Deep Sea Mining in the Cook Islands

Paul Lynch new pic

Global Island News interviews Cook Islands Seabed Minerals Authority Commissioner, Paul Lynch about the DSM sector’s capacity to transform the nation’s fortunes.

Given the virgin nature of the industry, what has the Cook Islands regulatory framework governing seabed minerals activities principally been informed by? 

The international Seabed Minerals industry could be classed by some as a “frontier” one. However, even though no actual seabed mining has occurred anywhere in the world yet, the international community and the Cook Islands people have been aware of the existence of valuable minerals resources on the deep seabed floor since the 1970s. In fact, July 2014 marked the 20th year commemoration of the coming into force of the United Nations 1994 Agreement relating to the Implementation of Part XI (on Seabed Minerals/the ISA) of the United Nations Convention on the Law of the Sea (see endnote[i]).  The Cook Islands has taken a steady approach to the development of its national seabed minerals sector. In 2009, the Cook Islands became the first nation to pass legislation – the Seabed Minerals Act which is dedicated to the sensible development of its national seabed minerals resources, known as polymetallic Manganese Nodules. The key objective is to “establish a legal framework for the efficient management of the seabed minerals of the Cook Islands”. This Act commenced on March 1st 2013 and currently a world class, sustainable Regulatory Framework of regulations is being developed to regulate future Seabed Minerals Exploration activities in the Cook Islands. The Cook Islands has also been a founding and active member since 2011 of the SPC-EU EDF10 Deep Sea Minerals (the “DSM project”)[1], and will continue to take the best advice possible and keep an eye on improvements and developments affecting the Pacific region and international seabed minerals sector.

To what extent has development of the sector to date been a collaborative effort incorporating regional partners?

While Pacific collaboration in DSM has been important to the Cook Islands, it must be borne in mind that the Cook Islands DSM resource and deep sea environment is uniquely different from other Pacific islands and the international nodule zone, known as the Clarion Clipperton Zone (CCZ)[2]. So many DSM concerns and issues in other places, while of significant interest for consideration, are not directly transferable to the Cook Islands situation. We do, however, uphold many common beliefs about the protection and sustainable use of the ocean and principles like the Precautionary principle[ii].  Since 2011, the Cook Islands has been receiving excellent technical support and advice from several development partners and donors, like the Commonwealth Secretariat, IMF, SOPAC, SPREP, NZAid and AusAID, and as a founding and active member of the SPC-EU EDF10 Deep Sea Minerals (the “DSM project”)[3].

Our Seabed Minerals Act requires that all revenues from DSM activities be deposited into a national savings fund known as a Sovereign Wealth Fund (SWF).

What safeguards are in place to ensure that a significant proportion of the potentially hugely significant financial rewards associated with DSM stays in the nation and that it permeates all sectors of Cook Islands society? How would this be monitored and evaluated?

Our Seabed Minerals Act requires that all revenues from DSM activities be deposited into a national savings fund known as a Sovereign Wealth Fund (SWF). The Cook Islands is taking the best international advice on the development and use of SWFs from Norway [4] and other development partners. In this way, our SWF law seeks to secure the bulk of national DSM revenue, for future use by and for the Cook Islands people, as the Mineral Resource Owner. Our national SWF law has been drafted and will be in place long before any future DSM revenues are received. We have passed new Royalties and tax laws relating specifically to securing a reasonable and legitimate national benefit from all future DSM activities in the Cook Islands.

In respect of mining licences what are the key determinants informing which organisation(s) to grant them to? Will this procurement process be fully transparent to anyone who wishes to scrutinise it?

Currently, a world class, sustainable Regulatory Framework of regulations is being developed to regulate future Seabed Minerals Exploration activities in the Cook Islands. The Act states that this Framework will include the normal expectations placed on the mining industry, such as making an Application for an Exploration Licence[iii], which must include providing a Project proposal, include a bona fide and effective Work Plan, and must allow for independent environmental and financial Due Diligence assessments to take place on the Applicant. This process will be administered by the Cook Islands Seabed Minerals Authority, through a transparent and accountable Licencing system under the SBM Act, and will involve representation and input from various important community stakeholder and interest groups.

Exploitation of the manganese nodule resource within the Cook Islands’ EEZ has the potential to transform the nation’s fortunes. As well as being likely to precipitate further investment, it will bring with it skilled job opportunities, heightened demand for local goods and services and ample scope for the creation of a national Sovereign Wealth Fund. With such an intoxicating array of potential riches, a nation could end up ‘going through the motions’ when it comes to undertaking sufficiently rigorous environmental due diligence which must preface exploitation. In the event that current research throws up some uncomfortable truths in respect of damage to ecosystems and the tourism and fisheries sectors, how would this information impact the move from a state of exploration to actual exploitation?

The Cook Islands has not issued any licences to commence the DSM Exploration phase in its EEZ. However from the scientific, biological and benthic data obtained in the Exploration phase over the next 3 to 5 years, not only will Applicants be able to determine the economic viability of DSM exploitation activities in the Cook Islands, the Cook Islands people will be able to determine the overall risks and benefits that may be involved in DSM in our EEZ. This determination and consultation can take place in our nation, before any final national decision is made to move to the next step to permit DSM exploitation to occur within our sovereign waters, measuring almost 2 million square kilometres. If the benefits are available and the risks are mitigated, then an appropriate decision can be made to pursue DSM in the Cook Islands for the benefit of our people and our development partners. Of great importance to the continued sustainable use and conservation of our national marine resources in the Cook Islands Ocean context is the recent Government Declaration of a new national marine managed area, called Marae Moana[5], being seen by the Government as a multi-use, zoned marine managed area, of up to 1 million square kilometres.

 

For more information, please visit www.seabedmineralsauthority.gov.ck.

Paul Lynch is a practising Cook Islands lawyer with over 20 years of wide and varied legal experience, in the private sector, and then the public sector, firstly for the National Environment Service in 2005 and then the Crown Law Office as Senior Crown Counsel and Legislative Drafter.

Since 2011, he has been with the Office of the Cook Islands Government Minister for Mineral and Natural Resources. In August 2012, he was formally appointed as the first Cook Islands Seabed Minerals Commissioner, under the Cook Islands Seabed Minerals Act 2009.

He is now a recognised expert in the Cook Islands Seabed Minerals sector, having prepared the first ever Report in 2011 on the Cook Islands Seabed Minerals sector, which has a unique abundance of Manganese Nodules of 10 billion tonnes in its 2.4 million km2 EEZ.

He also helped guide the successful Cook Islands Sponsoring State Application to the International Seabed Authority, which was granted in July 2014. This is linked with CIIC and GSR (Belgium).

He holds Law/Arts combined degrees, a Masters of Business Administration and is currently studying for his Masters of Environmental Laws. He studied legislative Drafting at the University of London in 2007.

He resides in Rarotonga, is married with one daughter. On his maternal side, he is related to a senior chiefly and landowning family on the main island of Rarotonga.

 

[i] The Cook Islands government exercises sovereignty and jurisdiction over its EEZ according to international law and convention as a member state under UNCLOS. This allows government to exercise full control over resources in its EEZ, including minerals on the seabed.

It is now a settled principle of international law that mineral resources in the high seas, being beyond the maritime jurisdiction of a states’ EEZ, are the common heritage of mankind.

[ii] http://www.unep.org/Documents.Multilingual/Default.asp?DocumentID=78&ArticleID=1163

[iii] 102.  Application for tender exploration licence – required information: An application made for the purposes of section 101 must –                          

 

(a)          be made in accordance with the approved form; and

(b)          be made in the approved manner; and

(c)           specify the blocks for which the application is made; and

(d)          include details of –

(i)            the exploration operations that the applicant intends to carry out; and

(ii)           the amount of money that the applicant intends to spend on those activities; and

(iii)          the technical qualifications of the applicant and of the applicant’s employees who are likely to be involved in the operations authorised by the licence; and

(iv)           the technical advice available to the applicant; and

(v)            the financial resources available to the applicant; and,

(vi)           if the licence is to be held by more than one person—the share of the licence that each prospective holder will hold; and

(e)          be accompanied by maps that –

(i)            relate to the blocks; and

(ii)           comply with any guidelines or directions issued by the Authority; and

(f)           specify an address for service of notices under this Act and the regulations.

[1] http://www.sopac.org/dsm/public/files/countries/Overview_of_the_SPC-EU_Deep_Sea_Minerals_Project_DSM_Workshop.pdf

[2] http://www.isa.org.jm/en/scientific/exploration

[3] http://www.sopac.org/dsm/public/files/countries/Overview_of_the_SPC-EU_Deep_Sea_Minerals_Project_DSM_Workshop.pdf

[4] http://qz.com/252753/norways-gargantuan-sovereign-wealth-fund-by-the-numbers/

[5] http://www.maraemoana.gov.ck/