Deep-sea Mining: Running out of time?

As set out in our previous alert Pivotal Year for Deep-Sea Mining, the deep seabed is rich in mineral concretions containing cobalt, nickel, copper and manganese called polymetallic nodules. A vast number of these nodules are located in the seabed beyond national jurisdiction (the “Area”) an area addressed in the 1982 United Nations Convention on the Law of the Sea (“UNCLOS”) framework. The International Seabed Authority (“ISA”) is responsible for protecting the marine environment and regulating activities in the international seabed Area. The ISA has been working on developing a regulatory framework for exploitation activities of the deep seabed since 2011. The first part of the ISA’s governing council’s (the “Council”) 28^th session closed on 31 March 2023. The two weeks of negotiations concluded without approving rules and regulations on the exploitation of the deep seabed.

The ISA faces unprecedented pressures for three main reasons. First, the ISA is tasked with regulating access to deeply valuable resources. The deep seabed is home to billions of polymetallic nodules, each containing critical raw materials necessary for many processes, including the clean energy transition. The Metals Company announced it was expecting to apply for an exploitation contract this year.¹ Second, the ISA is working under a very tight timeline. On 25 June 2021, Nauru triggered a clause that requires the Council to complete the elaboration of all relevant regulations for exploitation by 9 July 2023 (i.e. within two years of Nauru triggering its request).² Third, the international and scientific communities have urged caution and proposed moratoriums to protect the delicate environment. At the end of January, the French Parliament voted in favour of banning deep-sea mining in its waters.³ France, Spain, Chile, New Zealand and several Pacific nations have called for a “precautionary pause” or a ban on mining in the high seas.⁴ Several nations called again for a moratorium on deep-sea mining during the Council’s meeting.

The approval process set out under the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982 (the “Agreement”) requires the Legal and Technical Commission (“LTC”), a subsidiary body of the Council, to review a proposed plan of work for mineral extraction, based on a number of provisions of the Agreement and the yet to be adopted exploitation regulations.⁵ The LTC would then make recommendations to the Council, which takes the final decision on whether to approve the application.

Of particular importance in the impasse of the exploitation regulations, Section 1(15)(c) of the Annex to Part XI of the Agreement states:⁶

“15. The Authority shall elaborate and adopt, in accordance with article 162, paragraph 2(o)(ii), of the Convention, 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 subparagraphs:

(c) If the Council has not completed the elaboration of the rules, regulations and procedures relating to exploitation within the prescribed time and an application for approval of a plan of work for exploitation is pending, it shall none the less consider and provisionally approve such plan of work based on the provisions of the Convention and any rules, regulations and procedures that the Council may have adopted provisionally, or on the basis of the norms contained in the Convention and the terms and principles contained in this Annex as well as the principle of non-discrimination among contractors.” (emphasis added)

There is no consensus as to the meaning of “consider and provisionally approve,” nor which procedure and criteria should be followed for this consideration and provisional approval.

Notwithstanding the continued lack of progress on the regulatory front, but in accordance with Section 1(15), the Council formulated a decision on 30 March 2023 to allow companies to file plans of work (i.e. permit applications) starting on 9 July 2023.⁷ The decision sets out that:⁸

• the LTC is under no obligation to recommend approval or disapproval of a plan of work, nor does it have an obligation to submit any recommendation at all;
• the decision includes an understanding that the Council does not have any obligation to consider a plan of work, but that it has the capacity to decide whether or not to provisionally approve it; and
• the decision requires the Secretary-General to inform States within three days of a plan of work being submitted.

However, it remains unclear how the LTC/Council would review and approve applications for a provisional license without any guidance, as the exploitation regulations are still in draft form. In particular, the decision does not progress the question of what directives the Council may give the LTC in its review of the applications. It is also unclear what specific activities would be allowed under such provisional licenses. Finally, would companies granted provisional licenses be allowed to begin their mining activities immediately or would they be required to wait for the regulatory framework to be created?

The second part of the Council’s 28th session is set to start in a couple of weeks on 10 July 2023. We at V&E will continue to monitor the Council’s discussions and any potential outcome.

¹ See Timeline, The Metals Company, https://metals.co/timeline/. Speaking at an event taking place on the penultimate day of the Council meeting, the CEO of the Metals Company stated: “The ISA isn’t down there deciding whether this is going to happen or not, that is decided” (Water Tower Research fireside chat, March 30, 2023 (quote from DSCC Interventions – 31/3/23 transcription at https:// savethehighseas.org/isa-tracker/2023/03/31/dscc-interventions-31-3-23/)).

² Int’l Seabed Auth., “Nauru requests the President of ISA Council to complete the adoption of rules, regulations and procedures necessary to facilitate the approval of plans of work 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 Limb, “France votes to ban deep-sea mining in its waters: Why is this practice so controversial?” Euronews (January 22, 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 industry starts, The Guardian (Nov. 2, 2022), https://www.theguardian.com/environment/2022/nov/02/germany-calls-for-precautionary-pause-before-deep-sea-mining-industry-starts; Spanish parliament throws support behind a ‘precautionary pause’ on deep-sea mining, Seas At Risk, (Feb. 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,from%20its%20own%20national%20waters.

⁵ Annex to Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, Section 1:6.

⁶ Annex to Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea of 10 December 1982, Section 1:15.

⁷ Decision of the Council of the International Seabed Authority relating to the understanding and application of section 1:15, of the annex to the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea (ISBA/28/C/9, Mar. 31, 2023), https://www.isa.org.jm/wp-content/uploads/2023/04/2306127E.pdf.

⁸ Id.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.