One hundred sixty-nine parties have ratified UNCLOS, which, amongst other things, regulates activities in the seabed, ocean floor and subsoil beyond the limits of national jurisdiction (the “Area”).2 Thirteen states have signed, but not ratified UNCLOS: Afghanistan, Bhutan, Burundi, Cambodia, Central African Republic, Colombia, El Salvador, Ethiopia, Iran, Libya, Liechtenstein, the United States, and the United Arab Emirates. This means that these states are not member states of UNCLOS or the ISA.3 There are fifteen other United Nations members and observer states which have neither signed nor ratified UNCLOS.4
There is an argument to be made that a number of the provisions in the UNCLOS deep seabed regime have attained the status of customary law.5 The prohibition of unilateral mining activities may already have that status.6 In addition, the 1970 United Nations resolution which declared seabed resources were the “common heritage of mankind” has been internationally recognized7 and enshrines the fundamental premise of UNCLOS. Furthermore, the UNCLOS deep seabed mining regime is recognized by the international community as a whole. As set out above, a large number of states have ratified the treaty, others have signed but not ratified, and almost all non-signatory states are observers. The fact that there has been no contrary deep seabed mining practice in the Area outside of the UNCLOS regime, including and in particular from the key NSPs, bolsters UNCLOS’s deep seabed mining regime’s international recognition.
For example, the U.S. has enacted its own regime for mining of the deep seabed. The Deep Seabed Hard Mineral Resources Act (the “DSHMRA”) was enacted in 1980 to establish a U.S. legal regime for the exploration and recovery of hard mineral resources in the deep seabed, pending the U.S.’s adoption of UNCLOS. The DSHMRA sets out a licensing and permit process for the exploration and recovery of hard mineral resources for persons and entities under U.S. jurisdiction. Under the DSHMRA, the Administrator of the National Oceanic and Atmospheric Administration (“NOAA”) regulates the activities and issues licences. NOAA has to determine a number of factors before issuing a licence, in particular whether the proposed exploration or exploitation activities:
“(1) will not unreasonably interfere with the exercise of the freedoms of the high seas by other states, as recognized under general principles of international law;
(2) will not conflict with any international obligation of the United States established by any treaty or international convention in force with respect to the United States;
(3) will not create a situation which may reasonably be expected to lead to a breach of international peace and security involving armed conflict;
(4) cannot reasonably be expected to result in a significant adverse effect on the quality of the environment, taking into account the analyses and information in any applicable environmental impact statement prepared pursuant to section 109(c) or 109(d); and
(5) will not pose an inordinate threat to the safety of life and property at sea.” 8 (emphasis added)
No commercial deep seabed mining is currently being conducted under the DSHMRA permitting regime. At present, only two deep seabed exploration licences remain active under the DSHMRA, and both of these are held by U.S. defence giant, Lockheed Martin.9 Both Lockheed Martin and the U.S. Department of State have recognized that the licences lack international recognition.
In March 2022, NOAA addressed the interaction of these U.S. licences with the UNCLOS deep seabed mining regime after a request for an extension of the licences by Lockheed Martin. NOAA acknowledged that the DSHMRA’s purpose is to establish an interim deep seabed mining regime, pending the completion of the negotiations for UNCLOS.10 In addition, the extension request states “Lockheed Martin has stated that at-sea exploration activities have been delayed for several reasons including conditions in the metals markets and the lack of international recognition of the DSHMRA licenses USA–1 and USA–4.”11 (emphasis added) NOAA also expressly acknowledges that the Area partially overlaps with DSHMRA exploration license USA-1. The licences had been previously renewed in 2017 when NOAA had stated “Any rights a U.S. company may have domestically are not secured internationally because U.S. companies are not able to go through the internationally recognized process at the International Seabed Authority established for Parties to the United Nations Convention on the Law of the Sea (UNCLOS).”12
The only definitive way in which NSPs can render their nationals eligible to undertake mining activities in the Area is through ratification of UNCLOS. This is reflected in the fact that NSPs or their nationals are not in fact conducting mining activities in the Area outside of the UNCLOS regime. One possible workaround for NSP nationals is to structure their investments in a way that permits participation within UNCLOS. For example, operating within the framework of UNCLOS, two applications to the ISA by UK Seabed Resources Ltd (“UKSRL”) were sponsored by the U.K. UKSRL was incorporated in May 2012 and is a wholly-owned subsidiary of Lockheed Martin. Lockheed Martin has recently sold UKSRL to Norway’s Loke Marine Minerals.13 This workaround is allowed based on Annex III Article 4(3) of UNCLOS which states that if effective control of an entity lies elsewhere, both the controlling state and the state of nationality of the applicant must cosponsor the applicant. However, in past practice, the ISA has interpreted the effective control requirement as being equivalent to “regulatory control”, or incorporation in the sponsor state.14
In fact, it is not only nationals of NSPs which have been structuring their investments in that way. The Metals Company, a Canadian company, was granted an exploration contract in the Clarion Clipperton Zone through its Nauru-incorporated subsidiary, Nauru Ocean Resources Inc. (“NORI”), sponsored by the government of the Republic of Nauru. The Metals Company was also granted an exploration contract through its Tonga subsidiary, Tonga Offshore Mining Ltd, sponsored by the Kingdom of Tonga. Another way of structuring the investment is to have the foreign company act as a subcontractor for exploration contracts held by sponsoring states’ companies. This was the case for G-TEC Sea Mineral Resources NV and GSR, two Belgian companies, and the Cook Islands.15
Any entity conducting mining operations in the Area without the appropriate ISA licence would face significant risk. Considerable resources and funding are required for deep seabed mining activities, and it seems unlikely that any entity would risk pursuing activities without a clear legal framework and an enforceable legal title to protect its investment. It seems therefore unlikely that any deep sea mining in the Area would occur outside of the UNCLOS regime at present due to the commercial, financial and legal risks and uncertainty that would involve for any entity. The ISA’s mining regulations will be the international framework of reference, and it is crucial that the set of exploitation guidelines currently being negotiated by ISA’s Council provide a clear balance between sustainability, legal certainty and commercialization.
1 Article 153(2)(b) of UNCLOS.
2 Please refer to our earlier articles for the latest updates on the International Seabed Authority’s (“ISA”) efforts to finalise the Mining Code, a set of exploration and exploitation guidelines for the deep seabed: Pivotal Year for Deep-Sea Mining and Deep-sea Mining: Running out of time?
3 Where the signature is subject to ratification, acceptance or approval, the signature does not establish the consent to be bound. However, it is a means of authentication and expresses the willingness of the signatory state to continue the treaty-making process. The signature qualifies the signatory state to proceed to ratification, acceptance or approval. It also creates an obligation to refrain, in good faith, from acts that would defeat the object and the purpose of the treaty. [Vienna Convention on the Law of Treaties 1969, Articles 10 and 18.] Ratification is the international law act whereby a state indicates its consent to be bound to a treaty if the parties intended to show their consent by such an act. In the case of bilateral treaties, ratification is usually accomplished by exchanging the requisite instruments, while in the case of multilateral treaties such as UNCLOS, the usual procedure is for the depositary to collect the ratifications of all states, keeping all parties informed of the situation. The institution of ratification grants states the necessary time-frame to seek the required approval for the treaty at the domestic level and to enact the necessary legislation to give domestic effect to that treaty. [Vienna Convention on the Law of Treaties 1969, Articles 2(1)(b), 14(1) and 16.]
4 Andorra, Eritrea, Israel, Kazakhstan, Kyrgyzstan, Peru, San Marino, South Sudan, Syria, Tajikistan, Turkey, Turkmenistan, Uzbekistan, Holy See, and Venezuela.
5 Customary law is international general practice accepted as law.
6 Article 137 of UNCLOS.
7 United States General Assembly Resolution 2749 (xxv) (1970).
8 Deep Seabed Hard Mineral Resources Act, section 105(a)(1)-(5). Accessible at: https://www.govinfo.gov/content/pkg/COMPS-1561/pdf/COMPS-1561.pdf.
9 Nat’l Oceanic and Atmospheric Admin., Deep Seabed Hard Minerals; Request for Extension of Exploration Licenses; Comments Request, 87 Fed. Reg. 15,408 (Mar. 18, 2022). Accessible at: https://www.federalregister.gov/documents/2022/03/18/2022-05793/deep-seabed-hard-minerals-request-for-extension-of-exploration-licenses-comments-request.
10 Id. at 15,409.
11 Id.
12 Nat’l Oceanic and Atmospheric Admin., Deep Seabed Mining: Approval of Exploration License Extensions, 82 Fed. Reg. 42327, 42,328 (Sept. 7, 2017). Accessible at: https://www.federalregister.gov/documents/2017/09/07/2017-18994/deep-seabed-mining-approval-of-exploration-license-extensions.
13 Lockheed Martin sells deep-sea mining firm to Norway’s Loke, Reuters (Mar. 16, 2023), https://www.reuters.com/markets/deals/norways-loke-buys-uk-deep-sea-mining-firm-lockheed-2023-03-16/.
14 Int’l Seabed Auth., Legal and Technical Comm’n, Note by the Secretariat: Analysis of the Regulations on Prospecting and Exploration for Polymetallic Nodules and Polymetallic Sulphides in the Area (ISBA/20/LTC/10, June 5, 2014), paragraphs 20 and 21.
15 Int’l Seabed Auth., Report and recommendations of the Legal and Technical Commission to the Council of the International Seabed Authority relating to an application for the approval of a plan of work for exploration for polymetallic nodules by the Cook Islands Investment Corporation (ISBA/20/C/18, July 9, 2014).
