SOPAC Expedites New Seabed Mining Legislation for Lockheed Martin

Cross-posted from Moana Nui.

FijiCurrently, US military contractor Lockheed Martin is negotiating with Fiji’s Bainimarama administration to fast-track and sponsor new legislation that would allow the private U.S.-based transnational titan to delve into experimental deep seabed mining. Because the U.S. has not ratified the UN Convention on the Law of the Sea (UNCLOS), U.S. industries cannot engage in deep seabed mining in international waters, outside of a country’s Exclusive Economic Zone (EEZ). In the 1970s, before UNCLOS, Lockheed had conducted an analysis of the nodules found in the Clarion-Clipperton zone, just below the Hawaiian Islands. Now, large industrial mining companies are jockeying for position to be the first to successfully vacuum up Pacific resources, which include rich deposits of gold, silver, copper, nickel, manganese, and rare-earth minerals.

Little is known about the deep seabed, and no conclusive environmental study has been completed. What is known is that the life that thrives in this unusual environment is sulfur-based rather than oxygen-based and we do not know how this sulfuric sediment will impact ocean bio-diversity. There is also no regulatory oversight guiding the technology that seeks to raze the deep ocean floor and suck up the minerals.

SOPAC (the Applied Geoscience and Technology Division of the Secretariat of the Pacific Community) began operation on January 1, 2011 and was established by the Pacific Island Leaders Forum to include the assessment of the potential of ocean and onshore mineral resources, coastal protection and management, and geohazard assessment. However, with no conclusive Environmental Impact Assessment or statement, the concern that SOPAC is working on behalf of Lockheed Martin, one or the world’s largest private military contractors, should not only betray the trust of Pacific Island Forum countries, but also damage the legitimacy of the scientific community at large.

In an October 2011 press release, SOPAC announced the contracting of Hannah Lily, Solicitor for the British Government to be their legal advisor to the Deep Sea Minerals Project and she has since been working on behalf of Lockheed Martin, advocating for legal changes to Fijian law. Her comments governing the environmental, regulatory and investment agreements concerning deep seabed mining are further troubling since Fiji’s president Bainimarama is viewed to be illegitimate by many. The Bainimarama regime has not held elections since the 2006 military coup, and New Zealand and Australia have only recently restored diplomatic ties with Fiji.

It could very well be that it is through Hannah Lily’s contract with SOPAC, that British PM David Cameron has just pledged to “put Britain at the forefront of a new international seabed mining industry, which he claimed could be worth £40bn to the UK economy over the next 30 years,” according to the Guardian.

Further entrenching SOPAC into what is beginning to look like a cover-up, on March 6, SOPAC requested that the Pacific Network on Globalization (PANG) remove an article, “U.S. giant using SOPAC and Fiji regime to access seabed minerals in international waters” from its website and we have obtained copies of both the article and Hannah Lily’s comments to the draft decree.

Additionally, section 46 of the draft decree criminalizes protest of the Fiji International Seabed Sponsorship Authority (FISSA), which could be read as providing a blanket of coverage for Lockheed Martin to pursue experimental deep seabed mining without public protest.

Here is the removed article:

US giant using SOPAC and illegal Fiji regime to access seabed minerals in international waters

FEBRUARY 28, 2013 · 9:09 AM

The illegal government in Fiji is being squeezed by the American corporate giant, Lockheed Martin, to sponsor its search for seabed minerals in international waters. To that end, Lockheed is pushing the Fiji regime to fast track legislation and is being assisted in this endeavor by the Deep Sea Minerals Project (run by SOPAC, part of the Secretariat of the Pacific Community) and its British lawyer, Hannah Lily.

Fiji’s cabinet is expected to approve a new Decree on seabed mineral management by March the 5th. Consultation on the draft Decree has been fast tracked with relevant stakeholders given less than 3 days to make submissions whilst US giants Lockheed were consulted well in advance. The new law is required before Lockheed will enter into a formal joint-venture with the Fiji regime. Lockheed will then apply in April to the International Seabed Authority for a new exploration licence.

The new law, which SOPAC, has assisted in drafting, makes vague statements about applying a precautionary approach and best environment practices and requiring Environment Impact Assessments but without specifying where or how Fiji is suddenly to get the expertise to manage and enforce these.

Lockheed has already been granted approval by the International Seabed Authority to explore for polymetallic nodules in one area in partnership with the UK government. It now wants to join Fiji as its official national partner for further exploration licences – but first Fiji needs to have the necessary laws to allow seabed mining in place.

The proposed legislation covers the various aspects and issues arising out of experimental seabed mining operations, including establishing a regulatory authority within Fiji, and introducing a licensing regime, provisions on the protection of the marine environment, and delineating Fiji’s and the company’s duties and responsibilities.

Hannah Lily, employed as a legal adviser by SOPAC, has been advising on the drafting process directly on behalf of Lockheed (LH). Here are some of her comments on a draft version of the new law embedded below:

“LH would not accept the jurisdiction of the courts of Fiji, in case of dispute. The sub-contract would specify that the parties would be subject to UK law and courts. LH therefore suggest section 14 be deleted to avoid confusion. However UNCLOS Art 235 requires that: “States shall ensure that recourse is available in accordance with their legal systems for prompt and adequate compensation or other relief in respect of damage caused by pollution of the marine environment by natural or juridical persons under their jurisdiction”. the ITLOS Advisory Opinion summarises this as ‘requiring the sponsoring State to establish procedures, and, if necessary, substantive rules governing claims for damages before its domestic courts’. Whether the proposed Fiji / LH model can navigate this requirement and LH’s requirement for UK arbitration remains a point to be explored.”

“LH consider it unfair both to be charged the admin fee and to require the Company to cover its application costs. They suggest it should be one or the other, not both. “LH would expect a standalone non-disclosure agreement to cover Fiji’s handling of their commercial data.”

“Query whether there is a reason Fiji would like this notice period to be so lengthy? LH would prefer this to be shorter, or if that is not possible to clarify that they would not be penalised for failure to conduct activities during that 6-month notice period.”

“LH request to delete, otherwise Fiji could unilaterally revoke the licence after 2 years’ inaction, which creates too great an uncertainty for the company.”

“LH request that these specific figures are removed from the Decree and replaced with a provision permitting the Government to negotiate financial terms in a Sponsorship Agreement. NB The suggested fees are too high for LH. The UK rates (GBP 10k for application, 15k for first year, 25k after 6 years , 25k on each extension), which use an actual cost recovery mechanism would be more feasible for LH – perhaps with some small room for negotiation, given that this is a developing country.”

“LH would require that the contract stipulates the UK as the prevailing law and dispute resolution mechanism.”

The International Sea Bed Authority (ISBA) which regulates the leasing of seabed deposits have not yet developed a mining code to regulate the exploitation of minerals in international waters. NGOs have raised serious concerns about the experimental nature of the industry as well as its relevance as a development option for island nations. In addition NGOs have raised concerns about the need to protect the marine environment, prevention of pollution from seabed activities and whether states such as Fiji have the ability to monitor the environment impact.

Arnie Saiki is the coordinator for Moana Nui Action Alliance, which focuses on Pacific Island political and economic justice issues.