Deep-sea mining: running out of time? | Vinson & Elkins LLP
As outlined in our previous deep-sea mining warning year, the deep-sea floor is rich in mineral concretions containing cobalt, nickel, copper and manganese, called polymetallic nodules. A large number of these nodules are located in the seabed outside national jurisdiction (the “Area”), an area covered by the 1982 United Nations Convention on the Law of the Sea (“UNCLOS”) . The International Seabed Authority (“ISA”) is responsible for protecting the marine environment and regulating activities in the international seabed area. Since 2011, the ISA has been developing a regulatory framework for deep-sea bottom exploitation activities. The first part of the board of directors of the ISA (the “Board”) 28e session closed on March 31, 2023. The two weeks of negotiations ended without approval of rules and regulations for the exploitation of the deep-sea bed.
The ISA is under unprecedented pressure for three main reasons. First, the ISA is tasked with regulating access to highly valuable resources. The deep-sea floor is home to billions of polymetallic nodules, each containing critical raw materials needed for many processes, including the clean energy transition. The Metals Company announced that it will apply for an exploitation contract this year.1 Second, the ISA operates under a very tight timeline. On June 25, 2021, Nauru activated a clause requiring the Council to complete the elaboration of all relevant operating regulations by July 9, 2023 (i.e within two years of Nauru activating its request).2 Third, the international and scientific communities have urged caution and proposed moratoriums to protect the fragile environment. At the end of January, the French parliament voted to ban deep-sea mining in its waters.3 France, Spain, Chile, New Zealand and several Pacific nations have called for a “precautionary pause” or ban on high seas mining.4 Several countries again called for a moratorium on deep-sea mining during the Council meeting.
The approval process set out in the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea dated December 10, 1982 (the “Agreement”) is the Legal and Technical Commission (“LTC”) ) required, a subordinate body of the Council, to review a proposed mineral extraction work plan, based on some provisions of the agreement and operating rules yet to be adopted.5 The LTC would then make recommendations to the Board, which would make the final decision on whether or not to approve the application.
Of particular importance in the impasse of the Operating Rules, Section 1(15)(c) of the Schedule to Part XI of the Agreement provides:6
“15. The Authority shall, in accordance with Article 162(2)(o)(ii) of the Convention, establish and adopt rules, regulations and procedures based on the principles contained in Sections 2, 5, 6, 7 and 8 of this Annex, as well as any additional rules, regulations and procedures necessary to facilitate the approval of plans of work for exploration or exploitation, in accordance with the following sub-paragraphs:
(C) If the Council has not completed the elaboration of the rules, regulations and procedures relating to exploitation within the set period and an application for approval of an exploitation work plan is being processedit will nevertheless to consider and provisionally approve such plan of work on the basis of the provisions of the Convention and any rules, regulations and procedures which the Council may have provisionally adopted, or on the standards contained in the Convention and the conditions and principles contained in this Annex, as well as the principle of non-discrimination between contractors.” (emphasis added)
There is no consensus on the meaning of “to consider and provisionally approve”, nor what procedure and criteria should be followed for this consideration and provisional approval.
Despite the continued lack of regulatory progress, but in line with Article 1 point 15, the Council issued a decision on 30 March 2023 to allow companies to submit work plans (i.e license applications) from 9 July 2023.7 The decision states that:8
- the LTC is under no obligation to recommend approval or disapproval of a plan of work, nor to make any recommendation;
- the decision includes an agreement that the Council is not obliged to consider a plan of work, but that it has the power to decide whether or not to provisionally approve it; And
- according to the decree, the secretary-general must inform states within three days of the submission of a plan of work.
However, it remains unclear how the LTC/Council would review and approve applications for a provisional license without any guidance as the Operating Scheme is still in draft form. In particular, the decision does not address the question of what guidelines the Council can give the LTC when assessing the applications. It is also unclear what specific activities would be permitted under such provisional permits. Finally, would companies that have received a provisional license be allowed to start their mining activities immediately or should they wait for the regulatory framework to be put in place?
The second part of the 28th session of the Board will start in a few weeks, on July 10, 2023. We at V&E will continue to monitor the Board’s discussions and the possible outcome.
1 To see Timeline, The Metals Company, https://metals.co/timeline/. At an event that took place on the penultimate day of the Council meeting, the CEO of the Metals Company stated: “The ISA doesn’t decide down there whether this is going to happen or not, it decides(Water Tower Research fireside chat, March 30, 2023 (quote from DSCC Interventions – 3/31/23 transcript at https://savethehighseas.org/isa-tracker/2023/03/31/dscc-interventions-31-3 – 23/)).
2 Int’l Seabed Auth.,”Nauru requests ISA Board Chair to finalize approval of rules, regulations and procedures necessary to facilitate approval of work plans for exploitation in the area(June 29, 2021), https://www.isa.org.jm/news/nauru-requests-president-isa-council-complete-adoption-rules-regulations-and-procedures/.
3 Lottie Limbs,”France votes to ban deep-sea mining in its waters: why is this practice so controversial?Euronews (22 January 2023), https://www.euronews.com/green/2023/01/18/france-votes-to-ban-deep-sea-mining-in-its-waters-why-is – this-practice-so-controversial.
4 Germany calls for ‘precautionary pause’ before deep-sea mining beginsThe Guardian (Nov 2, 2022), https://www.theguardian.com/environment/2022/nov/02/germany-calls-for-precautionary-pause-before-deep-sea-mining-industry-starts ; Spain’s parliament supports a ‘precautionary pause’ for deep-sea miningSeas At Risk, (February 22, 2023), https://seas-at-risk.org/general-news/spanish-parliament-throws-support-behind-a-precautionary-pause-on-deep-sea-mining/ #:~:text=In%20a%20sign%20that%20momentum,of%20%20are%20own%20national%20waters.
5 Annex to Agreement Implementing Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, Article 1:6.
6 Annex to Agreement Implementing Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, Article 1:15.
7 Decision of the Council of the International Seabed Authority on the Understanding and Application of Section 1:15 of the Annex to the Agreement Implementing Part XI of the United Nations Convention on the Law of the Sea (ISBA/28/C/ 9, March 31, 2023), https://www.isa.org.jm/wp-content/uploads/2023/04/2306127E.pdf.
8 ID card.