Vol. 53-1 Federal Update

Federal Update

Deep-Sea Mining and the Two-Year Rule

The seabed of the Pacific Ocean is one of the richest remaining sources of untapped raw minerals used to make batteries for electric vehicles, including cobalt, copper, and nickel.[1] The minerals are scattered 15,000 feet below sea level on the ocean floor in the form of polymetallic nodules, which are fist-sized rocks that have formed over millions of years.[2] The nodules are collected through deep-sea mining by using a vehicle that vacuums up the top four inches of sediment and separates out the nodules for harvesting.[3]

Although the collection technology needed for deep-sea mining is relatively new, the existence of mineral deposits on the seabed has been known for decades.[4] The first nodule was discovered in 1873 by a British naval ship, but it took another hundred years for developed nations to seriously begin exploring the seabed of the Pacific Ocean as a possible resource.[5] Those early explorations identified the Clarion-Clipperton Zone, which is a section of ocean located between Hawaii and Mexico that has an “especially large volume of nodules.”[6] The area is estimated to have “six times more cobalt and three times more nickel than all known land-based stores, as well as vast deposits of manganese and a substantial amount of copper.”[7]

The United Nations established the International Seabed Authority (ISA) on November 16, 1994 under the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and the 1994 Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea (1994 Agreement).[8] Ratified by 167 countries and the European Union, the ISA controls activities relating to mineral resources in around 54% of the total area of the world’s oceans for “the benefit of mankind as a whole.”[9]  The ISA’s duty is to adopt appropriate regulations that “ensure the effective protection of the marine environment from harmful effects that may arise from mineral exploration and exploitation.”[10]

As of mid-2019, the ISA has granted fifteen-year exploration contracts to thirty governmental and private entities.[11] However, the ISA has never granted an exploitation contract.[12] The reason for this discrepancy is that exploitation contracts cannot be granted until the ISA develops comprehensive exploitation regulations, which it has yet to do—despite working on the regulations for over twenty years.[13] This state of affairs might change in the very near future: Nauru, a Pacific island nation with a population of around 10,0000 people[14] invoked the “two-year rule” in June 2021.[15]

The two-year rule is a provision in the 1994 Agreement that allows member states to request that the ISA “‘elaborate and adopt’ the exploitation regulations” within two years of the request.[16] If the ISA fails to meet this deadline, it must provisionally approve the exploitation request in accordance with other sections of UNCLOS and the 1994 Agreement.[17] The ISA has until July 2023 to finalize exploitation regulations.[18]

If the finalized regulations allow industrial deep-sea mining to begin in earnest, the environmental consequences could be far-reaching. The major environmental concern with deep-sea mining is that it “poses unknown risks to the ocean, the climate, valuable fisheries, biodiversity, and the people that depend on the ocean.”[19] At the moment, very little is known about the short- and long-term environmental effects of deep-sea mining, although researchers are working to uncover the potential consequences.[20] One of the key concerns is that sediment accumulates on the ocean floor “at a glacial pace. . . of 1 millimeter every millennium.”[21] This slow growth rate means that mined areas of the seabed will be unlikely to recover within any reasonable timeframe.[22] As a result, both organisms and geographic features like water columns that exist on the seabed today could be irreparably damaged.[23]

In light of such significant environmental concerns, it would be a serious problem if the two-year rule forces the ISA to rush its exploitation regulations and consequently causes it to produce sub-standard regulations that inadequately protect the marine environment. One researcher, Pradeep Singh, has suggested that the two-year deadline “could largely prove inconsequential” because the ISA could choose to take “a measured, calculated risk” by advancing creative legal arguments to delay or frustrate the elaboration and adoption of exploitation regulations.[24] Yet other environmental lawyers, like Duncan Currie, who advises the Deep Sea Conservation Coalition, are convinced that the ISA will be forced to provide a decision by July 2023 as to “whether to go down what is a very one-way street toward deep-sea mining at the enormous expense of the marine environment, or whether…to continue to take a cautious view.”[25]

Critics of deep-sea mining are also concerned about Nauru’s motivations for triggering the two-year rule in the first place.[26] Nauru triggered the rule on the basis that it is sponsoring a company called Nauru Ocean Resources, Inc. (NORI), that wants to apply for a contract to begin exploiting the seabed.[27] But while NORI is incorporated and registered in Nauru, it is a wholly owned subsidiary of a private Canadian company, the Metals Company.[28] Both Nauru and the Metals Company portray deep-sea mining as essential to cutting carbon emissions because it can provide metals that are necessary to facilitate the switch from gas to electric vehicles.[29] While this potential environmental benefit is real, it is arguably offset or canceled out by the environmental costs of disrupting the seabed.[30] It is also true that deep-sea mining could be incredibly lucrative; the Metals Company estimates that it will earn at least $31 billion over the course of its 25-year mining project.[31] As a small island nation without a lot of resources, Nauru has “no ability of its own to pursue such an undertaking” like deep-sea mining, but still wants to benefit from it.[32] The solution is to partner with a foreign firm, potentially for as little as “half of one percent of the firm’s total estimated value of the mined mineral.”[33]

While it is understandable that Nauru would seek to boost its own economic situation given the circumstances, the fact remains that it has unilaterally put the ISA in an uncomfortable position. For almost twenty years the ISA has been maintaining a delicate balance between promoting industry and protecting the environment by allowing the exploration of the seabed while delaying the exploitation of it. It remains to be seen next summer whether that balance could be permanently upset if exploitation regulations are formalized.

Amy Rodriguez is an attorney at Montage Legal. She primarily handles civil litigation and her previous work centered on advancing environmental goals through negotiation and administrative hearings. She is a 2017 graduate of the University of Texas School of Law.

Camille Richieri is a J.D. Candidate, Class of 2024, at The University of Texas School of Law. Camille joined TELJ in Fall 2022. She was born in New York and studied public policy and economics at Duke University.