Nauru triggers two-year countdown for deep seabed mining

On 25 June 2021, the Republic of Nauru (“Nauru”) triggered a two-year countdown for the International Seabed Authority (the “ISA”) to finalise the regulations for the exploitation of minerals in the international seabed.  If ISA does not complete those regulations within two years, deep seabed mining contractors could commence exploitation based on provisionally adopted regulations.

 

ISA regulates all mining activities in the international seabed beyond the limits of national jurisdiction (the “Area”).  ISA is an autonomous international organisation established under the 1982 United Nations Convention on the Law of the Sea (“UNCLOS”).  No mining activities, whether exploration or exploitation, can take place in the Area without an appropriate licence from ISA.

 

ISA has developed a detailed licensing system for prospecting and the exploration of the Area, but it is yet to adopt such a system for the exploitation of mineral resources in the Area.  ISA has adopted three-sets of exploration regulations and it has granted 31 exploration licences to a total of 22 national agencies and private companies.  In the absence of exploitation regulations, those contractors, in principle, cannot move to the exploitation phase yet.  Since 2014, ISA has been developing exploitation regulations.  Although, those regulations remain in draft form, significant progress has been made.  They comprise more than 117 pages of complex technical and legal considerations and are accompanied by several detailed draft standards and guidelines.

 

Nauru has now invoked the 1994 Agreement relating to the Implementation of Part XI of UNCLOS, Annex 1, Section 1(15) to request that ISA adopt the exploitation regulations necessary to facilitate the approval of plans of work for exploitation in the Area.  Nauru made this request on the basis that Nauru Ocean Resources Inc (“NORI”), a State-sponsored Nauruan contractor and a wholly-owned subsidiary of The Metals Company, intends to apply for approval of a plan of work for exploitation in two years.

 

If in two years’ time ISA has not completed the exploitation regulations, ISA shall consider plans of work from NORI and other contractors, based on provisionally adopted regulations.  The current draft exploitation regulations (which would likely be adopted provisionally) foresee a one-year process to review a plan of work for exploitation.  As such, commercial mining could potentially commence in three years time.  Notably, however, ISA can refuse to approve a plan of work and thereby prevent exploitation in the Area.

 

Nauru explained that it triggered the two-year count down because of “the urgency of concluding [the exploitation regulations] […] to provide the legal certainty required for this industry to move forward.”  Others that support Nauru’s initiative point towards the need to unlock mineral resources in the Area to accelerate the green energy transition.  Opponents like Deep Ocean Stewardship Initiative, however, warn that two years is not sufficient to allow for scientifically informed decision-making and that rushing the regulations would run counter to the precautionary approach.  A collective of African States has criticised Nauru’s action noting that key sections of the exploitation regulations have yet to be agreed, in particular a financial regime that compensates land-based miners for their losses.

 

For further information, please contact Robert Volterra (Robert.Volterra@volterrafietta.com), Angela Ha (Angela.Ha@volterrafietta.com) or Florentine Vos (Florentine.Vos@volterrafietta.com).

See here for the Volterra Fietta virtual seminar on the subject of deep seabed mining.