A summary of the PhD thesis: International law on the management of marine mineral resources and its practicality in Vietnam

Research subject of the thesis firstly are international treaties regulating marine resources management, including multilateral treaties in the field of law of the sea and sea environment protection relating to the mineral exploration and exploitation; bilateral and regional treaties and agreements on protection sea environment from pollutants of activities in continental shelf, treaties that establish joint exploitation areas. In addition, the thesis also researches on documents issued by Regional Authorities and decisions issued by International Judicial Institution for settling disputes or releasing advisory conclusions on issues relation to exercising the objects „s rights and 2 obligations in the process of performing activities in continental shelf and Region. Lastly, the thesis researches on the regulations of Vietnam‟s law on oil and gas management and international treaties, agreements on this field which Vietnam has entered into.

MINISTRY OF EDUCATION AND

TRAINING

MINISTRY OF JUSTICE

HANOI LAW UNIVERSITY

PHAM HONG HANH

INTERNATIONAL LAW ON THE MANAGEMENT

OF MARINE MINERAL RESOURCES AND ITS

The PhD Thesis was accomplished at:

Hanoi Law University

Adviosrs/Supervisors: 1 Assoc.Prof: Nguyen Hong Thao

2 Assoc.Prof: Nguyen Thi Thuan

PREAMBLE

1 Reason for choosing topic

Vietnam‟s Continental Shelf has many sediments containing oil and gas and having many prospects to exploit these mineral resources with expected total amount of around 3.8 – 4.2 billion tons of oil and around 150 billion m3 of gas Oil and gas industry has discovered and put into operation many oil and gas miners, bring Vietnam to the list of countries exporting crude oil, greatly contributing to national economy‟s stability and development, ensuring national energy‟s security In the past period, Vietnam Oil and Gas Group ( PVN) provided nearly 35 billion m3 of crude gas to manufacture, 40% of the nation‟s electric output, 35% - 40% of urea demand and also provided 70% of gas demand to industrial development and life‟s consumption Despite the economically and socially great significance that oil and gas have brought, Vietnam also has been confronting some big challenges Firstly, the risk of environmental pollution may arising from the process of the exploration and the exploitation, for example, oil leakage and overflowing may occur due to engine and equipment„s breakdown on drilling rigs or in the process of oil transfer of supply vessels or the breakdown of the oil tank on drilling rigs as well as service vessels; the transformation of the marine ecological environment due to chemicals used, wastes eliminated from the process of exploration and exploitation The second one is the risk of resource depletion in the

future when almost miners in Vietnam have been exploited in a long time and now in the last

period leading to the strong decline of natural output For example, Bach Ho Miner supplies the

largest output, accounting for more than 60% of PVN‟s output, has been in the stage of exhaustion Thirdly, the complication of East Sea‟s disputes along with the violation activities of Vietnam‟s sovereignty in the continental shelf is more and more increasing in quantity and serious level, threatening the national security and interest at sea

Derived from the above reasons, the study of international law‟s regulations on managing marine mineral resources and the comprehensive assessment of sea/marine mineral resource management in Vietnam, particularly oil and gas, is significantly vital The results of these studies will be essentially benefit to law makers and mangers in policy and law making, not only in order to implement the target: “step by step bring Vietnam to become rich in sea, rich from the sea, based on the sea and forward to the sea” as Vietnam Sea Strategy to 2030 with vision to 2045 affirmed but also meet the demand of integration and cooperation in all aspects as well as defend sovereignty and sovereign rights of Vietnam Moreover, having a profound understanding of international law‟s regulations on marine mineral resource management will be practically significant to raising awareness of each person, especially organizations (bodies) directly involving in exploration and exploitation activities on legal basis and the legality of activities of exercising the sovereign rights and jurisdiction of Vietnam at sea, thereby contributing to enhancing the consciousness of protecting natural resources as well as defend the sovereignty and sovereign rights of the country

2 Scope - research subject

Research subject of the thesis firstly are international treaties regulating marine resources management, including multilateral treaties in the field of law of the sea and sea environment protection relating to the mineral exploration and exploitation; bilateral and regional treaties and agreements on protection sea environment from pollutants of activities in continental shelf, treaties that establish joint exploitation areas In addition, the thesis also researches on documents issued by Regional Authorities and decisions issued by International Judicial Institution for settling disputes

or releasing advisory conclusions on issues relation to exercising the objects „s rights and

obligations in the process of performing activities in continental shelf and Region Lastly, the thesis researches on the regulations of Vietnam‟s law on oil and gas management and international treaties, agreements on this field which Vietnam has entered into

On the basis of research subjects mentioned above, the research scope of the thesis includes:

- Basic theoretical issues on management of marine mineral resources and international law on management of marine mineral resources

- The Status of international law on management of marine mineral resources

- The Status of Vietnam‟s law and the reality of implementation of Vietnam‟s law on management of oil and gas resources Vietnam‟s law on management of Vietnam‟s marine mineral resources currently comprising 2 parts, the first one is regulations on activities relating to oil and gas and the second one is regulations on activities relating to the other minerals (including marine mineral) Despite the fact that Vietnam sea is rather abundant in marine mineral, apart from oil and gas, the exploitation of the other minerals is mainly carried out by localities in some small miner such as Quang Xuong Miner ( Thanh Hoa), Cam Hoa Miner, Ke Ninh Miner, Ke Sung Miner, De

Gi Miner, Ham Tan Miner, even there are some minerals having no ability to exploit Therefore, among Vietnam‟s marine mineral resources, oil and gas are still the most commonly exploited resources, and also the resources bringing the high economic value, the annual contribution of oil and gas industry to the State‟s budget accounts for 20% along with many products serving the economy such as gas electric, petroleum, high – pressure pneumatic and clean energy

Derived from the above reasons, for Viet Nam, the research scope of the thesis focuses on analyzing Vietnam‟s regulations and the reality of the implementation of Vietnam‟s regulations on oil and gas management

3 Objective and mission of the thesis

Research objectives of the thesis is to systematically clarify the theoretical and legal issues

on marine mineral management of international law; legal issues and the reality of marine mineral management, particularly oil and gas of Vietnam, therefore, to propose some solutions on improve the efficiency of management of these resources in Vietnam

In accordance with research objectives of the thesis, the research missions of the thesis include:

- Analyzing the definition of marine mineral and definition of management, therefore, release the definition of marine mineral management

- Clarifying some theoretical issues of international law on marine mineral resource management, particularly: the source of law, the principles, content and role of international law on marine mineral resource management and the history of the development of these regulations in international law of the sea

- Analyzing the content of international law on marine mineral resource management

in a systematic manner, includes: (i) Management of marine mineral exploration and exploitation; (ii) Protection of sea environment in the process of petroleum ( oil and gas) exploration and exploitation and (iii) Settlement of international disputes arising from oil and gas activities; analyzing and evaluating the reality of the implementation of law according to the 3 above contents and propose some specific solutions to improve the efficiency of Vietnam‟s oil and gas management

4 Methodology and Research methods

The thesis is based on the scientific methodology of Marxism – Leninism, thoroughly utilized the viewpoints of dialectical materialism and historical materialism The thesis is also conducted on the basic of a profound understanding of the Party‟s and State‟s guidelines on foreign policy, particularly in regard to the South China Sea and the defend of sovereignty and sovereign rights of Vietnam at sea

For each specific content, the thesis use many different scientific research method such as

systematic approach methods, historical methods, synthetic methods, analytical methods,

combining with researching theory and practice to propose specific solutions Particularly:

- Synthetic and analytical methods were used for overall assessment of thesis – related works

- Historical methods were used for clarification of the development process of international law on marine mineral resource management

- Systematic approach and analytical methods were used throughout the thesis, especially in chapter 2,3, 4 Systematic approach methods were used to elucidate theoretical and legal issues on marine mineral management in international law and Vietnam law in a general manner instead of approaching in the sense that it is only a part of the legal status of waters or only approaching under a certain aspect of marine mineral management Analytical methods were used

to elucidate the content of international and Vietnam law on marine mineral resource management and the practical implementation of law on marine mineral resource management

- Combined theoretical and practical methods were used to compare and assess the practical implementation of marine mineral resource management in Vietnam, then propose specific solutions to enhance the effectiveness of these management activities

- Comperative law were also used in certain measure to make the definition of “ marine mineral” on the basis of different approaches of nations‟ s law and to propose some experiences for Vietnam in improving law on management of oil and gas resources

5 Scientific meaning and novelty of the thesis

The thesis is a comprehensive research work of theoretical and legal issues on marine mineral resource management in international law as well as legal and practical issues on marine mineral resource management, particularly Vietnam‟s oil and gas The thesis made contributions in scientific aspects as follows:

- Firstly, the thesis made the definition of marine mineral and marine mineral resource management, then clarified characters of marine mineral resource management

- Secondly, the thesis systematically analyzed some basic legal issues of international law on marine mineral resource management, then clarified the content of international law on this field

- Thirdly, the thesis analyzed more profound and comprehensively and systematically assessed regulations of international laws on marine mineral resource management on the basis of analyzing international treaties, documents issued by the Authority and decisions and judgments issued by relevant International Juridical Institutions, then indicate some “gaps” in these regulations

- Forth, the thesis analyzed overall issues on Vietnam‟s management of oil and gas resources in both legal and practical aspects according to content of marine mineral resource management that is recognized by international law, then propose a number of solutions to enhance the efficiency in management of Vietnam‟s oil and gas

6 Practical meaning of the thesis

The research results of the thesis can be used as reference materials for legislative bodies, managers in activities of making and issuing policies and regulations on sea in general and marine resource management in particular The thesis also contributed to legal knowledge systems for dissemination and propagation of international law and law of the sea with the aim at raising the awareness of each person, especially organizations directly involving in exploration and exploitation resources at sea, thereby, make them have a right understanding of the activities of exercising sovereign rights and jurisdiction of Vietnam at sea Moreover, analyses, comments and assessments of the content of the regulations of international law on marine mineral resource management will be valuable for reference to those engaged in researching and teaching international law, particularly law of sea as well as those who are interested in this law

7 Structure of the thesis

In addition to the introduction and the conclusion, the thesis is structured into 4 chapters: Chapter 1: Overview of research related to the subject

Chapter 2: Theory of marine mineral resource management in international law

Chapter 3: Status of international law on marine mineral resource management

Chapter 4: Vietnam law and the practice of law on management of oil and gas resources in Vietnam

CHAPTER 1 – OVERVIEW OF RESEARCH RELATED TO THE SUBJECT

As one of the earliest laws, international law of the sea has been a object of much interest among scholars Among the content of international law of the sea, the issues on marine resources, especially marine mineral resources has been a object research of a large number of works In the term of scale, these researches were carried out in many levels: reference textbooks, workshop articles, journal articles, scientific papers, master theses, doctoral these, … These works reflected the development history of marine mineral resource management in the continental shelf and the Zone and through different periods, from period of traditional law of the sea to period of contemporary law of the sea with important marks such as unilateral statements of nations, conferences on law of the sea and the peak was the birth of 1982 United Nation Convention on the Law of the Sea ( UNCLOS) and elucidated a number of legal issues in international law and Vietnam law on marine mineral resource management Nonetheless, most of these works approached mineral resources as a part of legal status of the continental shelf and the Zone or approached just one certain content of mineral management The separate and comprehensive research of marine mineral resource management in international law in the legal aspect has been quite superficial, therefore, it has not resolved this subject in both theoretical and legal aspects On the basis of comparing with the objectives and missions of the thesis and the limitation of previous works, the thesis will clarify issues as follows:

Firstly, in the term of theory, the thesis will clarify the definition of marine mineral, marine

mineral resource management and basic theoretical issues in international law on marine mineral resource management

Secondly, legally, the thesis will continuously improve 2 legal content mentioned in the

previous works, on the basis of a comprehensive review of regulations recognized in relevant international treaties on law of the sea and sea environment, regulations issued by the Authority and judgments and advices issues by Juridical Institutions, including: (1) The exploration and exploitation of marine mineral resources in continental shelf and region; (2) Protection of sea

environment from the exploration and exploitation of marine mineral resources in the continental shelf and the Region At once, the thesis will supplement a new legal content - settlement of the disputes arising from the exploration and exploitation of marine mineral resources in the continental shelf and the region, which will focus on analyzing settlement mechanism of Seabed Disputes Chamber under the provision of UNCLOS 1982 Based on the analysis of these legal issues, the thesis will provide an assessment of the limitations and gaps in the provision of prevailing international laws regulating the management of marine mineral resources

Thirdly, on the legal and practical issues of Vietnam, the thesis will analyze basic content of

Vietnam law on management of oil and gas resources and the practice of Vietnam law on aspects: (1) Management of oil and gas exploration and exploitation; (2) Protection of environment in oil and gas exploration and exploitation; and (3) Settlement of international disputes in oil and gas exploration and exploitation, thereby, assess and indicate limitations of Vietnam law Based on assessments of the law and the practice of law, the author will propose some solutions with a view

to enhancing the efficient of Vietnam‟s management of oil and gas resources

CHAPTER 2 THE THEORY OF MARINE MINERAL RESOURCE MANAGEMENT IN

INTERNATIONAL LAW 2.1 The definition of marine mineral resources and marine mineral resource management

2.1.1 The definition of “marine mineral resources”

Based on the definition in the Antarctic Treaty and the approaches in Mineral Laws of some nations, “marine mineral resources” can be defined as “natural inorganic, non-renewable, economically meaningful , including metallic and non-metallic resources ( construction resources), oil and gas (petroleum) resources, existing in solid, liquid, gas form on the seabed and beneath the seabed, but not including ice, water or snow” This definition demonstrates the characters of marine mineral resources as follows:

Firstly, the nature of marine mineral resources is natural inorganic, non-renewable, lost or

completely altered and no longer retain the original nature after use

Secondly, marine mineral resources insist of metallic and non – metallic resources

(construction resources), oil and gas resources, which can be exist in any state such as liquid state, solid state or gaseous state, in which it is mainly solid state and in some cases including water but generally no water, which means no chemical components of water or metals in water

Thirdly, marine minerals are the resource having special economic significance

Forth, marine minerals exist on the seabed and beneath the seabed However, not all marine

minerals that are in any position become the subjects of international law The governing subjects

of international law will consist of all minerals which are at or beneath the seabed and beyond the limits of national jurisdiction, including minerals in the Continental Shelf and the Region

2.1.2 The definition of “management”

“Management” is the process in which competent authority impact/affect (tac dong) on certain objects through various activities and forms for the purpose of achieving objectives

Management has the following characters:

Firstly, the management relationship between subjects and objects, in which, the subjects

are those who issue the orders and the objects are the executor these orders

Secondly, management is always directed toward certain common objectives

Thirdly, in management, there are always the factors of management power, this

management power is a tool for management subjects to impact on management objects with the aim at achieving management objectives and also the basis to distinguish between the subjects and the objects

2.1.3 The definition of marine mineral resource management

Based on the definition of management in general, “mineral resource management” can be

defined as: “is the process in which the competent authorities adopt various activities to regulate

and control the exploration and exploitation of marine mineral resources and issues arising from these activities of relevant subjects with the aim at ensuring interest and justice between nations in the exploitation use of the sea.” Marine mineral resource management has the following characters:

Firstly, on the subject of management:

In Continental Shelf, according to UNCLOS 1982, Coastal State are entitled in two aspects: (i) sovereign rights to natural resources, including mineral resources and (ii) jurisdiction with regard

to the establishment of artificial islands, installations and structures and the protection of marine environment Clause 1, Article 77 of the Convention provided that: “The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources” Despite of not being specifically provided, it can be possible to understand that,

sovereign rights of coastal State shall include: “all reasonable rights for and in connection with the

exploration and exploitation of natural resources of the continental shelf These rights include the jurisdiction to the prevention or punishment of infringements The Convention does not request Coastal State to execute any acts of occupation or proclamation to enjoy the rights recognized by

UNCLOS According to this, the rights recognized by the Convention are natural, inherent and “do

not depend on occupation, effective or notional, or any express proclamation.” (Clause 3, Article 77

UNCLOS) In the Area – the common heritage of mankind, under the provision of Article 137 UNCLOS, all rights in the resources of the Area are vested in mankind as a whole, on whose behalf the Authority (International Seabed Authority, hereinafter called Authority) shall act The competences of Authority comprise: (i) Issuing regulations and procedures in order to perform a function of marine mineral resources management in the Area; (ii) exercise control over activities in the Area as is necessary for the purpose of securing compliance with the relevant provisions of this Part and the Annex that related to this Part, the rules, regulations and procedures of the Authority and the plans of work approved

Secondly, on the object of management:

The object of marine mineral resources management is the minerals in the continental shelf and the Area along with all subjects executing the exploration and exploitation of minerals in both

of these waters

Thirdly, on the objectives of management:

In the event that the Continental Shelf not excess 200 nautical miles from the baselines, the management of international law is aimed at two objectives: protecting the Coastal State‟s rights to natural resources in the Continental Shelf and protecting the rights of other subjects by regulating the obligations which the Coastal State shall comply with in the exercise of its rights In the event the Continental shelf extends beyond, the objectives of management are still not only to protect the rights of exploitation for use of mineral resources of the Coastal State but also to share some of interests that the Costal State achieves as executing the exploitation in the Extension to other countries, especially the most underdeveloped countries and the non-sea countries with a view to ensuring the relatively fair due to the extension of the Continental shelf In the Area, the regulations

of international law is aimed at ensuring that all acts to mineral resources in this water shall be executed for the purpose of serving and protecting the common interest of the mankind

2.2 The theory of international law on marine mineral resources management

International law on marine mineral resources management is a system of international principles and regulations which stipulate legal issues arising between subjects and objects of management in the course of the exploration and the exploitation of the marine mineral at the seabed and beneath the seabed and beyond the limits of nation‟s jurisdiction and issues arising from these activities

2.2.1 The foundation/establishment and development history of international law on marine mineral resources management

The foundation/establishment history of international law on marine mineral resources management is in association with the birth of waters in international law This course has clearly reflected the struggles between different national groups, the coastal State with other States, developed countries and developing and underdeveloped countries in the exploitation and use of the sea Up to now, the process of establishing the principles on management of marine resources in general and marine mineral resources in particular has still been continuing with a view to meeting the economic development needs of each country and the requirements of environmental protection and ensuring international peace and security

2.2.2 The sources of international law on marine mineral resources management

The regulations of international law stipulating these resources are firstly the source of the international law of the sea, in which The Convention on the Law of the sea ( UNCLOS 1982), The Agreement on the implementation of Chapter XI are the global legal framework regulating issues

on marine mineral resources management in waters beyond nation‟s territories In addition, the sources of this law also include the sources of law that mainly focus on technical or specific issues

in the course of the subject‟s exploration and exploitation of mineral resources such as documents issued by the Authority and international treaties on civil responsibilities arising from the case of oil spills

2.2.3 Principles of international law on marine mineral resources management

 The principle of the Domination of the Land over the Sea

The principle of the Domination of the Land over the Sea and its contents were officially recognized in the case of North Sea‟s Continental Shelf in1969 and has been continuously affirmed

in many subsequent judgments relating to the Continental shelf According to these, “For the Continental shelf, the principle applied is the principle of the Domination of the Land over the Sea, […], which means the Land is the legal basis of a country‟s power to exercise in its territory that extends to the sea.” Thus, “the rights which the Coast States are entitled by the international law in their respective territories originate from the fact that these seabed areas can only be regarded as part of the territories in which the Coastal States exercise their power This due to the fact that while covered by the water, these seabed areas are the extension, continuation, expansion of these territories by the sea The influence of this principle on the Continental Shelf in general and the natural resources management in particular, including mineral resources in the Continental Shelf is expressed in 2 aspects: Firstly, the rights of the Coastal State in the exploration and exploitation of mineral are natural, inherent and do not depend on occupation, effective or notional, or on any express proclamation.”(Clause 3, Article 77 UNCLOS), secondly, these rights of the Coastal State are “privileged”, not shared

 The principle of the Common Heritage of Mankind

The principle of the Common Heritage of Mankind was recognized in The Convention of the Law of the Sea 1982 and became a legal principle regulating the legal status of The Area in general and the exploration and exploitation of natural resources in the Area in particular According to this, “The Area and its resources are the common heritage of mankind” (Article 136 UNCLOS) The content of this principle is expressed in 2 aspects: Firstly, No occupying the Area and its resources, secondly, establishing a international mechanism on management of the Area and its resources, thirdly, the exploration and exploitation of the Area and its resources are carried out for the common interest of mankind and the fourthly is using the Area for peaceful purposes

 The Principle of equity

In the Continental Shelf, the principle of Equity is expressed that: despite the assertion of the economic privileges of the Coastal State, the Convention still ensure some certain interests for other nations in the event that the Coastal State executes the exploitation in the Continental Shelf beyond

200 nautical miles from the baselines through the obligation of contributing of the Coastal State as exploiting in the extensions In the Area, the principle of equity is expressed in 3 aspects: Firstly, asserting that the Area is open to all States; Secondly, asserting that all activities relating to the Area are for the purpose of ensuring interests of all nations, especially the least developed countries and the thirdly is the equitable distribution, on the basis of non – discrimination between financial interests and other economic interests from activities carried out in the Area

 The Principle of Sustainable Development

The term “sustainable development” was clearly mentioned in the Report “Our common future” of World Commission of Environment and Development According to this, “sustainable development” is “the development that meets the needs of the present without compromising the ability of future generations to meet their own needs This principle is expressed in 2 aspects: Firstly, managing the exploration and exploitation to ensure that these activities are carried out in a appropriate, saving and efficient manner and secondly is the obligation of protecting marine environment in the course of exploration and exploitation of the marine minerals

2.2.4 The content of international law on marine mineral resources management

Under the current provisions in The Convention on the Law of the Sea 1982 as well as the documents issued by the Authority, the contents of international law on marine mineral resources management consist:

The first is the management of the exploration and exploitation of the minerals in the Continental Shelf and the Area The second is the protection and prevention of marine environment

in the course of exploration and exploitation of the marine minerals The third is the settlement of the disputes arising in the course of exploration and exploitation of the marine minerals

The management of the exploration and exploitation of the minerals includes: the first is the permission to explore and exploit the minerals through permits or contracts or agreements signed with relevant subjects; the second is the supervision of the compliance with subject‟s obligations in the course of exploration and exploitation of the minerals; the third is the handing of violations of subjects in the course of exploration and exploitation of the minerals

The protection and prevention of marine environment includes: Establishment of regulations and rules to prevent, limit and control the marine environment‟s pollution resulting from the exploration and exploitation in the Continental Shelf and the Area as well as mechanisms to ensure the compliance with the environmental protection obligations of subjects directly involving in the exploration and exploitation; assessment and monitoring of the environmental impacts; respond in

the event of incident; management of the waste and chemical treatment in the course of exploration and exploitation and cooperation in protection and prevention of marine environment

In addition to the impacts on environment, the exploration and exploitation of marine minerals raise the risk of potential disputes Nevertheless, the commonality of these disputes is that all of them are the international disputes, therefore the mechanism applied to settle these disputes is the common dispute settlement mechanism in international law without any specific provision, except for the provision of The Institution (Vien) of settlement of disputes related to the seabed with the competence in settlement of the disputes related to activities in the Area

CHPATER 3 THE STATUS OF INTERNATIONAL LAW ON MARINE MINERAL RESOURCES

MANAGEMENT 3.1 The management of exploration and exploitation of marine mineral resources

3.1.1 The management of exploration and exploitation of marine mineral resources in the Continental Shelf

Stemming from the nature of the Continental Shelf which is the natural extension of the territorial land as mentioned above, the management of the natural resources in general and the marine minerals in particular are carried out for the most important purpose of protection the Coastal State‟s interest While in the national territory, the rights that the Nation exercises to its territory are the rights which “are aimed at performing the public functions in a common and specific manner in order to achieve objectives and objects by determined by the Nation itself”, the rights in the Continental Shelf are regulated by international law and have certain limits In other worlds, to ensure that the Coastal State‟s management will not affect the rights of other subjects as well as the common interest which are protected by the international law, in addition to recognize the rights, the Convention also sets out the limits that the Costal State shall comply with in the course of exercising its sovereign rights

3.1.1.1 The continental shelf not beyond 200 nautical miles and no any disputes

In the course of exercising its sovereign rights over the exploration and exploitation of the Continental Shelf‟s resources, the Coastal State shall respect the rights which are provided by UNCLOS of other nations, including the freedoms of navigation and aviation (Article 78 UNCLOS) and the right to lay submarine cables and pipelines based on the consent of the Coastal State In addition, the rights of the Coastal State over it‟s the Continental Shelf do not affect the legal status

of the superjacent waters and of the air space above these waters ( Clause 1 Article 78 UNCLOS) These provisions are regulated by the international law with the aim at respecting and protecting a number of rights of all nations according to the principle of freedom of the seas from the sovereign rights of the Coastal State In the term of history, the birth/establishment of the waters under sovereignty of the Nation, namely the Exclusive Economic Zone and the Continental Shelf is the result of the process of struggles between the Coastal States that desire to expand their rights over the resources and the others countries that desire to keep on maintaining the maritime order previously set out in traditional maritime law In the term of nature, the positions of the Exclusive Economic Zone and the Continental Shelf are the suis generic, are not totally national territory but not totally international water, therefore, in these positions, the Coastal State is entitled the

sovereignty due to the geographical continuation with the territory of the Coastal State and at the

same time, a number of rights and freedoms of other subjects are still ensured These points explain why, in the legal status of waters under sovereign rights in general and the Continental Shelf in particular always contains the opposite groups of rights, namely the Coastal State‟s rights and the

rights of other countries in conformity with the principle that the rights of this subject are corresponding with the obligations of respect of the other subjects, at the same time, each subject, when exercising its rights, must not infringe the rights of other subjects

3.1.1.2 The Extended Continental Shelf

In order to limit the Coastal State‟s arbitrary extension of the Continental Shelf which affects the common interests of international community, the Convention provided a number of conditions and procedures with which the Coastal State must comply if having intention to extend the scope of exercising the rights over the resources that regulated by the international law for the Continental shelf Once the determination of the outer limit has come into effect, the Coastal State shall have the full rights of exploration and exploitation of mineral resources at and beneath the seabed within the extension without exceeding 350 nautical miles from the baselines and all these rights are similar to those over the normal 200 nautical mile - Continental shelf Nonetheless, The Coastal State shall be under an obligation to make payments or contributions in kind in respect of the exploitation of the non – living resources of the extended Continental Shelf, except for a developing States which a net importer of a mineral resource produced from its continental shelf (Article 82 UNCLOS) Through the contribution obligation of the Coastal State, The Convention ensure the equity for nations in benefiting from the exploitation marine resources and at the same time bring the specific economic interests to nations, thereby, creating favorable conditions for nations, especially developing countries to enjoy the equal development opportunities to others The legal status of the Continental Shelf and profit sharing mechanism in the extended Continental Shelf are regarded “compensation for each othes” In other words, this provision is an agreement between

2 sides: the first one is nations opposing to the extension of the outer limit of the Continental Shelf

on the principle the common heritage of mankind and the other is nations supporting the extension

on the basis of the nature of the Continental that are the natural extension of territorial land under the sea on the principle of the dominant of the Land over the Sea

3.1.1.3 Undelimited Continental Shelf

Under the Article 83 UNCLOS 1982, the delimitation of the Continental Shelf between States with opposite or adjacent coast shall be effected by agreement on the basis of international law so as to achieve an equitable solution If no agreement can be reached, the States concerned shall not unilaterally execute the exploration and the exploitation of resources in the Continental shelf that has not been delimited, due the fact that the limit of the Continental Shelf under the sovereign rights of each Side has not been delimited and the unilateral activities of the exploration and exploitation of resources will complicate the dispute The Clause 3, Article 83 UNCLOS provided the obligations of the States during this period: “During this transitional period, not to jeopardize or hamper the reaching of the final agreement” In the dispute of Guyana with Suriname, The International Arbitrator Court affirmed that UNCLOS do not forbid all of the unilateral activities in the overlapping waters, the States concerned shall have the right to execute some activities is these waters in themselves but other activities require the agreement/ consent of all States concerned The criterion to distinguish these two activity groups is the risk of compromising the seabed or subsoil beneath the seabed In the event of the overlapped Continental shelf mentioned above, agreement on the common exploration, exploitation and management in a certain zone in the overlapping waters is a temporary measure so that the States concerned can exploit resources without affecting or hampering the final delimitation Such agreements are called as Joint Exploitation Agreement (JEA).The content of these agreements regularly insists of legal basis issues such as JEA‟s zone, JEA‟s term, the rights of exploration and exploitations of each State

(specifically over the minerals of the Continental Shelf), the exercise of jurisdiction of each State in JEA‟s zone, mechanism of management and sharing profits and responsibilities arising from the exploration and the exploitation of resources and dispute settlement,… In the course of exercising the rights over the mineral resources in JEA‟s zone, the State concerned shall respect all rights of other States recognized in UNCLOS and at once, not affect the legal status of the superjacent waters and of the air space above these waters (Clause 1, article 78 UNCLOS)

3.1.2 The Management of the exploration and the exploitation of mineral resources in the Area – the common Heritage of Mankind

3.1.2.1 The permission to conduct of mineral activities in the Area

Under the provisions of paragraph 2 of Article 152 of the UNCLOS, activities carried out

in the Area may only be conducted by the following entities: Enterprise; Party State; State enterprises, natural or juridical persons that are nationals of the Party State, or by the Party State

3.1.2.2 The management and supervision of the performance of subject’s obligations in the course of mineral exploration in the Area

During the conducting of the activities in the Area, the subjects must comply with the obligations recognized in the Convention and the documents issued by the Authority and shall be subject to the Authority„s supervision in the performance of these obligations, including: financial obligations to contracts entered into with the ISA; technical transfer obligation; obligations on production output; other obligations, such as organizing training programs, informing the Authority

of all necessary and appropriate data for the performance of this agency‟s functions, preserving and protecting the environment, In addition, the ISA has the right to monitor the performance of the obligations of the sponsoring country, including the obligation to ensure the compliance with the contract‟s terms, obligations provided by the Convention and related documents and direct obligations

3.1.2.3 Handling violations committed by subjects in the process of mineral exploration

in the Area

The contracting party is responsible for all losses incurred during the course of carrying out the contractual activities, taking into account the responsibilities that may be attributed to ISA due to acts or omissions of this agency, except in force majeure In conjunction with civil liability, the contracting party may be suspended or terminated under the ISA's decision In respect of other violations, in addition to suspending or terminating the contract, the ISA may force the contractor to incur penalties in proportion to the seriousness of the breach, except exceptions are provided by UNCLOS For the sponsoring country, in the event of failure to comply with its obligations, such country shall be subject to legal liabilities provided in paragraph 2 of Article 139 of the UNCLOS provided that: the first is that the damage occurred and, secondly, there must be a causal relationship between the breach due to the failure to perform its obligations and the damage occurred

In the provisions/regulations of UNLCOS on management of exploration and exploitation

of marine mineral in the Continental Shelf, the issue that has not been specifically regulated by the Convention is in the relation is mainly the obligations of The Coastal State in the case of exploitation of mineral in the Extended Continental Shelf under the Article 82 Particularly, (i) on the form of obligation performance, UNCLOS has not specifically provided whether the Coastal State may change the form of obligation performance or whether it have to apply only one of unique form in the entire course of performance In case the State choose to pay, which currency will be used? By contrast, if the Sate choose to contribute in kind, how will the receipt, transfer and