The Environmental Protection Authority (EPA) has rejected a second application for deep sea mining under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (the EEZ Act). 

The decision against Chatham Rock Phosphate (CRP) this week follows the rejection in June last year of a bid by Trans-Tasman Resources Ltd (TTR).

Both decisions demonstrate the precautionary approach that the EPA is required to adopt in implementing the EEZ Act, and the care that therefore needs to be taken when preparing projects and applications for consent to mine within the EEZ.

The applications

CRP wanted to mine phosphorite nodules on the Chatham Rise; TTR to extract offshore iron sand in the South Taranaki Bight.

Both applications were declined on the basis of a lack of certainty about the environmental impacts and risks associated with their proposals.  The EPA found that both TTR and CRP had provided the best available information on the nature and scale of the effects of their respective projects. 

But in both cases, significant information gaps and uncertainties remained.   Neither applicant could satisfy the EPA’s concerns with their proposed adaptive management plans.  

Careful and strategic advice should be taken on the scope of applications, the nature and contents of the accompanying environmental impact assessments and any draft conditions proposed (especially any relating to adaptive management regimes).

The EEZ Act

The EEZ Act requires the EPA to favour caution and environmental protection where there is uncertainty regarding the environmental effects and risks of a proposal.  But before declining a proposal on grounds of uncertainty, the EPA must consider whether an adaptive management approach would enable the application to be undertaken. 

The EPA has recognised that the scientific knowledge we have of the EEZ is manifestly incomplete.  While a complete and perfect understanding of the EEZ environment is not required before consent will be granted, applicants must still come to the EPA with enough information about the environmental effects of their proposed operations in order that the risks and impacts of the proposal can be properly assessed.

Where to from here?

In the wake of the CRP decision, some members of the business community have questioned what mining investor is going to be prepared to lodge the third application for a deep sea mining marine consent. 

There were other reasons why the TTR and CRP applications were refused.  As well as failing to provide adequate information or adaptive management conditions, TTR and CRP both failed to demonstrate that their proposals could provide more than modest economic benefit to New Zealand. 

The EPA also had concerns in both cases about the impact on groups such as iwi and the commercial fishing industry that had existing interests in the area where the activities were proposed.  In addition, the potential environmental impact of both proposals would be more than minor.  It may be that an application which fares better in these areas would be in with a better shot at success. 

It is also worth mentioning that both TTR and CRP rejected the suggestion that they should undertake a small scale trial of the proposed mining activities, stating that would be unfeasible.  In the case of CRP in particular, the depth of mining and methods proposed have never been carried out worldwide.  It is possible that a project which has international experience or can start with a small scale trial would have a better chance of being granted approval. 

Both the CRP and TTR applications attracted a large number of submissions from a diverse range of New Zealanders including iwi, the commercial fishing industry, conservation groups, and recreational users of the marine environment.  The issue of deep sea mining and how best to manage the resources in our exclusive economic zone will continue to evoke a range of strong opinions. 

The High Court has not yet had a chance to consider the provisions of the EEZ Act.  TTR has recently abandoned its appeal to the High Court and it remains to be seen whether CRP will attempt an appeal, submit a new application, or walk away.