[co-authors: Claire Robertson, Eran Sthoeger Esq., Gigi Lockhart, Riley Arthur, Benjamin Crowley]
Key takeaways
- Having missed the deadline to finalise exploitation regulations by 2023, the International Seabed Authority (ISA) is targeting Part Two of its 30th session being held this month from 7 to 18 July 2025 for the finalisation of the Draft Exploitation Regulations for Deep Sea Mining (DSM) in the Area.
- Some States are calling for a “moratorium” or “precautionary pause” on DSM exploitation activities until the Draft Exploitation Regulations are agreed. Other States wish to proceed with exploitation activities as permitted under the United Nations Convention on the Law of the Sea (UNCLOS) and the 1994 Agreement relating to the Implementation of Part XI of UNCLOS (Implementation Agreement).
- Regardless of whether exploitation activities are paused or proceed, disputes in both the international and domestic fora are likely to arise with implications for Contractors, States, Sponsoring States, and the ISA.
Introduction
To pause or proceed? This is the current dilemma facing States and the ISA in relation to DSM exploitation activities. As the scientific community has gained greater understanding of the potential impacts of DSM, some States have called for a “moratorium”, “precautionary pause”, or a total ban on DSM. On the other hand, despite the lack of agreed Exploitation Regulations, UNCLOS and the Implementation Agreement permit applications to be made for exploitation activities – a position States Parties to UNCLOS agreed upon in negotiating these texts.
In Part One of our three-part series, we provided an introduction to DSM, its processes, and the science behind it. Part Two analysed the regulatory and legal frameworks applicable to DSM. In this Part Three, we consider the wider international law issues at play and the landscape of international and domestic disputes likely to arise in relation to DSM.
Implementing the Implementation Agreement: exploitation in the absence of regulation
As discussed in Part One of our series, the science presents strong evidence for both proponents and opponents of DSM. Despite the Implementation Agreement permitting applications for exploitation contracts, the international community’s understanding of the potential impacts of DSM exploitation have evolved over time, resulting in some States calling for a “moratorium”, “precautionary pause”, or a total ban on DSM. On the other hand, some States are ready to take the plunge and commence DSM exploitation activities.
Most recently, on 24 April 2025, President Donald Trump signed an Executive Order, to “restore American dominance in offshore critical minerals and resources”.1 The Executive Order notes that the United States of America “must take immediate action to accelerate the responsible development of seabed mineral resources, quantify the Nation’s endowment of seabed minerals, reinvigorate American leadership in associated extraction and processing technologies, and ensure secure supply chains for our defense, infrastructure, and energy sectors”.2 In relation to DSM in the Area, the Executive Order instructs the Secretary of Commerce to expedite the process for reviewing and issuing seabed mineral exploration licences and commercial recovery permits, in areas beyond national jurisdiction, under the Deep Seabed Hard Mineral Resources Act.
Following the Executive Order, on 29 April 2025, The Metals Company (TMC) submitted applications to the National Oceanic and Atmospheric Administration for two exploration licences and one commercial recovery permit (otherwise known as an exploitation licence) under the Deep Seabed Hard Mineral Resources Act and National Oceanic and Atmospheric Administration implementing regulations, which form the US seabed mining code.3 The application area for the commercial recovery permit, is 25,160 km2 in the Clarion Clipperton Zone (CCZ).4 The application area for the exploration licences is a combined 199,895 km2.5 The precise areas applied for (referred to as TMC USA A, B, and A-A2) for exploration are not publicly known.6 However, TMC has indicated they include “areas that contain the Company’s already indicated and measured resources,” suggesting they may overlap with the ISA exploration licenses held by Nauru Ocean Resources Inc. (NORI) in the CCZ.7
These announcements coincided with the ISA’s 30th session. Part One of the 30th session was held in Jamaica at the end of March 2025, during which “the Council completed a reading of the Revised Consolidated Text of the Draft Exploitation Regulations, issued by the President of the Council in November 2024, covering the Preamble through draft regulation 55” and “negotiations proceeded on a regulation-by-regulation basis, fostering in-depth discussions among delegations”.8 As discussed in Part Two of our series, Part Two of the ISA's 30th session is being held this month between 7 to 18 July 2025, where discussions on agreeing the consolidated text of the Draft Exploitation Regulations continue. It is hoped the Draft Exploitation Regulations will be agreed during this session.
Navigating unchartered waters: the legality of pausing or proceeding with DSM exploitation activities
The texts of UNCLOS and the Implementation Agreement, which explicitly permit exploitation activities to proceed in the absence of exploitation regulations, create a tension with the position that several States have advanced calling for a moratorium on DSM. Proceeding with, or pausing, DSM activities are both likely to give rise to international law issues that will implicate both Contractors and States alike.
Legal validity of any moratorium or precautionary pause
What are the legal arguments for a “moratorium” or “precautionary pause”?
As explained in Part Two of our series, despite the Implementation Agreement permitting applications for exploitation contracts, the international community’s understanding of the potential impacts of DSM exploitation have evolved over time, resulting in some States calling for a moratorium on DSM.
Those States seeking to justify a “moratorium” or “precautionary pause” advance two key arguments:
- the customary international law “precautionary principle”, a principle that dictates that in the absence of full scientific certainty, States should take preventative measures to prevent serious or irreversible damage to the environment, and requires States to defer exploitation activities until more is known about the potential harm from these activities to the marine environment; and
- Article 145 and Part XII of UNCLOS regulate protection of the marine environment (including the Area), and oblige States Parties to defer DSM activities until protecting of the marine environment can be guaranteed.
The precautionary principle has been included in the exploration regulations and the Draft Exploitation Regulations. The recent International Tribunal for the Law of the Sea (ITLOS) advisory opinion on climate change considered the precautionary principle in the context of anthropogenic greenhouse gas emissions, and the principle may be relevant to future DSM regulations and negotiations. In the context of anthropogenic greenhouse gas emissions, ITLOS stated that “States must apply the precautionary approach” to determine the necessary measures that they are required to take to regulate marine pollution. Much earlier, in 2011, the Seabed Disputes Chamber (SDC) in its Advisory Opinion on Responsibilities and obligations of States with respect to activities in the Area noted that the precautionary principle was on "a trend towards [being] part of customary international law".9
ITLOS concluded that the obligation to take measures necessary to protect and preserve the marine environment, is one of due diligence (see Art 192 UNCLOS). The obligation’s contents are dependent on the specific treaty, however, the standard of the obligation is stringent and determined by an assessment of the risk and level of harm combined.10 Consequently, ITLOS concluded that “States are required to take measures as far-reaching and efficacious as possible to prevent or reduce the deleterious effects of climate change and ocean acidification on the marine environment”.11 In the context of DSM, all States must adhere to these stringent due diligence obligations, sourced either through UNCLOS or customary international law, to ensure that their activities do not harm the marine environment. The ITLOS advisory opinion is also important for future DSM activities due to the explicit recognition that the obligation to conduct environmental impact assessments is crucial to ensure that activities do not harm the marine environment.
Further, the International Court of Justice (ICJ) is currently considering a request from the General Assembly to clarify States' obligations under general international law to protect the climate system from anthropogenic greenhouse gas emissions, including the legal consequences for breaching those obligations. It is possible that the ICJ’s opinion will have an impact on the obligations of States with respect to DSM, the development of DSM regulations, and the scope of DSM activities.
In light of these UNCLOS provisions and ITLOS’ recent findings, some argue that a precautionary pause or moratorium is necessary “to ensure compliance with the environmental protection imperatives of UNCLOS”, as “States must not permit exploitation to be undertaken if they cannot be confident” of ensuring the protection of the marine environment.12
Is a “moratorium” likely to be permanent?
Where UNCLOS and the Implementation Agreement currently permit applications for exploitation activities, a moratorium is unlikely to be permanent, and the ISA has not expressed any intention that it will implement a moratorium or precautionary pause. However, a moratorium is not foreign to the law of the sea and environmental issues. In 1982, faced with calls to consider new scientific research and led by the anti-whaling movement, the International Whaling Commission voted to temporarily pause commercial whale killings. Consequently, a “temporary deferral” of DSM exploitations is not unprecedented.13
Legality of unregulated exploitation
What are the legal arguments for proceeding with exploitation activities in the absence of Exploitation Regulations?
As outlined in Part Two of this series, Nauru triggered a two-year process whereby the ISA was to conclude the Draft Exploitation Regulations. Upon expiration of the deadline (regardless of whether the Draft Exploitation Regulations have been agreed), all State Parties to UNCLOS would be permitted to apply for an exploitation licence. Where the explicit text of UNCLOS and the Implementation Agreement do not prohibit such activities, imposing a ban on DSM activities would likely be contrary to the express agreement of the State Parties in the treaties.
Notwithstanding the absence of Exploitation Regulations, State Parties must adhere to existing obligations and principles set out in UNCLOS. Article 139 is a key provision and requires Sponsoring States “to ensure” activities in the Area are carried out with due diligence and in conformity with UNCLOS, the regulations, the ISA, and contracts. Sponsoring States also have “direct obligations” under UNCLOS and the regulations to assist the ISA in its exercise of control over activities in the Area (Article 153(4) UNCLOS), to apply a precautionary approach (under Regulation 2 of the Draft Exploitation Regulations and customary international law), to apply best environmental practices (under the Sulphides and Ferromanganese Regulations) and to conduct environmental impact assessments (under section 1(7) of the Annex to the Implementation Agreement as well as the Nodule, Sulphides and Ferromanganese Regulations).14
Other provisions of UNCLOS and the Implementation Agreement relating to DSM may also inform the interpretation of these provisions, as do the treaties’ object and purpose, in accordance with rules of treaty interpretation (Article 31 Vienna Convention on the Law of Treaties (VCLT)). For example, where the Implementation Agreement permits State Parties to apply for exploitation licences, the assessment of that licence application should be informed by the provisions of Part XII, Part XI and Article 145 of UNCLOS to promote protection of the marine environment in the Area, and Sponsoring States’ due diligence obligations to supervise their Contractors in the Area. Where DSM proponents are legally permitted to make exploitation applications, and can align their activities with the environmental protection expectations set forth in UNCLOS, then arguably Contractors can proceed in accordance with international law and a manner that protects the marine environment.
Does the same legal argument apply to States that are not parties to UNCLOS and the Implementation Agreement?
While State Parties are bound by the two treaties, rules and regulations, non-Parties to UNCLOS and the Implementation Agreement are not bound to the rules, regulations, and procedures of the ISA.
This is particularly important when considering the position of the United States of America - a non-Party to UNCLOS, but a signatory to the Implementation Agreement. As a non-Party to UNCLOS, commentators contend that the United States could assert its entitlement to exploit natural resources without the ISA’s permission. However, on the other hand, as a signatory to the Implementation Agreement, under Article 18(a) of the VCLT, the United States has an obligation “to refrain from acts which would defeat the object and purpose of a treaty”. Non-Parties have obligations to protect and preserve the marine environment, because Article 192 of UNCLOS is part of customary international law.15 Some commentators argue that “the normative nature of the [common heritage of mankind] along with the widespread participation in [UNCLOS] and the [Implementation] Agreement by states, coastal and landlocked, including big maritime states with the requisite marine technology, would appear to lend credence to the view that the concept of the [common heritage of mankind] is part of [customary international law]’.16 Customary international law binds all States (except for persistent objectors), regardless of whether that State is also party to a treaty which imposes that right or obligation. Where the principle of the “common heritage of mankind” (discussed in Part Two of this series) is considered customary international law, non-Parties to UNCLOS are required to operate in the Area in a manner that respects the notions of equitable benefit sharing and protection of the marine environment for all States’ use. There are different views as to whether this entails that States cannot exploit some of the resources of the Area unilaterally.
Some multinationals domiciled in one non-Party jurisdiction have avoided the legal uncertainty of non-Parties by acquiring ISA contracts from subsidiaries in State Parties to UNCLOS. For example, Lockheed Martin, an American company, has two ISA contracts for exploration of polymetallic nodules in the Area, obtained through its British subsidiary, UK Seabed Resources.
Disputing DSM: disputes and enforcement of current legal obligations
The final crucial question is how DSM obligations can and will be enforced.
UNCLOS governs exploration and exploitation of the Area and it is the starting point for dispute resolution relating to DSM activities in the Area, whether before ITLOS, the SDC or an ad hoc arbitral tribunal, or in a non-binding conciliation process.
For Sponsoring States and their sponsored Contractor, the contractual dispute settlement mechanism in a Sponsorship Agreement, typically arbitration, also provides additional recourse for claims arising in relation to DSM activities or regulation.
Finally, for DSM activities within a State's national jurisdiction, national courts also offer an additional avenue for dispute resolution proceedings.17
Dispute resolution under UNCLOS
UNCLOS, as the framework agreement, establishes several dispute settlement mechanisms that enable State Parties, Sponsoring States, Contractors and the ISA to enforce their rights. Importantly, the dispute settlement mechanisms under UNCLOS regarding DSM activities can be activated by either proponents or opponents of DSM.
Dispute settlement avenues for States
States have a broader range of dispute settlement options compared to Contractors. First, the SDC has jurisdiction (see Article 187 UNCLOS) to hear disputes between States, or between a State and the ISA relating to DSM activities, including Part XI of UNCLOS and the Implementation Agreement, the ISA’s acts or omissions, and work plans and licenses. For example, a Sponsoring State could potentially commence proceedings against a State advocating a moratorium on DSM. Similarly, a State Party (either for or against DSM) could potentially commence a claim against the ISA for failing to adopt the Exploitation Regulations within the deadline.
Article 188(1) of UNCLOS extends the forums for State Party disputes, allowing State Parties to bring the dispute in a special chamber of ITLOS, an ad hoc chamber of the SDC, or a commercial arbitral tribunal for resolution. Disputes relating to the general interpretation and application of UNCLOS can be pursued in these forums. For example, a State may seek to bring a claim against another State for DSM activities relating to an alleged breach of the marine protection provisions in Part XII of UNCLOS.
Dispute settlement avenues for Contractors
The SDC is the sole dispute settlement mechanism for Contractors under UNCLOS, given its rationae materiae jurisdiction in Article 187 of UNCLOS and Articles 20 and 21 of the Statute of ITLOS. There are four potential disputes Contractors may seek to bring before the SDC,:
• a Contractor’s rights relating to the ISA;
• the ISA’s acts or omissions “directed to the other party or directly affecting its legitimate interests”;
• “a refusal to grant a contract or a legal issue arising in the negotiation of the contract”; and
• where the ISA has incurred liability for damage from its wrongful acts.
The SDC can hear disputes relating to the negotiation and conclusion of contracts, so long as the dispute does not relate to the ISA exercising its discretionary powers. To illustrate this point, an unsuccessful applicant could bring a dispute before the SDC relating to the Legal and Technical Commission’s failure to apply the rules in a uniform and non-discriminatory manner, as a “misuse of power”. Nevertheless, an unsuccessful applicant could not challenge the ISA’s decision to refuse a contract where the applicant fails to provide adequate information about the mineral resources and environment.
Dispute resolution under sponsorship agreements
A sponsorship agreement creates a contractual relationship between the Contractor and the Sponsoring State, and these agreements do not fall within the DSM UNCLOS framework.18 Rather, a Sponsorship Agreement is a matter of domestic law of the Sponsoring State. However, a Sponsoring Party provides a certificate of sponsorship to the ISA to demonstrate a legal connection between the Sponsoring State and its contractor.
When a Sponsoring State terminates its certificate of sponsorship, it notifies the ISA and must state the reasons for the termination. In the absence of a stabilisation clause, UNCLOS does not provide any mechanism for settlement of disputes between contractors and Sponsoring States arising out of the termination of a certificate of sponsorship agreement. Such disputes would need to be resolved through the dispute resolution provision of the sponsorship agreement and by national courts.
For example, the Sponsorship Agreement between The Republic of Nauru and Nauru Ocean Resources Inc. (Nauru Sponsorship Agreement) provides an escalating dispute settlement mechanism. In relation to a dispute “arising out of or in connection with the Agreement” or “the breach, termination, or validity thereof”, the Parties must first seek to negotiate and resolve the dispute, before a dispute can be settled by arbitration in accordance with the UNCITRAL Arbitration Rules.19 The escalating mechanism is without prejudice to either parties’ right to seek urgent injunctive, interrogatory, or declaratory relief from a court of competent jurisdiction. Similarly, the Sponsorship Agreement between The Kingdom of Tonga and Tonga Offshore Mining Limited follows the same escalating dispute resolution process and provides for arbitration in accordance with the UNCITRAL Arbitration Rules.
In respect of termination, the Nauru Sponsorship Agreement provides that if Nauru terminates the Sponsorship Agreement, it must not revoke the Certificate of Sponsorship “until at least six months from the date of the Republic Termination Notice”. Nauru is also obliged, if requested by Nauru Ocean Resources Inc (NORI), to do all things necessary to maintain sponsorship during this period and assist NORI to assign its rights.
Domestic dispute resolution
Disputes in relation to deep sea mining have already borne several cases in domestic courts. For instance, in 2021, the New Zealand Supreme Court held in Trans-Tasman Resources Ltd v Taranaki Whanganui Conservation Board [2021] NZSC 127 that a marine consent for seabed mining in New Zealand's Exclusive Economic Zone could not be granted unless the decision-maker is satisfied that material harm (pollution) to the environment will be avoided, among other factors.
Courting clarity: where to next?
The myriad of unresolved issues associated with DSM provides scope for significant litigation at both international and domestic levels. Even if the new target date of July 2025 for the finalisation of the Draft Exploitation Regulations is not met, Contractors may submit a mining lease application at any time, operating without formal Exploitation Regulations. There are significant gaps in the current legal framework for appropriately litigating disputes between contractors and Sponsoring States engaged in DSM activities. As States become increasingly restless with the ISA process, and appreciating the increasing risk that the Draft Exploitation Regulations may not be approved in the ISA's next session, States could move to clarify the scope and legal obligations relating to DSM activities through strategic international litigation. For example, States have recently relied on advisory opinions to clarify issues relating to States’ obligations and the environment, including the marine environment. States could seek an advisory opinion from ITLOS or the SDC to further clarify States and contractors’ obligations with respect to DSM activities, particularly in the absence of Exploitation Regulations. Alternatively, a State, or group of States, could pursue contentious proceedings against the ISA for failing to adopt the Draft Articles within the deadline, or for refusing to approve an exploitation contract in the absence of agreed regulations. It is hoped that the Draft Exploitation Regulations will be agreed soon, establishing a clearer remedial mechanism to provide certainty to both Sponsoring States and contractors.
1 The White House, 'Fact Sheet: President Donald J. Trump Unleashes America’s Offshore Critical Minerals and Resources' (24 April 2025).
2 The White House, 'Unleashing America’s Offshore Critical Minerals And Resources' (24 April 2025).
3 The Metals Company, 'World First: TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals in the High Seas Under U.S. Seabed Mining Code' (April 2025).
4 The Metals Company, 'World First: TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals in the High Seas Under U.S. Seabed Mining Code' (April 2025).
5 The Metals Company, 'World First: TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals in the High Seas Under U.S. Seabed Mining Code' (April 2025).
6 Asia Maritime Transparency Initiative, 'Between rocks and a hard place: seabed mining in the Pacific' (29 May 2025).
7 The Metals Company, 'World First: TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals in the High Seas Under U.S. Seabed Mining Code' (April 2025).
8 International Seabed Authority, 'The Council of the International Seabed Authority concludes Part I of its thirtieth session' (29 March 2025).
9 Responsibilities and obligations of States with respect to activities in the Area (Advisory Opinion) [2011] ITLOS Rep 10, [135].
10 Request for an Advisory Opinion submitted by the Commission of Small Island States on Climate Change and International Law (Request for Advisory Opinion submitted to the Tribunal) (Case No 31, 21 May 2024), [396]-[397]].
11 Request for an Advisory Opinion submitted by the Commission of Small Island States on Climate Change and International Law (Request for Advisory Opinion submitted to the Tribunal) (Case No 31, 21 May 2024), [399].
12 International Seabed Authority, Draft Regulations on Exploitation of Mineral Resources in the Area (2024); In the Matter of a Proposed Moratorium or Precautionary Pause on Deep-Sea Mining Beyond National Jurisdiction (Opinion, Pew Charitable Trust) at [99], [102].
13 In the Matter of a Proposed Moratorium or Precautionary Pause on Deep-Sea Mining Beyond National Jurisdiction (Opinion, Pew Charitable Trust) at [109].
14 Responsibilities and obligations of States with respect to activities in the Area (Advisory Opinion) [2011] ITLOS Rep 10 [110], [122].
15 Alleged Violations of Sovereign Rights and Maritime Spaces in the Caribbean Sea (Nicaragua v Colombia), Judgment, ICJ. Reports (2022), p. 266, at [95].
16 Chapter 3: The Legal Status of the Area: Common Heritage of Mankind and African States, in E Egede (ed) 'Africa and the Deep Seabed Regime: Politics and International Law of the Common Heritage of Mandkind' (2011, Springer), 68.
17 Albert Pecoraro, 'Deep Seabed Mining in the Area: Investment Protection and the Common Heritage of Mankind' (2020) p 41.
18 L Sun, 'Dispute Settlement Relating to Deep Seabed Mining: A Participant’s Perspective' (2017) p 82.
19 'Sponsorship Agreement between The Republic of Nauru / The Nauru Seabed Minerals Authority and Nauru Ocean Resources Inc' (No date) at clause 23.
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