23. Safeguarding the Interests of Developing States Within the Context of Deep-Sea Mining in the Area

LOSC (n 1), Articles 156–157.

Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area (22 July 2013), ISA Doc. ISBA/19/C/17 (2013) (Exploration Regulations PMN); Regulations on Prospecting and Exploration for Polymetallic Sulphides in the Area (15 November 2010), ISA Doc. ISBA/16/A/12/Rev.1 (2010) (Exploration Regulations PMS); Regulations on Prospecting and Exploration for Cobalt-rich Ferromanganese Crusts in the Area (22 October 2012), ISA Doc. ISBA/18/A/11 (2012) (Exploration Regulations FMC).

LOSC (n 1), Article 153(2)(b), Annex III Article 4(1) and (3).

LOSC (n 1), Annex III Articles 8 and 9(4).

R Wolfrum (1983) The Principle of the Common Heritage of Mankind. Heidelb J Int Law 43:317; J Frakes (2003) The Common Heritage of Mankind Principle and the Deep Seabed, Outer Space, and Antarctica: Will Developed and Developing Nations Reach a Compromise. Wisc Int Law J 21:433; E Guntrip (2003) The Common Heritage of Mankind: An Adequate Regime for Managing the Deep Seabed. Melb J Int Law 4:380–381.

SJ Shackelford (2009) The Tragedy of the Common Heritage of Mankind. Stanf Environ Law J 28:109–110; E Franckx (2010) The International Seabed Authority and the Common Heritage of Mankind: The Need for States to Establish the Outer Limits of their Continental Shelf. Int J Mar Coast Law 25(4):566, doi: https://​doi.​org/​10.​1163/​157180810X525377​; G Hardin (1968) The Tragedy of the Commons. Science 162:1243–1248, doi: https://​doi.​org/​10.​1126/​science.​162.​3859.​1243

Cf. J Dingwall (2020) Commercial Mining Activities in the Deep Seabed beyond National Jurisdiction: the International Legal Framework. In: Banet C (ed), The Law of the Seabed. Access, Uses, and Protection of Seabed Resources, Brill Nijhoff, Leiden, 142; JE Noyes (2012) The Common Heritage of Mankind: Past, Present, and Future. Denv J Int Law & Pol 40: 459–460; M Koskenniemi & M Lehto (1996) The Privilege of Universality: International Law, Economic Ideology and Seabed Resources. Nord J Int Law 65(3–4):536–552, doi: https://​doi.​org/​10.​1163/​1571810962029496​0; E Holmila (2005) Common Heritage of Mankind in the Law of the Sea. Acta Societatis Martensis 1:187.

A Jaeckel, JA Ardron, KM Gjerde (2016) Sharing benefits of the common heritage of mankind – Is the deep seabed mining regime ready? Mar Policy 70:199, doi: https://​doi.​org/​10.​1016/​j.​marpol.​2016.​03.​009; BH Weston, D Bollier (2013) Green Governance: Ecological Survival, Human Rights, and the Law of the Commons. Cambridge University Press, Cambridge, p 219.

LOSC (n 1), Articles 155(2) and 311(6).

LOSC (n 1), Article 153(2)–(3), Annex III Article 3; Implementation Agreement 1994 (n 5), Annex Section 1(6).

LOSC (n 1), Article 153(2)(b), Annex III Article 4(1) and (3).

Ibid., Article 139, Annex III Article 4(4); ITLOS, Responsibilities and obligations of States sponsoring persons and entities with respect to activities in the Area, Advisory Opinion, 1 February 2011, ITLOS Reports 2011, 10 (ITLOS Advisory Opinion), paras 228–230.

LOSC (n 1), Annex III Article 4(3); ITLOS Advisory Opinion (n 30), paras 77 and 190.

Cf. K Willaert (2020) Crafting the perfect deep sea mining legislation: a patchwork of national laws. Mar Policy, doi: https://​doi.​org/​10.​1016/​j.​marpol.​2020.​104055

LOSC (n 1), Annex III Article 21(3).

Draft Exploitation Regulations (n 8), Articles 64–73, Appendix IV.

K Willaert (2019) The financial aspects of deep sea mining: common heritage of mankind or first-come-first-served? J Int Mar Law 25(5):387–395.

R Kirchain, R Roth, FR Field et al. (2019) Report to the International Seabed Authority on the Development of an Economic Model and System of Payments for the Exploitation of Polymetallic Nodules in the Area, p 5.

LOSC (n 1), Articles 153(2)(a) and 170, Annex III Article 3(1)–(2), Annex IV Article 1; Implementation Agreement 1994 (n 5), Annex Section 2.

Cf. Implementation Agreement 1994 (n 5), Annex Section 2(2); Draft Exploitation Regulations (n 8), Article 19(1).

K Willaert (2020) Effective protection of the marine environment and equitable benefit-sharing in the Area: empty promises or feasible goals? Ocean Dev. Int. Law 51(2):185–186, https://​doi.​org/​10.​1080/​00908320.​2020.​1737444; K Willaert (2021) The Enterprise: state of affairs, challenges and way forward. Mar Policy, https://​doi.​org/​10.​1016/​j.​marpol.​2021.​104590; Report of the Chair of the Legal and Technical Commission on the work of the Commission at the first part of its twenty-sixth session (9 March 2020), ISA Doc. ISBA/26/C/12 (2020), paras 37–41.

Implementation Agreement 1994 (n 5), Annex Section 2(1).

Draft Exploitation Regulations (n 8), Article 19(2).

LOSC (n 1), Article 148.

As this poses some practical problems in case of polymetallic sulphides and cobalt-rich ferromanganese crusts, the relevant regulations provide for the option to offer an equity interest in a joint venture arrangement with the Enterprise instead (Exploration Regulations PMS (n 7), Articles 16 and 19; Exploration Regulations FMC (n 7), Articles 16 and 19).

LOSC (n 1), Annex III Article 8; Exploration Regulations PMN (n 7), Articles 15–16.

Besides the fact that an application for an exploration contract was filed for that specific zone, indicating promising prospects for the recovery of mineral resources, the ISA Secretariat also undertakes efforts to evaluate the resource potential of reserved areas (International Seabed Authority (2019) Current Status of the Reserved Areas with the International Seabed Authority, pp. 4–5; LOSC (n 1), Article 143(2)).

For example, Report and recommendations to the Council of the International Seabed Authority relating to an application for the approval of a plan of work for exploration by Nauru Ocean Resources Inc. (11 July 2011), ISA Doc. ISBA/17/C/9 (2011), para 3; Report and recommendations 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 Tonga Offshore Mining Limited (8 July 2011), ISA Doc. ISBA/17/C/10 (2011), para 3; 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 Marawa Research and Exploration Ltd. (18 July 2012), ISA Doc. ISBA/18/C/18 (2012), para 3.

LOSC (n 1), Annex III Article 9; Exploration Regulations PMN (n 7), Article 17.

LOSC (n 1), Annex III former Article 5.

Implementation Agreement 1994 (n 5), Annex Section 5.

LOSC (n 1), Article 144(1)(b).

Ibid., Articles 143(3)(b)(ii) and 144(2), Annex III Article 15; e.g., Report of the Chair of the Legal and Technical Commission on the work of the Commission at the first part of its twenty-sixth session (9 March 2020), ISA Doc. ISBA/26/C/12 (2020), paras 4–7.

Implementation Agreement 1994 (n 5), Annex Section 5(1)(c); LOSC (n 1), Article 143.

Implementation Agreement 1994 (n 5), Annex Section 5(1)(b).

Report of the Finance Committee (25 September 2020), ISA Doc. ISBA/26/C/21 (2020), paras 14–15; Report of the Chair of the Legal and Technical Commission on the work of the Commission at the first part of its twenty-sixth session (9 March 2020), ISA Doc. ISBA/26/C/12 (2020), paras 2 and 43.

Cf. Y Tanaka (2015) The international law of the sea. Cambridge University Press, Cambridge, pp. 162–164.

K Willaert (2020) Forum shopping within the context of deep sea mining: towards sponsoring states of convenience? Bel Rev Int Law 2019(1–2):116–138.

LOSC (n 1), Article 144; Implementation Agreement 1994 (n 5), Annex Section 5.

“Equality of treatment between developing and developed sponsoring states is consistent with the need to prevent commercial enterprises based in developed states from setting up companies in developing states, acquiring their nationality and obtaining their sponsorship in the hope of being subjected to less burdensome regulations and controls. The spread of sponsoring states ‘of convenience’ would jeopardize uniform application of the highest standards of protection of the marine environment, the safe development of activities in the Area and the protection of the common heritage of mankind.” (ITLOS Advisory Opinion (n 30), para 159)

K Willaert, P Singh (2021) Deep sea mining partnerships with developing states: favorable collaborations or opportunistic endeavours? Int J Mar Coast Law, doi: https://​doi.​org/​10.​1163/​15718085-BJA10052

LOSC (n 1), Article 153(2)(b), Annex III Article 4(1) and (3); ITLOS Advisory Opinion (n 30), paras 77 and 190.

AS Rojas, FK Phillips (2019) Effective control and deep seabed mining: Toward a definition. Liability Issues for Deep Seabed Mining Paper Series, p 2.

Cf. Analysis of regulation 11.2 of the Regulations on Prospecting and Exploration for Polymetallic Nodules and Polymetallic Sulphides in the Area (5 June 2014), ISA Doc. ISBA/20/LTC/10 (2014), paras 20–22; Issues related to the sponsorship of contracts for exploration in the Area, monopolization, effective control and related matters (21 June 2016), ISA Doc. ISBA/22/LTC/13 (2016), paras 5–7 and 11.

AS Rojas, FK Phillips (n 69), p 10.

LOSC (n 1), Articles 139 and 153(2)(b); ITLOS Advisory Opinion (n 30), para 77.

AS Rojas, FK Phillips (n 69), pp. 4, 10.

LOSC (n 1), Article 140(2).

LOSC (n 1), Article 136.

LOSC (n 1), Article 140(1).

Cf. ICJ, Barcelona Traction, Light and Power Company, Limited (Belgium v Spain), Judgment, ICJ Reports 1970, 3, para 70; AS Rojas, FK Phillips (n 69), p 9.

LOSC (n 1), Annex III Article 9(4).

Decision of the Council relating to a request for approval of a plan of work for exploration for polymetallic nodules submitted by Nauru Ocean Resources Inc. (19 July 2011), ISA Doc. ISBA/17/C/14 (2011); Decision of the Council relating to a request for approval of a plan of work for exploration for polymetallic nodules submitted by Tonga Offshore Mining Limited (19 July 2011), ISA Doc. ISBA/17/C/15 (2011); Government of the Republic of Nauru (2018) Nauru partners with deep sea mining company on quest for sustainable future; DeepGreen (2020) DeepGreen acquires third seabed contract area.

Decision of the Council relating to an application for the approval of a plan of work for exploration for polymetallic nodules submitted by the Cook Islands Investment Corporation (21 July 2014), ISA Doc. ISBA/20/C/29 (2014); 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 (9 July 2014), ISA Doc. ISBA/20/C/18 (2014), para 19; Decision of the Council relating to a request for approval of a plan of work for exploration for polymetallic nodules submitted by Marawa Research and Exploration Ltd. (26 July 2012), ISA Doc. ISBA/18/C/25 (2012); DeepGreen (2020) Sponsoring states.

Application for approval of a plan of work for exploration by Tonga Offshore Mining Ltd. (14 June 2011), ISA Doc. ISBA/17/LTC/L.5 (2011); Application for approval of a plan of work for exploration for polymetallic nodules in the Area by Nauru Ocean Resources Incorporated (21 June 2011), ISA Doc. ISBA/17/LTC/L.4 (2011); Application for approval of a plan of work for exploration for polymetallic nodules in the Area by Marawa Research and Exploration Ltd. (11 June 2012), ISA Doc. ISBA/18/LTC/L.6 (2012).

K Willaert (2020) On the legitimacy of national interests of sponsoring states: a deep sea mining conundrum. Int J Mar Coast Law, doi: https://​doi.​org/​10.​1163/​15718085-BJA10011

For example, Tonga Seabed Minerals Act 2014, Section 77(5)(ii); Nauru International Seabed Minerals Act 2015, Section 23(1)(c)(ii); Kiribati Seabed Minerals Act 2017, Section 87(2)(ii); Cook Islands Seabed Minerals Act 2019, Section 134(1)(c).

Pacific Community (2012) Pacific-ACP States Regional Legislative and Regulatory Framework for Deep Sea Minerals Exploration and Exploitation.

For example, Tonga Seabed Minerals Act 2014, Section 91(2)(b); Nauru International Seabed Minerals Act 2015, Section 40(4); Kiribati Seabed Minerals Act 2017, Section 105(4)(b); Cook Islands Seabed Minerals Act 2019, Section 153(4).

R Kirchain et al. (n 38), pp. 5, 54, 71–73.

However, these proposed corrections come with a caveat: as soon as the levies of the sponsoring states are taken into account and the payment system is introduced by the ISA, lowering corporate tax rates and eliminating recovery fees will not automatically lead to higher benefits for mankind as a whole and would simply result in reduced taxes for deep-sea mining contractors. Consequently, in order to ensure that national taxation is effectively replaced by international taxation, it is crucial to combine the suggested adjustments with synchronized changes to the forthcoming ISA payment system, for example by linking the financial model and related contractual terms to certain threshold values regarding the accumulated tax rates imposed by sponsoring states. After all, revisions of the payment system and the applicable tariffs can only be introduced in existing contracts at the election of the contractor (K Willaert (n 83); Implementation Agreement 1994 (n 5), Annex Section 8(1)(e); Draft Exploitation Regulations (n 8), Articles 81–82).

LOSC (n 1), Article 140(2).

For example, recovery fees or high corporate income taxes could be deemed legitimate when applied by developing states for as long as the ISA has not adopted suitable payment and distribution systems, on condition that the fees are paid into a specific fund dedicated to adequate and sustainable management of deep-sea mining activities and provided that recovery fees and corporate tax tariffs exceeding the mean among sponsoring states are not cumulated.

K Willaert (n 83).