition) towhich the parties are involved in the venture.

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A detailed description of the proposed explora-tion activities and, to the extent possible, adetailed description of the proposed develop-ment plan.A detailed assessment of environmental andother impacts of the proposed activities, and adescription of the Operators capacity to re-spond to accidents, especially those with po-tential environmental effects.Certification by the Sponsor of the capacity ofthe Operator to comply with the guidelinesestablished by the Regulatory Committee; ofthe technical competence and financial ca-pacity of the Operator; and that the relationshipof the Operator to the Sponsor is substantial andgenuine.A description of any proposed joint venture orother participation terms.

Approval of Exploration Permit andManagement Scheme

The Regulatory Committee has the authority toapprove an exploration permit and ManagementScheme (contract). The approval of an explorationpermit and Management Scheme for a specific blockaccords an Operator exclusive rights to explore forthe resources identified and the exclusive right todevelop those resources, subject to subsequentissuance of a development permit. The ManagementScheme sets out the specific terms and conditions forboth exploration and development. Those governingdevelopment will only be as detailed as the informa-tion available at this stage and are subject to reviewat the development stage. Terms and conditionsmust be consistent with the Convention and applica-ble regulations and guidelines adopted either by theCommission or the Regulatory Committee, andwould include procedures for settlement of disputesbetween the Operator and the Regulatory Commit-tee.

When considering the application and Manage-ment Scheme, the Regulatory Committee is requiredto have recourse to certain of its members: theSponsoring State, any state making claims in thearea with respect to which the Regulatory Com-mittee is competent, and, as may be required, one ortwo additional members of the Committee (art. 46).The meaning of this requirement is not specified. Aprocedural right to be deeply involved in the process,

Figure 34-Exploration: Articles 4 and 43-51I 1

Area opened for exploration anddevelopment for a particular resource. I+

Commission establishes RegulatoryCommittee for area.


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Table 3-4-Exploration

Definition: Activities, including logistic support, aimed at evalu-ating specific mineral occurrences or deposits, including explora-tory drilling, dredging, and other surface or subsurface excava-tions required to determine the nature and size of mineralresource deposits and the feasibility of their development, butexcluding pilot projects or commercial production. Art. 1(9).General provisions:

Exploration prohibited unless specifically authorized. Art. 4.The decision to authorize exploration and possible develop-ment in a particular area must be based on informationadequate to enable informed judgments, including a descrip-tion of the physical and environmental characteristics of thearea, an environmental impact assessment, and likely scale ofdevelopment, methods used, and types of resources sought.Arts. 4 and 47.Any authorized activities subject to the specific terms andconditions prescribed by Regulatory Committees in Manage-ment Schemes. Art. 47.An exploration permit accords exclusive rights to the Operatorsubject to consideration of needs for modifications to theManagement Scheme prior to development-to explore and todevelop mineral resources in accordance with the Manage-ment Scheme. Arts. 48, 53, and 54.Management Schemes subject to modification if new infor-mation suggests greater than anticipated impacts or if anOperator has failed to comply with the Convention. Art. 51.

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A consensus decision must be made by the Commissionmembers to allow exploration and development in a particulararea. Art. 41.The Special Meeting of Parties advises the Commission onwhether allowing exploration in an area is consistent with theprinciples of the Convention. Art. 41.The Advisory Committee reviews information submitted to theCommission and Regulatory Committee and gives advice. Arts.40,45, 51, and 52.If exploration and development are considered to be consistentwith the Convention, a Regulatory Committee is constituted forthe area. The Committee is responsible for subdividing the areainto blocks, adopting procedures for handling applications, andadopting general guidelines for exploration and development inthe area. Arts. 29 and 43.The Regulatory Committee examines each application, issuesan exploration permit or denies exploration, and devisesManagement Schemes which prescribe specific terms andconditions under which exploration and development mayproceed. Arts. 45-48.

SOURCE: - of Technology Assessment, 19S9.

rather than any decisionmaking power as such, issuggested. The provision may imply a core negotiat-ing or drafting group, or some less structured formof consultation. The reference to one or twoadditional members may imply that the UnitedStates and the Soviet Union are to be included in allcases, although there appears to be no formaldecision in the Convention or Final Act to this effect.

The approval of a Management Scheme by theRegulatory Committee constitutes authorization for

The Regulatory Committee may suspend, cancel, or modify aManagement Scheme if unanticipated unacceptable impactscould result or if the Operator has failed to comply with theConvention. Art. 51.Any member of the Regulatory Committee or any six membersof the Commission may request a review by the Commission ofthe Regulatory Committees decision to approve a Manage-ment Scheme or issue a development permit, and the Commis-sion may request that the Regulatory Committee reconsider itsdecision. Art. 49,

Key sponsor obligations:l On behalf of an Operator, to submit an application for an

exploration permit. The application must be accompanied byappropriate fees and by detailed information about the Opera-tor and about proposed exploration activities, including adetailed assessment of environmental and other impacts of theproposed development. (Most likely, the Operator will supplymuch of this information to the Sponsor. Sponsors will need toestablish domestic procedures for accepting and reviewing thisinformation.) Art. 44.

. To certify the capacity of the Operator to conform to thestandards of the Convention and to certify the Operatorstechnical competence and financial capacity, Art. 44(c-d).

Operator obligations:In concert with the Sponsor, to provide the data and information

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required for the Commission to consider identifying an area forexploration and development and for the Regulatory Commit-tee to consider issuing an exploration permit. Arts. 39 and 44.Exercise its rights with due regard to the rights of otherOperators. Art. 50.To live up to the specific terms and conditions of the Manage-ment Scheme, which relate, inter alia, to duration of exploration,measures and procedures for protection of the environment,response action to environmental mishaps, performance re-quirements, technical and safety specifications, monitoring andinspection, liability, resource conservation, financial obliga-tions, provision of data and information, and removal ofinstallations and equipment at the end of exploration and/ordevelopment. Art. 47. Suspension, modification, or cancellationof a Management Scheme may occur if an Operator fails tocomply with the Management Scheme. Art. 51.Subject to procedures to be established by the Commission,Operators may request the Arbitral Tribunal andl/or other bodyto review a denial of an exploration or development permit,cancellation of a Management Scheme, e

Documents

Convention on the Regulation of Antarctic Mineral Resource Activities