Activities in the Area are to be carried out by the Enterprise and other commercial operators in accordance with Article 153(2) of the LOSC. The commercial operators include States Parties, State enterprises, natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals provided for in Article 153(2). This arrangement is called the ‘parallel system’. This system represents a compromise between various interest groups. Actually the LOSC provides three operational modes for deep seabed mining.
First, the Authority carries out activities in the Area directly through its operational organ, i.e. the Enterprise. As will be seen, however, the establishment of the Enterprise was postponed. It is also to be noted that the initial operations are to be carried out through joint ventures pursuant to section 2(2) of the 1994 Implementation Agreement. A contractor which has contributed a particular area to the Authority as a reserved area has the right of first refusal to enter into a joint-venture arrangement with the Enterprise for exploration and exploitation of that area by virtue of section 2(5) of the Implementation Agreement.
Second, the deep seabed operations may also be carried out in association with the Authority by States Parties or other entities specified in Article 153(2)(b). Under Article 153 (3), these operators are obliged to submit, in the form of a contract with the Authority, a plan of work to the Authority. The plan is to be approved by the Council after review by the Legal and Technical Commission. The plan of work must be in the form of a contract in accordance with Article 3 of Annex III. In this case, each application is required to cover a total area sufficiently large and of sufficient estimated commercial value to allow two mining operations. Within forty-five days of receiving such data, the Authority is to designate which part is to be reserved solely for the conduct of activities by the Authority through the Enterprise or in association with developing States pursuant to Article 8 of Annex III of the LOSC. The part not reserved for the exploitation by the Enterprise becomes the area for the exploitation of the applicant. This arrangement is called the ‘banking system’ or ‘site-banking system’. This system is closely linked with the parallel system.
Third, activities in the Area can also be carried out by the joint arrangement between the Authority and States or other entities referred to in Article 153(2)(b) to conduct activities in the Area in accordance with Article 11 of Annex III.
In all cases the Authority is to exercise such control over activities in the Area as is necessary for the purpose of securing compliance with the relevant provisions of Part XI and the Annexes relating thereto, and other relevant rules under Article 153(4).
