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Deep Seabed mining in the Pacific, a recent lecture prompts the question - Who bears the legal risk under the legal framework for seabed mining outside areas of national jurisdiction (the Area)?

Aug 6, 2019 12:48:10 PM / by James Sloan

On Friday 2 August 2019, the School of Marine Studies at the University of the South Pacific (USP) hosted an informative and well attended public lecture entitled “The issue of Deep Seabed Mining and Pacific Island States”. The lecture was jointly delivered by Mr Akuila Tawake from the CROP agency SPC who covered technical aspects of deep seabed mining and Mr Michael W Lodge, the Secretary General of the International Seabed Authority (ISA).

The lecture was an impressive achievement given that it was arranged a day or so before when Mr Lodge dropped in to say hello to his old friend, Dr Joeli Veitayaki. The high attendance at this public lecture and the robust nature of debate and questions are indicative of the interest and concern that exists in the region relating to the potential risks and rewards for mining ventures that if they do take place will be in areas of seabed beyond the national jurisdictions of continental shelves. This area of seabed beyond national jurisdictions is defined by the 1982 United Nations Convention of the Law of the Sea (LOSC) as “the Area”.

We were privileged to be joined by Mr Lodge who provided an informative and eloquent talk in his role as Secretary General of ISA. ISA is the international organisation created by LOSC to regulate deep seabed mining in the Area. In this legal bulletin we update on his lecture and consider the specific question of legal risk associated with DSM. Please see our earlier legal bulletin for a full explanation of the legal framework for seabed mining, including deep seabed mining in the Area: here


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Attendees at the School of Marine Studies lecture Theatre, USP, on Friday 2 August 2019

Who bears the legal risk under the legal framework for seabed mining outside areas of national jurisdiction (the Area)?

Mr Lodge explained in a robust question and answer session following his presentation that he is not the ISA. The ISA comprises and represents 168 nation States (including Fiji and other Pacific Island States) that are signatories to the LOSC. As such, the question of whether to licence any particular seabed mining activity is determined by ISA. ISA, as the regulator of deep seabed mining in the Area is responsible for granting licences and various efforts to minimise the risks associated with seabed mining are being taken into account before any exploitation licences are granted. At the time of writing, while exploratory licences have been granted, no exploitation licences have, as yet, been granted.

The ISA is responsible, pursuant to LOSC to protect the marine environment and its flora and fauna. For this reason, the ISA is actively monitoring the development of technology to manage the environmental impact of deep seabed mining. Mr Lodge provided this slide to illustrate this point:

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In addition, it was explained that in accordance with the regulatory framework ISA has various other regulatory responsibilities that include but are not limited to equitable sharing of the benefits of deep sea bed mining for humankind, promoting the participation of developing States including Pacific Island States in deep seabed mining, and ensuring the safety of deep seabed mining.

Mr Lodge pointed out that out of all extractive industries globally, deep seabed mining is the first to be regulated before it starts and also pointed to numerous scientific discoveries that had been made and shared during exploratory stages licensed by ISA. The point was also made that there has been genuine progress made to promote the interests of Pacific Island States with both Nauru and Tonga securing rights to mine specific areas of deep seabed under the Pacific Ocean known as the Clarion Clipperton Zone.

ISA has also, via a regional environmental management plan, set some areas aside under the Pacific ocean where mining cannot happen as they are ‘areas of Particular Environmental Interest’.

These slides presented by Mr Lodge show the efforts that ISA is making to fulfil its obligation to protect the marine environment, and the second slide shows that to date 1.6 million sq km of seafloor is protected from mining:

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However, despite all the best laid plans, the history of the extractive industries, particularly in the oil and gas sector, has shown the potential for environmental catastrophe. In short, there is always a risk that things can go wrong, and this is why there is genuine concern about the potential negative impacts of deep seabed mining in the Pacific.

In response to concerns raised from the audience, Mr Lodge explained that the ISA would welcome more dialogue on concerns about deep seabed mining and suggested that ISA would be willing to host a delegation from the Pacific to have an open dialogue, while stressing that ultimately the question of whether to licence deep seabed mining activities is for the 168 countries that make up ISA.

This discussion should in our view include the important question of legal risk for Pacific Island States. This is because, while the Area and its resources are the common heritage of humankind, it is most likely that the ISA will provide exploitation licences or contracts to deep seabed mining companies who will be sponsored by a Pacific Island State as well as other nation States. This focus on Pacific Island States demonstrates that the ISA is meeting a commitment to encourage the participation of Pacific nations in the industry.

The system of contracts or licences that ISA will implement was envisaged by LOSC in 1982, and before ISA can licence exploitation activity ISA is required to set internationally binding regulations, assess applicants for licences and then set the conditions of those licences. This provides the ISA with an overarching role to vet applicants for deep seabed exploitation licences based on qualification requirements as well as meeting environmental standards in accordance with Regulations for Exploitation that ISA is currently developing.

But, there is also risk for sponsoring parties, like Nauru, Tonga, Tuvalu, Kiribati and the Cook Islands (all States that have started preparations to be sponsoring States with Nauru, Tonga and Tuvalu the most advanced) in this region, as they are the States who are responsible to ensure the contractor adheres to LOSC and the ISA rules. In undertaking this role sponsoring States can impose additional standards and requirements via its national law.

In response to a question on legal risk (if despite all ISA’s best efforts to minimise risk something goes wrong), Mr Lodge explained sponsoring States will not bear the risk if the State implements the law and meets all legal requirements. It is partly for this reason that each sponsoring State is required to enact sufficient and applicable national legislation to ensure that the contractor will comply with the conditions of its ISA contract. This legislation should include detailed provisions for financial and technical compliance as well as sanctions for non-compliance.

This reflects the principle that the sponsoring State would be prima facie liable for any damage incurred by any mining activity in the Area that it sponsors. The sponsoring State therefore carries legal risk, except where the State has met its duty as a sponsoring State including via the enactment and effective implementation of such legislation. This was confirmed by the International Tribunal on the Law of the Sea (ITLOS) in an advisory opinion (case number 17 - Responsibilities and obligations of States with respect to activities in the Area). In its opinion ITLOS provided that the sponsoring State must exercise high standards of due diligence to secure compliance with the terms of the contract awarded by ISA. It seems to follow, as a matter of logic, that if a sponsoring State does not exercise high standards of due diligence then there is legal risk. What the potential consequences would be for sponsoring States are, in our view, unclear. But it seems to us that there is a risk that the sponsoring State could find itself in breach of its international legal obligations and responsibilities pursuant to LOSC.

Sponsoring States and the precautionary approach

It follows that sponsoring States should remain cautious about who/which commercial entities they decide to sponsor. ITLOS specifically mentioned that principles like due diligence, the requirement for EIAs and the exercise of the precautionary approach should apply before awarding contracts to exploit the Area.

Further, sponsoring States should consider and ensure that they have the capabilities and resources to enforce the technical and financial rules that will apply to the exploitation licence, because if they do not, then it may be possible that those States will not meet the standards set out by ITLOS and could, if an environmental disaster occurs, be in breach of their obligation in LOSC to protect the marine environment.

Should deep seabed mining proceed at the present time?

Mr Lodge was clear this question is for the 168 States parties that comprise the ISA.

However, bearing in mind:

  • the significant technical hurdles that deep seabed mining faces;
  • the lack of conclusive scientific evidence of the potential harmful effects on existing resources;
  • the importance of protecting marine biodiversity and the marine environment;
  • the potential legal risks for sponsoring States including but not limited to from poor operators or shell companies (companies without financial depth);
  • the fact that 37 years have already passed since LOSC was created and the minerals aren’t going anywhere;
  • the principle of the precautionary approach; and
  • there has been a call for a moratorium on deep seabed mining,

there are persuasive arguments for taking more time for further discussion and consensus aimed at ensuring all sponsoring States are ready and able to regulate this new mining industry and take care of the concerns. For more information on the concerns related to deep seabed mining please see here.

For these reasons, it may be a good idea for a delegation of concerned stakeholders from the Pacific to present at ISA and encourage an open dialogue related to those concerns. Such a dialogue would support good decision making processes and principles that take into account all views, scientific evidence and customary legal principles like transparency and accountability, EIAs and the precautionary approach. The purpose of such a dialogue would be to assist nation States to meet their important international obligations contained in LOSC and other sources of international law.

 

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Mr Lodge presents a slide that shows the scale and size of the Area

 

With thanks to: Mr Michael W Lodge and Mr Akuila Tawake for their informative presentations, Dr Joeli Veitayaki for his excellent initiative and the School of Marine Studies at USP for providing the venue for such an informative and important event.

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Please note: This is not intended to be and should not be relied upon as legal advice. This update is provided for general information purposes only.

 

Topics: Oceans Law, Pacific, Maritime boundaries, Environmental governance, Environmental decision making, Fiji commercial lawyers, Integrated Oceans Management Pacific, Pacific Ocean Rights, Pacific Blue Economy, Large Ocean States, Seabed Mining, Deep Seabed Mining, Pacific Ocean, Precautionary Principle, School of Marine Studies, University of the South Pacific

Written by James Sloan

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