The Wild West of Deep-Sea Mining

The International Seabed Authority is racing to draft regulations for the nascent deep-sea mining industry.

Published May 19, 2017

In the coming years, a new gold rush will begin. Deep beneath the ocean’s waves, from scalding hydrothermal vents to the frigid stretches of the abyssal plain, ocean processes have deposited vast quantities of valuable minerals on the seafloor. Now, the convergence of technological development and political will has placed this ore within reach. But like the gold rushes of old, the deep-sea-mining industry is emerging on the frontiers of society, far from legislatures and law enforcement.

Officially, the nascent deep-sea-mining industry is governed by the International Seabed Authority (ISA), an intergovernmental organization established in 1996 by the United Nations Convention on the Law of the Sea (UNCLOS)*. The authority’s critical task is to coordinate its 168 member nations in establishing and enforcing regulations for the developing deep-sea-mining industry.

But the ISA’s teeth are just coming in, says Duncan Currie, a legal advisor to the Deep Sea Conservation Coalition, an advocacy organization. At the moment, the authority still hasn’t created an enforcement agency. In addition, “they won’t and they can’t force countries to comply with ISA regulations when drafting their own laws,” says Currie.**

Back in 1982, when UNCLOS was still under development, US president Ronald Reagan and British prime minister Margaret Thatcher introduced an agreement guiding how the treaty would operate—a provision that also applies to the ISA. According to that agreement, once the ISA receives an application for a mining permit, it has two years to develop regulations. If the ISA does not finalize its rules after two years, it has to give the country provisional approval with whatever rules it has in place.

So far, the ISA has yet to finalize its regulations for deep-sea-mineral extraction. It has, however, already granted 26 permits for deep-sea-mineral exploration in international waters, though none yet for mineral extraction.

Though there appears to be little likelihood of a country bypassing the ISA’s permitting process, “there’s very little to stop them,” Currie says. At the moment, deep-sea mining in international waters is sufficiently far in the future that the regulatory situation has not yet made any country itchy enough to jump the gun, he says.

As it stands, deep-sea mining is a game for two. If a company wants to mine in international waters, it needs to partner up with an ISA member state. The country, in turn, must have regulations to govern the company’s activities. The ISA checks this as part of the application review process, but can’t compel a country to adopt any rules.

“It’s simply a question of peer pressure,” says Michael Lodge, the ISA’s secretary general. “That’s how the international system works.”

If there’s a difference between the country’s laws and those of the ISA, the company must meet the higher standard, says Mike Johnston, CEO of Toronto-based Nautilus Minerals Inc. Nautilus found its partner in the Tongan government, and has since been granted 75,000 square kilometers of prospective territory in the eastern Pacific Ocean.

The international regulations under development will also impact mining in national waters, since UNCLOS member states are required to pass laws that fall in line with international standards. But here again, the ISA does not have the power to compel nations to adopt provisions.

That the ISA has not yet landed on a set of rules puts countries such as Papua New Guinea—where Nautilus plans to open the first commercial deep-sea-mining operation—in an uncertain state. There’s no international template for Papua New Guinea to follow, says Conn Nugent, director of the Pew Charitable Trusts’ efforts to study and guide the development of seabed mining. Papua New Guinea’s Mining Act governs both onshore and offshore activities.

The ISA has also yet to determine how it will enforce regulations and respond to allegations of noncompliance. There are provisions within its mandate to create an inspection arm, says Lodge, but it has not been established because mining has yet to begin. Currently, the ISA has no revenue to fund an enforcement division before mining begins, says Nugent, adding that the two will probably be parallel processes.

The International Tribunal for the Law of the Sea presents one option for member nations to settle disputes, says Nugent. The tribunal was established by UNCLOS to deal with any major disputes that would arise from the treaty.

Still, Nugent has confidence that the ISA will eventually develop and enforce strong policies. Unlike high-seas fishing, which is regulated by more than a dozen regional agencies, the entirety of the international seafloor falls under the ISA’s purview. This centralization will help it create stronger, more coherent regulations for mining, says Nugent.

Besides, says Lodge, deep-sea mining is not a fly-by-night enterprise—a deep-sea-mining operation requires an investment of hundreds of millions of dollars. This means that companies will have to get money from banks, and banks want certainty. “The consequences of license denial are extremely high,” says Lodge. A company that opts to go rogue after failing to get ISA approval will quickly find itself without the financial backing it needs to operate.

Many scientists, however, argue that we do not yet know enough about the potential effects of mining in deep-sea ecosystems to create sound regulations, let alone begin mining. Nugent agrees, but he also notes “the time to write environmental protections is before an activity becomes profitable.

“There are no regulations yet. This is a wonderful, I would even say historic, opportunity to help write the rulebook to [govern] an extractive activity before the activity begins.”

* The International Seabed Authority is an intergovernment agency, not a nongovernmental agency. 
** This paragraph was updated for clarity.