Conn Nugent, senior fellow at The Ocean Foundation, spoke at a virtual meeting of the RNRF Washington Round Table on Public Policy on July 22, 2020. His talk was titled, “Recent developments in rulemaking and rule enforcement that govern mining of the ocean floor beyond national jurisdictions.” Nugent previously served as the project director for the Seabed Mining Project at the Pew Charitable Trusts, and also served as the president of the Heinz Center for Science, Economics, and the Environment, a Washington think-tank. He also served as executive director of International Physicians for the Prevention of Nuclear War, at the time that it was awarded the Nobel Peace Prize.

Nugent began his presentation with a brief history of the international governance structures for deep seabed mineral mining. The UN Convention on the Law of the Sea, first conceived in the 1970s and revised in the 1990s, provided the first legal framework for the eventual exploitation of seabed minerals in international waters. The treaty contemplates and encourages the mineral exploitation of the international seabed, or the area of the ocean floor outside of any country’s exclusive economic zone, an area that constitutes about half of the area of the world’s ocean floor. The organization created under UNCLOS to regulate the exploration and exploitation of mineral resources in international waters is called the International Seabed Authority (ISA). All 160 states which have ratified UNCLOS are members of the ISA. This does not include the United States, which has not yet ratified the treaty.

Under UNCLOS, the international ocean floor and the minerals found there are considered the “common heritage of mankind.” This means that any activity to exploit the assets in this area must simultaneously protect the marine environment. It also dictates that the operation of mining and the production of metals from the international seabed shall not harm the financial interests of developing countries. These requirements create a need for balance in the execution of the treaty. If minerals are to be mined from the deep seabed to embody the common heritage of mankind, it should be done in an equitable way that does minimal harm to the marine environment. The proceedings of the ISA can be described as attempts to achieve this balance while planning for the commencement of mining activity.

ISA functions are contracted to the ISA secretariat, the Legal and Technical Commission (LTC), and the ISA Council, which collectively try to ensure that all relevant national and international interests are represented in decision making. There are 30 exploration contracts currently in force at the ISA, 18 of which are for exploration in the Clarion-Clipperton Zone, a vast area of the middle Pacific which houses a large supply of polymetallic nodules. The other 12 contracts give license to explore either hydrothermal vent zones or cobalt-rich crusts on sea mounts. These exploration contracts allow contractors to prospect and gather data about mineral resources on the deep seabed, but do not allow for the commencement of mining activity. The deep seabed mining activity that is most likely to commence first is the removal of polymetallic nodules from the Clarion-Clipperton Zone. It is not clear to what extent the environmental regulations developed for nodule removal will apply to other types of mining activity.

The main priority of the ISA right now is to develop regulations for exploitation contracts, which will actually authorize contractors to commence mining activity on the deep seabed. Until these regulations are finalized and approved, no exploitation contracts can be issued. The mining code will consist of environmental regulations which will apply to all contractors in all places. It will also dictate how frequently these rules need to be updated, and the reporting requirements for data received in the act of exploitation. While these regulations were originally supposed to be completed by the end of 2020, that is very unlikely. Nugent predicted that the earliest he foresees the exploitation regulations being formally approved is 2022.

In addition to these non-region-specific environmental regulations, the ISA is also developing Regional Environmental Management Plans (REMPs). These are different sets of environmental regulations which will be applied to specific areas of the seabed. Originally, these were viewed as a supplementary set of rules, not applicable with the same force of law as the non-regional regulations. However, as the code has been developed, the importance of REMPs has increased, and they are now a precondition to any mineral exploitation on the deep seabed. This change happened largely due to the interests of some nation-states and observer comments.

In the next two years, new REMPs will potentially be finalized for the Clarion-Clipperton Zone, hydrothermal vent zones (particularly along the mid-Atlantic ridge), and western Pacific sea mounts. The content of these REMPs, including the differences between them, were also originally intended to be finalized by the end of 2020. However, complications in the science and the interests of certain member states have delayed the process. In particular, some European states such as Germany and the Netherlands have accentuated the importance of ensuring that REMPs are strict and enforceable.

The fact that mineral resources found on the deep seabed are considered the common heritage of mankind has made discussions of the financial aspects of the mining code another point of disagreement in negotiations. There is an ongoing debate about whether financial payments should be based on royalties – known as the ad valorum approach – or use a profit-sharing mechanism. For the most part, this debate is taking place between representatives from China, who support the implementation of a profit-sharing mechanism, and contractors from the EU and North America who prefer a standard ad valorum royalty approach. There is also disagreement about whether special financial inducements should be granted to “pioneer” contractors who do not yet have the benefit of experience to guide their mining operations, and if they are granted, what the nature of those inducements should be. These financial discussions are also taking longer than anticipated, contributing to delays in the development of the mining code.

Nugent predicted that, barring further delays, the mining code will likely be finalized in 2022. There is some possibility that it will take longer than that; the COVID-19 pandemic has slowed negotiations, which were not exactly expeditious even at their most efficient. However, in general, the ISA secretariat and council are operating at higher levels of analysis and member participation than previously. During the Q&A session of the round table, Nugent noted that, while general engagement in the rulemaking process is increasing, different states have different motivations for becoming more involved. This is partially a product of which government authority represents each country in their ISA delegation. For example, some national governments send representatives from their environmental protection agencies, and others send representatives from their mining departments. Generally speaking, in the last few years, western European delegates such as Germany and the Netherlands have advocated for a more strongly environmentalist agenda. Costa Rica has also emerged as an advocate for increased discussion among member states, safeguards for the environment, and the use of external expertise to inform ISA decision making.

There has been an element of controversy about whether the ISA has the technical and administrative capacity to accomplish the work required to approve exploitation plans and enforce REMPs. The trend has definitely been toward the introduction of outside experts, retained by the LTC of the ISA, particularly to aid in the development of REMPs. Especially in the past year, the ISA council has welcomed outside expertise to provide information and recommendations for development of environmental regulations, reporting requirements, etc. Nugent remarked during the Q&A session that member states have generally agreed upon the utility of bringing in external experts to inform ISA discussions due to skepticism that the ISA has the capacity and funding to conduct the necessary analyses itself for seabed mining to commence.

Increasingly, representatives from environmental organizations are taking tougher anti-exploitation stances. Environmental organizations make up the majority of the observer groups to the ISA. Other observers include representatives from industry and potential contractors. Some environmental groups are calling for an outright ban on exploitation activity on the deep seabed. Others are calling for moratoriums on any exploitation activity until much more scientific information about environmental impacts is gathered, since it is widely acknowledged that scientists are only beginning to understand the benthic ecosystems which would be harmed by mining activity. In the general population as well, there has been a definite rise in interest in the issue of seabed mining, and among those who have become acquainted with the issue, Nugent noted that the general sentiment is overwhelmingly anti-mining.

Another recent development in the seabed mining conversation concerns a Canadian mining operation called Deep Green, which Nugent described as the most vocal and publicly oriented of the seabed mining contractors. Deep Green already has exploration contracts with three small island states in the Pacific, but like all other mining companies, is waiting for the mining code to be finalized so that it can receive exploitation contracts and begin mining the seabed. Much of their public messaging is centered around the argument that seabed mining will play a necessary role in the fight against climate change, despite the inevitable environmental impacts of mining operations on ocean ecosystems. They propose that, in order to make possible the renewable energy solutions that will be necessary to transition away from fossil fuels, massive production of batteries will be necessary. Demand for batteries will increase due to their use in many renewable energy technologies, thereby increasing the need for the minerals used in their production. This raises the question of how these minerals can be procured in the least destructive manner possible.

Deep Green argues that the wealth of minerals housed in polymetallic nodules on the Pacific deep seabed are the answer to this question. They say that harvesting nodules from the Clarion-Clipperton Zone would cause less harm than terrestrial mineral mining alternatives. Therefore, the deep seabed represents the most environmentally friendly source of many minerals necessary to solve climate change. While this is not an argument supported by most environmental groups, it is an environmentally couched argument nonetheless. No mining activity, marine or terrestrial, is without environmental impact. Deep Green raises the question: to what extent should the assessment of environmental damage caused by seabed mining be limited to impacts on the ocean environment alone, and how much can the frame of reference be expanded to include a comparison to terrestrial mining of the same minerals?

Nugent ended his presentation by discussing an issue that he deems underrepresented in the discourse surrounding deep seabed mineral mining. Some ISA member states, including China, Japan, Russia, and Korea, seem interested in the prospects for mining of the cobalt-rich crusts of sea mounts in the western Pacific. It has been hypothesized that many of these states are not as interested in the mining of sea mounts in international waters as they are in mining the mounts within their exclusive economic zones. It is possible that these states are seeking an ISA standard for mining these features which they can replicate in their own national legislation. Nugent said that, while other aspects of ISA proceedings usually attract more attention, it is worth considering the possibility that the environmental regulations developed by the ISA for mining on western Pacific sea mounts could also be applied to mining activities in countries’ exclusive economic zones. — Stephen Yaeger, RNRF Program Manager