Royalty regime debate clouds deep-sea mining prospects

Several uncertainties still surround the future of the ocean as it relates to the emerging industry of deep-sea mining (DSM) following the conclusion of the 29th session of the International Seabed Authority (ISA) council last Friday.

One such cause of concern is the ultimate decision to be made on whether business interests will be given permission to extract valuable minerals from the ocean floor at depths greater than 200 metres, and the rules and regulations that would guide these activities.

Similar to this, the fate of life in the deep blue is also in jeopardy. For this reason, there is great anticipation among conservationists for the ISA assembly scheduled for July 29-August 2, which will bring down the curtain on a series of meetings, which started on March 4.

From March 18 to 29, several delegates from various nations gathered in Kingston at the ISA headquarters and engaged in closed-door discussions surrounding DSM.

The local organisation, Jamaica Climate Change Youth Council (JCCYC), along with members of the public, persisted in their protests while these meetings were being held, demanding that more data was needed on DSM before this “destructive” industry was allowed to disrupt the lives of hundreds of marine animals and risk human safety.

Conservationists believe that if the call for a ban or an international moratorium is disregarded and the rules and regulations concerning DSM are agreed and adopted, this will bring forth the greatest mining operation that humankind has ever witnessed.

Speaking last Thursday at an end-of-ISA-council meeting press briefing, Matthew Gianni, co-founder of the Deep Sea Conservation Coalition (DSCC), offered a round-up of the different ISA meetings.

“If you hear anybody saying that the negotiations are progressing nicely [and that there are] major steps forward, that’s not our view of these negotiations. There are many areas where negotiations have not progressed, and in some cases, it [has] become even more complicated,” Gianni said.

Some key issues debated, he said, included the need for a royalty regime to be established. This would see that companies or contractors (for example, state-owned enterprises) issued with mining contracts by the ISA, to which it would pay a fee, which would then be shared among member countries.

Gianni argued that before mining of the deep sea could begin, the royalty regime had to be in place as this was not just a regulation.

But he noted that it had remained unclear as to how much ISA would charge contractors to carry out mining.

“There’s a proposal on the table that would significantly increase the cost to companies to mine by charging a much higher royalty percentage on the mining of the metals that would be found in the deep sea,” he said.

ENVIRONMENTAL COMPENSATION FUND

Additionally, there was much debate surrounding an environmental compensation fund, which would apply to circumstances of damage occurring.

“The end result of that was [that] most states agreed that there has to be a lot of money in that fund before any mining can begin and contractors are gonna have to put the money into that fund to insure against damage that may occur as a result of their activities, but importantly, there was strong emphasis from most countries that the companies that want to mine, if they do get a mining licence, they’re gonna have to be heavily insured against damage to the marine environment,” he explained.

Gianni continued that the ISA had not clearly outlined what environmental regulations would be adopted.

“The environmental regulations are very much up in the air – how much harm will the ISA permit, if any at all; how could it monitor that harm; how could it define that harm, ... and this is something that something that states are still far apart on defining and this is going to be an ongoing discussion that has had very little progress on this particular point and this point is essential to the environmental elements of the regulations,” he said.

He also divulged that members had agreed that it was necessary for companies to conduct a test mining operation before they can apply for a mining licence. It was further noted that conducting this mine test would not guarantee that the company would receive a mining licence as the results of the mining test would be analysed and a decision would be made.

Gianni further indicated that other regulatory frameworks needed to be settled before mining could begin include a mining code; exploitation regulations; the need for the establishment of a mining inspectorate under the ISA to monitor the activities of the companies and ensure compliance with regulations; and an agreement that would ensure the protection of developing countries, whose economies would be adversely affected by DSM.

“The conclusion of this is that countries continue to debate these regulations, and in many respects, they’re even further apart than they were at the beginning of this week or at the end of the last negotiating session in November last year, and they’ve got a long way to go before they can agree to everything that needs to be agreed before they can begin taking on applications for mining, and anyone who says otherwise, in our view, is not accurately characterising the status of these negotiations as they are at the moment,” he said.

Emma Wilson, policy officer at the DSCC, urged the ISA to start “choosing planet over profit”.

She said there was a “major divide” concerning the issue of DSM as “on the one side, we have one aggressive industry player that is called The Metals Company ... that’s pushing to launch mining activities in the imminent future, and on the other side, there’s this ever-growing number of member states, scientists, civil society and others that are ringing alarm bells and just pushing back, not only on the rush to open up the seabed, but also on the haphazard and opaque processes of the ISA.

“At the July ISA assembly meeting of this year, we hope to see a discussion dedicated to the possibility to a moratorium or pause on deep-sea mining that would essentially take the pressure off by closing the door on any exploitation activities until a number of conditions are fulfilled,” she added.

asha.wilks@gleanerjm.com