PART XI

 THE AREA

 SECTION 1. GENERAL PROVISIONS

 Article 133. Use of terms

 For the purposes of this Part:

 (a) 'resources' means all solid, liquid or gaseous mineral resources  in situ in the Area at or beneath the sea-bed, including polymetallic  nodules;

 (b) resources, when recovered from the Area, are referred to as  'minerals'.

 Article 134. Scope of this Part

 1. This Part applies to the Area.

 2. Activities in the Area shall be governed by the provisions of this  Part.

 3. The requirements concerning deposit of, and publicity to be given  to, the charts or lists of geographical co-ordinates showing the  limits referred to in article l, paragraph 1, are set forth in Part  VI.

 4. Nothing in this article affects the establishment of the outer  limits of the continental shelf in accordance with Part VI or the  validity of agreements relating to delimitation between States with  opposite or adjacent coasts.

 Article 135. Legal status of the superjacent waters and airspace

 Neither this Part nor any rights granted or exercised pursuant thereto  shall affect the legal status of the waters superjacent to the Area or  that of the air space above those waters.

 SECTION 2. PRINCIPLES GOVERNING THE AREA

 Article 136. Common heritage of mankind

 The Area and its resources are the common heritage of mankind.

 Article l37. Legal status o f the Area and its resources

 1. No State shall claim or exercise sovereignty or sovereign rights  over any part of the Area or its resources, nor shall any State or  natural or juridical person appropriate any part thereof. No such  claim or exercise of sovereignty or sovereign rights, nor such appro  priation shall be recognized.

 2. All rights in the resources of the Area are vested in mankind as a  whole, on whose behalf the Authority shall act. These resources are  not subject to alienation. The minerals recovered from the Area,  however, may only be alienated in accordance with this Part and the  rules, regulations and procedures of the Authority.

 3. No State or natural or juridical person shall claim, acquire or  exercise rights with respect to the minerals recovered from the Area  except in accordance with this Part. Otherwise, no such claim,  acquisition or exercise of such rights shall be recognized.

 Article 138. General conduct of States in relation to the Area

 The general conduct of States in relation to the Area shall be in  accordance with the provisions of this Part, the principles embodied  in the Charter of the United Nations and other rules of international  law in the interests of maintaining peace and security and promoting  international co-operation and mutual understanding.

 Article 139. Responsibility to ensure compliance and liability for damage

 1. States Parties shall have the responsibility to ensure that  activities in the Area, whether carried out by States Parties, or  state enterprises or natural or juridical persons which possess the  nationality of States Parties or are effectively controlled by them or  their nationals, shall be carried out in conformity with this Part.  The same responsibility applies to international organizations for  activities in the Area carried out by such organizations.

 2. Without prejudice to the rules of international law and Annex III,  article 22, damage caused by the failure of a State Party or inter  national organization to carry out its responsibilities under this  Part shall entail liability; States Parties or international  organizations acting together shall bear joint and several liability.  A State Party shall not however be liable for damage caused by any  failure to comply with this Part by a person whom it has sponsored  under article 153, paragraph 2 (b), if the State Party has taken all  necessary and appropriate measures to secure effective compliance  under article l53, paragraph 4, and Annex III, article 4, paragraph 4.

 3. States Parties that are members of international organizations  shall take appropriate measures to ensure the implementation of this  article with respect to such organizations.

 Article 140. Benefit of mankind

 1. Activities in the Area shall, as specifically provided for in this  Part, be carried out for the benefit of mankind as a whole, irres  pective of the geographical location of States, whether coastal or  land-locked, and taking into particular consideration the interests  and needs of developing States and of peoples who have not attained  full independence or other self-governing status recognized by the  United Nations in accordance with General Assembly resolution 15 14  (XV) and other relevant General Assembly resolutions.

 2. The Authority shall provide for the equitable sharing of financial  and other economic benefits derived from activities in the Area  through any appropriate mechanism, on a non-discriminatory basis, in  accordance with article 160, paragraph 2 (f ) (i).

 Article 141. Use o f the Area exclusively for peaceful purposes

 The Area shall be open to use exclusively for peaceful purposes by all  States, whether coastal or land-locked, without discrimination and  without prejudice to the other provisions of this Part.

 Article 142. Rights and legitimate interests of coastal States

 1. Activities in the Area, with respect to resource deposits in the  Area which lie across limits of national jurisdiction, shall be con  ducted with due regard to the rights and legitimate interests of any  coastal State across whose jurisdiction such deposits lie.

 2. Consultations, including a system of prior notification, shall be  maintained with the State concerned, with a view to avoiding in  fringement of such rights and interests. In cases where activities in  the Area may result in the exploitation of resources lying within  national jurisdiction, the prior consent of the coastal State  concerned shall be required.

 3. Neither this Part nor any rights granted or exercised pursuant  thereto shall affect the rights of coastal States to take such  measures consistent with the relevant provisions of Part XII as may be  necessary to prevent, mitigate or eliminate grave and imminent danger  to their coastline, or related interests from pollution or threat  thereof or from other hazardous occurrences resulting from or caused  by any activities in the Area.

 Article 143. Marine scientific research

 1. Marine scientific research in the Area shall be carried out ex  clusively for peaceful purposes and for the benefit of mankind as a  whole, in accordance with Part XIII.

 2. The Authority may carry out marine scientific research concerning  the Area and its resources, and may enter into contracts for that  purpose. The Authority shall promote and encourage the conduct of  marine scientific research in the Area, and shall co-ordinate and  disseminate the results of such research and analysis when available.

 3. States Parties may carry out marine scientific research in the  Area. States Parties shall promote international co-operation in  marine scientific research in the Area by:

 (a) participating in international programmes and encouraging co-operation in marine scientific research by personnel of different  countries and of the Authority;

 (b) ensuring that programmes are developed through the Authority or  other international organizations as appropriate for the benefit of  developing States and technologically less developed States with a  view to:

 (i) strengthening their research capabilities;

 (ii) training their personnel and the personnel of the Authority in the techniques and applications of research;

 (iii) fostering the employment of their qualified personnel in  research in the Area;

 (c) effectively disseminating the results of research and analysis  when available, through the Authority or other international channels  when appropriate.

 Article 144. Transfer of technology

 1. The Authority shall take measures in accordance with this Con vention:

 (a) to acquire technology and scientific knowledge relating to  activities in the Area; and

 (b) to promote and encourage the transfer to developing States of such  technology and scientific knowledge so that all States Parties benefit therefrom.

 2. To this end the Authority and States Parties shall co-operate in  promoting the transfer of technology and scientific knowledge relating  to activities in the Area so that the Enterprise and all States  Parties may benefit therefrom. In particular they shall initiate and  promote:

 (a) programmes for the transfer of technology to the Enterprise and to  developing States with regard to activities in the Area, including,  inter alia, facilitating the access of the Enterprise and of  developing States to the relevant technology, under fair and  reasonable terms and conditions;

 (b) measures directed towards the advancement of the technology of the  Enterprise and the domestic technology of developing States,  particularly by providing opportunities to personnel from the  Enterprise and from developing States for training in marine science  and technology and for their full participation in activities in the  Area.

 Article 145. Protection of the marine environment

 Necessary measures shall be taken in accordance with this Convention  with respect to activities in the Area to ensure effective protection  for the marine environment from harmful effects which may arise from  such activities. To this end the Authority shall adopt appropriate  rules, regulations and procedures for inter alia:

 (a) the prevention, reduction and control of pollution and other  hazards to the marine environment, including the coastline, and of  interference with the ecological balance of the marine environment,  particular attention being paid to the need for protection from  harmful effects of such activities as drilling, dredging, excavation,  disposal of waste, construction and operation or maintenance of  installations, pipelines and other devices related to such activities; 

(b) the protection and conservation of the natural resources of the  Area and the prevention of damage to the flora and fauna of the marine  environment.

 Article 146. Protection of human life

 With respect to activities in the Area, necessary measures shall be  taken to ensure effective protection of human life. To this end the  Authority shall adopt appropriate rules, regulations and procedures to  supplement existing international law as embodied in relevant  treaties.

 Article 147. Accommodation of activities in the Area and in the marine  environment

 1. Activities in the Area shall be carried out with reasonable regard  for other activities in the marine environment.

 2. Installations used for carrying out activities in the Area shall be  subject to the following conditions:

 (a) such installations shall be erected, emplaced and removed solely  in accordance with this Part and subject to the rules, regulations and  procedures of the Authority. Due notice must be given of the erection,  emplacement and removal of such installations, and permanent means for  giving warning of their presence must be maintained;

 (b) such installations may not be established where interference may  be caused to the use of recognized sea lanes essential to  international navigation or in areas of intense fishing activity;

 (c) safety zones shall be established around such installations with  appropriate markings to ensure the safety of both navigation and the  installations. The configuration and location of such safety zones  shall not be such as to form a belt impeding the lawful access of  shipping to particular maritime zones or navigation along  international sea lanes;

 (d) such installations shall be used exclusively for peaceful  purposes;

 (e) such installations do not possess the status of islands. They have  no territorial sea of their own, and their presence does not affect  the delimitation of the territorial sea, the exclusive economic zone  or the continental shelf.

 .3. Other activities in the maritime environment shall be conducted  with reasonable regard for activities in the Area.

 Article 148. Participation of developing States in activities in the  Area

 The effective participation of developing States in activities in the  Area shall be promoted as specifically provided for in this Part,  having due regard to their special interests and needs, and in par  ticular to the special need of the land-locked and geographically  disadvantaged among them to overcome obstacles arising from their  disadvantaged location, including remoteness from the Area and  difficulty of access to and from it.

 Article 149. Archaeological and historical objects

 All objects of an archaeological and historical nature found in the  Area shall be preserved or disposed of for the benefit of mankind as a  whole, particular regard being paid to the preferential rights of the  State or country of origin, or the State of cultural origin, or the  State of historical and archaeological origin.

SECTION 3. DEVELOPMENT OF RESOURCES
OF THE AREA

Article 150
Policies relating to activities in the Area

 Activities in the Area shall, as specifically provided for in this Part, be carried out in such a manner as to foster healthy development of the world economy and balanced growth of international trade, and to promote international cooperation for the over-all development of all countries, especially developing States, and with a view to ensuring:

 (a) the development of the resources of the Area;

 (b) orderly, safe and rational management of the resources of the Area, including the efficient conduct of activities in the Area and, in accordance with sound principles of conservation, the avoidance of unnecessary waste;

 (c) the expansion of opportunities for participation in such activities consistent in particular with articles 144 and 148;

 (d) participation in revenues by the Authority and the transfer of technology to the Enterprise and developing States as provided for in this Convention;

 (e) increased availability of the minerals derived from the Area as needed in conjunction with minerals derived from other sources, to ensure supplies to consumers of such minerals;

 (f) the promotion of just and stable prices remunerative to producers and fair to consumers for minerals derived both from the Area and from other sources, and the promotion of long-term equilibrium between supply and demand;

 (g) the enhancement of opportunities for all States Parties, irrespective of their social and economic systems or geographical location, to participate in the development of the resources of the Area and the prevention of monopolization of activities in the Area;

 (h) the protection of developing countries from adverse effects on their economies or on their export earnings resulting from a reduction in the price of an affected mineral, or in the volume of exports of that mineral, to the extent that such reduction is caused by activities in he Area, as provided in article 151;

 (i) the development of the common heritage for the benefit of mankind as a whole; and

 (j) conditions of access to markets for the imports of minerals produced from the resources of the Area and for imports of commodities produced from such minerals shall not be more favourable than the most favourable applied to imports from other sources.

Article 151
Production policies

 1. (a) Without prejudice to the objectives set forth in article 150 and for the purpose of implementing subparagraph (h) of that article, the Authority, acting through existing forums or such new arrangements or agreements as may be appropriate, in which all interested parties, including both producers and consumers, participate, shall take measures necessary to promote the growth, efficiency and stability of markets for those commodities produced from the minerals derived from the Area, at prices remunerative to producers and fair to consumers. All States Parties shall co-operate to this end.

 (b) The Authority shall have the right to participate in any commodity conference dealing with those commodities and in which all interested parties including both producers and consumers participate. The Authority shall have the right to become a party to any arrangement or agreement resulting from such conferences. Participation of the Authority in any organs established under those arrangements or agreements shall be in respect of production in the Area and in accordance with the relevant rules of those organs.

 (c) The Authority shall carry out its obligations under the arrangements or agreements referred to in this paragraph in a manner which assures a uniform and non-discriminatory implementation in respect of all production in the Area of the minerals concerned. In doing so, the Authority shall act in a manner consistent with the terms of existing contracts and approved plans of work of the Enterprise.

 2. (a) During the interim period specified in paragraph 3, commercial production shall not be undertaken pursuant to an approved plan of work until the operator has applied for and has been issued a production  authorization by the Authority. Such production authorizations may not be applied for or issued more than five years prior to the planned commencement of commercial production under the plan of work unless, having regard to the nature and timing of project development, the rules, regulations and procedures of the Authority prescribe another period.

 (b) In the application for the production authorization, the operator shall specify the annual quantity of nickel expected to be recovered under the approved plan of work. The application shall include a schedule of expenditures to be made by the operator after he has received the authorization which are reasonably calculated to allow him to begin commercial production on the date planned.

 (c) For the purposes of subparagraphs (a) and (b), the Authority shall establish appropriate performance requirements in accordance with Annex III, article 17.

 (d) The Authority shall issue a production authorization for the level of production applied for unless the sum of that level and the levels already authorized exceeds the nickel production ceiling, as calculated pursuant to paragraph 4 in the year of issuance of the authorization, during any year of planned production falling within the interim period.

 (e) When issued, the production authorization and approved application shall become a part of the approved plan of work.

 (f) If the operator's application for a production authorization is denied pursuant to subparagraph (d), the operator may apply again to the Authority at any time.

 3. The interim period shall begin five years prior to 1 January of the year in which the earliest commercial production is planned to commence under an approved plan of work. If the earliest commercial production is delayed beyond the year originally planned, the beginning of the interim period and the production ceiling originally calculated shall be adjusted accordingly. The interim period shall last 25 years or until the end of the Review Conference referred to in
 article 155 or until the day when such new arrangements or agreements as are referred to in paragraph 1 enter into force, whichever is earliest. The Authority shall resume the power provided in this article for the remainder of the interim period if the said arrangements or agreements should lapse or become ineffective for any reason whatsoever.

 4. (a) The production ceiling for any year of the interim period shall be the sum of:

 (i) the difference between the trend line values for nickel consumption, as calculated pursuant to subparagraph (b), for the year immediately prior to the year of the earliest commercial production and the year immediately prior to the commencement of the interim period; and

 (ii) sixty per cent of the difference between the trend line values for nickel consumption, as calculated pursuant to subparagraph (b), for the year for which the production authorization is being applied for and the year immediately prior to the year of the earliest commercial production .

 (b) For the purposes of subparagraph (a):

 (i) trend line values used for computing the nickel production ceiling shall be those annual nickel consumption values on a trend line computed during the year in which a production authorization is issued. The trend line shall be derived from a linear regression of the logarithms of actual nickel consumption for the most recent 15 year period for which such data are available, time being the independent variable. This trend line shall be referred to as the original trend line;

 (ii) if the annual rate of increase of the original trend line is less than 3 per cent, then the trend line used to determine the quantities referred to in subparagraph (a) shall instead be one passing through the original trend line at the value for the first year of the relevant 15-year period, and increasing at 3 per cent annually; provided however that the production ceiling established for any year of the interim period may not in any case exceed the difference between the original trend line value for that year and the original trend line value for the year immediately prior to the commencement of the interim period.

 5. The Authority shall reserve to the Enterprise for its initial production a quantity of 38,000 metric tonnes of nickel from the available production ceiling calculated pursuant to paragraph 4.

 6. (a) An operator may in any year produce less than or up to 8 per cent more than the level of annual production of minerals from polymetallic nodules specified in his production authorization, provided that the over-all amount of production shall not exceed that specified in the authorization. Any excess over 8 per cent and up to 20 per cent in any year, or any excess in the first and subsequent years following two consecutive years in which excesses occur, shall be negotiated with the Authority, which may require the operator to obtain a supplementary production authorization to cover additional production.

 (b) Applications for such supplementary production authorizations shall be considered by the Authority only after all pending applications by operators who have not yet received production authorizations have been acted upon and due account has been taken of other likely applicants. The Authority shall be guided by the principle of not exceeding the total production allowed under the production ceiling in any year of the interim period. It shall not authorize the production under any plan of work of a quantity in excess of 46,500 metric tonnes of nickel per year.

 7. The levels of production of other metals such as copper, cobalt and manganese extracted from the polymetallic nodules that are recovered pursuant to a production authorization should not be higher than those which would have been produced had the operator produced the maximum level of nickel from those nodules pursuant to this article. The Authority shall establish rules, regulations and procedures pursuant to Annex III, article 17, to Implement this paragraph.

 8. Rights and obligations relating to unfair economic practices under relevant muitilateral trade agreements shall apply to the exploration for and exploitation of minerals from the Area. In the settlement of disputes arising under this provision, States Parties which are Parties to such multilateral trade agreements shall have recourse to the dispute settlement procedures of such agreements.

 9. The Authority shall have the power to limit the level of production of minerals from the Area, other than minerals from polymetallic nodules, under such conditions and applying such methods as may be appropriate by adopting regulations in accordance with article 161, paragraph 8.

 10. Upon the recommendation of the Council on the basis of advice from the Economic Planning Commission, the Assembly shall establish a system of compensation or take other measures of economic adjustment assistance including co-operation with specialized agencies and other international organizations to assist developing countries which suffer serious adverse effects on their export earnings or economies resulting from a reduction in the price of an affected mineral or in the volume of exports of that mineral, to the extent that such reduction is caused by activities in the Area. The Authority on request shall initiate studies on the problems of those States which are likely to be most seriously affected with a view to minimizing their difficulties and assisting them in their economic adjustment.

 Article 152
 Exercise of powers and functions by the Authority

 1. The Authority shall avoid discrimination in the exercise of its  powers and functions, including the granting of opportunities for activities in the Area.

 2. Nevertheless, special consideration for developing States, including particular consideration for the land-locked  and geographically disadvantaged among them, specifically provided for in this Part shall be permitted.

 Article 153
 System of exploration and exploitation

 1. Activities in the Area shall be organized, carried out and controlled by the Authority on behalf of mankind as a whole in accordance with this article as well as other relevant provisions of this Part and the relevant Annexes, and the rules, regulations and procedures of the Authority.

 2. Activities in the Area shall be carried out as prescribed in paragraph 3:

 (a) by the Enterprise, and

 (b) in association with the Authority by States Parties, or state enterprises or natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals, when sponsored by such States, or any group of the foregoing which meets the requirements provided in this Part and in Annex III.

 3. Activities in the Area shall be carried out in accordance with a formal written plan of work drawn up in accordance with Annex III and approved by the Council after review by the Legal and Technical Commission. In the case of activities in the Area carried out as authorized by the Authority by the entities specified in paragraph 2(b), the plan of work shall, in accordance with Annex III, article 3, be in the form of a contract. Such contracts may provide for joint arrangements in accordance with Annex III, article 11.

 4. The Authority shall exercise such control over activities in the Area as is necessary for the purpose of securing compliance with the relevant provisions of this Part and the Annexes relating thereto, and the rules, regulations and procedures of the Authority, and the plans of work approved in accordance with paragraph 3. States Parties shall assist the Authority by taking all measures necessary to ensure such compliance in accordance with article 139.

 5. The Authority shall have the right to take at any time any measures provided for under this Part to ensure compliance with its provisions and the exercise of the functions of control and regulation assigned to it thereunder or under any contract. The Authority shall have the right to inspect all installations in the Area used in connection with activities in the Area.

 6. A contract under paragraph 3 shall provide for security of tenure. Accordingly, the contract shall not be revised, suspended or terminated except in accordance with Annex III, articles 18 and 19.

 Article 154
 Periodic review

 Every five years from the entry into force of this Convention, the Assembly shall undertake a general and systematic review of the manner in which the international regime of the Area established in this Convention has operated in practice. In the light of this review the Assembly may take, or recommend that other organs take, measures in accordance with the provisions and procedures of this Part and the Annexes relating thereto which will lead to the improvement of the operation of the regime.

 Article 155
 The Review Conference

 1. Fifteen years from I January of the year in which the earliest commercial production commences under an approved plan of work, the Assembly shall convene a conference for the review of those provisions of this Part and the relevant Annexes which govern the system of exploration and exploitation of the resources of the Area. The Review Conference shall consider in detail, in the light of the experience acquired during that period:

 (a) whether the provisions of this Part which govern the system of exploration and exploitation of the resources of the Area have achieved their aims in all respects, including whether they have benefited mankind as a whole;

 (b) whether, during the 15-year period, reserved areas have been exploited in an effective and balanced manner in comparison with non- reserved areas;

 (c) whether the development and use of the Area and its resources have been undertaken in such a manner as to foster healthy development of the world economy and balanced growth of international trade;

 (d) whether monopolization of activities in the Area has been prevented;

 (e) whether the policies set forth in articles 150 and 151 have been fulfilled; and

 (f) whether the system has resulted in the equitable sharing of benefits derived from activities in the Area, taking into particular consideration the interests and needs of the developing States.

 2. The Review Conference shall ensure the maintenance of the principle of the common heritage of mankind, the international regime designed to ensure equitable exploitation of the resources of the Area for the benefit of all countries, especially the developing States, and an Authority to organize, conduct and control activities in the Area. It shall also ensure the maintenance of the principles laid down in this Part with regard to the exclusion of claims or exercise of sovereignty over any part of the Area, the rights of States and their general conduct in relation to the Area, and their participation in activities in the Area in conformity with this Convention, the prevention of monopolization of activities in the Area, the use of the Area exclusively for peaceful purposes, economic aspects of activities in the Area, marine scientific research, transfer of technology, protection of the marine environment, protection of human life, rights of coastal States, the legal status of the waters superjacent to the Area and that of the air space above those waters and accommodation between activities in the Area and other activities in the marine environment.

 3. The decision-making procedure applicable at the Review Conference shall be the same as that applicable at the Third United Nations Conference on the Law of the Sea. The Conference shall make every effort to reach agreement on any amendments by way of consensus and there should be no voting on such matters until all efforts at achieving consensus have been exhausted.

 4. If, five years after its commencement, the Review Conference has not reached agreement on the system of exploration and exploitation of the resources of the Area, it may decide during the ensuing 12 months, by a three fourths majority of the States Parties, to adopt and submit to the States Parties for ratification or accession such amendments changing or modifying the system as it determines necessary and appropriate. Such amendments shall enter into force for all States Parties 12 months after the deposit of instruments of ratification or accession by three fourths of the States Parties.

 5. Amendments adopted by the Review Conference pursuant to this article shall not affect rights acquired under existing contracts.
 

 SECTION 4. THE AUTHORITY

 SUBSECTION A. GENERAL PROVISIONS

 Article 156
 Establishment of the Authority

 1. There is hereby established the International Sea-Bed Authority, which shall function in accordance with this Part.

 2. All States Parties are ipso facto members of the Authority.

 3. Observers at the Third United Nations Conference on the Law of the Sea who have signed the Final Act and who are not referred to in article 305, paragraph 1 (c), (d), (e) or (f), shall have the right to participate in the Authority as observers, in accordance with its rules, regulations and procedures.

 4. The seat of the Authority shall be in Jamaica.

 5. The Authority may establish such regional centres or offices as it deems necessary for the exercise of its functions.

 Article 157
 Nature and fundamental principles of the Authority

 1. The Authority is the organization through which States Parties shall, in accordance with this Part, organize and control activities in the Area, particularly with a view to administering the resources of the Area.

 2. The powers and functions of the Authority shall be those expressly conferred upon it by this Convention. The Authority shall have such incidental powers, consistent with this Convention, as are implicit in and necessary for the exercise of those powers and functions with respect to activities in the Area.

 3. The Authority is based on the principle of the sovereign equality of all its members.

 4. All members of the Authority shall fulfil in good faith the obligations assumed by them in accordance with this Part in order to ensure to all of them the rights and benefits resulting from
 membership.

 Article 158
 Organs of the Authority

 1. There are hereby established, as the principal organs of the Authority, an Assembly, a Council and a Secretariat.

 2. There is hereby established the Enterprise, the organ through which the Authority shall carry out the functions referred to in article 170, paragraph 1.

 3. Such subsidiary organs as may be found necessary may be established in accordance with this Part.

 4. Each principal organ of the Authority and the Enterprise shall be responsible for exercising those powers and functions which are conferred upon it. In exercising such powers and functions each organ shall avoid taking any action which may derogate from or impede the exercise of specific powers and functions conferred upon anotheir organ.

 SUBSECTION B. THE ASSEMBLY

 Article 159
 Composition, procedure and voting

 1. The Assembly shall consist of all the members of the Authority. Each member shall have one representative in the Assembly, who may be accompanied by alternates and advisers.

 2. The Assembly shall meet in regular annual sessions and in such special sessions as may be decided by the Assembly, or convened by the SecretaryGeneral at the request of the Council or of a majority of the members of the Authority.

 3. Sessions shall take place at the seat of the Authority unless otherwise decided by the Assembly.

 4. The Assembly shall adopt its rules of procedure. At the beginning of each regular session, it shall elect its President and such other officers as may be required. They shall hold office until a new President and other officers are elected at the next regular session.

 5. A majority of the members of the Assembly shall constitute a quorum.

 6. Each member of the Assembly shall have one vote.

 7. Decisions on questions of procedure, including decisions to convene special sessions of the Assembly, shall be taken by a majority of the members present and voting.

 8. Decisions on questions of substance shall be taken by a two-thirds majority of the members present and voting, provided that such majority includes a majority of the members participating in the session. When the issue arises as to whether a question is one of substance or not, that question shall be treated as one of substance unless otherwise decided by the Assembly by the majority required for decisions on questions of substance.

 9. When a question of substance comes up for voting for the first time, the President may, and shall, if requested by at least one fifth of the members of the Assembly, defer the issue of taking a vote on that question for a period not exceeding five calendar days. This rule may be applied only once to any question, and shall not be applied so as to defer the question beyond the end of the session.

 10. Upon a written request addressed to the President and sponsored by at least one fourth of the members of the Authority for an advisory opinion on the conformity with this Convention of a proposal before the Assembly on any matter, the Assembly shall request the Sea-Bed Disputes Chamber of the International Tribunal for the Law of the Sea to give an advisory opinion thereon and shall defer voting on that proposal pending receipt of the advisory opinion by the Chamber. If the advisory opinion is not received before the final week of the session in which it is requested, the Assembly shall decide when it will meet to vote upon the deferred proposal.

 Article l60
 Powers and functions

 1. The Assembly, as the sole organ of the Authority consisting of all the members, shall be considered the supreme organ of the Authority to which the other principal organs shall be accountable as specifically provided for in this Convention. The Assembly shall have the power to establish general policies in conformity with the relevant provisions of this Convention on any question or matter within the competence of the Authority.

 2. In addition, the powers and functions of the Assembly shall be:

 (a) to elect the members of the Council in accordance with article 161;

 (b) to elect the Secretary-General from among the candidates proposed by the Council;

 (c) to elect, upon the recommendation of the Council, the members of the Governing Board of the Enterprise and the Director-General of the Enterprise;

 (d) to establish such subsidiary organs as it finds necessary for the exercise of its functions in accordance with this Part. In the composition of these subsidiary organs due account shall be taken of the principle of equitable geographical distribution and of special interests and the need for members qualified and competent in the relevant technical questions dealt with by such organs;

 (e) to assess the contributions of members to the administrative budget of the Authority in accordance with an agreed scale of assessment based upon the scale used for the regular budget of the United Nations until the Authority shall have sufficient income from other sources to meet its administrative expenses;

 (f) (i) to consider and approve, upon the recommendation of the Council, the rules, regulations and procedures on the equitable sharing of financial and other economic benefits derived from activities in the Area and the payments and contributions made pursuant to article 82, taking into particular consideration the interests and needs of developing States and peoples who have not attained full independence or other self-governing status. If the Assembly does not approve the recommendations of the Council, the Assembly shall return them to the Council for reconsideration in the light of the views expressed by the Assembly;

 (ii) to consider and approve the rules, regulations and procedures of the Authority, and any amendments thereto, provisionally adopted by the Council pursuant to article 162, paragraph 2 (o) (ii) . These rules, regulations and procedures shall relate to prospecting, exploration and exploitation in the Area, the financial management and internal administration of the Authority, and, upon the recommendation of the Governing Board of the Enterprise, to the transfer of funds from the Enterprise to the Authority;

 (g) to decide upon the equitable sharing of financial and other economic benefits derived from activities in the Area, consistent with this Convention and the rules, regulations and procedures of the Authority;

 (h) to consider and approve the proposed annual budget of the Authority submitted by the Council;

 (i) to examine periodic reports from the Council and from the Enterprise and special reports requested from the Council or any other organ of the Authority;

 (j) to initiate studies and make recommendations for the purpose of promoting international co-operation concerning activities in the Area and encouraging the progressive development of international law relating thereto and its codification;

 (k) to consider problems of a general nature in connection with activities in the Area arising in particular for developing States, as well as those problems for States in connection with activities in the Area that are due to their geographical location, particularly for land-locked and geographically disadvantaged States;

 (l) to establish, upon the recommendation of the Council, on the basis of advice from the Economic Planning Commission, a system of compensation or other measures of economic adjustment assistance as provided in article 151, paragraph 10;

 (m) to suspend the exercise of rights and privileges of membership pursuant to article 185;

 (n) to discuss any question or matter within the competence of the Authority and to decide as to which organ of the Authority shall deal with any such question or matter not specifically entrusted to a particular organ, consistent with the distribution of powers and functions among the organs of the Authority.
 

 SUBSECTION C. THE COUNCIL

 Article 161
 Composition, procedure and voting

 1. The Council shall consist of 36 members of the Authority elected by the Assembly in the following order:

 (a) four members from among those States Parties which, during the last five years for which statistics are available, have either consumed more than 2 per cent of total world consumption or have had net imports of more than 2 per cent of total world imports of the commodities produced from the categories of minerals to be derived from the Area, and in any case one State from the Eastern European (Socialist) region, as well as the largest consumer;

 (b) four members from among the eight States Parties which have the largest investments in preparation for and in the conduct of activities in the Area, either directly or through their nationals, including at least one State from the Eastern European (Socialist) region;

 (c) four members from among States Parties which on the basis of production in areas under their jurisdiction are major net exporters of the categories of minerals to be derived from the Area, including at least two developing States whose exports of such minerals have a substantial bearing upon their economies;

 (d) six members from among developing States Parties, representing special interests. The special interests to be represented shall include those of States with large populations, States which are land-locked or geographically disadvantaged, States which are major importers of the categories of minerals to be derived from the Area, States which are potential producers of such minerals, and least developed States;

 (e) eighteen members elected according to the principle of ensuring an equitable geographical distribution of seats in the Council as a whole, provided that each geographical region shall have at least one member elected under this subparagraph. For this purpose, the geographical regions shall be Africa, Asia, Eastern European (Socialist), Latin America and Western European and Others.

 2. In electing the members of the Council in accordance with paragraph 1, the Assembly shall ensure that:

 (a) land-locked and geographically disadvantaged States are represented to a degree which is reasonably proportionate to their representation in the Assembly;

 (b) coastal States, especially developing States, which do not qualify under paragraph I (a), (b), (c) or (d) are represented to a degree which is reasonably proportionate to their representation in the Assembly;

 (c) each group of States Parties to be represented on the Council is represented by those members, if any, which are nominated by that group.

 3. Elections shall take place at regular sessions of the Assembly. Each member of the Council shall be elected for four years. At the first election, however, the term of one half of the members of each group referred to in paragraph I shall be two years.

 4. Members of the Council shall be eligible for re-election, but due regard should be paid to the desirability of rotation of membership.

 5. The Council shall function at the seat of the Authority, and shall meet as often as the business of the Authority may require, but not less than three times a year.

 6. A majority of the members of the Council shall constitute a quorum.

 7. Each member of the Council shall have one vote.

 8. (a) Decisions on questions of procedure shall be taken by a majority of the members present and voting.

 (b) Decisions on questions of substance arising under the following provisions shall be taken by a two-thirds majority of the members present and voting, provided that such majority includes a majority of the members of the Council: article 162, paragraph 2, subparagraphs (f); (g); (h); (i); (n); (p); (v); article 191.

 (c) Decisions on questions of substance arising under the following provisions shall be taken by a three-fourths majority of the members present and voting, provided that such majority includes a majority of the members of the Council: article 162, paragraph 1; article 162, paragraph 2, subparagraphs (a); (b); (c); (d); (e); (l); (q); (r); (s); (t); (u) in cases of non-compliance by a contractor or a sponsor; (w) provided that orders issued thereunder may be binding for not more than 30 days unless confirmed by a decision taken in accordance with subparagraph (d); article 162, paragraph 2, subparagraphs (x); (y); (z); article 163, paragraph 2; article 174, paragraph 3, Annex IV, article 11.

 (d) Decisions on questions of substance arising under the following provisions shall be taken by consensus: article 162, paragraph 2(m) and (o); adoption of amendments to Part XI.

 (e) For the purposes of subparagraphs (d), (f) and (g), "consensus" means the absence of any formal objection. Within 14 days of the submission of a proposal to the Council, the President of the Council shall determine whether there would be a formal objection to the adoption of the proposal. If the President determines that there would be such an objection, the President shall establish and convene, within three days following such determination, a conciliation committee consisting of not more than nine members of the Council, with the President as chairman, for the purpose of reconciling the differences and producing a proposal which can be adopted by consensus. The committee shall work expeditiously and report to the Council within 14 days following its establishment. If the committee is unable to recommend a proposal which can be adopted by consensus, it shall set out in its report the grounds on which the proposal is being opposed.

 (f) Decisions on questions not listed above which the Council is authorized to take by the rules, regulations and procedures of the Authority or otherwise shall be taken pursuant to the subparagraphs of this paragraph specified in the rules, regulations and procedures or, if not specified therein, then pursuant to the subparagraph determined by the Council if possible in advance, by consensus.

 (g) When the issue arises as to whether a question is within subparagraph (a), (b), (c) or (d), the question shall be treated as being within the sub-paragraph requiring the higher or highest majority or consensus as the case may be, unless otherwise decided by the Council by the said majority or by consensus.

 9. The Council shall establish a procedure whereby a member of the Authority not represented on the Council may send a representative to attend a meeting of the Council when a request is made by such member, or a matter particularly affecting it is under consideration. Such a representative shall be entitled to participate in the deliberations but not to vote.

 Article 162
 Powers and functions

 1. The Council is the executive organ of the Authority. The Council shall have the power to establish, in conformity with this Convention and the general policies established by the Assembly, the specific policies to be pursued by the Authority on any question or matter within the competence of the Authority.

 2. In addition, the Council shall:

 (a) supervise and co-ordinate the implementation of the provisions of this Part on all questions and matters within the competence of the Authority and invite the attention of the Assembly to cases of non-compliance;

 (b) propose to the Assembly a list of candidates for the election of the Secretary-General;

 (c) recommend to the Assembly candidates for the election of the members of the Governing Board of the Enterprise and the Director-General of the Enterprise;

 (d) establish, as appropriate, and with due regard to economy and efficiency, such subsidiary organs as it finds necessary for the exercise of its functions in accordance with this Part. In the composition of subsidiary organs, emphasis shall be placed on the need for members qualified and competent in relevant technical matters dealt with by those organs provided that due account shall be taken of the principle of equitable geographical distribution and of special interests;

 (e) adopt its rules of procedure including the method of selecting its

 (f) enter into agreements with the United Nations or other international organizations on behalf of the Authority and within its competence, subject to approval by the Assembly;

 (g) consider the reports of the Enterprise and transmit them to the Assembly with its recommendations;

 (h) present to the Assembly annual reports and such special reports as the Assembly may request;

 (i) issue directives to the Enterprise in accordance with article 170;

 (j) approve plans of work in accordance with Annex III, article 6. The Council shall act upon each plan of work within 60 days of its submission by the Legal and Technical Commission at a session of the Council in accordance with the following procedures:

 (i) if the Commission recommends the approval of a plan of work, it shall be deemed to have been approved by the Council if no member of the Council submits in writing to the President within 14 days a specific objection alleging non-compliance with the requirements of Annex III, article 6. If there is an objection, the conciliation procedure set forth in article 161, paragraph 8(e), shall apply. If, at the end of the conciliation procedure, the objection is still maintained, the plan of work shall be deemed to have been approved by the Council unless the Council disapproves it by consensus among its members excluding any State or States making the application or sponsoring the applicant;

 (ii) if the Commission recommends the disapproval of a plan of work or does not make a recommendation, the Council may approve the plan of work by a three-fourths majority of the members present and voting, provided that such majority includes a majority of the members participating in the session;

 (k) approve plans of work submitted by the Enterprise in accordance with Annex IV, article 12, applying, mutatis mutandis, the procedures set forth in subparagraph (j);

 (l) exercise control over activities in the Area in accordance with article 153, paragraph 4, and the rules, regulations and procedures of the Authority;

 (m) take, upon the recommendation of the Economic Planning Commission, necessary and appropriate measures in accordance with article 150, sub-paragraph (h), to provide protection from the adverse economic effects specified therein;

 (n) make recommendations to the Assembly, on the basis of advice from the Economic Planning Commission, for a system of compensation or other measures of economic adjustment assistance as provided in article 151, paragraph 10;

 (o) (i) recommend to the Assembly rules, regulations and procedures on the equitable sharing of financial and other economic benefits derived from activities in the Area and the payments and contributions made pursuant to article 82, taking into particular consideration the interests and needs of the developing States and peoples who have not attained full independence or other self-governing status;

 (ii) adopt and apply provisionally, pending approval by the Assembly, the rules, regulations and procedures of the Authority, and any amendments thereto, taking into account the recommendations of the Legal and Technical Commission or other subordinate organ concerned. These rules, regulations and procedures shall relate to prospecting, exploration and exploitation in the Area and the financial management and internal administration of the Authority. Priority shall be given to the adoption of rules, regulations and procedures for the exploration for and exploitation of polymetallic nodules. Rules, regulations and procedures for the exploration for and exploitation of any resource other than polymetallic nodules shall be adopted within three years from the date of a request to the Authority by any of its members to adopt such rules, regulations and procedures in respect of such resource. All rules, regulations and procedures shall remain in effect on a provisional basis until approved by the Assembly or until amended by the Council in the light of any views expressed by the Assembly;

 (p) review the collection of all payments to be made by or to the Authority in connection with operations pursuant to this Part;

 (q) make the selection from among applicants for production authorizations pursuant to Annex III, article 7, where such selection is required by that provision

 (r) submit the proposed annual budget of the Authority to the Assembly for its approval;

 (s) make recommendations to the Assembly concerning policies on any question or matter within the competence of the Authority;

 (t) make recommendations to the Assembly concerning suspension of the exercise of the rights and privileges of membership pursuant to article l85;

 (u) institute proceedings on behalf of the Authority before the Sea-Bed Disputes Chamber in cases of non-compliance;

 (v) notify the Assembly upon a decision by the Sea-Bed Disputes Chamber in proceedings instituted under subparagraph (u), and make any recommendations which it may find appropriate with respect to measures to be taken;

 (w) issue emergency orders, which may include orders for the suspension or adjustment of operations, to prevent serious harm to the marine environment arising out of activities in the Area;

 (x) disapprove areas for exploitation by contractors or the Enterprise in cases where substantial evidence indicates the risk of serious harm to the marine environment;

 (y) establish a subsidiary organ for the elaboration of draft financial rules, regulations and procedures relating to:

 (i) financial management in accordance with articles 171 to 175; and

 (ii) financial arrangements in accordance with Annex III article 13 and article 17, paragraph I (c);

 (z) establish appropriate mechanisms for directing and supervising a staff of inspectors who shall inspect activities in the Area to determine whether this Part, the rules, regulations and procedures of the Authority, and the terms and conditions of any contract with the Authority are being complied with.

 Article 163
 Organs of the Council

 1. There are hereby established the following organs of the Council:

 (a) an Economic Planning Commission;

 (b) a Legal and Technical Commission.

 2. Each Commission shall be composed of 15 members, elected by the Council from among the candidates nominated by the States Parties. However, if necessary, the Council may decide to increase the size of either Commission having due regard to economy and efficiency.

 3. Members of a Commission shall have appropriate qualifications in the area of competence of that Commission. States Parties shall nominate candidates of the highest standards of competence and integrity with qualifications in relevant fields so as to ensure the effective exercise of the functions of the Commissions.

 4. In the election of members of the Commissions, due account shall be taken of the need for equitable geographical distribution and the representation of special interests.

 5. No State Party may nominate more than one candidate for the same Commission. No person shall be elected to serve on more than one Commission.

 6. Members of the Commissions shall hold office for a term of five years. They shall be eligible for re-election for a further term.

 7. In the event of the death, incapacity or resignation of a member of a Commission prior to the expiration of the term of office, the Council shall elect for the remainder of the term, a member from the same geographical region or area of interest.

 8. Members of Commissions shall have no financial interest in any activity relating to exploration and exploitation in the Area. Subject to their responsibilities to the Commissions upon which they serve, they shall not disclose, even after the termination of their functions, any industrial secret, proprietary data which are transferred to the Authority in accordance with Annex III, article 14, or any other confidential information coming to their knowledge by reason of their duties for the Authority.

 9. Each Commission shall exercise its functions in accordance with such guidelines and directives as the Council may adopt.

 10. Each Commission shall formulate and submit to the Council for approval such rules and regulations as may be necessary for the efficient conduct of the Commission's functions.

 11. The decision-making procedures of the Commissions shall be established by the rules, regulations and procedures of the Authority. Recommendations to the Council shall, where necessary, be accompanied by a summary on the divergencies of opinion in the Commission.

 12. Each Commission shall normally function at the seat of the Authority and shall meet as often as is required for the efficient exercise of its functions.

 13. In the exercise of its functions, each Commission may, where appropriate, consult another commission, any competent organ of the United Nations or of its specialized agencies or any international organizations with competence in the subject-matter of such consultation.

 Article l 64
 The Economic Planning Commission

 1. Members of the Economic Planning Commission shall have appropriate qualifications such as those relevant to mining, management of mineral resource activities, international trade or international economics. The Council shall endeavour to ensure that the membership of the Commission reflects all appropriate qualifications. The Commission shall include at least two members from developing States whose exports of the categories of minerals to be derived from the Area have a substantial bearing upon their economies.

 2. The Commission shall:

 (a) propose, upon the request of the Council, measures to implement decisions relating to activities in the Area taken in accordance with this Convention;

 (b) review the trends of and the factors affecting supply, demand and prices of materials which may be derived from the Area, bearing in mind the interests of both importing and exporting countries, and in particular of the developing States among them;

 (c) examine any situation likely to lead to the adverse effects referred to in article 150, subparagraph (h), brought to its attention by the State Party or States Parties concerned, and make appropriate recommendations to the Council

 (d) propose to the Council for submission to the Assembly, as provided in article 151 paragraph 10, a system of compensation or other measures of economic adjustment assistance for developing States which suffer adverse effects caused by activities in the Area. The Commission shall make the recommendations to the Council that are necessary for the application of the system or other measures adopted by the Assembly in specific cases.

 Article 165
 The Legal and Technical Commission

 1. Members of the Legal and Technical Commission shall have appropriate qualifications such as those relevant to exploration for and exploitation and processing of mineral resources, oceanology, protection of the marine environment, or economic or legal matters relating to ocean mining and related fields of expertise. The Council shall endeavour to ensure that the membership of the Commission reflects all appropriate qualifications.

 2. The Commission shall:

 (a) make recommendations with regard to the exercise of the Authority's functions upon the request of the Council;

 (b) review formal written plans of work for activities in the Area in accordance with article 153, paragraph 3, and submit appropriate recommendations to the Council. The Commission shall base its recommendations solely on the grounds stated in Annex III and shall report fully thereon to the Council;

 (c) supervise, upon the request of the Council, activities in the Area, where appropriate, in consultation and collaboration with any entity carrying out such activities or State or States concerned and report to the Council;

 (d) prepare assessments of the environmental implications of activities in the Area;

 (e) make recommendations to the Council on the protection of the marine environment, taking into account the views of recognized experts in that field;

 (f) formulate and submit to the Council the rules, regulations and procedures referred to in article 162, paragraph 2(o), taking into account all relevant factors including assessments of the environmental implications of activities in the Area;

 (g) keep such rules, regulations and procedures under review and recommend to the Council from time to time such amendments thereto as it may deem necessary or desirable;

 (h) make recommendations to the Council regarding the establishment of a monitoring programme to observe, measure, evaluate and analyse, by recognized scientific methods, on a regular basis, the risks or effects of pollution of the marine environment resulting from activities in the Area, ensure that existing regulations are adequate and are complied with and co-ordinate the implementation of the monitoring programme approved by the Council;

 (i) recommend to the Council that proceedings be instituted on behalf of the Authority before the Sea-Bed Disputes Chamber, in accordance with this Part and the relevant Annexes taking into account particularly article 187;

 (j) make recommendations to the Council with respect to measures to be taken, upon a decision by the Sea-Bed Disputes Chamber in proceedings instituted in accordance with subparagraph (i);

 (k) make recommendations to the Council to issue emergency orders, which may include orders for the suspension or adjustment of operations, to prevent serious harm to the marine environment arising out of activities in the Area. Such recommendations shall be taken up by the Council on a priority basis;

 (l) make recommendations to the Council to disapprove areas for exploitation by contractors or the Enterprise in cases where substantial evidence indicates the risk of serious harm to the marine environment

 (m) make recommendations to the Council regarding the direction and supervision of a staff of inspectors who shall inspect activities in the Area to determine whether the provisions of this Part, the rules, regulations and procedures of the Authority, and the terms and conditions of any contract with the Authority are being complied with;

 (n) calculate the production ceiling and issue production authorizations on behalf of the Authority pursuant to article 151, paragraphs 2 to 7, following any necessary selection among applicants for production authorizations by the Council in accordance with Annex III, article 7.

 3. The members of the Commission shall, upon request by any State Party or other party concerned, be accompanied by a representative of such State or other party concerned when carrying out their function of supervision and inspection.
 

 SUBSECTION D. THE SECRETARIAT

 Article 166
 The Secretariat

 1. The Secretariat of the Authority shall comprise a Secretary-General and such staff as the Authority may require.

 2. The Secretary-General shall be elected for four years by the Assembly from among the candidates proposed by the Council and may be re-elected.

 3. The Secretary-General shall be the chief administrative officer of the Authority, and shall act in that capacity in all meetings of the Assembly, of the Council and of any subsidiary organ, and shall perform such other administrative functions as are entrusted to the Secretary-General by these organs.

 4. The Secretary-General shall make an annual report to the Assembly on the work of the Authority.

 Article 167
 The staff of the Authority

 1. The staff of the Authority shall consist of such qualified scientific and technical and other personnel as may be required to fulfil the administrative functions of the Authority.

 2. The paramount consideration in the recruitment and employment of the staff and in the determination of their conditions of service shall be the necessity of securing the highest standards of efficiency, competence and integrity. Subject to this consideration, due regard shall be paid to the importance of recruiting the staff on as wide a geographical basis as possible.

 3. The staff shall be appointed by the Secretary-General. The terms and conditions on which they shall be appointed, remunerated and dismissed shall be in accordance with the rules, regulations and procedures of the Authority.

 Article 168
 International character of the Secretariat

 1. In the performance of their duties the Secretary-General and the staff shall not seek or receive instructions from any government or from any other source external to the Authority. They shall refrain from any action which might reflect on their position as international officials responsible only to the Authority. Each State Party undertakes to respect the exclusively international character of the responsibilities of the Secretary-General and the staff and not to seek to influence them in the discharge of their responsibilities. Any violation of responsibilities by a staff member shall be submitted to the appropriate administrative tribunal as provided in the rules, regulations and procedures of the Authority.

 2. The Secretary-General and the staff shall have no financial interest in any activity relating to exploration and exploitation in the Area. Subject to their responsibilities to the Authority, they shall not disclose, even after the termination of their functions, any industrial secret, proprietary data which are transferred to the Authority in accordance with Annex III, article 14, or any other confidential information coming to their knowledge by reason of their employment with the Authority.

 3. Violations of the obligations of a staff member of the Authority set forth in paragraph 2 shall, on the request of a State Party affected by such violation, or a natural or juridical person, sponsored by a State Party as provided in article 153, paragraph 2(b), and affected by such violation, be submitted by the Authority against the staff member concerned to a tribunal designated by the rules, regulations and procedures of the Authority. The Party affected shall have the right to take part in the proceedings. If the tribunal so recommends, the Secretary-General shall dismiss the staff member concerned.

 4. The rules, regulations and procedures of the Authority shall contain such provisions as are necessary to implement this article.

 Article 169
 Consultation and co-operation with international and non-governmental organizations

 1. The Secretary-General shall, on matters within the competence of the Authority, make suitable arrangements, with the approval of the Council, for consultation and co-operation with international and non-governmental organizations recognized by the Economic and Social Council of the United Nations.

 2. Any organization with which the Secretary-General has entered into an arrangement under paragraph I may designate representatives to attend meetings of the organs of the Authority as observers in accordance with the rules of procedure of these organs. Procedures shall be established for obtaining the views of such organizations in appropriate cases.

 3. The Secretary-General may distribute to States Parties written reports submitted by the non-governmental organizations referred to in paragraph I on subjects in which they have special competence and which are related to the work of the Authority.
 

 SUBSECTION E. THE ENTERPRISE

 Article 170
 The Enterprise

 1. The Enterprise shall be the organ of the Authority which shall carry out activities in the Area directly, pursuant to article 153, paragraph 2(a), as well as the transporting, processing and marketing of minerals recovered from the Area.

 2. The Enterprise shall, within the framework of the international legal personality of the Authority, have such legal capacity as is provided for in the Statute set forth in Annex IV. The Enterprise shall act in accordance with this Convention and the rules, regulations and procedures of the Authority, as well as the general policies established by the Assembly, and shall be subject to the directives and control of the Council.

 3. The Enterprise shall have its principal place of business at the seat of the Authority .

 4. The Enterprise shall, in accordance with article 173, paragraph 2, and Annex IV, article 11, be provided with such funds as it may require to carry out its functions, and shall receive technology as provided in article 144 and other relevant provisions of this Convention.
 

 SUBSECTION F. FINANCIAL ARRANGEMENTS
 OF THE AUTHORITY

 Article 171
 Funds of the Authority

 The funds of the Authority shall include:

 (a) assessed contributions made by members of the Authority in accordance with article 160, paragraph 2(e);

 (b) funds received by the Authority pursuant to Annex III, article 13, in connection with activities in the Area;

 (c) funds transferred from the Enterprise in accordance with Annex IV, article 10;

 (d) funds borrowed pursuant to article 174;

 (e) voluntary contributions made by members or other entities; and

 (f) payments to a compensation fund, in accordance with article 151, paragraph 10, whose sources are to be recommended by the Economic Planning Commission.

 Article 172
 Annual budget of the Authority

 The Secretary-General shall draft the proposed annual budget of the Authority and submit it to the Council. The Council shall consider the proposed annual budget and submit it to the Assembly, together with any recommendations thereon. The Assembly shall consider and approve the proposed annual budget in accordance with article 160, paragraph 2(h).

 Article 173
 Expenses of the Authority

 1. The contributions referred to in article 171, subparagraph (a), shall be paid into a special account to meet the administrative expenses of the Authority until the Authority has sufficient funds from other sources to meet those expenses.

 2. The administrative expenses of the Authority shall be a first call upon the funds of the Authority. Except for the assessed contributions referred to in article 171, subparagraph (a), the funds which remain after payment of administrative expenses may, inter alia:

 (a) be shared in accordance with article 140 and article 160, paragraph 2(g);

 (b) be used to provide the Enterprise with funds in accordance with article 170, paragraph 4;

 (c) be used to compensate developing States in accordance with article 151, paragraph 10, and article 160, paragraph 2(1).

 Article 174
 Borrowing power of the Authority

 1. The Authority shall have the power to borrow funds.

 2. The Assembly shall prescribe the limits on the borrowing power of the Authority in the financial regulations adopted pursuant to article 160, paragraph 2(f).

 3. The Council shall exercise the borrowing power of the Authority.

 4. States Parties shall not be liable for the debts of the Authority.

 Article 175
 Annual audit

 The records, books and accounts of the Authority, including its annual financial statements, shall be audited annually by an independent auditor appointed by the Assembly.
 

 SUBSECTION G. LEGAL STATUS, PRIVILEGES
 AND IMMUNITIES

 Article 176
 Legal status

 The Authority shall have international legal personality and such legal capacity as may be necessary for the exercise of its functions and the fulfilment of its purposes.

 Article 177
 Privileges and immunities

 To enable the Authority to exercise its functions, it shall enjoy in the territory of each State Party the privileges and immunities set forth in this subsection. The privileges and immunities relating to the Enterprise shall be those set forth in Annex IV, article 13.

 Article 178
 Immunity from legal process

 The Authority, its property and assets, shall enjoy immunity from legal process except to the extent that the Authority expressly waives this immunity in a particular case.

 Article 179
 Immunity from search and any form of seizure

 The property and assets of the Authority, wherever located and by whom so ever held, shall be immune from search, requisition, confiscation, expropriation or any other form of seizure by executive or legislative action.

 Article 180
 Exemption from restrictions, regulations, controls and moratoria

 The property and assets of the Authority shall be exempt from restrictions, regulations, controls and moratoria of any nature.

 Article 181
 Archives and official communications of the Authority

 1. The archives of the Authority, wherever located, shall be inviolable.

 2. Proprietary data, industrial secrets or similar information and personnel records shall not be placed in archives which are open to public inspection.

 3. With regard to its official communications, the Authority shall be accorded by each State Party treatment no less favourable than that accorded by that State to other international organizations.

 Article 182
 Privileges and immunities of certain persons connected with the Authority

 Representatives of States Parties attending meetings of the Assembly, the Council or organs of the Assembly or the Council, and the Secretary-General and staff of the Authority, shall enjoy in the territory of each State Party:

 (a) immunity from legal process with respect to acts performed by them in the exercise of their functions, except to the extent that the State which they represent or the Authority, as appropriate, expressly waives this immunity in a particular case;

 (b) if they are not nationals of that State Party, the same exemptions from immigration restrictions, alien registration requirements and national service obligations, the same facilities as regards exchange restrictions and the same treatment in respect of travelling facilities as are accorded by that State to the representatives, officials and employees of comparable rank of other States Parties.

 Article 183
 Exemption from taxes and customs duties

 1. Within the scope of its official activities, the Authority, its assets and property, its income, and its operations and transactions, authorized by this Convention, shall be exempt from all direct taxation and goods imported or exported for its official use shall be exempt from all customs duties. The Authority shall not claim exemption from taxes which are no more than charges for services rendered.

 2. When purchases of goods or services of substantial value necessary for the official activities of the Authority are made by or on behalf of the Authority, and when the price of such goods or services includes taxes or duties, appropriate measures shall, to the extent practicable, be taken by States Parties to grant exemption from such taxes or duties or provide for their reimbursement. Goods imported or purchased under an exemption provided for in this article shall not be sold or otherwise disposed of in the territory of the State Party which granted the exemption, except under conditions agreed with that State Party.

 3. No tax shall be levied by States Parties on or in respect of salaries and emoluments paid or any other form of payment made by the Authority to the Secretary-General and staff of the Authority, as well as experts performing missions for the Authority, who are not their nationals.
 

 SUBSECTION H. SUSPENSION OF THE EXERCISE OF RIGHTS
 AND PRIVILEGES OF MEMBERS

 Article 184
 Suspension of the exercise of voting rights

 A State Party which is in arrears in the payment of its financial contributions to the Authority shall have no vote if the amount of its arrears equals or exceeds the amount of the contributions due from it for the preceding two full years. The Assembly may, nevertheless, permit such a member to vote if it is satisfied that the failure to pay is due to conditions beyond the control of the member.

 Article 185
 Suspension of exercise of rights nd privileges of membership

 1. A State Party which has grossly and persistently violated the provisions of this Part may be suspended from the exercise of the rights and privileges of membership by the Assembly upon the recommendation of the Council.

 2. No action may be taken under paragraph I until the Sea-Bed Disputes Chamber has found that a State Party has grossly and persistently violated the provisions of this Part.
 

 SECTION 5. SETTLEMENT OF DISPUTES
 AND ADVISORY OPINIONS

 Article 186
 Sea-Bed Disputes Chamber of the International Tribunal for the Law of the Sea

 The establishment of the Sea-Bed Disputes Chamber and the manner in which it shall exercise its jurisdiction shall be governed by the provisions of this section, of Part XV and of Annex VI.

 Article 187
 Jurisdiction of the Sea-Bed Disputes Chamber

 The Sea-Bed Disputes Chamber shall have jurisdiction under this Part and the Annexes relating thereto in disputes with respect to activities in the Area falling within the following categories:

 (a) disputes between States Parties concerning the interpretation or application of this Part and the Annexes relating thereto;

 (b) disputes between a State Party and the Authority concerning:

 (i) acts or omissions of the Authority or of a State Party alleged to be in violation of this Part or the Annexes relating thereto or of rules, regulations and procedures of the Authority adopted in accordance there-with; or

 (ii) acts of the Authority alleged to be in excess of jurisdiction or a misuse of power;

 (c) disputes between parties to a contract, being States Parties, the Authority or the Enterprise, state enterprises and natural or juridical persons referred to in article 153, paragraph 2(b), concerning:

 (i) the interpretation or application of a relevant contract or a plan of work; or

 (ii) acts or omissions of a party to the contract relating to activities in the Area and directed to the other party or directly affecting its legitimate interests;

 (d) disputes between the Authority and a prospective contractor who has been sponsored by a State as provided in article 153, paragraph 2 (b), and has duly fulfilled the conditions referred to in Annex III, article 4, paragraph 6, and article 13, paragraph 2, concerning the refusal of a contract or a legal issue arising in the negotiation of the contract;

 (e) disputes between the Authority and a State Party, a state enterprise or a natural or juridical person sponsored by a State Party as provided for in article 153, paragraph 2(b), where it is alleged that the Authority has incurred liability as provided in Annex III, article 22;

 (f) any other disputes for which the jurisdiction of the Chamber is specifically provided in this Convention.
 Article 188
 Submission of disputes to a special chamber of the International Tribunal for the Law of the Sea or an ad hoc chamber of the Sea-Bed Disputes Chamber or to binding commercial arbitration

 1. Disputes between States Parties referred to in article 187, subparagraph (a), may be submitted:

 (a) at the request of the parties to the dispute, to a special chamber of the International Tribunal for the Law of the Sea to be formed in accordance with Annex VI, articles 15 and 17; or

 (b) at the request of any party to the dispute, to an ad hoc chamber of the Sea-Bed Disputes Chamber to be formed in accordance with Annex VI, article 36.

 2.(a) Disputes concerning the interpretation or application of a contract referred to in article 187, subparagraph (c) (i), shall be submitted, at the request of any party to the dispute, to binding commercial arbitration, unless the parties otherwise agree. A commercial arbitral tribunal to which the dispute is submitted shall have no jurisdiction to decide any question of interpretation of this Convention. When the dispute also involves a question of the interpretation of Part XI and the Annexes relating thereto, with respect to activities in the Area, that question shall be referred to the Sea-Bed Disputes Chamber for a ruling.

 (b) If, at the commencement of or in the course of such arbitration, the arbitral tribunal determines, either at the request of any party to the dispute or proprio motu, that its decision depends upon a ruling of the Sea-Bed Disputes Chamber, the arbitral tribunal shall refer such question to the Sea-Bed Disputes Chamber for such ruling. The arbitral tribunal shall then proceed to render its award in conformity with the ruling of the Sea-Bed Disputes Chamber.

 (c) In the absence of a provision in the contract on the arbitration procedure to be applied in the dispute, the arbitration shall be conducted in dance with the UNCITRAL Arbitration Rules or such other arbitration rules as may be prescribed in the rules, regulations and procedures of the Authority, unless the parties to the dispute otherwise agree.

 Article 189
 Limitation on jurisdiction with regard to decisions of the Authority

 The Sea-Bed Disputes Chamber shall have no jurisdiction with regard to the exercise by the Authority of its discretionary powers in accordance with this Part; in no case shall it substitute its discretion for that of the Authority. Without prejudice to article 191, in exercising its jurisdiction pursuant to article 187, the Sea-Bed Disputes Chamber shall not pronounce itself on the question of whether any rules, regulations and procedures of the Authority are in conformity with this Convention, nor declare invalid any such rules, regulations and procedures. Its jurisdiction in this regard shall be confined to deciding claims that the application of any rules, regulations and procedures of the Authority in individual cases would be in conflict with the contractual obligations of the parties to the dispute or their obligations under this Convention, claims concerning excess of jurisdiction or misuse of power, and to claims for damages to be paid or other remedy to be given to the party concerned for the failure of the other party to comply with its contractual obligations or its obligations under this Convention.

 Article 190
 Participation and appearance of sponsoring States Parties in proceedings

 1. If a natural or juridical person is a party to a dispute referred to in article 187, the sponsoring State shall be given notice thereof and shall have the right to participate in the proceedings by submitting written or oral statements.

 2. If an action is brought against a State Party by a natural or juridical person sponsored by another State Party in a dispute referred to in article 187, subparagraph (c), the respondent State may request the State sponsoring that person to appear in the proceedings on behalf of that person. Failing such appearance, the respondent State may arrange to be represented by a juridical person of its nationality.

 Article 191
 Advisory opinions

 The Sea-Bed Disputes Chamber shall give advisory opinions at the request of the Assembly or the Council on legal questions arising within the scope of their activities. Such opinions shall be given as a matter of urgency.

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