2ND GLOBAL ADMINISTRATIVE LAW SEMINAR, VITERBO, JUNE 9-10, 2006
AUTONOMY WITHOUT ACCOUNTABILITY– THE CASE OF THE INTERNATIONAL SEABED
AUTHORITY AND THE ENTERPRISE
Dionysia-Theodora Avgerinopoulou
1
TABLE OF CONTENTS
Introduction
Part I: Organizational Structure
1. ISA as the Custodian of the Wealth from the Natural Resources of the Deep Seabed
2. ISA as an Autonomous Organization
3. Organs and Structure
3.1 The Assembly
3.2 The Council
3.3 The Secretariat
3.4 The Enterprise
3.5 Other Organs
Part II: Accountability Mechanisms
4. Existing Accountability Mechanisms
4.1 Internal Accountability Mechanisms
4.2 Legal Accountability through the Dispute Settlement Mechanism
5. Need for External Accountability Mechanisms and Third Party Involvement
6. Proposals for Financial and Environmental Accountability Mechanisms
Conclusion
2
INTRODUCTION
In this paper I discuss the accountability mechanisms in regard with two innovative entities, the
International Seabed ISA (ISA), an international organization established by the 1982 United Nations
Convention for the Law of the Sea and the 1994 Agreement relating to the Implementation of Part XI of
the United Nations Convention on the Law of the Sea, and one of its organs, the so-called Enterprise.
The ISA is one of the most autonomous international organizations, with institutional independence
from the United Nations and discretionary powers concerning decision-making. ISA seems to be at the
same time the legislator, the executive and the corporation that performs the management of the Area,
namely the part of the deep seabed, ocean floor and subsoil thereof, beyond the limits of national
jurisdiction, while enjoying limited institutional supervision. The Enterprise is a semi-organ, semicorporation of public interest that will manage the commercial exploitation of the mineral resources in
the Area, part of the Deep Seabed beyond any national jurisdiction, when such exploitation commences.
In the second part of the paper, I present the structure of the ISA and the Enterprise, their hierarchical
relationship and existing accountability mechanisms. Both the entities are equipped with only internal
accountability mechanisms: the ISA reports to the Assembly of its Member States and the Enterprise
reports to the Council and the Assembly of the ISA. There is a Finance Committee, which, however,
simply manages the finances of the organization without playing any surveillance role. There are no
external audit scheme or monitoring mechanisms to supervise the financial management.
In the third part, I argue that exclusively internal accountability mechanisms are inadequate for any
international organization. This holds especially true in the case of the ISA, which enjoys extensive
3
institutional autonomy, decision-making and regulatory discretion and is destined to manage extremely
fragile ecosystems and unprecedented wealth. Indeed, the ISA has undertaken, on the one hand, the
protection of extremely vulnerable oceanic ecosystems and, on the other hand, the management of
unprecedented wealth deriving from commercial exploitation of the Area minerals. These two mandates
of the organization will be sharply conflicting for as long as there is no adequate scientific and
technological capacity to explore and exploit the minerals without causing extensive damage in the
Area’s oceanic environment. On the other hand, the gains expected from the commercial exploitation of
the minerals are so high that the extraction of the minerals has the potential to even disrupt the world
economy.
Thus, both the risky character of its activities and its managerial function impose a
requirement for further accountability mechanisms. In addition, the characterization of the resources of
the Area as “common heritage of the humankind” implies an obligation by the managerial organization
to be accountable to the whole international community at large, including civil society and individuals.
The need for non-state actors to hold the organization accountable is in this case even more justifiable.
Last in the picture come the so called “pioneer investors” or other, prospective contractors that aim to
the exploration and exploitation of the resources in the Area. These contractors currently are either
state-owned enterprises or international public-private consortia that have already singed or will sign
respective agreements with the ISA. Consequently, state and corporate accountability issues should also
be taken into account.
In the last part, I conclude that apart from the internal accountability mechanisms, the ISA should also
set up external accountability mechanisms for purposes of environmental protection, especially allowing
intervention of non-state actors. In addition, as soon as the Enterprise commences its commercial
4
activities, it should adopt a system of accountability and inspection similar to the mechanisms of
international financial institutions.
5
PART I: ORGANIZATIONAL STRUCTURE
1. ISA as the Custodian of the Wealth from the Natural Resources of the Deep Seabed
The International Seabed ISA Authority (“ISA” or “Authority”) is an intergovernmental organization
(IO), established by the 1982 United Nations Convention for the Law of the Sea (“LOS Convention”)
and the 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on
the Law of the Sea (“1994 Agreement”.)1 The ISA is the organization through which Signatory States to
the Convention shall, in accordance with the regime for “the seabed and ocean floor and subsoil thereof,
beyond the limits of national jurisdiction” (the Area), 2 organize and control activities in the Area,
particularly with a view to administering the mineral and biological resources of the Area. The Area is
considered part of the common heritage of humankind and the ISA functions as the custodian of the
Area on behalf of humankind.3
The role of the ISA is important both in environmental and financial terms.
The Area’s natural
environment is very rich in natural resources and many unique species reside in the deep seabed waters
and subsoil.4 In addition, the deep seabed contains high sensitive ecosystems, the balance of which
could be easily altered. Potential mining activities in the Area will involve a variety of environmentally
disruptive activities. Several parts of the process of mining Deep Seabed minerals, from the initial
placement of mining equipment in the area to the transportation of the minerals to shore, may produce
1
United Nations Convention on the Law of the Sea [LOS Convention], Dec. 10, 1982, U.N.A/CONF. 62/122, 21 I.L.M. 1261
(1982), Montego Bay, Jamaica, entered into force on November 16, 1994, as amended by the 1994 Agreement relating to the
Implementation of Part XI of the United Nations Convention on the Law of the Sea of December 10, 1982.
2
Paragraph 2 of the 1994 Agreement.
3
Art. 1(1) of the LOS Convention.
4
For relevant information and data, visit: www.isa.org.jm/ (last visited on May 14, 2006.)
6
adverse effects on the oceanic environment. The currently available technology does not yet allow for
environmentally friendly ways of mining.
Thus, the responsibility of the ISA for sustainable
management seems crucial in terms of environmental protection.
On the other hand, the wealth that could be extracted from the Area is invaluable. Exploitation of deep
seabed minerals could be such a profitable activity that it has the potential to disrupt the balance of the
world economy.5 The ISA is also in charge of the financial management of the wealth to be potentially
extracted and of the harmonious management of mining activities. Since all countries will benefit from
the “common heritage of the humankind”, ISA’s mandate includes the fair allocation of the gains to
whoever actively participates in mining and to the rest of the world. In face of these demanding tasks
regarding financial management and of the uncertainties regarding technological capacities and
scientific knowledge relevant to the Area’s natural environment, the signatories of the pertinent
conventions chose to attribute to the ISA institutional autonomy and discretionary powers as follows.
2. ISA as an Autonomous Organization
The signatories to the LOS Convention and the 1994 Agreement delegated broad discretion to the ISA. 6
The ISA is one of the most progressive, autonomous international organizations, institutionally
independent from the United Nations (UN), although these two constituent instruments have been signed
under the auspices of the UN. The constituent instruments of the ISA set out, only in broad outlines, the
5
The framers of the LOS Convention took this possibility into account and, as a result, the LOS Convention includes
provisions that allocate to the ISA the right to control the exploitation of the minerals in terms of quantity and time, in order
to maintain the financial balance worldwide. See, e.g. art. 151 (Production Policies.) It provides for relevant multilateral trade
agreements, a compensation system, and measures of economic adjustment assistance to every country that will suffer serious
adverse effects on their export earnings or economies caused by exploitation of minerals in the Area. See also art. 164 of the
LOS Convention referring to the Economic Planning Commission.
6
There are currently 149 signatories to the LOS Convention and 122 to the 1994 Agreement (as of May 15, 2006.)
7
duties, and the rules and principles that the ISA has to implement during its regulatory and
administrative work. For instance, neither Part XI of the LOS Convention referring to the Area (art. 133
- 191) nor the 1994 Agreement set any substantial management standards for the exploration and
exploitation of the mineral resources. These articles provide for the establishment of the ISA, describe
its structure and organs, and delineate only general principles, under which, ISA should perform its
duties and managerial tasks leaving though important policy questions to be answered by ISA itself.
Thus, the ISA holds discretionary powers regarding decision-making lato sensu, including also lawmaking functions. In combination with the fact that the regulatory framework for the Area resources, as
defined by the LOS Convention, its accompanying instruments and the general principles of
international law are largely vague, ISA is able to decide itself upon regulatory issues of great
importance, such as upon fundamental principles that will govern the activities in the Area. According
to the principles and laws adopted, the ISA is going to materialize the management of the Area
resources.
This is the case with the promulgation of two new pieces of legislation, the Regulations that govern
activities regarding the exploration and the exploitation of various minerals in the Area. Regarding the
first set of minerals, the polymetallic nodules, the ISA had decided for the adoption of the precautionary
principle, while regarding the adoption of the second set of mineral resources, hydrothermal
polymetallic sulphides and cobalt-rich ferromanganese crusts, the question of whether the ISA should
adopt the precautionary principle up todate still remains open. There is no, however, any obvious,
legitimate reason for such differentiation on the principles regarding the management of minerals in the
Area.7
7
See, Dionysia-Theodora Avgerinopoulou, The Lawmaking Process at the International Seabed Authority as a Limitation on
Effective Environmental Management, 3 Colum. J. Envtl. L. 565 (2005.)
8
Hence the ISA seems to be at the same time the legislator, the executive and the corporation that
performs the management of the Area, while enjoying limited institutional supervision. Comparatively,
only limited international institutions hold such extensive regulatory and managerial competences and
even in those cases the institutions have usually competence to regulate issues of only secondary
importance or technical and detailed nature, such as in the case of the International Civil Aviation
Organization (ICAO) 8 , the World Health Organization (WHO) 9 and the International Maritime
Organization (IMO.) 10 This extensive power held by the ISA indicates the necessity for additional
administrative linkages between the ISA and other international bodies and processes engaging
interested non-member states that would accordingly enhance its accountability. In the following part
the paper discusses ISA’s structure, the interrelationship among its organs and the existing
accountability mechanisms in order to evaluate the balance existing between autonomy and
accountability.
3. Organs and Structure
According to art. 158 para. 1, the Assembly, the Council and the Secretariat are the principal organs of
the ISA, while paragraph 2 refers to an additional organ, the Enterprise.
8
See, Articles 54 para 1 and 90 (a) and 37(e) and (k) of the Convention on International Civil Aviation (Chicago
Convention).
9
Constitution of the World Health Organization, July 22, 1946, art. 21 and 73, 62 Stat. 2679, T.I.A.S. No. 1808, 14 U.N.T.S.
185, amended May 23, 1967, 26 U.S.T. 990, T.I.A.S. No. 8086, amended May 22, 1973, 28 U.S.T. 2088, T.I.A.S. No. 8534,
amended May 17, 1976, T.I.A.S. No. 10, 930. Regarding the law-making techniques by the WHO, see C. Vignes, Towards
the Harmonization of Health Legislation: The Role of the World Health Organization, International Digest of Health
Legislation 46 (1995), 422 – 427.
10
See, e.g. IMO’s Convention regarding the Safety of Life at Sea Convention (SOLAS), art. VIII(b)(vi), Nov. 1 1974, 32
U.S.T. at 52, 1184 U.N.T.S. at 280. See further: CLEOPATRA ELMIRA HENRY, THE CARRIAGE OF DANGEROUS GOODS BY
SEA, THE ROLE OF THE INTERNATIONAL MARITIME ORGANIZATION IN INTERNATIONAL LEGISLATION, St. Martin’s Press, New
York (1985.)
9
3.1 Assembly
The main organ of the ISA is the Assembly. 11 The Assembly is currently composed of 142
representatives, one from each Member State of the ISA. The rule of "one state - one vote" governs the
decision-making process and is consistent with state sovereignty, as declared in art. 157 para. 3 of the
LOS Convention. The Assembly is the supreme organ of the ISA and the rest of the principal organs are
accountable to it.12 Among its powers and functions are the consideration and approval of the rules,
regulations and procedures of the ISA, and any amendments thereto, provisionally adopted by the
Council, pursuant to article 162, paragraph 2 (o)(ii) of the LOS Convention. These rules, regulations and
procedures shall relate to prospecting, exploration and exploitation in the Area. The Assembly holds also
the supreme supervisory role and is, thus, competent "(i) to examine periodic reports from the Council
and from the Enterprise and special reports requested by the Council or any other organ of the ISA."13
Further according to art. 154 of the LOS Convention:
"Periodic Review: Every five years from the entry into force of this Convention, the Assembly shall
undertake a general and systematic review of the manner in which the international regime of the Area
established in this Convention has operated in practice. In the light of this review the Assembly may take,
or recommend that other organs take, measures in accordance with the provisions and procedures of this
Part and the Annexes relating thereto which will lead to the improvement of the operation of the regime."
3.2 Council
11
See art. 159 - 160 of the LOS Convention.
Art. 160 para. 1 of the LOS Convention.
13
Art. 160 para 2 (i) of the LOS Convention.
12
10
The Council is elected by the Assembly and is composed of state representatives.14 As a body of limited
membership, the Council does not offer representation to each state separately, but rather to groups of
states. The interests of the states have a great deal of influence on the decisions of the Council, due to
the grouping system adopted. Half of the Council is composed of countries which are the most interested
in the Area commercial mining activities: the consumer-countries, the investor-countries, and the
exporter-countries, as well as developing countries with special interests. The other half is composed of
Member States that are only indirectly interested in such activities, that is, those that are to receive some
financial income from the mining, without having participated in the mining activities in any way,
because of the Area's status as part of the common heritage of humankind. The powers of the Council
are described in art. 162 of the LOS Convention. According to it, the Council is the executive organ of
the ISA. The Council has the power to establish, in conformity with the Convention and the general
policies established by the Assembly, the specific policies to be pursued by the ISA on any question or
matter within the competence of the ISA. In addition, the Council can approve, with a 75% majority, a
plan of work submitted by the Legal and Technical Commission that the Assembly has disapproved. The
Council can also exercise control over activities in the Area in accordance with article 153, paragraph 4
of the LOS Convention, and the rules, regulations and procedures of the ISA15 and can adopt and apply
provisionally, pending approval by the Assembly, the rules, regulations and procedures of the ISA, and
any amendments thereto, taking into account the recommendations of the Legal and Technical
Commission or other subordinate organ concerned. These rules, regulations and procedures are to relate
to prospecting, exploration and exploitation in the Area and to the financial management and internal
administration of the ISA. The Council may also make recommendations to the Assembly concerning
14
15
See art. 161- 162 of the LOS Convention.
Art. 162 par. 2 (l).
11
policies on any question or matter, within the competence of the ISA16, and finally disapprove areas for
exploitation by contractors or the Enterprise in cases where substantial evidence indicates the risk of
serious harm to the marine environment.17
3.3 The Secretariat
The Secretariat is composed of four functional units; the Office of the Secretary General18,19, the Office
of Administration and Management,20 the Office of Legal Affairs,21 and the Office of Resources and
Environmental Monitoring. 22 These units have assumed not only administrative functions, but also
scientific and policy-making advocacy functions.
3.4 The Enterprise
The Enterprise is a semi-organ, semi-corporation of public interest that will manage the commercial
exploitation of the mineral resources in the Area. Specifically, "the Enterprise shall be the organ of the
ISA which shall carry out activities in the Area directly, pursuant to article 153, paragraph 2(a) of the
LOS Convention, as well as the transporting, processing and marketing of minerals recovered from the
Area." Hence, the Enterprise is not yet an active organ, but it will start functioning after the initiation of
commercial mining.23 Its functions and accountability mechanisms remain, however, in the center of the
attention of this paper, because upon commencement the financial activity of the Enterprise could be
significant, primarily due to the unprecedented wealth that could derive from the exploitation of the
Deep Seabed minerals. The Enterprise shall have title to all minerals and processed substances produced
16
Art. 162 par. 2 (s).
Art. 162 par. 2 (x).
18
See information at: http://www.isa.org.jm/en/about/office.admin.man.stm.
19
http://www.isa.org.jm/en/about/office.secretary.general.stm.
20
See information at: http://www.isa.org.jm/en/about/office.admin.man.stm.
21
See, www.isa.org.jm.
22
Id.
23
Art. 170 par. 1 of the LOS Convention.
17
12
by it24 and shall have income from selling its products.25 In addition, the Enterprise will be eligible to
receive loans or contributions by the Member States 26 , loans from capital markets or international
financial institutions27 and income from other operations.28
The Enterprise is not a single layer organ, but it has its own multi-level structure. According to article
170 of the LOS Convention in combination with Annex IV: “The Enterprise shall have a Governing
Board, a Director-General and the staff necessary for the exercise of its functions.” Following patterns
adopted by financial international institutions “[t]he Governing Board will be comprised by individuals
acting in their personal capacity and they shall be independent from the member states the nationality of
which they might hold.” (art. 5.)29 Further, the Enterprise will enjoy privileges and immunities,30 will
have its own legal personality and will be entrusted with as many competences as necessary in order to
fulfill its purpose. There is hence created an organization within another organization.
The institutional affiliation between the Enterprise and the ISA becomes understood through
accountability mechanisms that connect the two structures.
For instance, Article 9 of the Annex
introduces transparency procedures regarding financial management, namely submission of annual
report containing an audited statement of its accounts, and a summary statement of its accounts and a
24
Art. 12 para. 4 of the 1994 Agreement.
Art. 12 para. 5 of the 1994 Agreement.
26
Art. 11 para. 2 (a) of the 1994 Agreement.
27
Art. 11 para. 2 (b) of the 1994 Agreement.
28
Art. 11 para. 2 (d) of the 1994 Agreement.
25
See, for example a similar structure in the case of the Multilateral Investment Guarantee Agency, Article 30: “The Agency
shall have a Council of Governors, a Board of Directors, a President and staff to perform such duties as the Agency may
determine” of the MIGA Convention, available at: www. http://www.miga.org/sitelevel2/level2.cfm?id=1107.
29
30
Art. 13 para. 1 of the 1994 Agreement.
13
profit and loss statement showing the results of its operations to the Council. In addition, these papers
will be distributed to all members of the ISA and there will be publications of its annual report.
Regarding the work of the Enterprise one should add to the picture the “pioneer investors” and other
prospective contractors with the ISA, namely enterprises that aim to exploration and exploitation of the
resources in the Area. These contractors currently are either state-owned enterprises or international
public-private consortia.31
3.5 Other organs
To promote efficiency, the ISA may create further subsidiary organs. 32 There are, for instance, some
committees created, such as the Credentials Committee or the Finance Committee with only
administrative tasks.33 For example the Finance Committee, a 15-member committee, comprised by
experts, has no other power than to examines the Secretary-General’s biennial budget proposals and
make recommendations to the Assembly in relation to this and other financial matters.
The most important category of future contractors will remain the group of the so-called “pioneer investors.” Pioneer
investors are the four multinational consortia from Belgium, Canada, Germany, United Kingdom, United States, the
Netherlands, Italy, Japan and France and public sponsored entities form the USSR, India and China, which first conducted
research in order to develop mining technology applicable to the Deep Seabed. Between 1987 and 1994, these countries were
registered at the ISA and will be the first countries eligible to conduct commercial mining, as soon as the regulatory regime
permits it. Noteworthy, regarding the contractors, state and corporate accountability should also be taken into account. It
remains, however, out of the framework of this case study.
32
Art. 158 par. 3 of the LOS Convention.
33
For the establishment of the Credentials Committee, visit:
http://www.isa.org.jm/en/documents/official_documents/doc_2000/ISBA%206%20A16.pdf (last visited at July 13, 2006.)
31
14
PART II: ACCOUNTABILITY MECHANISMS34
4. Existing Accountability Mechanisms
4.1. Internal Accountability Mechanisms
There is no reference to any special accountability mechanism regarding the work by the ISA in the
LOS Convention and its accompanying instruments. The hierarchical structure of the ISA itself, as
presented in Part I, and the linkages among its bodies reveal the existence of traditional internal
accountability mechanisms within the framework of international organizations (IOs). The Assembly,
where the Member States are being represented, is the supreme organ of the ISA and thus the rest of the
organs are accountable to the Assembly. 35 The Enterprise will report to both the Council and the
Assembly of the ISA regarding the financial management. 36 Thus, there is a pattern of internal
supervision common in structures with delegation of powers to executive bodies. Internal supervision
though in cases where immense financial interests, fragile environmental ecosystems and resources as
34
For specialized bibliography regarding international organizations and accountability see among others: Ved P. Nanda,
Accountability of International Organizations: Some Observations, 33 Denv. J. Int'l L. & Pol'y 379 (2005), Daniel D.
Bradlow, Private Complainants and International Organizations: A Comparative Study of the Independent Inspection
Mechanisms in International Financial Institutions, 36 Geo. J. Int'l L. 403, (2005), Carrie Noteboom, Addressing the
External Effects of Internal Environmental Decisions: Public Access to Environmental Information in the International Law
Commission’s Draft Articles on Prevention of Transboundary Harm, 12 N.Y.U. Envt’l. L.J. 245, (2003), Paul B. Stephan,
Accountability and International Lawmaking Rules, Rents and Legitimacy, 17 Nw. J. Int'l L. & Bus. 681 (1996-1997), Ruth
W. Grant & Robert O. Keohane, Accountability and Abuses of Power in World Politics, AM. POL. SCI. REV., Feb. 2005, at
1, Robert O. Keohane, Political Accountability 14-17 (paper presented to Conference on Delegation to International
Organizations, Park City, Utah, May 3-4, 2002); Robert O. Keohane & Joseph S. Nye, Democracy, Accountability and
Global Governance 1 (Harvard Univ. Politics Research Group, Working Paper No. 01-4, 2001), available at
http://www.ksg.harvard.edu/prg/nye/ggajune.pdf.
35
Articles 154 and 160 par. 1 of the LOS Convention.
See, e.g. article 9 of Annex IV: Statute of the Enterprise: “Reports and financial statements: 1. The Enterprise shall, not
later than three months after the end of each financial year, submit to the Council for its consideration an annual report
containing an audited statement of its accounts and shall transmit to the Council at appropriate intervals a summary statement
of its financial position and a profit and loss statement showing the results of its operations.2. The Enterprise shall publish its
annual report and such other reports as it finds appropriate.3. All reports and financial statements referred to in this article
shall be distributed to the members of the Authority.”
36
15
common heritage of the humankind are at stake is not enough. To complement the picture, the LOS
Convention provides for a dispute settlement mechanism.
4.2. Legal Accountability through the Dispute Settlement Mechanism
A comprehensive and obligatory dispute settlement mechanism (DSM), established by the LOS
Convention, complements the elementary accountability system of the ISA.37 Under this mechanism,
there exists a submission process of disputes regarding the Area resources to either a special chamber of
the International Tribunal for the Law of the Sea (ITLOS) or an ad hoc chamber of the Seabed Disputes
Chamber or to binding commercial arbitration.38 This model serves however better the “delegation”
model of accountability, according to which the performance of the power-wielders is evaluated by
those entrusting them with powers, than the “participation” model, where by contrast performance is
evaluated by those who are affected by their actions.39 As it is the case with the majority of international
tribunals, only states are entitled to bring cases before the dispute settlement bodies and only rarely
access to international tribunals is open to other members of the international community.40
It is debatable though, to what extent, non-state actors have access to the LOS Convention dispute
settlement mechanism. Indeed, the Seabed Disputes Chamber of the Tribunal has jurisdiction to hear
cases brought by “entities other than State Parties only as provided for” in the LOS Convention. 41
Further provisions in the LOS Convention include mainly contractors and prospective contractors, as
37
See, e.g. NATALIE KLEIN, DISPUTE SETTLEMENT IN THE UN CONVENTION ON THE LAW OF THE SEA,
(Cambridge University Press 2005); Alan Boyle, Further Development in the Law of the Sea Convention: Mechanism for
Change, 54 Int’l & Comp. L. Q. 563 (2005.)
38
Art. 186 – 190 of the LOS Convention.
39
See for the distinction between these two models in Ruth w. Grant et al, id at 34.
40
See, art. 187 of the LOS Convention regarding the jurisdiction of the tribunal.
41
Art. 291 para.2 of the LOS Convention.
16
well as other juridical or natural persons, which would be in a contractual relationship with the ISA.
According to the textual and systemic interpretation, the contractual link between any non-state actor
and the ISA is a prerequisite in order the non-state actor to obtain standing. Consequently civil society
remains outside the circle of the people that are entitled to obtain standing before the Chamber.
It is conceivable that the provision of Art. 291 para. 2 may in the future permit standing to other nonstate entities, such as environmentally-oriented groups, perhaps under liability or other legal regime that
could complement the LOS Convention.
The precise meaning of the provision awaits judicial
interpretation. Such provision would be extremely important, since non-state actors do not have any
recourse to domestic courts either. The ISA, as an international organization, enjoys organizational
immunity. There is no possibility for any lawsuit against the ISA before domestic courts, unless there is
any opposite contractual agreement or the ISA ad hoc consent to be subject to proceedings before
national courts.42
The dispute settlement mechanism set up by the LOS Convention is an important venue for holding the
administration of the ISA and other relevant players accountable. By no means though, adjudication
proceedings can effectively substitute the lack of other external accountability mechanisms that would
satisfy the participation model. There is a need to give standing to entities other than the Member States
or the organs of the ISA and the possibility to hold accountable the ISA and the Enterprise. In addition,
these possibilities should be open before any illegal action takes place or in prior stage than the creation
and settlement of a dispute, while the dispute settlement mechanism operates in a later point of time (ex
post).
42
WELLENS, REMEDIES AGAINST INTERNATIONAL ORGANISATIONS 120 (2002), at 29; HENRY G.
SCHERMERS & NIELS M. BLOKKER, INTERNATIONAL INSTITUTIONAL LAW §§1610-1612 (3d ed. 1999); Final
Report, supra note 1, at 50-51.
17
5. Need for External Accountability Mechanisms and Third Party Involvement
As R. W. Grant and R. O. Keohane mention “accountability functions to expose two sorts of abuses: the
unauthorized or illegitimate exercise of power and decisions that are judged by accountability holders to
be unwise or unjust.” 43 Legal dispute settlement mechanisms cover only the cases of accountability
where issues of illegality may arise, but these mechanisms cannot control the second set of potential
abuses. Legal accountability requiring that agents abide by formal rules and be prepared to justify their
actions in those terms in courts, quasi-judicial arenas and even administrative bodies could not be
adequate in this case where major policy and legal questions remain open and the principal agents hold
themselves legislative competence. In addition, where legislative and executive competences coincide
to a large extent in the same institution, there is potential for abuse of power. Thus, further procedures of
external accountability should be established first to check unwise or unjust behavior and secondly to
deter occurrence of abuse of power.
Further, external accountability mechanisms that would open up the organization for any third party,
including individuals are important.
The possibility for third parties to intervene is particularly
important in the case of the ISA for a series of conditions not often met in other international
institutions.
First, in contrast with the traditional international organizations where a degree of
divergence among the interests of the member-states exists and the international organization serves as a
forum for debate and conciliation or where the activities and legislation of the international organization
may impose financial and other sorts of burdens on the states and there exists thus a tension between the
interests of the organization and those of the member states, in the case of the ISA there is commonality
43
R. W. Grant, id. at 34.
18
of interests for the organization, all its Member States, even the non-member states, and the private
sector involved, namely the gains coming out of the extraction of the Area minerals. Under this
condition of commonality of interests, objection to the commencement of commercial mining by a
Member State solely on environmental grounds would be, not an impossible, but at least a rare occasion.
Apart from the rich and fragile biological diversity and the extensive mineral wealth of the Area, there is
an additional factor why the expression of environmental considerations should find a way towards the
ISA decision-making process other than this through the Member States. There is a great possibility that
in the case of the Area management states would tend to act as free riders and chose profit over
environmental protection.44 As mentioned above, the Area is the part of the deep seabed out of the
jurisdiction of any state. Hence, no state will have any direct responsibility due to an environmental
disaster. This lack of individual responsibility of a Member State is an additional factor leading to
adoption of less environmentally sensitive decisions.
Further distinctive elements of the case are the geographical distance of the Area from the states and the
lack of any image on the surface of the earth that would serve as a reminder of its existence. Area’s
geographical spot leads to lack of attention on behalf of the international community. The missing
invocative function of the image of the Area and the geographic distance lead to the absence of even
public reputational accountability mechanisms, the latter being the last resort in absence of other
accountability mechanisms.45 Both these elements seem to be decisive factors for the lack of attention
on behalf of international and domestic environmentally-oriented groups that would have the potential to
“Free-riding” refers to receiving the benefit of an action or state of affairs without bearing commensurate burdens - see,
Edward J. McCaffery et al, Shakedown at Gucci Gulch: The New Logic of Collective Action, 84 N. C. L. Rev. 1159 (2006), at
FN 4. See, George J. Stingler, Free Riders and Collective Action: An Appeal to Theories of Economic Regulation, 5 Bell J.
Mgmt. Sci. 359 (1974.)
45
For a definition of the “public reputational accountability”, see W. R. Grant et al. id 34, at 9.
44
19
influence governmental choices towards a more protective stance for the Area’s environment. In this
case the two-level game in international politics may end to an almost zero sum-up for the environment.
Third-party involvement seems to be limited both on grounds of non-intentional lack of interest and
non-existing institutional avenues. Mobilization of civil society forces is, however, both necessary for
achieving effective protection of the Area’s natural environment, and a procedural right that should be
attributed to civil society and non-member States due to the legal qualification of the Area as part of the
common heritage of the humankind. In order to balance the range of the above mentioned imbalances
and further accountability mechanisms should be established.
6. Proposals for Financial and Environmental Accountability Mechanisms
ISA’s activities have important financial and environmental aspects. These two sets of issues require
different accountability mechanisms. First, due to the importance of the future financial management by
the Enterprise, it is necessary that external fiscal accountability mechanisms be established. These
mechanisms should aim towards fairness regarding the allocation of the resources and issues of
transparency. Potential approaches could, for instance, include accountability mechanisms similar to
those pertinent to international financial institutions (IFIs), such as the World Bank or the International
Monetary Fund (IMF), 46 or fiscal accountability mechanisms functioning within the framework of
international banks, such as the introduction of an Ombudsman, should also be considered.47
46
For a discussion on the accountability mechanisms of financial institutions, see, Daniel D. Bradlow, Private Complainants
and International Organizations: A Comparative Study of the Independent Inspection Mechanisms in International Financial
Institutions, 36 Geo. J. Int'l L. 403, (2005.)
47
See for detailed information, Eisuke Suzuki et al., Responsibility of International Organizations: the Accountability
Mechanisms of Multilateral Development Banks, 27 Mich. J. Int'l L. 177 (2005.)
20
Fiscal accountability would possibly be further enhanced by the establishment of a supervisory body or
committee affiliated with the UN or belonging to the UN, such as the committees supervising the
progress of the Millennium Development Goals (MDGs) in regard with all the funds spent towards their
achievement.48 The UN as the organization that above any other organization represents the humankind,
being not only the international organization that enjoys the most universal participation, but also having
a comprehensive mandate to promote all the basic interests for the well-being of humankind.49 The UN
has further the organizational structure to represent various interests and solve conflicting mandates, as
is for instance the one between economic growth and environmental protection. To this end, another
possibility is the establishment of an external body with auditing competence regarding financial
management of the Area resources by the Enterprise. This external auditing body could report both to
the Assembly of the ISA and the UN.
Apart from the experts’ involvement, the ISA should also set up external accountability mechanisms,
especially for non-state actors, such as environmentally-sensitive groups. International practice can
show various possibilities for third party involvement through information gathering, submission of
complaints and dispute settlement mechanisms. One of the most prominent examples that satisfy this
requirement is the model of the Inspection Panel established by the World Bank, where individuals,
members of the civil society and non-member states may submit complains for social and environmental
48
See, e.g. www.millenniumgoals.com (last visited July 18, 2006.)
Internal accountability mechanisms could not adequately respond to the interests of the humankind, if humankind is not
represented as such in the organizational structure of the international organization, or if there is no external accountability
mechanism or at least any other strong affiliation with an organization or entity that genuinely represents the humankind.
Even in cases where an organization is of universal participation, the sum up of the states does not equal an organized
representation of the humankind or the dynamics and the complexity of interests the international community has. One of the
basic explanations to this end is that the representatives to the international organizations are mostly representatives of the
governments of the states. Governmental policies do not always represent the interests and policy choices of major groups
within their borders, such as environmental groups.
49
21
adverse effects of projects funded by the Bank 50 A further useful example is the citizen submissions
process that art. 14 and 15 of the North American Agreement on Environmental Cooperation 51 introduce
in order to promote compliance with environmental laws.52
Another option to satisfy the participation requirement on behalf of the humankind for the ISA is to
adoption of several models of review, as for instance the recently established External Review
Committee on IMF-World Bank Collaboration mandated by the World Bank President and the
Managing Director of the IMF to examine the areas of Bank-Fund collaboration and propose
improvements. The Committee’s members are ministers of finances and other high-level administrators
of private and public financial institutions. In proceeding with its work, the committee has decided to
solicit views from the public, and has asked the World Bank and the IMF to establish an electronic
mailbox for the public to offer their comments and perspectives on possible improvement to be made on
division of labor and collaboration between the IMF and the World Bank.53
Last, in order to satisfy the requirement of the non-state actors and non-member states to hold the ISA
accountable, there should be an enlargement of the circle of actors holding the right to bring proceedings
before the ITLOS or other dispute settlement bodies.
50
Daniel D. Bradlow, International Organizations and Private Complaints: The Case of the World Bank Inspection Panel,
34 VA. J. INT’L L. 553, 554 (1994.); Daniel Bradlow & Sabine Schlemmer-Schulte, The World Bank's New Inspection
Panel: A Constructive Step in the Transformation of the International Legal Order, 54 ZEITSCHRIFT FUR
AUSLANDISCHES OFFENTLICHES RECHT UND VOLKERRECHT (THE HEIDELBERG J. INT'L L.) 353, 395 (1994.)
See, also: THE STRUGGLE FOR ACCOUNTABILITY: THE WORLD BANK, NGOS AND GRASSROOTS
MOVEMENTS, (Fox, Jonathan A. and L. David Brown, eds.), (Cambridge: MIT Press 1998.)
51
North American Free Trade Agreement on Environmental Cooperation, Sept. 14, 1993, art. 8-19, 32 I.L.M. 1480 (entered
in force Jan. 1, 1994.)
52
See, David L. Markell, Governance of International Institutions: a Preview of the North American Commission for
Environmental Cooperation’s Citizen Submissions Process, 30 N.C. J. Int'l L. & Com. Reg. 759 (2005); John H. Knox, A
New Approach to Compliance with International Environmental Law: The Submissions Procedures of the NAFTA
Environmental Commission, 28 Ecology L.Q. 1 (2001.)
53
For
more
information,
visit:
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20967681~pagePK:64257043~piPK:437376~theSit
ePK:4607,00.html (last visited on July 25, 2006.)
22
23
Conclusion
The ISA is an international organization with an important mandate, to manage financially profitable
biological and mineral resources lying in the Area and at the same time to protect its fragile and
invaluable natural environment. In the face of disastrous environmental risks and intense competition of
financial interests after the commencement of the commercial exploitation of the resources of the Area,
the ISA should equip itself with additional accountability mechanisms than those traditionally available
to international institutions.
New venues where civil society and non-member states to the LOS
Convention and the ISA could have a say are necessary for both the protection of the natural
environment and the equitable allocation of the deep seabed wealth. Additions, such as an inspection
panel or the expansion of the circle of interesting parties to initiate judicial proceedings before the
International Tribunal of the Law of the Sea and finally institutional supervision by the UN, are
necessary under the good governance concept. Last, principles, such as transparency, and procedural
rights, such as access to information for the civil society, deriving from the realm of the global
administrative law (GAL) should complement ISA’s legislative framework and make the organization
further open and accountable to the international community.
24