Deep-Sea Mining: Dispute Settlements Under International Investment Law

Deep-sea mining activities on the seabed and ocean floor beyond national waters are a risky and capital-intensive venture. The unpredictability of little-known ecosystems and environmental impacts translate into regulatory uncertainty where a sponsoring state may be tempted to revoke sponsorship, amend the applicable regulations or alter the agreed economic bargain.

Contractors – parties exploring for minerals in these areas – and their ultimate foreign investors, therefore, seek robust contractual or international frameworks to protect their rights and their investment.

As the authors explored in the first part of the series, a contractor – such as a corporation, entity or individual – can only apply for the right to exploit the minerals on the international seabed once it is sponsored by a state party to the UN Convention of the Law of the Sea (UNCLOS) under a sponsorship agreement. The most important contract for contractors, as covered in part two, is the exploitation contract with the International Seabed Authority (ISA), which grants them access to the minerals and defines their rights and obligations for exploration.

In addition to the dispute resolution mechanisms enshrined sponsorship agreement and the exploitation contract, there may be another international regime available to contractors to protect their investment: international investment law.

While the applicability of international investment law to disputes between contractors and sponsoring states is so far only theoretical and untested, this article provides an overview of the requirements to bring a claim under an international investment treaty.

Read part three on Mining Technology.