Corporate Responsibility and Deep Seabed Mining: The Limits of Due Diligence

Abstract

The International Seabed Authority is under pressure from some states and companies to adopt the regulations that would allow deep seabed mining (DSM) to commence. While presented by its supporters as necessary to procure the minerals and metals needed for energy transition, DSM presents serious risks for the marine environments and human rights whose extent is still insufficiently understood. This article focuses on whether, should DSM be allowed in the short term, the current regulatory regime would suffice to ensure that the corporations leading this activity carry out effective assessment, prevention and mitigation of environmental impacts. In order to answer this question, it explores contractor obligations as they emerge from the current version of the ‘Mining Code’. In light of persisting scientific uncertainty and the high-risk profile of DSM activities, this article contends that the current version of the regulations does not devise sufficiently stringent due diligence obligations.

I. Introduction

Mining in the “Area”, defined by the United Nations Convention on the Law of the Sea (UNCLOS) as the seabed, ocean floor and subsoil beyond the limits of national jurisdiction, has not yet taken place. Under international law, only the International Seabed Authority (ISA) can grant exploration and exploitation licenses to contractors willing to prospect and exploit the Area’s mineral resources. ISA, the autonomous international organization established by UNCLOS, acts as a ‘trustee’ on behalf of humankind, as it is humankind as a whole that retains ‘all rights in the resources of the Area’. ¹ Before exploitation can commence, ISA must put in place a regulatory regime governing the activities commonly referred to as ‘deep seabed mining’ (DSM) to ensure, among other things, their compatibility with environmental protection obligations under UNCLOS. These regulations have been under negotiation for several years, but the rules governing exploitation activities, which would allow the first mining licenses to be issued, have not been finalized and adopted.

Several states and corporations are pushing the ISA to accelerate DSM authorization, especially after Nauru triggered the ‘two-year rule’, citing the need for minerals for the energy transition. However, limited knowledge about deep-sea ecosystems makes it hard to predict and mitigate DSM’s environmental and human rights impacts. While DSM, as an activity projected to take place in one of the planet’s most remote areas, may seem less controversial than land-based mining, ² there are serious concerns that its impacts on marine ecosystems would harm the livelihoods, well-being and cultural habits of coastal ocean-dependent communities. DSM might also disrupt the ecosystem services of delicate deep-sea habitats, with damages to present and future generations the extent of which is difficult to gauge. Given these risks, many states, scientists, activists and corporations are calling for a precautionary pause on DSM, despite some companies already investing in prospecting. DSM illustrates the dilemmas the international community faces in promoting a just energy transition, highlighting arguments of intergenerational justice and sustainability from both supporters and critics of this extractive activity. It raises complex questions of corporate accountability and reveals the limits of environmental and human rights due diligence amidst significant scientific uncertainty.

This article examines whether the emerging regulatory regime for DSM would ensure that contractors effectively assess, prevent and mitigate environmental impacts, aligning with the business and human rights normative framework. The analysis contributes to the broader debate on shaping international regulatory frameworks for a truly just energy transition. After exploring contractor obligations under the ISA exploration and draft exploitation regulations (the ‘Mining Code’), the article argues that the current regulations do not establish sufficiently stringent due diligence obligations and lack a clear definition of acceptable levels of environmental harm. The absence of specific legal guidance and science-based criteria for assessing contractor-led risk assessment and mitigation threatens to encourage a box-ticking approach to compliance and weakens corporate accountability in the face of potentially serious and irreversible damage to the marine environment.

This article begins by examining the known and unknown environmental and human rights risks of DSM (Section 2). It then outlines DSM’s regulation under international law and the ongoing debate regarding its authorization by the ISA (Section 3). Sections 4 and 5 focus on the due diligence obligations of sponsoring states and contractors within the DSM regime, particularly highlighting the contractor obligations outlined in the ISA’s regulations. Section 6 critiques the limitations of environmental due diligence in the current Mining Code, arguing that high scientific uncertainty and ISA’s institutional constraints undermine effective risk assessment and mitigation. Section 7 concludes by emphasizing the need for a precautionary pause to DSM to meet environmental protection obligations under UNCLOS.

II. Deep Seabed Mining at the Crossroads of the Energy Transition and Human Rights

DSM occurs at depths greater than 200 meters, ³ targeting minerals and metals found in potato-sized polymetallic nodules, polymetallic sulphides and ferromanganese crusts. These deposits form at a rate of a few millimetres per million years in areas both within and beyond national jurisdiction ⁴ and contain commercially valuable amounts of nickel, copper, cobalt, zinc, silver, gold, manganese and rare earth elements. ⁵ The deep seabed is believed to house the largest reserves of ‘critical minerals’, essential for advanced and green technologies. ⁶

A key argument for expediting DSM authorization is the need for these minerals to produce renewable energy technologies, ⁷ including electric car batteries, wind turbines and solar panels. ⁸ As controlling critical mineral supply chains is vital for leading the energy transition and capitalizing on its benefits, China’s dominance in supply chains for rare earth elements, copper and electric vehicle batteries raises concerns for the European Union (EU), United States (US) and other global actors. ⁹ The International Energy Agency notes that global demand for cobalt, lithium and nickel tripled from 2017 to 2022, while supply sources remain insufficiently diversified. ¹⁰

At the same time, land extraction, concentrated in a few countries, ¹¹ is frequently associated with serious human rights and environmental issues, as seen in the Democratic Republic of the Congo, ¹² which produces 60 per cent of the world’s cobalt. ¹³ In regions like South America’s ‘lithium triangle’ (Chile, Bolivia and Argentina), mining activities are linked to unsafe working conditions, corruption, high water consumption and negative impacts on local communities. ¹⁴ Thus, DSM is often presented as a solution to meet rising global demand for critical minerals while reducing reliance on concentrated land sources ¹⁵ and mitigating the harmful effects of terrestrial mining. ¹⁶

While this is a highly contested view, ¹⁷ several countries are willing to ride the wave of growing global demand and, attracted by the potential financial and strategic advantages, are creating the regulatory conditions to allow this activity to start within their exclusive economic zones (EEZs). ¹⁸ DSM exploration permits have been issued by Papua New Guinea, Fiji, Tonga, Vanuatu, the Solomon Islands and the Cook Islands, ¹⁹ and in 2017 Japan was the first country to carry out a large-scale DSM project on its own continental shelf. ²⁰ At the same time, several Pacific states (the Cook Islands, Kiribati, Tonga, Nauru and Tuvalu) ²¹ became interested in the potential benefits of mining the deep seabed in the mineral-rich Clarion-Coppertone fracture zone (CCZ), ²² mostly located beyond national jurisdiction. ²³ Among the areas of commercial interest, ²⁴ the CCZ constitutes the most attractive with estimated reserves of marine nodule resources that exceed the potential of land-based deposits of the same minerals. ²⁵ Contrary to DSM on a country’s continental shelf, DSM in international waters requires regulation and authorization from the ISA, thus it is a matter of global interest. The DSM debate speaks directly to the ‘just’ transition and its dilemmas, highlighting the tension between the alleged necessity of extracting minerals for the energy transition and the ecological and human rights impacts that this activity might cause.

A. Environmental and Human Rights Risks of Deep Seabed Mining

The deep sea, characterized by near-total darkness, high pressure and low temperatures, is largely unexplored and has been minimally affected by human activity. There is little scientific certainty about the effects that DSM might have on its unique ecosystems, although scientists warn of potential irreversible damage. ²⁶ The deep seabed, covering two-thirds of the ocean floor, ²⁷ is less known than Mars or the Moon. ²⁸ What we do know today, that was not obvious when UNCLOS was negotiated and adopted, is that the deep seabed, far from being dead matter, ²⁹ is home to diverse habitats, including abyssal plains, hydrothermal vents and seamounts, which host unique species ³⁰ and contribute to critical ecosystem services, such as carbon sequestration. ³¹ Manganese nodules themselves constitute the habitat for a rich diversity of organisms ³² and play an important role in abyssal food webs. ³³ At the same time, these ecosystems are highly sensitive to climate change-related alterations and might be at risk of biodiversity loss for this reason. ³⁴ DSM would produce high levels of pollution, vessel traffic and seafloor destruction likely to produce irreversible effects on ecosystems that we are only starting to understand. ³⁵

Several gaps in scientific knowledge may impede effective risk prevention in large-scale DSM operations. ³⁶ These gaps include a lack of comprehensive environmental baseline data for contract and adjacent areas and a limited understanding of DSM’s direct and indirect longterm impacts. ³⁷ While we know that sediment plumes would result from seafloor production and surface support vessels, ³⁸ their composition and interaction with ocean currents and biodiversity remain unclear. ³⁹ Although shallow-water or ex-situ experiments cannot reliably predict DSM’s impacts, ⁴⁰ a 1989 simulated mining experiment off Peru showed lasting biodiversity and ecosystem functions loss decades later, suggesting potentially irreversible damage from DSM. ⁴¹ Studies suggest that the suspended particulate matter contained in the plumes might affect marine habitats way beyond the mining areas, ⁴² although more specific recovery studies are needed to assess longterm impacts. ⁴³ Further ecosystem disruptions might derive from noise, light, waste materials and warmer water released during operations, ⁴⁴ as well as from the cumulative impacts of DSM and other human activities, like fishing or shipping, not to mention anthropogenic global warming. ⁴⁵

Another complex question is to what extent DSM might impact human rights. As mentioned earlier, DSM is expected to negatively affect fishing activities even beyond the mining areas, especially when interfering with vulnerable marine ecosystems such as the ones associated with seamounts. ⁴⁶ The United Nations Environment Programme (UNEP) notes that ‘sedimentation and pollution into the water column may disrupt pelagic fishery stocks (e.g. tuna)’. ⁴⁷ Even without considering major accidents (e.g., an oil spill), which could affect coastal communities beyond the mining regions, disturbances to deep-sea ecosystems from ordinary DSM activities might affect food security through the reduction or displacement of fish stocks, and food safety due to contamination of marine organisms. ⁴⁸ Thus, the livelihoods and well-being of ocean-dependent communities, such as Pacific islanders, ⁴⁹ as well as indigenous cultures closely linked to marine environments and wide-ranging marine species would be endangered. ⁵⁰ Some of these impacts have already been observed during exploration activities in the EEZs of Papua New Guinea and Tonga. ⁵¹ Several scholars argue that, regardless of the remote location of planned DSM activities, their possible impacts on indigenous peoples’ traditional territories entail a requirement to seek free, prior and informed consent (FPIC). ⁵²

The loss to current and future generations arising from the possible disruption of one of the world’s key carbon sinks should also be considered. ⁵³ A conservative estimate finds that ‘the value of the loss in ecosystem services associated to the deep sea mining of 10,000 km² every year from 2028-2043’ would amount to roughly half a trillion dollars, which would not be compensated by value creation by the same industry. ⁵⁴ In addition, like on-land mining, the climate impact of DSM would in large part derive from the continuing need for metallurgical processing, which contradicts the narrative of a sustainable form of energy production. ⁵⁵

At stake are human rights like the right to food, the right to health, the right to a healthy environment, the cultural rights of indigenous peoples and the rights of children, all already endangered by the triple planetary crisis (climate change, biodiversity loss, and pollution). ⁵⁶ Notwithstanding the high stakes for humanity, participation of civil society in ISA processes has so far been marginal, and the transparency of such processes has been limited. ⁵⁷ Only 32 non-governmental organizations (NGOs) are registered with observer status at the ISA, none of which directly represent a marginalized or vulnerable group. ⁵⁸ Three UN Special Procedures, including the UN Working Group on Business and Human Rights, have addressed an open letter to ISA in 2024, noting ‘the mounting scientific evidence and stakeholder disquietude that, if deep seabed mining becomes an industry, there will be irreversible human rights impacts’. ⁵⁹ The letter echoes earlier concerns expressed by the Office of the High Commissioner for Human Rights (OHCHR), ⁶⁰ stressing the need for a robust accountability framework for corporations and calling on the ISA to align such framework with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and to ensure meaningful consultation with potentially affected groups and other stakeholders. ⁶¹

III. The International Regulation of Deep Seabed Mining

A. Deep Seabed Mining under UNCLOS and the ‘Two-Year Rule’ Triggered by Nauru

The Area is a maritime zone beyond national jurisdiction, governed by Part XI of UNCLOS. Its mineral resources are regarded as the ‘common heritage of mankind’, a principle introduced by Ambassador Arvid Pardo in 1967 at the UN General Assembly. ⁶² This principle, included in UNCLOS and the Moon Agreement, ⁶³ prohibits the national appropriation of international spaces and their resources, mandates peaceful use and requires a management mechanism ensuring international control over the relevant activities and the sharing of their benefits. ⁶⁴ UNCLOS specifies that ‘resources’ under Part XI are intended as the ‘solid, liquid or gaseous mineral resources in situ in the Area at or beneath the sea-bed, including polymetallic nodules’. ⁶⁵ Importantly, the common heritage of humankind ⁶⁶ status does not per se bar said resources’ exploitation through mining, but it does subject them to an internationalized management system. UNCLOS also envisages the establishment of an enterprise through which ISA could directly lead exploration and exploitation activities of its own, but this organ has not yet been created. ⁶⁷ At the same time, the practical implementation of the common heritage of humankind principle, and particularly of its benefit-sharing component, has turned out to be complex and divisive, ⁶⁸ leading to the negotiation of an Implementing Agreement for Part XI. ⁶⁹

In a nutshell, under UNCLOS, any state or any (private or public) corporation willing to carry out exploration or exploitation activities in the Area needs to enter into a contract with the ISA. In order to apply for a contract, a natural or juridical person needs to possess the nationality of a state party to UNCLOS or be ‘effectively controlled’ by it or its nationals and obtain sponsorship by that state party. ⁷⁰ The applicant submits to the ISA two (not necessarily continuous) areas of similar estimated commercial value where it would like to start exploration or exploitation activities. The ISA itself allocates one of the two to the applicant and keeps the second site as a ‘reserved’ area where the ISA could conduct activities through the above-mentioned (never established) enterprise or in association with developing states. ⁷¹ This provision has enabled entities sponsored by Tonga, Nauru, Kiribati, the Cook Islands and Jamaica to stipulate exploration contracts with the ISA for reserved areas. ⁷² Interestingly, entities sponsored by China and Singapore, both still considered developing countries, also entered into exploration contracts for reserved areas. ⁷³ This provision, aimed at ensuring the involvement of developing countries in the exploration and exploitation of the deep seabed’s resources, makes it attractive for Global North enterprises to team up with the governments of developing countries, as shown by the example mentioned below of a Canadian parent company setting up a subsidiary in Nauru.

Since 2001, the ISA has entered into 31 exploration contracts with 22 contractors, among which are states, as well as state-owned and private corporations. ⁷⁴ While regulations concerning exploration activities were developed between 2000 and 2013, the ISA only started working on exploitation regulations in 2011, producing several drafts since 2016. ⁷⁵ Between 2019 and 2020, the Council, ⁷⁶ the executive organ of the ISA, started considering the regulations’ fourth draft, presented by its subsidiary organ, the Legal and Technical Commission (LTC). It was planning further discussions of the draft with the help of three working groups when the COVID-19 pandemic put the whole process on hold. ⁷⁷

In 2021, Nauru, aiming to sponsor Nauru Ocean Resources Inc. (NORI) for a DSM contract, triggered the ‘two-year rule’ under the 1994 Implementing Agreement. ⁷⁸ This rule requires the ISA Council to adopt exploitation regulations within two years of a state’s request. If the deadline is unmet, the Council must ‘consider and provisionally approve’ any pending plan of work for exploitation. ⁷⁹ Whether the drafters intended to impose a strict deadline on the Council is debated. ⁸⁰ While the rule was originally included in the Implementing Agreement to defuse stalling tactics (as the Council needs to decide by consensus), it was not designed for situations where most Council members have serious concerns about moving into exploitation. ⁸¹ The delay in ISA’s negotiations, which have now also missed the July 2023 deadline set by Nauru’s request, was not due to a deliberately created deadlock, but rather to genuine regulatory concerns and the impact of the global pandemic. ⁸² The two-year rule should not be used to forcibly rush the adoption of regulations at the risk of leaving outstanding issues unresolved, including contractor obligations, the controversial benefit-sharing mechanism or the quantity of mining to be allowed. ⁸³

It is unclear what consequences might follow from the missed deadline. ⁸⁴ If no mining applications are submitted before the finalization of the Mining Code, the ISA will simply continue negotiating the regulations. ⁸⁵ If an application is presented, ⁸⁶ the ISA Council would probably still retain the option of rejecting it. ⁸⁷ It is unclear what a ‘provisional approval’ would entail, with Singh arguing that it would not necessarily lead to an automatic signing of the contract and that it should be subjected to conditionality. ⁸⁸ While uncertainty persists, it is all the more important to reflect on the known and unknown risks of an activity that has no real precedent.

IV. Contractor and Sponsor State Obligations under UNCLOS

States, individuals and corporations can act as contractors under the DSM regime by entering into contracts with the ISA to explore and exploit resources in the Area. This analysis specifically focuses on corporations as contractors. To apply for an exploration and/or exploitation license, a corporation must obtain sponsorship from a state party. In some cases, multiple sponsorships may be necessary, such as when the applicant has multiple nationalities or is effectively controlled by a state different from their nationality. ⁸⁹ The ISA currently interprets control mainly as regulatory control, ⁹⁰ allowing multinational corporations to structure themselves in ways that simplify the identification of their sponsoring state, for instance by establishing subsidiaries in the jurisdiction of states parties willing to sponsor their application. ⁹¹

The responsibility regime of DSM is quite unique under international law. Firstly, only the ISA is entitled to authorize mining activities in the Area, and it organizes and controls them on behalf of humankind as a whole. ⁹² While the sponsoring state bears supervisory responsibility, the right to allow mining activities in the Area is removed from it and any other state. This is a significant difference with the regime emerging from the Outer Space Treaty, for instance, under which ‘non-governmental entities’ require ‘authorization and continuing supervision by the appropriate State party […])’. ⁹³ Secondly, whereas under international space law only state actors retain international responsibility for their own activities, as well as for the activities of non-governmental entities, ⁹⁴ UNCLOS Part XI envisages a shared responsibility regime under which not only the ISA and states parties but also corporations are duty-bearers. ⁹⁵ Given the peculiarity of this regime, the present paragraph first briefly illustrates the obligations of sponsoring states to then delve into the obligations of corporations operating as contractors.

A. Sponsoring State Responsibility and Liability

The 2011 Advisory Opinion by the Seabed Disputes Chamber (SDC) ⁹⁶ clarified sponsoring states’ responsibility and liability in DSM, addressing concerns from developing states that sponsoring such activities could result in damages exceeding their financial capacity, potentially limiting their participation in DSM. ⁹⁷ The SDC clarified that the regulatory regime for DSM creates a distribution of responsibilities between ISA, the sponsoring state and the contractor, ⁹⁸ each liable for their own wrongful acts, with the liability of the sponsoring state and the contractor existing in parallel. ⁹⁹ The sponsoring state has a due diligence obligation to ensure that the activities of contractors in the Area are carried out in conformity with their contractual requirements and with UNCLOS. ¹⁰⁰ While ‘effective control’ over the contractor, as explained above, is a precondition for a state to act as a sponsoring state, the ‘responsibility to ensure’ entails ‘an ongoing duty’ to exercise regulatory control over contractors. ¹⁰¹ The relevant ‘activities’ are all operations directly connected to minerals extraction and lifting to the surface, whereas they exclude on-land processing, marketing and transportation. ¹⁰²

Sponsoring states must deploy ‘adequate means’ and ‘exercise best possible efforts’ to ensure contractor compliance. ¹⁰³ Their obligations of conduct entail establishing domestic regulations ¹⁰⁴ and applying a precautionary approach, which the SDC considers a customary international law norm in statu nascendi. ¹⁰⁵ States are also obligated to apply best environmental practices and provide avenues for prompt and adequate compensation for environmental damage caused by marine pollution. ¹⁰⁶ Moreover, the SDC underlines that the obligation to conduct environmental impact assessments for all applications for approval of a plan of work reflects a general obligation of customary international law. ¹⁰⁷ It is a direct obligation of the sponsoring state to ensure that the contractor fulfils this requirement. ¹⁰⁸

The SDC recognizes the intrinsic variability of the concept of due diligence, which evolves over time and with the emergence of new scientific and technological knowledge. ¹⁰⁹ The severity of the standard is higher for the riskier activities, with exploitation to be generally regarded as riskier than prospecting. ¹¹⁰ The SDC affirms the principle of equality of treatment of sponsoring states, meaning that both developed and developing states face equal responsibility and liability. ¹¹¹ The underlying reasoning is that to bind developing states to a less stringent due diligence standard would encourage the spreading of sponsoring states ‘of convenience’, incentivizing contractors to set up companies where they can benefit from more lenient regulations. ¹¹²

The framework outlined by the SDC entails a risk of uncompensated loss. A sponsoring state is liable only if a causal link between its failure to fulfil its own responsibilities and the contractor’s damage can be established. ¹¹³ If this link cannot be proven, or if the state has complied and the contractor cannot pay its liability, the damage may go uncompensated. ¹¹⁴ In such cases, the state cannot be held liable for the contractor’s noncompliance. ¹¹⁵ The SDC recommends that the ISA consider establishing a trust fund to address this liability gap and notes that the responsibility and liability regime may evolve through changes in the DSM regulatory framework or developments in international law. ¹¹⁶

B. Contractor Responsibility and Liability

Contractors’ obligations under the DSM primarily stem from international law and the domestic laws of the sponsoring state, along with relevant transnational instruments. ¹¹⁷ For corporations, this includes international soft law standards like the UNGPs and Organisation for Economic Co-operation and Development (OECD) Guidelines on Responsible Business Conduct. ¹¹⁸ This section clarifies the nature of contractors’ obligations under the DSM regime, which, like those of sponsoring states, are obligations of conduct rather than result. ¹¹⁹ The DSM framework includes UNCLOS Part XI, its Implementing Agreement and secondary law adopted by the ISA, such as exploration and draft exploitation regulations. These rules apply to contractors through the Standard Clauses included as annexes in the exploration and draft exploitation regulations. ¹²⁰

Firstly, it should be noted that the Implementing Agreement’s provision that the ‘contractor shall have responsibility or liability for any damage arising out of wrongful acts in the conduct of its operations’ ¹²¹ should not be read as imposing strict liability. Indeed, here the terms responsibility and liability are used interchangeably to indicate ‘the secondary legal obligations arising from unlawful acts’, ¹²² namely, from the breach of a legal norm. As explained by the SDC, ‘the liability of the sponsored contractor arises from its failure to comply with its obligations under its contract and its undertakings thereunder’. ¹²³

Secondly, the due diligence nature of the contractor’s obligations appears from the language of the ISA’s regulations on exploration and of the Standard Clauses for Exploration Contracts. ¹²⁴ The ISA regulations on prospecting and exploration (‘exploration regulations’) affirm that contractors ‘shall take necessary measures’ to protect and preserve the environment in accordance with Article 145 UNCLOS. ¹²⁵ Such due diligence obligation is qualified by a reasonableness criterion (‘as far as reasonably possible’) and by a requirement to apply a precautionary approach and best environmental practices. ¹²⁶ The Standard Clauses specify that contractors are liable for damage arising out of not only their own wrongful acts or omissions, but also that of their ‘employees, subcontractors, agents and all persons engaged in working or acting for them’. ¹²⁷

The ILA noted that the SDC’s Advisory Opinion on the DSM’s liability regime did not consider situations where damage to the marine environment occurs without any unlawful acts by the contractor, who therefore cannot be held liable. ¹²⁸ The SDC may have assumed that harm from lawful activities would be covered by contractually mandated insurance as recommended by the ISA’s Standard Clauses. ¹²⁹ The ILA also pointed out that the DSM regime differs from the International Law Commission’s Loss Allocation Principles, which state that operator liability for transboundary damage from hazardous activities does not depend on fault. ¹³⁰ This difference may stem from two reasons: firstly, both Part XI of UNCLOS and the ISA regulations aim primarily to facilitate deep seabed resource exploitation while ensuring precautionary measures to protect the marine environment, rather than focusing solely on preservation. ¹³¹ Secondly, the limited knowledge of the deep-sea environment at the time UNCLOS was negotiated likely led to an underestimation of DSM’s hazards. ¹³² As knowledge improves and the risks become clearer, the DSM regime must evolve accordingly.

The SDC recognizes that due diligence is a flexible standard, allowing contractors’ specific obligations to evolve with emerging scientific evidence about environmental risks and the availability of new technologies. ¹³³ While this flexibility does not allow for a shift from due diligence liability to strict liability, it enables the ISA to establish stringent environmental due diligence obligations that consider both known and unknown risks posed by DSM to vital deep-sea ecosystems. ¹³⁴ The ILA suggests that a broad due diligence obligation may initially promote participation, with the potential to evolve into a stricter system of legal accountability as involvement increases. ¹³⁵ In its 2024 Advisory Opinion, the International Tribunal for the Law of the Sea (ITLOS) confirmed that ‘stringent’ due diligence obligations are necessary to prevent ‘serious and irreversible harm to the marine environment’, particularly in cases of transboundary pollution. ¹³⁶ It emphasized that the obligation to protect and preserve the marine environment under UNCLOS Article 192 applies to all maritime areas and all forms of marine environmental degradation. ¹³⁷

A more fundamental question, explored in the next section, is whether the current level of knowledge allows, in practice, for the designing of due diligence processes that can be reasonably expected to prevent serious and irreversible harm.

V. The elements and Limits of a Due Diligence Process in the Context of Deep Seabed Mining

While contractor obligations under the DSM regime are obligations of conduct, the UNGPs establish a ‘strict’ responsibility, formulated as a ‘no harm’ responsibility, for a corporation’s own impacts. ¹³⁸ The UNGPs adopt due diligence as a standard of care only in relation to a corporation’s responsibility for the conduct of third parties (for instance, their suppliers). ¹³⁹ The parallel between the international law regime for DSM and the UNGPs is of course limited, given the different nature and goals of these frameworks. However, the contractor’s obligation, under the Mining Code, ¹⁴⁰ to establish procedures to identify and mitigate risks resonates with the concept of human rights (and environmental) due diligence, intended as a process, ¹⁴¹ contained in both the UNGPs and the OECD Guidelines for Multinational Enterprises. Under these soft law instruments, risk assessment constitutes the first step of the due diligence process. The OECD Guidelines recommend conducting an appropriate environmental impact assessment when significant environmental impacts are identified. They state that due diligence measures should include measurable objectives and science-based targets and strategies, and they recommend regularly reviewing the relevance of these objectives and the effectiveness of the measures adopted. ¹⁴² Both the UNGPs and the OECD Guidelines emphasize that the severity of impacts—based on their scale and irremediability—should guide companies in prioritizing due diligence measures. ¹⁴³ Meaningful consultation with stakeholders and affected communities is also essential throughout the assessment and due diligence processes. ¹⁴⁴

As the next paragraphs show, scientific uncertainty around the potential impacts of DSM, certain institutional limitations and flaws in the current version of the Mining Code might stand in the way of credible impact assessment and due diligence processes in the context of DSM.

A. The elements of Environmental Due Diligence Emerging from the Mining Code

Environmental Impact Assessment Provisions in the Exploration Regulations

The UNGPs posit that the first step of a due diligence process is the identification and assessment of any actual or potential adverse impacts with which the corporation may be involved either through its own activities or as a result of its business relationships. ¹⁴⁵ In relation to environmental risks, the revised OECD Guidelines for Multinational Enterprises specifically recommend environmental impact assessments addressing risks associated with their operations, products and services. ¹⁴⁶ Under the DSM regime, the exact obligations of contractors are not fully defined, yet, pending the finalization of the exploitation regulations. ¹⁴⁷

Under the ISA Exploration Regulations, ¹⁴⁸ adopted in 2013, two relevant phases can be identified: before contract award and after contract award. In the first phase, the obligation is limited to a ‘preliminary assessment of the possible impact of the proposed exploration activities on the marine environment for the first five years of the plan of work’. ¹⁴⁹ While the Standard Clauses for exploration contracts require submission of ‘an impact assessment’ of the proposed activities prior to the commencement of exploration work, ¹⁵⁰ the scope and contents of this preliminary assessment are not further specified and are likely to be limited by the scarce information that the applicant can collect at this stage of the process. ¹⁵¹ In the second phase, namely, during an exploration contract, the assessment of potential environmental impacts of exploration activities is guided by a set of non-binding Environmental Impact Assessment (EIA) Recommendations issued by the LTC that contractors are called to observe ‘as far as reasonably practicable’. ¹⁵² Submission of an Environmental Impact Statement (EIS) prior to the commencement of exploration is recommended only for certain activities, whose unspecific characterization (e.g., ‘taking of large samples’ and ‘testing of mining components’) leaves room for interpretation. ¹⁵³ While the EIS should follow a 14-heading template and the Recommendations provide a list of baseline data, no minimum requirements are set against which an EIA for exploration activities should be assessed. ¹⁵⁴ Lacking harmonized binding rules on data collection, the LTC has noted that the quality and type of data collected by contractors varies significantly. ¹⁵⁵ While the LTC reviews the EIA ‘for completeness, accuracy and statistical reliability’, ¹⁵⁶ it lacks the power to reject an inadequate EIS. ¹⁵⁷ The LTC may decide to ‘not recommend incorporation of the environmental impact statement into the programme of activities under the contract’, ¹⁵⁸ but the consequences of this are unclear. ¹⁵⁹ These EIA features fall short of recognized best practices. ¹⁶⁰

Recommendations on stakeholder involvement and post-permit monitoring are also relatively weak. The UNGPs consider ‘meaningful consultation with potentially affected groups and other relevant stakeholders’ to be an essential part of the risk assessment process. ¹⁶¹ The OECD Guidelines refer more generally to ‘meaningful stakeholder engagement’ as a key component of the due diligence process, which should prioritize ‘the most severely impacted or potentially impacted stakeholders’. ¹⁶² While weakened by their non-binding character, the EIA Recommendations could ground a more granular definition of states’ and contractors’ due diligence obligations by setting clear parameters. Instead, they fail to set an explicit stakeholder consultation requirement, although the LTC ‘may encourage’ the sponsoring state to conduct one, they do not spell out the features of and conditions for such consultation. ¹⁶³ This seems at odds with the principle of public participation contained in the Aarhus Convention, ¹⁶⁴ and it increases the risk of exploration plans being approved notwithstanding inadequate or incomplete EIAs. ¹⁶⁵ The failure of the Solwara 1 project in Papua New Guinea, partly fuelled by an NGO’s critical review of its EIA, ¹⁶⁶ highlights the importance of independent reviews, which the current regime does not mandate. Nor has the LTC, so far, followed a practice of involving independent experts to fill the gaps of its in-house expertise, ¹⁶⁷ which raises concerns about how the LTC can ensure, ‘on the basis of the best available scientific and technical information’, ¹⁶⁸ that the proposed activities won’t harm vulnerable marine ecosystems.

The recently adopted Agreement on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction (BBNJ Agreement) will require states parties to conduct EIAs for activities beyond national jurisdiction, assessing not only environmental impacts but also economic, social, cultural and human health impacts, including cumulative effects. These assessments should be based on the best available science and, where applicable, the traditional knowledge of indigenous peoples and local communities. ¹⁶⁹ This obligation will bind states parties involved in DSM projects. Unlike ISA regulations, which allow conducting EIAs after exploration permits are issued, the BBNJ Agreement mandates a full EIA before authorizing any planned activity. ¹⁷⁰

Environmental Due Diligence under the Draft Exploitation Regulations

The consolidated draft of the exploitation regulations was submitted by the LTC to the ISA Council in 2019, and in 2020 an informal working group was tasked with advancing discussions on its marine environmental protection provisions. ¹⁷¹ The latest draft, discussed at the 29^th ISA annual session, ¹⁷² includes the principle of effective protection of the marine environment from the harmful effects of exploitation. ¹⁷³ Like the exploration regulations, ¹⁷⁴ it embraces the precautionary principle, ‘or approach, as appropriate’. ¹⁷⁵ In 2023, the informal working group proposed conditioning the LTC’s consideration of a plan of work on the adoption by the ISA Council of a Regional Environmental Management Plan (REMP) for the area concerned. ¹⁷⁶ The REMP aims at providing the ISA, the contractor and the sponsoring state ‘with proactive area-based and other management tools to support informed decision-making processes that balance resource development with conservation’. ¹⁷⁷ A REMP has been adopted for the CCZ ¹⁷⁸ and others are under discussion. ¹⁷⁹ While the REMP is a precondition to mining, not all its elements are automatically binding. ¹⁸⁰ The CCZ’s REMP, adopted in 2012 and updated in 2021, designates ‘areas of particular environmental interest’ (APEIs) protected from future mining. ¹⁸¹ The draft regulations indicate that the LTC will not recommend for approval mining proposals in these areas, suggesting legally binding protection for APEIs. ¹⁸² However, the binding nature of other REMP elements remains unclear, as disagreements persist among states. ¹⁸³ Discussions at the 29th ISA session emphasized that REMPs are ‘first and foremost policy instruments’, although parts of them might be made binding. ¹⁸⁴ It is worth noting that, while REMPs are area-based management tools (ABMTs) narrowly focused on environmental considerations in DSM, ¹⁸⁵ ABMTs under the new BBNJ Agreement are more broadly aimed at protecting biodiversity and ecosystems while supporting ‘food security and other socioeconomic objectives, including the protection of cultural values’. ¹⁸⁶

Under the draft regulations, contractors must establish an environmental management system (EMS) to protect the marine environment from mining impacts. ¹⁸⁷ The EMS, reviewed periodically by an independent organization, ¹⁸⁸ contains an environmental impact statement (EIS) ensuring compliance with applicable environmental standards, including the relevant REMP. ¹⁸⁹ The EIS is based on an Environmental Impact Assessment (EIA) and an Environmental Risk Assessment (ERA). ¹⁹⁰ The EMS also includes an environmental management and monitoring plan (EMMP) for continuous monitoring by the contractor of the actual and potential harmful effects of mining on the marine environment. ¹⁹¹ Some members of the Informal Working Group on the Protection and Preservation of the Marine Environment criticize this self-monitoring approach and advocate for independent monitoring programmes covering at least the first years of a mining project. ¹⁹² The EMS also includes a closure plan, though specific guidance is pending. ¹⁹³

A positive aspect of the draft Regulations is the 90-day public consultation period for submitted environmental plans (EIS, EMMP and Closure Plan), allowing stakeholders to provide written feedback. ¹⁹⁴ However, disagreements remain over what confidential information will be excluded from publication. ¹⁹⁵ Similar to the exploration regulations, stakeholder participation in the exploitation regime is limited. ¹⁹⁶ The draft regulations establish that the EIA process shall ‘provide’ for stakeholder consultation which, under Regulation 93 bis, entails measures of transparency and requires contractors to submit a written response to the consultation. ¹⁹⁷ However, it is unclear how much influence these consultations will have on decision-making, ¹⁹⁸ as Regulation 12 only states that the LTC ‘shall take into account’ stakeholder comments and the contractor’s response. ¹⁹⁹

The current DSM regime gives limited attention to human rights risks. ²⁰⁰ The draft regulations mention the protection of human life, health, safety and labour standards for those involved in exploitation ²⁰¹ but provide less focus on broader human rights impacts. The LTC is required to ‘take into account’ health effects from environmental impacts, ²⁰² and the ocean’s cultural value is only considered regarding underwater heritage discoveries. ²⁰³ Draft Annex IV of the EIS asks contractors to describe the socioeconomic and sociocultural impacts of projects, which ‘may include’ details about the scale, severity or cumulative nature of impacts. ²⁰⁴ A ‘list of sociocultural values and uses’ should be provided in the EIS, indicating when a site is associated with the activities of indigenous peoples and local communities, ²⁰⁵ but human rights are not explicitly referenced. There is also little clarity on how contractors should gather impact data and apply mitigation measures, and a list of goals and targets against which the EIS can be evaluated is not provided by the draft regulations. ²⁰⁶

Morgera argues that ‘deep-seabed mining can reduce the availability, accessibility, and acceptability of marine spaces and marine resources in the Area’ and in connected marine areas, with impacts on human rights and the rights and culture of indigenous peoples. ²⁰⁷ Yet, human rights and social impacts remain marginal in the emerging DSM regime, both from a substantial and procedural point of view. ²⁰⁸ Several experts are calling on the ISA to adopt a human rights-based approach and make its decision-making participatory, in line with its obligation ²⁰⁹ to manage the Area on behalf and for the benefit of humankind while ensuring the protection of the marine environment and human life. ²¹⁰

Assessing ‘Acceptable Harm’ in the Face of Scientific Uncertainty

It is important to recall that an obligation of due diligence does not guarantee that harm will not occur. ²¹¹ State and contractor due diligence obligations under the DSM regime do not imply a no-harm standard but rather allow for a degree of ‘acceptable’ harm. ²¹² Establishing what degree of environmental harm is acceptable under this regime, therefore, is crucial to devising adequate due diligence standards and assessing their adequacy. As Feichtner notes, under the Convention for the Regulation of Antarctic Mineral Resource Activities (CRAMRA), the resource exploitation framework for Antarctica which never entered into force, exploitation was prohibited if it caused certain ‘significant’ changes or adverse environmental effects. ²¹³ The unacceptable impacts were defined with a certain degree of specificity and based on a low threshold of harm. ²¹⁴ Under UNCLOS, the ISA Council may disapprove an area for exploitation, based on an LTC’s recommendation, when ‘substantial evidence’ indicates the risk of ‘serious harm’ to the environment. ²¹⁵ Under the Exploration Regulations, ‘serious harm’ is defined as ‘any effect […] which represents a significant adverse change in the marine environment’ determined on the basis of internationally recognized standards and practices. ²¹⁶ In the draft Exploitation Regulations, instead, the definition remains in brackets, hence, still under discussion. ²¹⁷

While the threshold for serious harm remains undefined, the negotiating history of UNCLOS shows that it should be set lower than ‘irreversible harm’. ²¹⁸ This, however, besides establishing a higher threshold than the one found in CRAMRA, ²¹⁹ provides little practical guidance as to the conditions that should compel the ISA to prohibit mining. Clarifying how ‘significant adverse change’ should be assessed in practice is of key importance in defining the specific obligations of states, contractors and the ISA. ²²⁰ The vagueness of the legal definition is compounded by the high level of scientific uncertainty, which means that available baseline information might not be enough to estimate the scale, severity and persistence in time of the impacts. ²²¹ This complicates contractors’ ability to implement effective impact assessments and due diligence. Additionally, the LTC’s capacity to address complex environmental science issues is limited by resource constraints and a lack of specialized expertise. ²²²

These factors would warrant an approach based on precaution, considering that a fine line might stand in the way of habitat destruction and species extinction. In the absence of clear standards, the crucial definition of ‘serious harm’ risks being subjected to the autonomous determination of contractors. ²²³ Moreover, the lack of a clear threshold and criteria against which to assess the adequacy of a contractor’s risk assessment and mitigation measures could create obstacles in the finding of liability and the application of insurance coverage. ²²⁴

VI. Discussion

Feichtner claims that the scientific knowledge we already hold concerning the likely impacts of DSM on the marine environment is sufficient to qualify DSM as a ‘hazardous activity’, ²²⁵ which under international environmental law generally requires a higher standard of care. ²²⁶ While contractors under the DSM regime are not strictly liable for the adverse impacts of their DSM operations, the ISA could still strengthen their liability, as well as enhance environmental protection, by devising far-reaching due diligence obligations, setting a low threshold for ‘acceptable harm’ and implementing the precautionary principle. ²²⁷ Stringent due diligence obligations would also be compatible with existing business and human rights standards, which associate high-risk contexts or activities with the need for enhanced forms of human rights and environmental due diligence. ²²⁸ In general, soft law and emerging mandatory due diligence legislation provide for risk-based due diligence, requiring companies to prioritize and shape their actions based on the severity of the (potential) impacts and on issues of context. ²²⁹ For high-risk activities such as those often characterizing the extractive industries, an outcome-based approach to due diligence is paramount to preventing harm and should lay the basis for ‘go/no go’ decisions. ²³⁰

The current state of the Mining Code, with the Exploitation Regulations still under negotiation, leaves several key issues unresolved. There is no binding guidance on how to assess the adequacy of environmental baselines or EIS. While the LTC may provide more clarity in the future, ²³¹ there are no definite criteria for the ISA to disallow or halt exploration and exploitation activities. ²³² The lack of precise definitions and thresholds for ‘harmful effects’ and ‘serious harm’, along with scientific uncertainty, makes it difficult for contractors to implement effective risk assessments and due diligence processes. This also hinders sponsoring states and the ISA from identifying flaws before irreversible damage occurs, increasing the risk of ‘managerialization’, ²³³ where contractors control the definition of compliance. ²³⁴

Extractive activities often take place in remote locations with ‘few linkages with the rest of the economy and the remainder of the population’. ²³⁵ These features, which are arguably present to the extreme in the case of DSM, encourage business-centric models of due diligence, with limited involvement of stakeholders, in which the due diligence model’s adequacy is evaluated only ex post. ²³⁶ In the case of DSM, even this retrospective assessment could be made impossible by the remoteness and the dilution in time and space of the impacts, which complicate the reconstruction of causal links. If contractors’ due diligence obligations are to be devised taking into account the hazardous nature of DSM, ²³⁷ the law must provide clear and binding guidance as to the criteria—in primis, the definition of unacceptable harm—that must orient go/no go decisions on the part of the duty-bearers. Whether this is possible in practice remains doubtful, in the light of current gaps in scientific knowledge. ²³⁸

A. The Call for a Precautionary Pause to DSM

A significant movement of scientists, activists, ²³⁹ and several states and companies is advocating for a ‘precautionary pause’ or ‘moratorium’ on DSM. To date, 58 businesses have signed a petition, ²⁴⁰ including companies from the technology sector, ²⁴¹ the energy and mobility sector, ²⁴² the retail sector ²⁴³ and several financial institutions. ²⁴⁴ Other companies and financial institutions have expressed support for a moratorium ²⁴⁵ or have adopted a policy ‘excluding deep-sea metals from their procurement policies and/or investment policies’. ²⁴⁶ 32 States expressly support a precautionary pause or moratorium, at the time of writing. These include Global North countries such as France (advocating for a ban), the United Kingdom (UK), Canada, Denmark, New Zealand, Germany and Spain, among others, and Global South countries, mostly from Latin America (e.g., Brazil, Chile and Mexico) and the South Pacific (e.g., Vanuatu, Fiji and Samoa). ²⁴⁷ Malta, Tuvalu, Honduras, Guatemala and Austria joined this front at the 29^th annual session of the ISA. ²⁴⁸ These calls are broadly based on the precautionary principle, which permeates the Mining Code ²⁴⁹ and requires adopting cost-effective measures for environmental protection despite scientific uncertainty. ²⁵⁰ A deferral of DSM based on this principle is not only compatible with UNCLOS but arguably required to comply with its provisions. ²⁵¹

While the term ‘moratorium’ could raise concerns about compatibility with UNCLOS—indeed, a moratorium would require amending the treaty, and could open the door to even more problematic unilateral actions ²⁵²—a ‘precautionary pause’ would only temporarily delay exploitation and could be decided by the ISA without treaty amendments. ²⁵³ This deferral would last until sufficient scientific progress is made to establish environmental baselines, a solid legal framework is in place, and the ISA has the institutional capacity to oversee mining activities effectively. ²⁵⁴

Importantly, the expected social and economic benefits of DSM are not a legally valid argument in favour of allowing DSM to start in the absence of a robust legal framework and adequate scientific knowledge. ²⁵⁵ The precautionary principle’s cost-effectiveness dimension refers to adopting ‘the most cost-effective means’ to ensure the desired level of environmental protection, ²⁵⁶ and not to a trade-off between environmental protection and economic development. ²⁵⁷ Neither the precautionary principle nor UNCLOS allow for balancing environmental goals against development objectives. ²⁵⁸ Moreover, while UNCLOS Part XI promotes resource development for the benefit of humanity, ²⁵⁹ it also requires compliance with marine environmental protection, ²⁶⁰ making a premature authorization of DSM incompatible with these obligations.

VII. Conclusion

Transitioning to more sustainable energy sources, enhancing energy security and reducing reliance on ‘volatile countries’ for energy supply are legitimate goals that DSM is said to support. ²⁶¹ However, the viability of DSM as a tool for energy transition remains contested ²⁶² due to uncertainties regarding its necessity, profitability ²⁶³ and environmental impacts. Moreover, there is a fundamental concern that DSM may reinforce an extractive model focused on unfettered growth, mirroring the unsustainability of traditional on-land mining. ²⁶⁴ Part XI of UNCLOS assumes that mineral exploitation in the Area will eventually begin, ²⁶⁵ and the ISA is under pressure to finalize the necessary regulations. However, a ‘just’ transition ²⁶⁶ necessitates addressing the tension between actions enabling the energy transition and their potential human rights impacts. ²⁶⁷ While the knowledge available at the time UNCLOS was adopted may have been insufficient to fully appraise the risks of DSM, there is now growing evidence that DSM could disrupt marine ecosystems in the Area and beyond. This may affect the human rights of coastal communities and indigenous peoples while threatening species, habitats and ecosystem services that remain insufficiently understood. ²⁶⁸

DSM is arguably a hazardous activity requiring stringent due diligence obligations for both sponsoring states and contractors. Focusing on contractor obligations, this paper has highlighted that the lack of reliable environmental baseline data, science-based thresholds and a clear definition of ‘acceptable’ harm prevents the adoption of credible risk assessment and mitigation processes. Scientific uncertainty and insufficient legal guidance prevent effective identification, prioritization and mitigation of impacts, hindering both sponsoring states and the ISA in assessing adequacy.

ISA negotiations will continue in 2025 under the new Secretary-General, Brazilian oceanographer Leticia Reis de Carvalho, ²⁶⁹ whose election is viewed as a potential turning point due to her commitment to increased transparency and greater attention to environmental protection compared with her predecessor. ²⁷⁰ Currently, the vagueness of key definitions in the Mining Code creates a risk of ‘managerialization’ of compliance where interpretation is highly susceptible to private interests and which could render environmental due diligence an empty exercise. ²⁷¹ Methods and responsibilities for monitoring mining activities remain undefined in the draft exploitation regulations, ²⁷² while the ISA’s role is undermined by institutional limitations, including the lack of a scientific committee for assessments based on the best available science, ²⁷³ limited transparency, inadequate stakeholder participation ²⁷⁴ and risk of corporate capture. ²⁷⁵ Considering our insufficient knowledge about ecological connectivity between maritime areas, ecosystem services and human rights, it is also regretful that human rights are neglected in the Mining Code. ²⁷⁶

While it has been suggested that DSM lacks social legitimacy, ²⁷⁷ in practice, companies may not face a backlash due to the remoteness of DSM operations and the challenges of establishing causality for impacts that might be diluted in time and space. Yet, companies are required under the DSM legal framework and under business and human rights standards to assess risks and halt activities if impacts cannot be mitigated. A precautionary pause on DSM is necessary at least until science and regulations can effectively guide these processes.