This article was first published in LexisPSL Commercial on 11 June 2014.
Commercial analysis: The Deep Sea Mining Act 2014 (DSMA 2014) has received Royal Assent, signaling the UK’s interest in and commitment to this industry. Stephen Palmer, senior associate at Norton Rose Fulbright, reviews the significance of DSMA 2014 and looks at the compliance challenges faced when operating in such an extreme environment.
What are the most significant features of DSMA 2014?
Having received Royal Assent on 14 May 2014, DSMA 2014 effects amendments to the existing Deep Sea Mining (Temporary Provisions) Act 1981 (DSM (TP)A 1981) so that UK legislation is aligned with the United Nations Convention on the Law of the Sea (UNCLOS).
Importantly, this means that it is now clear from a legislative standpoint that the UK conforms and complies with requirements under UNCLOS and as commented on by the Advisory Opinion of the Seabed Disputes Chamber (1 February 2011) which sets out several findings as to the responsibilities and obligations of Sponsoring States under UNCLOS (the Advisory Opinion). The Advisory Opinion stated that in sponsoring contractors, sponsoring states have a responsibility to ensure contractors conduct their activities in conformity and compliance with UNCLOS. The Advisory Opinion also indicates that such a precautionary approach would include the adoption of appropriate rules and measures within the framework of a state’s own legal system to oblige contractors to also adopt that approach.
On a commercial level, DSMA 2014 very much signifies the UK as open for business in the deep sea mining sector, and that it is committed to this industry and ready to sponsor viable project contractors.
How will the new measures affect this area of law?
DSMA 2014 takes a very broad approach to the exploitation of minerals and resources in the deep sea environment. Under DSMA 2014, licensing for the exploration and exploitation of polymetallic nodules, massive sulphides and cobalt crusts is now provided for. In fact, DSMA 2014 is broad enough that all solid, liquid or gaseous minerals are captured.
DSMA 2014 makes specific reference to UNCLOS and the Agreement for the Implementation of Part XI of UNCLOS in respect of activities in ‘the Area’ (non-territorial waters). It is now clear that sponsored contractors must comply with the applicable provisions of UNCLOS, any rules and regulations adopted by the International Seabed Authority (ISA) and the terms of specific exploration or exploitation contracts with the ISA.
DSMA 2014 also amends the existing legislation so that the English courts can enforce decisions of the Seabed Disputes Chamber. Where a decision of the Seabed Disputes Chamber is registered with the High Court (or the Court of Session for Scottish purposes), it will be deemed to have been given by that court.
Does DSMA 2014 create any challenges in this area?
Just like DSM(TP)A 1981, the legislation is by no means prescriptive and essentially states that any exploration or exploitation licence granted shall contain such terms as are appropriate (as the Secretary of State thinks fit). While the terms of UNCLOS will need to be adhered to, uniformity between licences for different contracting parties sponsored by the UK is not a given. Transparency has also therefore not been fully achieved, which would have been the case if detailed licensing terms and conditions had been stipulated within DSMA 2014. Nevertheless, DSMA 2014 (and the relative speed of its passing) does highlight the attention the UK government is giving to this sector and its focus on meeting its requirements under UNCLOS.
Operating in such extreme environments, it will of course be a great challenge for the sponsored contractors and project operators to comply with DCMA 2014 requirements--and the environmental protective measures under UNCLOS and with respect to the area.
What are the important dates for practitioners?
As of 14 May, DSMA 2014 has come into effect, having received Royal Assent. To practitioners and all potential stakeholders in this industry and sector, probably the most important (and pressing) date is when an actual regulatory and legal framework as to exploitation and commercial mining activities is put in place. While regulations as to exploration of the area are in place and these activities are very much underway, the ISA is yet to put in place regulations that will govern actual mining activities. Work on this is currently underway at the ISA but the regulations may not be finalised until the end of 2015/16.
What should lawyers do next?
If they haven’t done so already, lawyers should appraise themselves of DSMA 2014. Given the significant cross-referencing with UNCLOS, they should also review the content of UNCLOS and specifically the Agreement for the Implementation of Part XI of UNCLOS in respect of activities in the area.
It is also advisable to monitor the ISA website for updates on the state of progress as to the exploitationrelated regulations.