Green Economy in a Blue World-Full Report

adequate regulatory frameworks and the existence of appropriate and strong institutions with the expertise and authority to perform a clearly defined role.

in legislation which reflect best international practices for transparency in decision-making, together with measures which are designed to uphold accepted standards of corporate responsibility for companies, as well as enhancing thedevelopmental benefits for local communities. Fiscal framework 4 Arrangements for the fiscal framework must balance international competitiveness (in order to attract and sustain investment in the natural resources sector) with fiscal benefits for the host country. This is not an easy balance to strike, though at least one important feature of an adequate fiscal regime is its progressivity. A progressive regime ensures that thegovernment will be in a position to capture a higher share of fiscal benefits generated frommining activity as a project’s profitability increases.

in a Blue World

3.2.1 Adequate frameworks

Legal and contractual There are several reasons why comprehensive and well-implemented legislative and regulatory frameworks are essential to the governance of mining activity. As a first step, investors require a minimum of rules before making a positive investment decision, because of 1) the long-term nature of the investment; 2) the extremely high capital intensity of the industry, especially in mining; and 3) the immobility of assets once built. In devising legal and contractual frameworks, it is important to entrench internationally accepted standards and practices concerning natural resource sector administration and management. This includes making appropriate provisions Nations Convention on the Law of the Sea the seabed and ocean floor beyond national jurisdiction (i.e. beyond the outer limit of the continental shelf ) is knownas the‘Area’. A special legal regime applies to the Area, which is considered to be the common heritage of mankind. The resources of the Area are to be used for the benefit of mankind as a whole. The Convention also establishes an international organization – the International Seabed Authority – to manage and control mineral prospecting, exploration and exploitation in the Area. These activities may only be carried out under a contract with the Authority. Contracts may be awarded to States Parties, state enterprises sponsored by States Parties or to natural or juridical persons having the nationality of States Parties and sponsored by States Parties. This element of sponsorship is fundamental to the international regime, as it is designed to ensure that, ultimately, a State Party to the Convention has international responsibility for the activities of contractors with the Authority. Under the 1982 United

4. For a full discussion of different fiscal frameworks in mineral- rich countries, see Minerals Taxation Regimes: A review of issues and challenges Commonwealth Secretariat and International Council on Mining and Metals, 2009.

ISA regulations and policy under UNCLOS

Whilst the primary function of the Authority is to regulate seabed mining in the Area, it also has broad responsibilities (under article 145 of the Convention) to take measures for the protection of the marine environment of the Area from the harmful effects of seabed mining, as well as to conduct, as well as to promote and encourage, marine scientific research in the Area for the benefit of developing States (article 143 of the Convention). The measures taken by the Authority to date include regulations which require exploration contractors to collect and submit to the Authority environmental data which will help to establish environmental baselines for the conduct of environmental impact assessments. The Authority has also developed a provisional environmental management plan for the seabed of the Clarion- Clipperton Zone of the Central Pacific Ocean, which is the main area of interest for nodule mining.

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