The Prospect of an Independent Enterprise under UNCLOS 1982: A Study on the Sound Commercial Principles Fulfillment

Agustina Merdekawati ； Marsudi Triatmodjo ； Nahda Anisa Rahma ； Irkham Afnan Trisandi Hasibuan

《Tamkang Journal of International Affairs》 25卷3期 (2022/01) Pp. 109-163

https://doi.org/10.6185/TJIA.V.202201_25(3).0003

摘要

United Nations Convention on the Law of the Sea (UNCLOS) 1982 envisioned that the Enterprise would allow indirect participation of the developing states to engage in deep seabed mining without the barriers of capital and technology. The Implementing Agreement 1994 to the UNCLOS 1982 required the operationalization of the Enterprise must fulfill one of two prerequisites, namely the approval of an exploitation plan of work or the approval for a joint venture proposal with the Enterprise. However, fulfilling one of the prerequisites is not adequate as there is no certainty that the Enterprise can operate effectively. UNCLOS 1982 required that the Enterprise operates based on sound commercial principles. However, the sound commercial principles have never been officially explained or interpreted. It is necessary to have clear parameters in the sound commercial principles and their fulfillment prospects. After the International Seabed Authority (ISA) approves the exploitation mining code, the seabed mining industry will soon proceed to the exploitation phase. The start of the exploitation phase would indicate that one of the prerequisites for the operationalization of an independent Enterprise would soon be met. This article attempted to identify the elements that make up the sound commercial principles by analyzing their meanings based on historical studies from the negotiation of UNCLOS 1982 and current practices. This study concluded that there are two vital elements of the principles. These two elements are the independent and commercial sustainability of the Enterprise. The independent characteristics of the Enterprise must apply to all its organs to not be subjected to the interests of any state. The commercial sustainability of the Enterprise depends on two equally vital components, namely technological and financial capabilities. Based on these two elements, the authors identified conditions that would prevent the fulfillment of sound commercial principles. Among the issues identified by the authors are the unclear internal affairs between the Board and the Director-General and the financing for the Enterprise's early operations and upfront expenditures.

關鍵字

Enterprise ； Sound Commercial Principles ； UNCLOS 1982 ； the Area ； Deep Seabed Mining

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