The

Interna*onal Seabed Authority and the Regulatory Regime for Deep Seabed Mining
SPC-EU EDF10 Deep Sea Minerals Project Inaugural Regional Workshop Nadi, Fiji, 6-8 June 2011

Michael W. Lodge Legal Counsel Interna6onal Seabed Authority

 Mankinds ability to understand and

control the forces of nature greatly exceeds our ability to govern ourselves.
George Soros My Philanthropy New York Review of Books, June 2011

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

The Interna6onal Seabed Authority FuncLons

Conceived in 1967 common heritage of mankind. Established under the 1982 LOSC and 1994 Implementa6on Agreement. To manage the mineral resources of the seabed beyond na6onal jurisdic6on for benet of mankind as a whole. To ensure protec6on of the marine environment from harmful eects of mining. To promote and encourage MSR in the seabed beyond na6onal jurisdic6on. To distribute revenue from OCS. To promote capacity-building.

The Interna6onal Seabed Authority The deniLon of the Area

The Interna6onal Seabed Authority The deniLon of the Area

The Interna6onal Seabed Authority Fundamental principles and sources of law

Ar6cle 136 The Area and its resources are the common heritage of mankind. Ar6cle 137 No State shall claim or exercise sovereignty or sovereign rights over any part of the Area or its resources. All rights in the resources of the Area are vested in mankind as a whole (represented by the ISA) and no State or natural or juridical person shall exercise mineral rights except in accordance with Part XI. Ar6cle 140 Ar6cle 141 Ac6vi6es in the Area shall be carried out for the benet of mankind as a whole. The Area shall be open to use exclusively for peaceful purposes by all States.

The Interna6onal Seabed Authority Structure

Based in Kingston, Jamaica

The Interna6onal Seabed Authority Structure

Based in Kingston, Jamaica Assembly of 161 Member States and European Union

The Interna6onal Seabed Authority Structure

Based in Kingston, Jamaica. Assembly of 161 Member States and European Union. 36-member elected Council with chamber vo6ng system.

The Interna6onal Seabed Authority Structure

Based in Kingston, Jamaica. Assembly of 161 Member States and European Union. 36-member elected Council with chamber vo6ng system. Legal and Technical Commission of elected experts acts as advisory body to formulate rules and regula6ons including environmental standards

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

Regulatory Regime for Deep Seabed Mining The Mining Code

The comprehensive set of rules, regulaLons and procedures issued by the InternaLonal Seabed Authority to regulate prospecLng, exploraLon and exploitaLon of marine minerals in the Area. Regula6ons on: Prospec6ng Explora6on Exploita6on Rules and procedures Environmental recommenda6ons Data standards Financial repor6ng Covering: Polymetallic nodules Polymetallic sulphides Cobalt-rich crusts Other resources

Regulatory Regime for Deep Seabed Mining Status of regulaLons

Current regulaLons cover prospecLng and exploraLon phases for polymetallic nodules and polymetallic sulphides. Polymetallic nodules (2000) Polymetallic sulphides (2010) Cobalt-rich crusts (2011)?

Regulatory framework largely idenLcal, dierences reect dierent nature of resources

Regulatory Regime for Deep Seabed Mining ProspecLng and exploraLon

Current regulaLons cover prospecLng and exploraLon phases for polymetallic nodules and polymetallic sulphides. Prospec*ng Searching for mineral deposits with no exclusive rights. Requires wrieen no6ca6on to the Secretary-General. Most prospec6ng may be undertaken as MSR. Explora*on Searching for and evalua6ng poten6al of mineral deposits with exclusive rights under a contract. Priority over other applicants for exploita6on rights.

Regulatory Regime for Deep Seabed Mining ApplicaLon criteria

Qualied Applicants State Party to the 1982 Conven6on or State enterprise sponsored by a State Party or Natural or juridical person possessing the na6onality of a State Party and sponsored by a State Party. Fundamental requirement. Sponsorship by State of which applicant is a na6onal or State having eec6ve control (may be more than one sponsoring State). Evidenced by cer6cate of sponsorship. Declara6on of responsibility.

State Sponsorship

Regulatory Regime for Deep Seabed Mining Content of applicaLon for exploraLon licence
Informa6on on nancial capability. Informa6on on technical capability. Proposed 15-year explora6on programme. Detailed ve-year plan showing an6cipated annual actual and direct expenditure on explora6on. Proposal for oceanographic and environmental baseline studies and preliminary environmental impact assessment. Proposed measures to prevent pollu6on (con6ngency plan). Undertaking of good faith. Fee (US$ 250,000 per applica6on for nodules, US$ 500,000 or variable fee for sulphides). List of coordinates and chart of proposed area.

Regulatory Regime for Deep Seabed Mining Polymetallic nodules size of area for exploraLon
Each site to be not more than 150,000 Km2 in size, relinquish to 75,000 Km2 May be in any geographical congura6on and need not be a single area Eight contracts issued to date (seven in CCZ and one in Indian Ocean) Applicant must oer two sites of equal es6mated commercial value (one for the contractor, one to be reserved)

Regulatory Regime for Deep Seabed Mining Polymetallic nodules CCZ exploraLon contracts

Regulatory Regime for Deep Seabed Mining Polymetallic nodules scale of CCZ exploraLon

Regulatory Regime for Deep Seabed Mining Polymetallic sulphides block allocaLon system
Maximum 100 blocks (10 km x 10 km). Map shows hypothe6cal example of distribu6on of clusters of con6guous blocks within a constraint area superimposed on known resource distribu6on in the Central Atlan6c.

Regulatory Regime for Deep Seabed Mining Polymetallic sulphides block allocaLon system

Illustra6on of constraint area for explora6on licence (300,000 km2 rectangle, where longest side does not exceed 1,000 km)

Regulatory Regime for Deep Seabed Mining Cobalt-rich crusts block allocaLon system
Regula6ons under development: possibly to be adopted in 2011. Proposal is 100 explora6on blocks where each block is 5 x 5 km in size, organized into 8 clusters of con6guous blocks. Total explora6on area 2,500 Km2, to be relinquished down to 500 km2 Op6on to oer joint venture in lieu of reserved area.

Regulatory Regime for Deep Seabed Mining ConsideraLon of applicaLons for exploraLon licences

Legal and Technical Commission reviews and makes recommenda6on to the

Council, which shall approve the applica6on unless disapproved by two-thirds majority including a majority in each chamber

Then a Contract issued by Secretary-General in standard format

Regulatory Regime for Deep Seabed Mining Content of standard exploraLon contract
Standard contract terms in Annex 4 of Regula6ons. 15 year dura6on, extension for 5 years in excep6onal circumstances. Schedule of progressive relinquishment of explora6on area Mandatory training programme for personnel of developing countries. Annual repor6ng requirement to the Authority. Minimum explora6on expenditure requirement. Preference over other applicants for exploita6on of same area. Strict limita6ons on use of and access to conden6al data, e.g. commercially sensi6ve data on ore grade, abundance and metal content. Note that environmental data not considered conden6al, but proprietary data (e.g. equipment design) always considered conden6al.

Regulatory Regime for Deep Seabed Mining Responsibility and liability

Contractor liable for damage arising from wrongful acts or omissions. Authority liable for damage arising from wrongful acts or omissions, including vicarious liability under ar6cle 168. Sponsoring States liable unless taken all necessary and eec6ve measures to ensure compliance (includes adequate na6onal regulatory system). Personal liability on members of Legal and Technical Commission and Secretariat sta for abuse under ar6cle 168(8) of the Conven6on.

Regulatory Regime for Deep Seabed Mining Suspension and terminaLon of contract
Contract may be suspended or terminated in case of: Termina6on of sponsorship; Serious persistent and wilful viola6ons; Failure to comply with nal binding decision of Court or Tribunal; or Insolvency. Monetary penal6es may be imposed by Council for breach of contract. Disputes to be seeled in accordance with Part XI, Sec6on 5, of the Conven6on, including recourse to Seabed Disputes Chamber of the Interna6onal Tribunal for the Law of the Sea.

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

Environmental protec6on Fundamental responsibility

Reg 33(1): The Authority shall, in accordance with the ConvenLon and the Agreement, establish and keep under periodic review environmental rules, regulaLons and procedures to ensure eecLve protecLon for the marine environment from harmful eects which may arise from acLviLes in the Area. Reg 33(2): In order to ensure eecLve protecLon for the marine environment from harmful eects which may arise from acLviLes in the Area, the Authority and sponsoring States shall apply a precauLonary approach, as reected in principle 15 of the Rio DeclaraLon, and best environmental pracLces.

Indica6ve area comparison: Largest open pit mine in the USA (Bingham copper mine, Utah) compared to a model mining opera6on for polymetallic nodules (model parameters: 4.5 million metric tonnes annual ore produc6on over 20 years at a recovery rate of 10 kg per m2)

20 years

10 years

5 years

1 year

Environmental protec6on ObligaLons and responsibiliLes on all parLes

The Authority Establish and keep under review environmental rules, regula6ons and procedures. Apply a precau6onary approach. Develop and implement programmes for monitoring and evalua6ng impacts of mining on marine environment. Include environmental informa6on with applica6on (Reg. 20). Take necessary measures to prevent, reduce and control pollu6on and other hazards to the marine environment, applying a precau6onary approach and best environmental prac6ces. Cooperate with Authority in establishment and implementa6on of monitoring and evalua6on programmes. Gather environmental baseline data and establish baselines, taking account of any recommenda6ons issued by the Legal and Technical Commission. Report annually to the Authority. Make recommenda6ons to Council on implementa6on of Regula6on 33 (1) and (2). Consider annual reports of contractors. Issue Recommenda6ons for Guidance of Contractors. Other powers under ar6cle 165.

The Contractor

The Legal and Technical Commission

Environmental protec6on Technical studies and workshops

Environmental protec6on Technical studies and workshops

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

Exploita6on Future work for the Authority

Regulatory framework for exploitaLon does not exist.
Exploita*on Recovery for commercial purposes and extrac6on of minerals. Construc6on of mining, processing and transporta6on systems. To be conducted under licence from Authority. Financial terms (1994 Agreement, Annex, Sec*on 8) System should be fair to both Authority and contractor and comparable to land-based mining. System should not be complicated. Should be an annual xed fee. Considera6on should be given to royalty system. Equitable sharing criteria Environmental Impact Assessment (EIA) and Monitoring

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

The Reserved Areas Areas contributed by exisLng contractors

The Reserved Areas Annex III and 1994 Agreement

Reserved Areas open to applica6on by: The Enterprise; Any developing State Party; A natural or juridical person sponsored by and eec6vely controlled by a developing State Party. Advantage is that reserved areas known to have commercial value: no need for prior prospec6ng to iden6fy poten6al site. If not used within 15 years, may revert to original contributor. Same contract terms and condi6ons apply as to any other contractor. NORI and TOML rst applica6ons for reserved area licences.

The ISA and the Regulatory Regime for Deep Seabed Mining Outline

Interna6onal Seabed Authority: Func6ons and Structure Regulatory Regime for Deep Seabed Mining Environmental protec6on Exploita6on The Reserved Areas Considera6ons for Na6onal Regulatory Regimes

Considera6ons for Na6onal Regulatory Regimes What is the relevance of the internaLonal regime?
ArLcle 208 PolluLon from seabed acLviLes subject to naLonal jurisdicLon 1. Coastal States shall adopt laws and regula*ons to prevent, reduce and control pollu*on of the marine environment arising from or in connec*on with seabed ac*vi*es subject to their jurisdic*on and from ar*cial islands, installa*ons and structures under their jurisdic*on, pursuant to ar*cles 60 and 80. 2. States shall take other measures as may be necessary to prevent, reduce and control such pollu6on. 3. Such laws, regula*ons and measures shall be no less eec*ve than interna*onal rules, standards and recommended prac*ces and procedures. 4. States shall endeavour to harmonize their policies in this connec*on at the appropriate regional level. 5. States, ac6ng especially through competent interna6onal organiza6ons or diploma6c conference, shall establish global and regional rules, standards and recommended prac6ces and procedures to prevent, reduce and control pollu6on of the marine environment referred to in paragraph l. Such rules, standards and recommended prac6ces and procedures shall be re-examined from 6me to 6me as necessary. ArLcle 209 PolluLon from acLviLes in the Area 1. Interna*onal rules, regula*ons and procedures shall be established in accordance with Part XI to prevent, reduce and control pollu*on of the marine environment from ac*vi*es in the Area. Such rules, regula*ons and procedures shall be re-examined from *me to *me as necessary.

Considera6ons for Na6onal Regulatory Regimes ISA Capacity-building programmes

ISA Endowment Fund for MSR 30 scien6sts from developing countries trained since 2009; Only Palau and Papua New Guinea from SOPAC region. InterRidge Fellowship Programme. ISA-Tongji University Scholarship Programme. Mandatory training programmes by all ISA Contractors. Sensi6za6on seminars: Brazil, Nigeria, Indonesia, Spain. GIS of Central Atlan6c Project (Brazil-West Africa collabora6on) Regular programme of interna6onal workshops possible Fiji workshop 2011 (on EIA).

hVp://www.isa.org.jm