A LEGAL analysis released by the Pacific Network on Globalisation (PANG) raises regional concerns for Pacific Island Countries exploring deep-sea mining through contentious contracts with private companies.
The legal analysis examines the sponsorship agreement between the Kingdom of Tonga and Tonga Offshore Mining Limited (TOML), which raises serious concerns about the overly generous rights granted to TOML and the extensive liabilities imposed on Tonga. This raises regional concerns about the progress of deep-sea mining, especially as countries meet in Kingston, Jamaica, to discuss deep-sea mining rules at the 31st Session of the International Seabed Authority (ISA).
“This sponsorship deal is a callback to investor agreements that give all the advantages to the corporation, including the right to sue the Tongan government for changes in policy and law in pro-investor, foreign jurisdictions. This is a wake-up call for the region about the exposure they may face from sponsoring such mining, especially with the international legal basis for it being unclear,” commented Mr Adam Wolfenden, PANG Deputy Coordinator.
The legal analysis, conducted by University of Auckland Emeritus Professor of Law, Dr Jane Kelsey, examined the TOML contract with Tonga and found numerous clauses that would grant extensive rights to TOML and allow it to sue the Kingdom of Tonga in an offshore jurisdiction if any government policies or regulations were to impede TOML profits or expectations.
These investor rights and arbitration processes belong to the “old generation” of bilateral investment treaties. Those are blunt instruments that guarantee extensive investor rights with few, or in this case, no exceptions. Those rights are enforceable extraterritorially through ad hoc private arbitration that lacks fundamental elements of a public legal system,” stated Dr Kelsey.
The rules and regulations for deep-sea mining are far from settled as the ISA Council debates the Mining Code this week. Tonga, as a sponsoring state, is already moving ahead with deep-sea mining without ISA approval, underscoring the urgent need for robust regulations to ensure that national governments are not exposed to excessive legal liabilities while protecting fragile marine ecosystems.
“Tonga must not be rushed into deep-sea mining at the expense of our sovereignty, environment, and future generations. Racing ahead without clear international safeguards exposes our nation to dangerous liabilities and undermines the very principles of sustainable development we stand for,” stated Latai Halafihi, Civil Society Forum of Tonga.
Reverend Ikani Tolu, General Secretary of the Tonga National Council of Churches, stated, “Given deep knowledge gaps, slow recovery rates, transboundary effects, and high value of deep-sea biodiversity and services, a precautionary approach including moratorium until robust science and governance are in place is strongly advised. No doubt deep-sea mining poses significant, largely irreversible ecological risk and socio-economic uncertainties for Tonga.”
“Deep-sea mining is an untested and dangerous new industry that is made even riskier by entering into agreements that give priority to the expectations, financial well-being, and protection of the mining corporation, especially over national laws and policies. Under this agreement, TOML could challenge Tongan laws in Singapore, and there is no requirement to be notified or to provide a financial settlement. This does not support development or environmental protection,” concluded Mr Wolfenden.