High seas beyond the jurisdiction of any country are considered a common estate for all humans, and resources derived from the high seas shall be utilized for the good of mankind as a whole.

That is one of the main ideas of what was agreed upon in the “The United Nations Convention on the Law of the Sea” in December 1970. The resources discussed here include marine fisheries, environmental conditioning functions that allow us and all other species on the Earth to survive, cultural assets, and also the mineral resources that are found deep underwater. However, currently this common estate is under threat due to a handful of private sector entities.

Because the climate crises is more imminent than ever, the world is in a rush to make a swift transition to low-carbon technologies. While this is welcomed by many environmentalists who have been urging for that energy transition to happen, it has also brought massive new demands for mineral resources such as nickel, cobalt and copper. The World Bank estimates that annual nickel production will have to be doubled compared to 2018 production levels, and cobalt will have to be more than quadrupled right now and to have it sustained until 2050 in order to achieve the “2 degree scenario” projected by the IPCC. Thus we are now in a world where places that were previously not seriously considered as viable investment for mineral mining are being considered. One such frontier for mineral procurement is the deep sea.

When the Convention on the Law of the Sea was signed, governments already knew mineral deposits are available in the deep sea, but there were no means of efficiently exploiting them. However, half a century of technological advancements have brought the minerals within our reach. We now know a lot more about the prospects of these minerals, but on the other hand, we still know very little about deep sea creatures and the ecosystem that nurture them.

The few things we know is that deep sea creatures have constructed an ecosystem that has not had to deal with invaders for tens and hundreds of centuries, and have characteristics that are sometimes beyond imagination. For example, a species of sponges were found to live for centuries, and one of the oldest of the kind found is estimated to have lived already for over 11,000 years. Knowledge about these extraordinary species has just begun to develop, and researchers regularly find new species each time they take a deep dive into the sea bed.

Deep sea mining is literally bulldozing this rather unknown habitat before understanding more about it.

The impacts are said to not be contained to the deep sea. Support vessels that operate at the surface will bring 24 hour human activity including light and noise pollution to areas of the Pacific that are known to be important paths for commercially valuable fish like varieties of tuna. Potential mine sites also cross intersect with migration routes and feeding grounds for whale sharks and leather-back turtles, both of which are on the verge of extinction.

Changes in the activity patterns of these migratory species will have lasting impacts beyond the mining area. Various pacific indigenous peoples and small scale fisherfolks depend on tuna and other commercially viable fisheries. If these patterns are disrupted these vulnerable communities will be hit hardest.

Greenhouse gases may be possible to be off-set, but biodiversity cannot. Due to suspected irreversible impacts, the IUCN, which holds over 200 government bodies and over 900 civil society organizations in its membership, overwhelmingly approved a demand for a global moratorium on deep sea mining in September 2021.

Similar views are also voiced by a group of over 600 marine scientists, who demand that a moratorium should be placed during the United Nations Decade of Ocean Science for Sustainable Development starting from 2021 and going until 2030.

In support of this demand, major private companies are already beginning to declare exclusion of deep sea minerals from their supply chains and support for a decade of moratorium on deep sea mining. As of December, 2021, BMW, Google, Patagonia, Philips, Samsung SDI, Scania, Triodos Bank, Volkswagen, and Volvo have signed this declaration.

In addition to the environmental considerations, questions are also raised regarding who benefits from the exploitation of the deep sea. Currently, some private actors are signing contracts with the regulatory agency, International Seabed Authority (ISA) in non-transparent manners. Learning from such practices of exploitation on land, watchdogs have reason to believe the common estate will be exploited for the fortunes of the few in the Global North as shown further in this report. This will again bring wealth to developed countries at the expense of the South, of humanity, and the environment.

One such example is The Metals Company (TMC) with its headquarters in Canada. TMC is pushing forward a contract with ISA, utilizing the Government of Nauru as its sponsor for the ISA application. But the benefit sharing between TMC and Nauru is not made clear. Nauru can easily end up gaining close to nothing while having to inherit a destroyed ocean. The people of Nauru have already voiced their opposition to be exploited in that manner, and rejected being used as pawns in the rush for deep sea resources. However, TMC has made legal maneuvers that do not change the substance of the deal, but that gives them a veneer of deniability. Essentially, the owners sold the Nauru-based subsidiary to two Nauru-based foundations that they themselves own, so that the subsidiary looks like it is controlled by Nauru-based entities. But the fact remains that TMC publicity documents still claim the subsidiary to be 100 percent owned by TMC. This is completely contradictory to the ISA application filed in 2011 that states that the local company in question, Nauru Offshore Resources Inc (NORI), “is no longer affiliated with […any] entity or person outside the jurisdiction of the sponsoring State”. This raises serious question about the deal and is apparently a betrayal to the people of Nauru. Similar questionable arrangements are made with the governments of Tonga and Kiribati. Which makes us wonder, why won’t this company have its own national Canadian government, sponsor its exploration contracts?

Interestingly, Glencore, a major land-based mining company, has signed an offtake agreement with TMC ensuring that 50% of the minerals, if mining ever succeeds, will go to Glencore. So who is the benefactor here? A multi-billion mining giant, a dodgy entrepreneur, its investors, or a small island nation that was lured into stamping its name on the contract? If history is any lesson, the small Pacific island nations have already been exploited by powerful nations for its rich mineral deposits. Demanding clarity and mechanisms to ensure equitable benefit sharing should not be considered an overreaction.

Another deep sea mining company, Ocean Mineral Singapore (OMS), based in Singapore, claims Singapore is a “developing country”, when in fact they rank among the top 10 richest countries in terms of per capita GDP. Yet, they signed an agreement with ISA which allows OMS to mine in deep sea territories that have been “reserved” for developing nations, so as to prevent monopoly exploitation by developed countries. Research into corporate ownership structures by Fair Finance Guide Japan has shown that a subsidiary of Lockheed Martin has an investment of USD 20 million in the company and owns 19.9% of its shares. Thus, they are expected to benefit from any proceeds that OMS makes. A Belgian dredging company, DEME, is also expected to benefit through business dealings with OMS. So this arrangement also begs the question, is this what fair and equitable benefit sharing looks like?

Meanwhile, marine-based indigenous peoples and small-scale fisherfolks who depend on marine resources for their food, revenue and culture are all but left out from all this conversation.

The authority that is allowing these dodgy deals to take place is ISA, and it is obviously not well governed to prevent such exploitation from taking place. And yet, at least one Japanese mining company, Sumitomo Metal and Mining, responded to NGOs that regardless of IUCN resolutions and other proposals/recommendations, they will solely adhere to ISA standards.

Right now, ISA has not agreed upon standards for code of conduct in mining the high seas. But it has a mandate to come up with a rule by June 2023. If no rules are agreed upon by then, that will be the law of the seas; that deep sea mining shall not be regulated by an international authority. Businesses seem to have open arms for this result.

International regulatory framework is all but absent, but the risks form deep sea mining are becoming clearer than ever. Financial institutions are also expected to act. Seeing this situation, UNEP-FI has singled out deep sea mineral mining from its scope of Blue Economy, and made it clear in its guidance document. The Dutch bank, Triodos Bank, as mentioned above is already a signatory to a declaration which pledges not to use minerals sourced from the deep sea and to support a moratorium on deep sea mining. Financial Institutions across the globe should join in creating a league of responsible financial institutions.

Disappointingly, no Japanese financial institutions have yet endorsed the same pledge, and no institution has any specific policy that touches on deep sea mining. But whether financial institutions are ready or not, deep sea mining is coming to their doorstep soon. We urge all financial institutions to become actors in preventing the destruction and exploitation of the high seas by taking the following actions:

  • Construct and disclose strict policies on its own use of deep sea minerals
  • Declare support for a moratorium on deep sea mining
  • Construct and disclose policies so that companies they invest and finance will be promoted into declaring exclusion of deep sea minerals from their supply chains and support for a moratorium on deep sea mining


Read the full report here (only in Japanese).


About Fair Finance Guide Japan

Fair Finance Guide Japan composes of four civil society organizations: Japan Center for a Sustainable Environment and Society (JACSES), Pacific Asia Resource Center (PARC), Alternative People’s Linkage in Asia (APLA), and Japan Tropical Forest Action Network (JATAN). Fair Finance Guide Japan focusses on analysing the policies of Japanese financial institutions (both banks and insurers) on their investments against common, comparable environmental, social and governance (ESG) criteria. Going beyond analysing the policies of these financial institutions, the Fair Finance Japan coalition also highlights the practices of different financial institutions and companies on the ground through their case studies. Underscoring the importance of an active and engaged civil society, the coalition works with other Japanese CSOs towards making Japanese financial institutions accountable for their financing activities across Asia.

For more information, please contact: 

Mr. Yuki Tanabe, the Program Director for Japan Center for a Sustainable Environment and Society (JACSES).