The “Regulations on Exploitation of Mineral Resources in the Area” (hereafter: “Exploitation Rules”) are currently drafted under the auspices of the International Seabed Authority (ISA). It was established by the UN Convention on the Law of the Sea (UNCLOS) to administer exploration and exploitation of marine minerals, such as manganese nodules, from the deep seabed outside national jurisdiction (the “Area”). The following organs of ISA are involved in the establishment of the necessary regulatory framework:
- the Legal and Technical Commission (“LTC”) which is expert-manned;
- the Council, “one step higher”, which consists of 36 state representatives elected under a scheme of inter alia geographical and economical distribution. It presently negotiates the Exploitation Rules and is supposed to submit them for adoption by
- The Assembly, as the highest of the three, comprises representatives of all States Parties to UNCLOS.
The Sea-Bed Disputes Chamber of the International Tribunal for the Law of the Sea shall have jurisdiction relative to disputes arising from the activities in the Area.
Drafting the Exploitation Rules
A number of draft versions of the Exploitation Rules have been generated and discussed over the years. While the instrument has grown in complexity from draft to draft; a specific date for adoption of the Rules seemed hard to identify.
Admittedly, the task to create Exploitation Rules is extremely complex and difficult: Environmental concerns, qualification of the contractors, appropriate monitoring and reporting mechanisms, and a compensation regime compatible with the Common Heritage principle – to mention just a few – require diligent and circumspect drafting. Political and economic factors play also a decisive role.
At the same time, concerns grew about the possible environmental effects of deep seabed mining, and about the small amount of knowledge hence gathered to assess their character and magnitude. A moratorium or a precautionary pause has been demanded from various influential and unsuspicious sides based on these reasons. Other sources indicate, however, that there is significantly less environmental impact from seafloor mining operations than previously assumed.
The above mentioned concerns can be seen as one of the causes for the delay in drafting the Exploitation Rules: Over time, negotiators added more and more precautions, caveats, conditions and procedures to the text with the aim of mitigating the risks of mining to the marine environment. To properly review and integrate them, and thereafter to negotiate them in the ISA Council, takes time and effort.
Meanwhile the drafting process has taken six years. Yet, moves of the Pacific Island State of Nauru put pressure on a speedy completion and adoption of the Exploitation Rules.
Recent Development
In June 2021, Nauru notified ISA that Nauru Ocean Resources Inc. (NORI), a Nauruan entity, sponsored by Nauru, intends to apply for the Approval of a Plan of Work for exploitation. According to the 1994 Agreement relating to the Implementation of Part XI of UNCLOS this notice triggered a 2-year deadline to finalise the Exploitation Rules. However, this “shot across the bow” did not speed up the negotiation process.
While the deadline elapsed in July 2023, the foremost concern of ISA’s executive organ, the Council, was to reach a common understanding on the disputed question of whether absent adopted Exploitation Rules the consideration of an incoming Application for Approval of a Plan of Work could be postponed.
In the 2024 meetings of the Council, a first reading of the Exploitation Rules could be completed, yet not their adoption. The next meeting of the Council will take place in March 2025. Notwithstanding and following its letter of indication of June 2021 Nauru gave notice on 12 November 2024 that NORI is ready to submit its Application for the Approval of its Plan of Work on June 27, 2025.
Nauru underlined that this date shall enable the Council to finally establish its position on how to deal with a submitted Plan of Work when no Exploitation Rules are adopted. On the other hand, ISA has decided to finalize this clarification only once the application has been received. It remains to be seen how this dilemma will be resolved.
Possible Further Process
With the above notice, Nauru made what appears to be a smart move. Yet, it may turn out to be an “own goal” in disguise. The 1994 Agreement lays out the path to follow for such incident quite clearly but its implementation may be very cumbersome and time-consuming:
For if there are no Exploitation Rules adopted when an Application is submitted, the 1994 Agreement in its Annex, Section 1, para 15 (c) provides two alternatives: The Application shall be reviewed either on the basis of the provisions of the Convention and any rules, regulations and procedures that ISA has adopted provisionally, or on the basis of the norms contained in the Convention and the terms and principles contained in the Annex to the 1994 Agreement as well as the principle of non-discrimination among contractors.
There are currently no Rules etc. provisionally adopted by the Council, thus only the second alternative is applicable. However, it is more than open how much time and effort it would take to derive a basis to decide on an approval of the submitted Application from such a broad set of norms as those referred to in said alternative. Expectably, Nauru will push for a decision, and ISA will be torn between two urgent tasks, i.e. to find a solution for Nauru and/or to complete the Exploitation Rules.
Additional pressure comes from two other directions:
First, Nauru claims in its letter of 12 November 2024 that the ISA would breach its obligations under UNCLOS and the 1994 Agreement, both by overstepping the 2-year-deadline as well as by omitting to outline a procedure which would facilitate the approval of an Application for a Plan of Work prior to its receipt. This implies a possible move of NORI/Nauru to have the matter adjudicated by the Seabed Disputes Chamber of the International Law of the Sea Tribunal which could be again very time-consuming and disturbing the work on the draft. Such complaint may possibly include a claim for damages alleged to arise from delayed return on investment.
Second, UNCLOS provides in its Article 208 (3) that the beneficial effects on the Area’s environmental legislation shall be duly taken into account also by coastal states in waters under their jurisdiction. Consequently, those states shall adopt respective laws and regulations no less effective than international rules, standards and recommended practices and procedures.
In fact, many states have already a mature regulatory framework for deep sea mining within their Exclusive Economic Zones. The sooner the Exploitation Rules come into force, the greater the impact on corresponding national legislation. The positive effect on the marine environment is obvious: marine pollution does not respect any borderlines between areas inside and those outside of national jurisdiction.
Conclusion
Thus, there are several reasons to adopt the Exploitation Rules in 2025, provided they can be whittled down to a workable size.
The Secretary-General of the Authority has principally a steering role. The influence of this office on processes within the Authority, as anchored in the rules of procedure of its organs, can hardly be overestimated. Thus, there is great hope that the newly elected person holding this function, Leticia Carvalho, will use this position accordingly.
How strongly UNCLOS can stand guard over an unregulated Area would depend also on the degree of need of states and enterprises to get hold of deep seabed minerals. If market prices soared, and states with large deposits on land were to reduce their export volumes, a worldwide industry relying on electronics as well as on electrical energy produced from renewables might someday be forced to meet very tough decisions.
In the meantime, powerful players like China or the U.S. (not even an UNCLOS member!) will certainly not wait in the sidelines forever, but might one day use their sheer technical and political clout to help themselves to these submarine resources, Exploitation Rules or no. If so, this would be another fierce blow against the rule of law in international relations.
