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[East Asia Forum] Pacific Islands: leading the way in deep sea minerals legislation

May 11th, 2013

Author: Cristelle Maurin, University of Stellenbosch

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A decade of sustained upward trends in the market value of metals found in seabed mineral deposits and considerable advances made in subsea technologies have reignited interest for offshore minerals exploration.

Pacific Island Countries (PICs), holding sovereign rights over vast areas of the seabed with promising mineral potential stand at the forefront of this new pioneering venture. With this opportunity also comes a responsibility, ensuring that operations on the seabed under the continental shelf regime are compliant with international law. The UN Convention on the Law of the Sea confers sovereign rights to coastal states over the seabed minerals within their exclusive economic zones (EEZs), as well as an overriding shared responsibility for the protection and preservation of the marine environment. States interested in pursuing this high-risk venture within their maritime jurisdictions will therefore need to elaborate legal regimes to effectively regulate deep sea minerals activities.

Papua New Guinea, Tonga, Fiji and the Solomon Islands are among the first countries in the world to have issued exploration licences for companies to assess the commercial feasibility of mineral resources development in their EEZs. The potential seabed wealth includes the polymetallic nodules, found predominantly in the Cook Islands; the seafloor massive sulphides, in PNG, Tonga and Fiji; and the cobalt-rich crusts in Micronesia — all first identified in the region in the 1970s and 1980s with high-value strategic metals such as copper, gold, manganese, zinc, cobalt and nickel.

Significant investments in exploration activities across the Southwest Pacific region presage prospects for a long-term source of revenue for PICs. This new economic development potential is enormously attractive for those developing nations seeking to diversify their economies, so far highly reliant on fisheries. But this remains to be balanced against the risks to the marine environment and the potential impacts on other vital industries, such as fisheries, as little is known about the bio-chemical and physical processes that sustain the ocean’s ecosystems.

To ensure effective protection for the marine environment from harmful effects which may arise from deep sea minerals activities, while guaranteeing prospective benefits are adequately channelled into developmental outcomes, coastal states will need to set up legal and institutional structures and strengthen their currently limited capacities to regulate offshore operations. Countries in the West Pacific region convened in 1999 a Workshop in Madang highlighting the new opportunities for offshore mineral development as well as the responsibilities of states to ensure such developments are socially and environmentally responsible and sustainable. Principles for the development of national offshore mineral policies were also articulated. This milestone in the development of a regulatory approach to deep sea minerals (supported by the Pacific Islands Forum, the South Pacific Applied Geoscience and Technology Commission (SOPAC) and the Metal Mining Association of Japan) is all the more important that new momentum is gathering around the exploitation of seabed minerals, with the imperative now to translate the vow into stringent legal frameworks.

The Cook Islands and the Kingdom of Tonga have taken the lead amongst PICs and are currently establishing national statutory regimes to complement the International Seabed Authority’s (ISA) efforts at the international level. Tuvalu and Niue are contemplating similar initiatives. The ISA which controls seabed activities in the ‘Area’, the part of the seabed beyond national jurisdiction upon which non-living resources are recognised as the ‘common heritage of mankind’, is in the process of elaborating a Mining Code encompassing regulations for prospecting, exploration and exploitation of seabed minerals.

Pacific Island countries can be praised for realising the importance of developing of precautionary policies and dedicated seabed minerals legislation. Nevertheless, it must be recognised that the implementation of such regimes, once established, will be a big ask for small island states with limited regulatory and operational capacities. The imbalance of power in the negotiation and enforcement of seabed mineral contracts is of concern too, and it will be opportune for regional and international organisations to consider how to assist PICs in that respect.

Last month, the Kingdom of Tonga, with the support of the Secretariat of the Pacific Community and the European Union, hosted a regional workshop on ‘Law and Contract Negotiations for Deep Sea Minerals’, for the purpose of expanding technical and legal knowledge and strengthening capacities at the regional level. As alluded to by the representatives of 14 Pacific island governments, a collaborative approach for the management and monitoring of deep sea minerals activities, and a coordinated negotiating bloc of countries, could promote sustainable and equitable development across the region, rather than mere exploitation of non-renewable resources.

Governments in the region could then leave a lasting legacy if they seized the opportunity of devising forward-looking policies for offshore resource extraction, while seeking external assistance to reinforce their capacities and bargaining powers. Resource extraction can lead to national economic development if a range of conditions are met, including effective macroeconomic management and high-quality governance institutions characterised by transparency and accountability. Equally important are consistent, reliable and predictable legal structures to attract responsible foreign investors and sound fiscal regimes that allow for sustainable revenue growth.

Learning from the experience of Melanesian countries with on-land mining, PICs should prioritise a precautionary approach and well-devised strategies to maximise returns to their nations over quick win opportunities. The pooling of resources at the regional level may be one avenue for small island states to strengthen their position to achieve those objectives.

Cristelle Maurin is Legal Consultant at the Applied Geoscience and Technology Division of the Secretariat of the Pacific Community, Fiji, and Associate to the Centre for Chinese Studies, University of Stellenbosch, South Africa.

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