Push to Mine Seabed in International Waters Faces Legal Hurdles

The International Seabed Authority (ISA), which governs deep-sea mining in international waters, could face its first application for seabed mining this year, despite the fact that it has not yet finalized needed regulations for such activity. Created under the United Nations Convention on the Law of the Sea (UNCLOS) in 1982, the ISA is mandated “to ensure the effective protection of the marine environment from harmful effects that may arise from deep-seabed-related activities.” The ISA has been negotiating a set of rules for deep-seabed mining but is years away from agreeing on a final, comprehensive set of regulations.

The ISA Council has clearly said that unregulated mining should not be permitted before the ISA finalizes its rules. Despite this, a handful of governments and companies are pushing to begin mining, and one has stated its intention to submit an application later this year.

Given the lack of precedent for such a case, and the potential for irreparable damage to the environment resulting from mining activities, legal disputes might arise from the Authority’s decisions on this mining application. Two recent papers commissioned by The Pew Charitable Trusts explore potential legal issues that may be triggered by a forthcoming exploitation application: whether an applicant would have grounds to file a claim against the ISA for rejection of their mining application; and whether an ISA member State could bring a claim against the Authority if an application is approved in the absence of regulations.

Some mining proponents have cited the legal doctrine of “legitimate expectations,” drawn from investment law, as a basis for potential lawsuits against the ISA if an application to mine is rejected, since the ISA had allowed the applicant’s investment of time and money in prior mineral exploration activities.

However, recent expert analysis indicates that there are significant obstacles to such legal challenges due to the ISA’s unique circumstances. Specifically:

• The legitimate expectations doctrine does not apply to the ISA because investment law precedents are based on relationships between sovereign states and foreign investors – not international organizations, such as the ISA. Moreover, the ISA is not party to any investment treaties, and its governing document – UNCLOS – does not create legitimate expectations for a mining contract. Instead, UNCLOS says each application should be considered on its own merit, based on a set of criteria for assessment.
• The ISA’s mining regulations are still under negotiation, creating uncertainty that could undermine any claim of legitimate expectations by investors.
• Courts in various countries have ruled – in cases not involving seabed mining – that compelling a regulatory authority such as the ISA to grant a right based on legitimate expectations is “legally impossible.” It is also impractical to enforce any compensation award against the ISA, considering its budget and status as an intergovernmental organization. There is also no clear tribunal with jurisdiction to hear a claim against the ISA from a rejected investor on these grounds.

The legal experts therefore conclude that the private commercial interests of an individual investor are not a legally relevant factor and should not be used to intimidate ISA member States in their decision-making.

Thus, the prospects of successfully suing the ISA for rejecting an application are weak. Conversely, there is a strong case for legal action against the ISA if it approves an application in the absence of a regulatory framework. Foremost, the ISA’s decision-making must deliver on its mandate under UNCLOS, including its responsibilities towards environmental protection and overall benefit to all of humankind.

Thirty-two member States of the ISA have called for a moratorium on seabed mining, and the ISA Council has repeatedly decided that mining cannot proceed without regulations. Given this context, member States could have legal recourse against a mining approval, especially because such an approval would breach the ISA’s obligations to protect the marine environment and would exceed the ISA’s jurisdiction.

With respect to this potential liability, in one of the Pew-commissioned papers, legal experts found that:

• UNCLOS grants the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea (ITLOS) – which UNCLOS created as a dispute settlement mechanism – jurisdiction over disputes related to activities in the seabed in international waters, including those between UNCLOS Parties and the ISA. Therefore, ITLOS would have jurisdiction over a dispute related to the approval of a mining application.
• A Party to UNCLOS could challenge a mining approval by appealing to the chamber on the basis of several grounds, including that the approval is inconsistent with the ISA’s obligation to protect and preserve the marine environment, or on the merits of the application itself, which could lack sufficient information about potential environmental impacts or have procedural inconsistencies.
• UNCLOS Parties could also request an advisory opinion from ITLOS to resolve legal uncertainties.

The approval of a mining application in the absence of regulations would not only violate the ISA’s obligation to protect the marine environment but also expose the ISA to potential legal challenges. The significant environmental implications of unregulated mining, and the necessity for strict adherence to international law – including the precautionary principle – require that the ISA exercise extreme caution in its approval processes and reject any mining applications in the absence of adequate regulations. Litigation threats from commercial entities should not influence the ISA to discharge its duty to safeguard ocean ecosystems from the impacts of mining.

Anindita Chakraborty works on The Pew Charitable Trusts’ ocean governance project.