Guardians of the ocean's treasures

The deep seabed, abundant with minerals like nickel and cobalt, is crucial for renewable energy technologies. For instance, the Clarion-Clipperton Zone in the Pacific Ocean holds significant nickel deposits essential for electric batteries. As the demand for these metals surges, the seabed’s resources become increasingly pivotal. Governing their extraction, a sophisticated international framework, primarily the United Nations Convention on the Law of the Sea (UNCLOS), along with the 1994 Agreement, plays a central role, regulating mining activities beyond individual state jurisdictions.

UNCLOS, a comprehensive treaty since 1982, orchestrates various marine aspects, including mining regulations, ensuring collective benefits and equitable resource access. Particularly, it fosters a supportive environment for developing states, granting them special rights and participation in seabed activities, embodying the ocean as humanity’s "common heritage." This article focuses on these sponsoring states, elucidating their essential roles and rights in the regulatory landscape of deep seabed mining.

Role of sponsoring states

Sponsoring states hold a pivotal role in the governance structure established by the United Nations Convention on the Law of the Sea (UNCLOS). As per the Convention, exploration and exploitation of the seabed’s mineral resources must be orchestrated under a contract with the International Seabed Authority ("the Authority"), adhering strictly to its comprehensive rules, regulations, and procedures. For a private entity to be eligible for a contract, it necessitates sponsorship from a state party of UNCLOS.

This sponsorship mechanism is integral to the UNCLOS framework, playing a crucial role in safeguarding the seabed areas, revered as "the common heritage of mankind." In an illuminating Advisory Opinion issued in 2011 by the International Tribunal for the Law of the Sea ("ITLOS"), sponsorship was highlighted as a cardinal element in the system, instrumental for the exploration and exploitation of the ocean’s resources in accordance with the Convention's guidelines.

Rights of sponsoring states

Sponsoring states are bestowed with an array of explicit and implicit rights under UNCLOS and the 1994 Agreement. These rights manifest in various facets such as:

Participation and Control: Sponsoring states, leveraging their membership in the Authority, have the privilege to actively participate in orchestrating and regulating activities in the seabed areas (UNCLOS, Article 157(2)).

Benefiting from Policies: They are entitled to reap benefits from policies pertinent to activities in these regions. This encompasses aspects like resource development, management strategies, participation opportunities in exploitation activities, and revenue-sharing mechanisms (UNCLOS, Article 150).

Sponsorship and Jurisdiction: Sponsoring states have the autonomy to endorse natural or legal entities, such as commercial deep seabed mining enterprises, facilitating them to execute activities in these regions. Furthermore, they retain the authority to exert jurisdiction and control over these sponsored entities (UNCLOS, Article 153(2)(b)).

Equitable Sharing of Benefits: Sponsoring states are eligible to partake equitably in the financial and diverse economic advantages emanating from activities pursued in these oceanic realms (UNCLOS, Articles 140(2) and 160(2)(f)(i)).

Liability Protection: They are shielded from liabilities stemming from potential damages caused by the non-compliance of sponsored entities with the Convention’s stipulations, provided that all requisite and apt measures were undertaken to ensure stringent compliance (UNCLOS, Article 139(2)).

Each right elucidated above intricately interweaves into the broader tapestry of UNCLOS, affirming the indispensable role and multifaceted rights of the sponsoring states in the exploration and exploitation of the ocean’s bountiful resources.

Status and rights

Developing states occupy a paramount position in the architecture of the deep seabed mining framework. The Convention meticulously crafts a regime that fosters and amplifies the participation of developing states, ensuring that they are afforded equitable opportunities to harness the Area’s resources and partake in its multifaceted benefits. A pivotal article, Article 148, articulates the ethos of promoting effective participation of developing states, paying meticulous attention to their unique interests and needs, especially those that are land-locked and geographically disadvantaged.

Provisions Facilitating Participation: Several instrumental provisions within the Convention and the 1994 Agreement underscore the commitment to facilitating developing states' involvement in the Area’s activities. For instance:

Priority Access: Contractors aiming to secure exploration and exploitation rights are required to opt for territories that manifest substantial commercial value and size. The Authority plays a pivotal role in partitioning the chosen site into two areas of analogous commercial potential. One segment is earmarked for commercial utilization, while the counterpart is reserved for collaborative activities with developing states. This strategic allocation affords developing states and their entities priority access to prosperous areas underpinned by robust geological data (UNCLOS, Annex III, Articles 8 and 9).

Enhanced Rights for Sponsoring Developing States: Developing states that also embody the role of sponsoring states are conferred with an augmented spectrum of rights and safeguards. These privileges transcend the foundational provisions of the sponsorship framework and encompass:

Tailored Consideration: Tailoring activities in the Area to accommodate the nuanced interests and needs of developing states (UNCLOS, Article 140).

Marine Scientific Research: Opportunities to benefit from marine scientific research initiatives facilitated by the Authority or other global organizations (UNCLOS, Article 143(3)(b)).

Development Promotion: Assurance that activities in the Area are orchestrated with a pronounced emphasis on bolstering their developmental trajectory (UNCLOS, Article 150).

Consideration in Authority’s Functioning: Developing states are bestowed with “special consideration” in the operational manifestations of the Authority’s powers and functionalities (UNCLOS, Article 152(2)).

Equitable Benefit Sharing: They are subject to “particular consideration” in the formulation of rules and procedures that govern the equitable distribution of financial and other economic benefits emanating from the Area’s activities (UNCLOS, Article 160(2)(f)(i)).

Training Programmes: Developing states stand to benefit from bespoke training programmes that contractors are obligated to extend to the Authority and the developing states (UNCLOS, Annex III, Article 15).

Representational Adequacy: Provisions are in place to ensure that developing states maintain a robust representational presence in the Council and its ancillary organs (UNCLOS, Articles 161, 163, and 164 and Section 3 of Annex to the 1994 Agreement).

These nuanced treaty provisions sculpt a fortified landscape of rights that sponsoring developing states can invoke and champion within the realms of international law. This constellation of rights reflects a profound commitment to nurturing the active and meaningful participation of developing states in the exploration and exploitation of the ocean’s profound treasures.

The International Seabed Authority (the “Authority”) encountered a pivotal crossroad in its July 2023 congregations. Orchestrated by Section 1, Paragraph 15 of the Annex to the 1994 Agreement, a procedural avenue, notably termed the "two-year rule," was actualized. It permitted a state, aspiring to initiate a work plan for exploitation, to petition the Council to finalize the requisite rules, regulations, and procedures within a two-year frame subsequent to the request.

The Republic of Nauru (“Nauru”), exemplifying a small island developing state, catalyzed this rule in 2021, signifying its sponsorship intent towards an exploitation work plan application. Consequently, this mandated the Council to meticulously cultivate and provisionally institute exploitation regulations by the definitive date of 9 July 2023. Post this juncture, the 1994 Agreement autonomously authorizes applicant contractors to forward exploitation work plans, compelling the Authority towards a consideration and provisional affirmation trajectory.

Council’s delay

Regrettably, the anticipated deadline eclipsed without witnessing the Council’s realization and provisional endorsement of the exploitation protocols. This omission, within legal interpretations, arguably substantiates a breach, negating both the explicit and intrinsic rights endorsed to the Sponsoring and Developing States.

Subsequent procrastinations by the Authority's member states potentially pose a profound risk of depreciating the intrinsic value associated with proposed undertakings within the Area. Such delays cast shadows of uncertainty, especially as considerable resources have already been channelized by Sponsoring States, inclusive of developing ones like Nauru, towards prepping for commercial engagements within the Area. In a demonstration of readiness, states such as Nauru have pioneered legislative reforms to encapsulate regulations pertinent to seabed mining, concurrently re-engineering administrative frameworks to proficiently administer and regulate affiliated mining entities.

The authority’s decision

In a reconciliatory maneuver, the Council, on 21 July 2023, reciprocated with a decision acknowledging the exhaustion of the two-year prerogative as of 9 July 2023. This reciprocation delineated a strategic pathway towards the conceptualization and incorporation of exploitation RRPs, scheduling subsequent councils and envisaging a provisional affirmation horizon by the closure of the thirtieth session.

Despite being a positive progression, this decision also echoes the prevailing breach of obligations by member states, in alignment with pertinent international laws and treaties. It vividly illustrates the consequential opportunity losses inflicted on Sponsoring States, with Nauru epitomizing a critical reference.

As the Authority navigates the future, a reflective consideration of strategies to meticulously honor its legal commitments appears imperative, emphasizing the safeguarding of Sponsoring States’ rights. An ensuing exploration will delve into these rights’ enforceability through the UNCLOS's entrenched mechanisms, offering a conduit for mandatory and legally binding resolutions in instances of dispute.

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