Deep Sea Mining Bill
(10 years, 9 months ago)
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Baroness Wilcox (Con)
My Lords, some noble Lords will be aware of my keen interest in the sea as a native of Plymouth, with its rich maritime history. So my curiosity was drawn to this Deep Sea Mining Bill, despite its less than auspicious title. Now, knowing more about it, I am persuaded of the importance of this Bill and of UK involvement in deep sea mining, including, paradoxically, for the marine environment.
First, let me explain the essence of what this Bill is about because deep sea mining is still an industry in its infancy, working in an environment about which little is known, and I suspect the subject is perhaps new to a few of my noble colleagues.
Back in the 1970s, when the deep sea mining provisions of the United Nations Convention on the Law of the Sea—UNCLOS—were being negotiated, polymetallic nodules were the only mineral resource envisaged as commercially exploitable in the deep sea. No doubt this was due to the relative ease of access to them. Polymetallic nodules lie on the seabed or partially submerged in the sediment on the seabed. So while they are found only at great depths, at least 3,000 metres deep and up to 6,000 metres deep, no drilling would be required to harvest them.
Why would these lumps of rock be exploitable? The clue is in the name: polymetallic nodules. It is for the metal content. Polymetallic nodules are potato-like rocks in shape and size, by which I mean smallish, but variable. They are created by the accretion of minerals from the seabed under great pressure over some millions of years and in places they lie in great abundance on the sea floor. They contain a variety of metals, mainly manganese, but also iron, aluminium, copper, nickel, cobalt and some rare earth elements. Moreover, some of these metals are found in greater concentration in polymetallic nodules than they are in mineral sources on land.
Around that time, the Deep Sea Mining (Temporary Provisions) Act 1981 was passed. This allowed the Government to license companies for the exploration and exploitation of polymetallic nodules in the deep sea in areas beyond any state’s national jurisdiction. Let me be clear that for the purposes of the Bill, we are talking of areas at least beyond 200 nautical miles from the coast of any state. Potentially, we are referring to areas in the southern Indian Ocean, a swathe down the middle of the Atlantic Ocean and extensive areas of the Pacific Ocean.
The reason for the “Temporary Provisions” in the title was in recognition that international rules on deep sea mining were still being negotiated as part of UNCLOS. The convention was eventually finalised in 1982. It defined the deep seabed and its resources as the common heritage of mankind. This novel concept meant that they did not belong to any one state: it was not going to be the case of a free-for-all. Under UNCLOS, the benefits from the minerals are to be shared among states, particularly developing nations. UNCLOS provided for the establishment of the International Seabed Authority, based in Jamaica, to oversee the exploration and exploitation of minerals in the deep sea, and ultimately to oversee the sharing of the benefits.
Some 30 years on, despite the early expectation that deep sea mining was imminent, the International Seabed Authority issued its first contract for the exploration of polymetallic nodules to a commercial operator only in 2011. A year later, the ISA approved an application for exploration of these nodules by a UK company, and subsequently signed a contract with them in 2013. The UK Government have sponsored a second application by the same company, and this is expected to be approved by the ISA at its meeting in 2014.
Why, when the Government are already able to issue licences to UK companies, and then sponsor their application to the ISA, do we then need a new Bill to amend the Deep Sea Mining (Temporary Provisions) Act 1981? The answer is twofold. First, the 1981 Act predated UNCLOS and, on a few small and technical issues, it is not compatible with the convention. In this new and developing industry, and as one of the early sponsors of a commercial operator exploring in the deep sea, it is important that the United Kingdom sets a good example to others by demonstrating that it upholds international law in every respect, and that it is able to act accordingly as and when required.
Secondly, in recent years the ISA has agreed regulations for the exploration of two other mineral types: polymetallic sulphides and cobalt-rich crusts. The 1981 Act allows the Government to issue licences only for exploration and exploitation of polymetallic nodules. If the Government cannot license for exploration of other minerals, they cannot demonstrate that they have legislative oversight of the operations of the company concerned and thus they cannot sponsor an application to the ISA. It would be a great shame if, as would be likely, a United Kingdom company then applied for sponsorship to another state. The United Kingdom would, in effect, be turning business away.
The second amendment therefore widens the definition of what is licensable from polymetallic nodules to all mineral resources. This means that the Government can license applications for the exploration and exploitation of polymetallic sulphides and cobalt-rich crusts. It also means that if the ISA introduces regulations for the exploration of different mineral types in the future, such as oil and gas, no further amendments to United Kingdom legislation will be needed.
Now that I have explained what the Bill does with two apparently small amendments to the 1981 Act, that begs the question of why the Bill is so important. There are two main reasons. I will not be shy in saying that the first is for the economic value to the United Kingdom. Noble Lords will be only too aware that the price of metals has rocketed over the past decade or so. Alas, the consequences have been felt by some of us with rail services having been disrupted when power cables, and occasionally the rails themselves, have disappeared. Metal prices are no doubt why commercial companies are now looking hard at the possibility of deep sea mining. New sources of supply would be hugely beneficial.
For some metals, particularly rare earths required for a lot of modern technology applications, there is a near monopolistic source of supply. In these cases, there are additional, important, strategic benefits in the diversification of supply. Another area of potential benefits is in job creation. Deep sea mining should play to some of the UK’s industrial and technological strengths that have developed over the decades of oil and gas mining in the North Sea, some of which has occurred at great depths. The United Kingdom has, for example, developed some of the most advanced autonomous underwater vehicles—mini-submarines to you and me—which can go down to great depth for exploring and studying the deep seabed. We can also expect our science and academic community, which already has some expertise in the deep ocean floor, to benefit from the study of the environment. It gives me great pleasure to mention the University of Plymouth, which is to benefit from a link-up with the commercial company that the UK Government have licensed. I went to that university when it was a polytechnic, and was honoured to become one of its first governors and am now able to hold an honorary science doctorate from there, so I am prejudiced.
The more direct taxable benefits are difficult to quantify because the industry is still at the exploration stage. International regulations for exploitation have yet to be developed. A good understanding of the environment on the deep seabed has yet to be fully realised. Full environmental impact studies based on the technologies for mining, which are themselves still to be developed, are still some way off. The negotiations for how the revenue from any mining operation is to be shared between the operator, the sponsoring state and the ISA on behalf of the common heritage of mankind have yet to take place. Despite the uncertainty of the regulatory framework for exploitation, and despite this being still a few years off, I am certain that it will happen. There seems little doubt about this, as I noted with interest that both the Government and the Opposition accepted this point in their deliberations in the other place.
That brings me to my second reason why the Bill is important. If we accept that deep sea mining will happen, we want it to do so adhering to the highest possible environmental standards. The United Kingdom will be best placed to help that happen if it is at the forefront of the industry. The Government can do this domestically by, first, carrying out due diligence on the companies applying for a UK licence to ensure that they are able to carry out their proposed work; secondly, ensuring that the applications they consider for a licence employ the best possible standards; and, thirdly, maintaining oversight of the activities and reports of the company during the lifetime of its licence. I know that I am reassured by the idea of a company being given a licence by the UK Government, rather than by many other Governments which I might not name, and which might not be as thorough as ours.
At an international level, backed up by the example set by United Kingdom companies, the Government have assured me that they will argue for the best possible standards in the negotiations over what should go into the mining regulations. As Kerry McCarthy said at Third Reading in the other place,
“we want to be at the forefront not just because of the business opportunities afforded to the UK, but in order to be able to determine standards for ourselves rather than leaving it to others who may not consider environmental protection as important as we do”.—[Official Report, Commons, 24/1/14; col. 584.]
I feel bound to add that Kerry McCarthy also proposed an amendment on Report. This was with the expressed intention of strengthening the environmental requirements under which the Government may offer a licence for exploration or exploitation of minerals on the deep seabed. I am assured that this is unnecessary because there are already sufficient powers for the Government to impose high environmental standards. Moreover, as knowledge of the deep sea environment increases and technology improves, the Bill provides the flexibility for the Government to adapt and increase the standards they consider applicable.
On this basis, with support from the Government and thus far from the Opposition too, I am pleased to support this Private Member’s Bill. I beg to move.
Lord Triesman (Lab)
My Lords, I congratulate the noble Baroness, Lady Wilcox, on introducing an important and timely Bill. I was also pleased to hear her remind us that she is from Plymouth. I hope that she is able to travel home and back to us without any unwanted contact with the deep sea as she makes her progress. I also place on the record our appreciation of the steps taken to introduce the proposals in another place by the noble Baroness’s honourable friend Sheryll Murray. It is clear from debates at all stages that there is broad support for the Bill—and so it will be from these Benches in your Lordships’ House.
I personally welcome the Bill. I dealt for nearly three years with the interpretation of the international law of the sea, and also with territories, including the hyper-fragile Antarctica territories for which the United Kingdom is responsible. What we do on land has significance for the habitats in the oceans, and how we treat the oceans will have vital ramifications for life on land. The earth is, in a couple of words, wholly interdependent.
I also express appreciation for the work of the FCO officials, not least for the provision of a really helpful set of Explanatory Notes. As the notes observe, part 11 of the United Nations Convention on the Law of the Sea, which was modified in 1994, provides for regulation of deep seabed mining. Individual states that are signatories to the convention are required to make certain that mining contractors act within domestic law in each of the assenting states so as to be sponsored by those states for the conduct of the work. Moreover, all those contractors must enter a contract with the International Seabed Authority before any activity can commence, whether exploration or mining mineral resources. Some may regard such a system of safety interlocks as being inhibiting. I do not, and it is clear in moving that the noble Baroness did not think them inhibiting either. I am sure that she is right; this is a prudent set of arrangements.
It is also true that few commercial businesses were interested initially. Companies I spoke with gave three interlinked reasons for that. First, it was technically difficult and expensive to undertake such work, as the commercial risks were high. Secondly, there was little clarity about what might be found, and in what quantities. Again, that compounded the commercial risk. Thirdly, even if there were significant polymetallic nodules or resources lying in the sediment at slightly deeper levels, it was not clear that there was a significant enough market, given that there are known polymetallic resources on dry land and that the size of existing markets for mined products might not at one stage have been sufficiently large. That gave little reassurance to businesses assessing commercial risk. The consequence, at least in my view, was that it was close to impossible to price the risk. Companies could not price it in allocating their own working capital, and neither could they or market analysts price it for either quoted markets or for private equity or debt. It was pretty much beyond reasonable computation. No wonder that things moved at the pace of a deep-ocean snail.
What changed all that—and I was very grateful to the noble Baroness, Lady Wilcox, for touching on these facts—is that there has been a considerable move in a positive commercial direction. There has been progress in the development of technologies capable of operating in deep water, both submarines and robotics, and the rapid growth in demand for polymetallic nodules and polymetallic sulphides, as well as cobalt and rare earths—which are of some significance in this—created by the huge economic surges in China, India, Russia and Brazil, and now in Turkey, Mexico, Indonesia and Nigeria, has all but overwhelmed the supplies that might be available on land. The same has happened with other commodities as varied as oil, concrete, iron, wheat and beef, which are all part of the same economic trajectory. Finally, the science has become clearer about what could be found at different depths, making the targeting of specific minerals a practical task. In short, it became easier to price risk, raise and deploy capital with a degree of certainty about the returns, and then commence the work.
Two problems immediately surface. The original convention and consequential legislation did not cover all the new circumstances that we have seen and which have been among the areas of change described by the noble Baroness and by me today. The updating this new Bill aims to achieve would be welcome enough on those grounds alone. However, it helps us add the second missing ingredient: the environmental issues and our responsibility to protect the environment. We cannot regard this obligation as merely helpful. It is obligatory and summed up in the initial iteration of Clause 5 of our own 1981 Act. I will quote it briefly because the groundwork was set at that time. It states:
“In determining whether to grant an exploration or exploitation licence the Secretary of State shall have regard to the need to protect (so far as reasonably practicable) marine creatures, plants and other organisms and their habitat from any harmful effects which might result from any activities to be authorised by the licence; and the Secretary of State shall consider any representations made to him concerning such effects”.
That is not a bad start. However, more than 30 years on, and guided by the Rio Declaration, particularly at principle 15, we know more but still not enough about the environment. A precautionary approach seems very sensible. That precautionary approach, urged on us by the World Wide Fund for Nature and many others, should be part of our focus today. We have urged the same approach on other nations in fragile environments, for example in our legislation on the Antarctic and in our criticisms of some of the mining proposals others have had in respect of the Arctic as well.
I hope that the House will not misunderstand the argument I am trying to put. I do not say for a moment, “Do nothing until we know every possible consequence”. That is not what I mean by “precautionary”, and would be a legal and practical veto on doing anything. I accept that it is impossible to say that nothing is permitted until we know everything; there would be no progress at all if such an overwhelming test of efficacy was to be imposed. I argue, rather, that we should proceed in a circumspect and incremental manner, using what science can tell us wherever possible.
The first-order question is easy: should we protect the environment and husband its living resources? The answer is obviously yes, but what follows? Perhaps the noble Baroness, Lady Wilcox, and others involved in advancing the Bill may take a view, even if not in the course of today’s debate. I just wish to record some things which we need to resolve, but I do it in a wholly friendly spirit, because these issues concern us all.
Will the entire procedure for granting exploitation contracts be sufficiently robust and well integrated, given the multiple issues—authority at the mining location, knowledge of the ecosystem at the location, and control over mining practices? Not all the information or decisions will lie in the hands of any one party. They will need to be integrated to get a holistic picture and avoid the scope for real error.
Is the ISA able to monitor and police at scale? I have no doubt that it can do it in a limited way, but I am not as convinced that it can do it at scale; that is something that we should explore. Do we have evidence of risk of extinction for affected species? For example, do we know if sedimentary plumes below known densities of specific depths are dangerous or benign? Can scientists advise us on risk mitigation capable of being written into any set of regulations? What density of mining activity in any one location will be allowed on environmental grounds? Indeed, what will be the criteria for awarding permissions?
There is an opportunity to mine between 1,400 metres and 5,000 metres below the surface. I think that I am right in saying that it is usually near active or extinct hydrothermal vents in the earth’s crust—and I am grateful to the noble Baroness for identifying these parts of the globe. But we know that those are precisely the locations of a vast array of aquatic life; they happen to be particularly dense in species of animal life. Preferred methods will spread the sedimentary plumes far more widely than the water column where the mining is actually undertaken. Will the Government perhaps be able to commit themselves to funding longitudinal research to ensure that we know as much as possible about each incremental step so that we can make the best informed decisions without preventing the development of this commercial and necessary opportunity?
I hope that no one will say, in answering, that we should rely on the United Nations agencies for the research, as they take too long—and much of the research, to be candid, is not that great. We, along with the United States and some our European partners, have universities capable of really credible research in these areas, and I would wish to see that done because I am much more confident of the quality of the research that could be done that way.
Important as these questions are, progress today on the Bill is important, as it will be in later stages. For those reasons, I finish by saying that we support the Bill and wish it rapid progress, and I thank the noble Baroness for introducing it.
Lord Wallace of Saltaire (LD)
My Lords, I start by saying that the Government give this Bill their whole-hearted support. I thank my noble friend Lady Wilcox for introducing the Bill for your Lordships’ consideration, along with her honourable friend in the House of Commons, Sheryll Murray, who brought forward this valuable Bill. Both of them have good links with the sea in south-west England—happier links than in the current conditions. I have had many conversations with the noble Baroness, Lady Wilcox, on the fisheries issue.
To some extent, this is a journey down Memory Lane for me. In the 1970s, as a young academic working on British foreign policy, I did some work on the British-Icelandic fisheries dispute and got from there into the question of international fisheries regulation. I then found myself invited to some of the conferences preparing the UN Convention on the Law of the Sea, and I remember hearing about manganese nodules and how they were very much one of the materials of the future. The future is clearly rather longer term than people in the late 1970s and early 1980s were thinking, but it is clear that, as some companies begin investigating whether one can mine asteroids, the deep sea will be rather easier than that, as we search for other resources.
In answer to the noble Lord, Lord Triesman, efforts at global fisheries regulation, in treating global fisheries as the common heritage of mankind, have not yet succeeded in providing the level of enforcement of regulation that we all hoped for then. That raises a number of issues for how well global and regional institutions will be able to co-operate to make sure that, in these very deep oceans, regulations are observed. It is yet another area in which the idea that Britain on its own as a sovereign country, not co-operating with others, can do things—the myth of UKIP and others—is clearly idiotic. We have to work intensively with others to conduct the sort of research that the noble Lord, Lord Triesman, is talking about, and that is much better done in a European, OECD or UN context. That is the way in which any intelligent foreign policy has to go forward—a message that all of us who believe in international co-operation are going to have to make loud and clear over the next few months. We are better together in the European Union, in the UN and within the UK.
We have heard that deep sea mining has tremendous potential, but it is still potential. We expect that at some point in the next generation it will begin to play a very significant role in the world economy. We welcome this Bill partly as reinforcing the ability of the United Kingdom Government to be an active participant at the leading edge of such developments. The Government have already sponsored two applications to the International Seabed Authority by a British company to explore for polymetallic nodules in the north Pacific. We want to make sure that British business is well placed to take advantage of all future developments in deep sea mining. Britain already has substantial expertise in relevant technologies learnt through exploiting gas industries in the North Sea, in deeper and deeper waters. Much of this technology and the associated expertise could also be utilised in the deeper sea mining that is envisaged.
Last year, my colleagues in the Department for Business, Innovation and Skills organised a very successful industry day to alert British companies to the opportunities which deep sea mining might in time provide for them. I am pleased to say that about 80 British companies participated. The economic opportunities which deep sea mining might open up are potentially very substantial. The Government have already taken action to bring them to the attention of British companies.
At present, we are only at the stage where exploration for minerals on the deep seabed is taking place. In due course, we can expect that the International Seabed Authority will move to consider exploitation—in other words, actual mining—of minerals on the deep seabed. The Government are, of course, committed to ensuring that the highest environmental standards are applied at the exploration phase, and even more so at the exploitation phase. The UK delegation made it clear during a first discussion of exploitation regulations at last year’s session of the council of the ISA that we would expect to see the exploitation regulations include the highest possible environmental standards, and we are determined to press this position. We also emphasised the importance of there being full consultations with all relevant shareholders, including, therefore, non-governmental organisations with an interest in the marine environment. I say to the noble Lord, Lord Triesman, that we will engage with the question of how we manage to enforce what is agreed as well as getting through the process of what is agreed. We certainly need to learn from the difficulties that we have experienced with regard to international fisheries.
During the debates in the other place, we were urged to look again at Section 5 of the 1981 Act. This section requires the Government, when issuing licences, to have regard to the need to protect the marine environment so far as is reasonably practicable. It is clear that deep sea mining cannot have no effect on the marine environment, but we can mitigate the effects, and that is what Section 5 of the 1981 Act already requires us to do. Therefore, the Bill does make amendments to Section 5 of the 1981 Act, but these are all purely consequential upon the fact that Scottish Ministers will now have the ability to issue licences under the Act.
However, in the light of the comments made in the other place, we have looked again at whether more substantive changes should be made to Section 5. We remain of the view that Section 5 is still adequate for our purposes. In particular, in carrying out their duties under Section 5, Ministers would necessarily have to take into account the terms of the advisory opinion from the International Tribunal for the Law of the Sea given in 2011. This made it clear that, in sponsoring applications to the International Seabed Authority, states must have regard to their environmental obligations. That includes specifically the precautionary approach set out in the Rio declaration. Therefore, we are satisfied that Section 5 is adequate as it stands and, indeed, that it is worded in such a way that account can be taken of further developments in the international law relating to the protection of the environment.
It was suggested in the other place that, since the ISA will shortly be considering the question of exploitation regulations, the Bill might be premature. I can assure the House that this is not so. On the contrary, it is important that the law of the United Kingdom should enable us to ensure compliance with the mining regulations once they are adopted, and that is what this Bill will do. The new Section 2(3A) will enable Ministers to include in licences a requirement on contractors to comply with any rules, regulations or procedures adopted by the International Seabed Authority. Therefore, the Bill is not at all premature. It is, in fact, very timely because it will enable us to give effect to the mining regulations as soon as they are adopted by the ISA. I am happy to reiterate that the Government are committed to applying the highest environmental standards in any applications which they sponsor, and will do all they can to ensure that the ISA also incorporates such standards in its regulations.
The Bill itself applies only to exploration and exploitation on the deep seabed; that is to say, the area of the seas beyond the jurisdiction of any state, including that of the United Kingdom. The Bill makes extensive amendments to the existing legislation— the 1981 Act, which has proved anything but temporary, being now of course more than 30 years old—and, in recognition of this, the Short Title will be amended to remove the reference to its temporary character.
There are two principal reasons why it was felt necessary to bring forward amendments to the 1981 Act. As has already been remarked, the first was that it was passed before the UK’s ratification of the United Nations Convention on the Law of the Sea. It is therefore not surprising that in some respects the 1981 Act does not fully reflect the requirements of the convention. However, the most significant reason for needing this Bill is that the 1981 Act covered only polymetallic nodules, or manganese nodules as they were known in those days. I have already explained what these are, and it was thought at the time that the 1981 Act was passed that they were the only mineral resources on the deep seabed likely to be exploitable. Now we are discovering polymetallic sulphides and cobalt-rich crusts; I am sure that all of us would instantly recognise these when we saw them. They happen to be a mere 3,000 metres down, under the ocean.
In the past few years, the ISA has adopted regulations about cobalt-rich crusts and polymetallic sulphides. I am told that cobalt-rich crusts occur on sea mounts in the western Pacific Ocean and there is already interest in exploring for them from China, Japan and Russia. I am pleased also that Brazil, one of the key emerging markets in the world, has just submitted an application to explore for crusts in the south Atlantic. As to polymetallic sulphides, these normally occur at the source of extinct volcanic activity on the deep seabed, as the noble Lord, Lord Triesman, said. There are now six applications to explore for these minerals, covering areas of the Indian Ocean and the Atlantic Ocean.
Obviously, I am sure all noble Lords will agree, the Government would like to have an open door to any contractor who wishes to explore for any of the mineral resources of the deep seabed. However, under the 1981 Act as it stands, we could not give a licence to a commercial company that wished to explore for cobalt-rich crusts or polymetallic sulphides. If a company came along with a request for the United Kingdom to sponsor an application to explore for either of these mineral resources, we would be obliged to say no. The company would no doubt simply then go to one of the other 160 states that are members of the ISA and seek sponsorship from it. To put it crudely, the United Kingdom would simply lose out.
It is for this reason among others that the Government fully support this Bill—indeed, they are enthusiastic about it. It demonstrates that the UK is open for business internationally and that we are keen to participate in what will, I am sure, in time—perhaps not in my time—be a ground-breaking and innovative industry. I congratulate again my noble friend Lady Wilcox on introducing this Bill and I hope that it will receive the unanimous support of the House.
Baroness Wilcox
My Lords, I have been fortunate indeed to have as my Minister someone with whom I have worked over time. My noble friend Lord Wallace of Saltaire knows the area that we are talking about and certainly knows the sea very well; it is certainly worth having him on board. I am always interested to hear about the career of the noble Lord, Lord Triesman, because he has always done something with which I have been involved somewhere along the line. He is a man of many parts—there is no doubt about that—and I am very grateful to him.
I should have started my earlier remarks by of course thanking Sheryll Murray, who introduced the Bill in another place. I also thank the FCO officials who have done a wonderful job of giving me a superb briefing and making me sound as if I really know what I am talking about on this very complex subject. However, it is an exciting subject. For me, anything to do with the sea is an exciting subject. So little is known yet about the potential impact of deep sea exploitation but because we are coming at it in the way we are, and with the support of all sides of the House, I am extremely grateful and hope that we will move forward at speed.
Bill read a second time and committed to a Committee of the Whole House.