Article 82 of the United Nations Convention on the Law of the Sea (“unclos”) creates an obligation for coastal States to make payments or contributions in kind in respect of the exploitation of non-living resources of the continental shelf beyond 200 nautical miles. These payments or contributions are to be made through the International Seabed Authority (the “isa”), which is required to distribute them to State Parties to unclos on the basis of equitable sharing criteria. As technological advances expand the possibilities for the development of deep-water resources, analysis of the once dormant Article 82 has rapidly moved beyond the academic realm and is now a pressing issue of practical importance.
The parties likely to feel the first effects of an operative Article 82 are the isa and the coastal States that permit development activities on their continental shelf beyond 200 nautical miles (“ocs States”). While there has been extensive and lively debate on the respective obligations of ocs States and the isa regarding payments under Article 82, the purposefully broad language of the Article leaves considerable room for interpretation. Accordingly, an important hurdle to the implementation of this “collections” aspect of Article 82 is to determine how the calculation of payments is performed, who is responsible for performing the calculations, and how the payments are ultimately administered.
The impacts of an operative Article 82 will quickly extend to parties beyond the isa and the contributing ocs States. In particular, as outer continental shelf production begins and the isa collects funds under Article 82, potential recipients will expect the appropriate and timely distribution of these funds. Determining how, when, and to whom payments should be made is an additional hurdle for Article 82 implementation.
Finally, individual states have entrenched interests that will inform their expectations of how Article 82 ought to be implemented. This is true both for states that are potential contributors and those that are potential recipients of Article 82 funds. If, or more likely when, the implementation of Article 82 does not meet a state’s expectations, that aggrieved state may seek a formal remedy. Determining the mechanism by which a remedy may be sought and who is ultimately responsible for pursuing a remedy is an important hurdle to address before it arises, especially considering that the parties most in need of a remedy may be the ones that have the least financial capacity to pursue one.