135 



The Enterprise does not have taxing authority. 



The relationship of the Governing Board of the Enterprise 

 and the Council and Assembly under the current text of the 

 Authority is very complex. The Council has the power to issue 

 directions, but need not do so. If the Council chooses not 

 to restrain the Enterprise, the Enterprise's potential range 

 of action is very wide. Under the current Council composi- 

 tion and voting structure, we would have to depend upon 

 developing countries to help us impose that restraint. 

 On the record to date, the extent to which they would be 

 willing to do so is open to serious question. 



10. On page 5, you state that the Enterprise could 

 eventually monopolize production of seabed minerals. How is 

 this possible in view of the fact that the proposed seabed 

 authority is to be structured according to a parallel system 

 on which there is substantial consensus and which, in turn 

 means that the third world is not likely to seek a monolopy? 



A. The Enterprise could establish a dominant position 

 in, and eventually monopolize seabed mining in two ways. 

 First, under the current text, it has many advantages over 

 the "private side" of the parallel system, such as free, pro- 

 spected mine-sites, access, the right to purchase if neces- 

 sary, the most advanced seabed mining technology, interest 

 free and guaranteed loans for an initial mining operation, a 

 ten-year holiday from the payment of proceeds to the Authority, 

 probable exemption from taxes in countries where its processing 



