Resource Roulette – How Deep Sea

This report benefitted greatly from the assistance of many people on the ground, including numerous experts and partners across the Pacific. We are especially grateful to all those representatives of government, industry, civil society, academia, think- tanks, customary landowners, and other concerned citizens with whom we met during our case study fieldwork carried out in Tonga, Papua New Guinea, and Fiji, many of whom provided us with helpful insights and legislative and other material on deep sea mining, as well as feedback on the report itself. We would also like to thank our partners at Brot für die Welt (Bread for the World), particularly Ulla Kroog and Francisco Mari, for their invaluable role in conceptualizing and supporting this work. TABLE OF CONTENTS 1 EXECUTIVE SUMMARY ....................................................................... i 2 METHODOLOGY ................................................................................ 1 3 INTRODUCTION ................................................................................. 1 4 POLICY DISCUSSION ......................................................................... 2 4.1 Big Ocean States ............................................................ 2 4.2 DSM Overview ................................................................ 2 4.3 European Union Interest ............................................... 3 4.4 SPC’s Position ................................................................. 3 4.5 Risks, Uncertainties, and Impacts of DSM .................... 4 4.6 Governance Challenges: The “Resource Curse,” Revenue Management, and Corruption ....................... 6 4.7 Effects of Extractive Industry Activity on Indigenous Peoples and FPIC ........................................................... 9 5 COUNTRY MAPPING .......................................................................... 10 5.1 COOK ISLANDS ............................................................... 10 5.2 FEDERATED STATES OF MICRONESIA ............................ 11 5.3 KIRIBATI ........................................................................... 12 5.4 MARSHALL ISLANDS ....................................................... 12 5.5 NAURU ............................................................................ 13 5.6 NIUE ................................................................................ 14 5.7 PALAU ............................................................................. 14 5.8 SAMOA ............................................................................ 15 5.9 SOLOMON ISLANDS ....................................................... 15 5.10 TUVALU ........................................................................... 15 5.11 VANUATU ........................................................................ 16 6 CASE STUDY ANALYSIS ..................................................................... 17 6.1 TONGA ............................................................................ 17 6.1.1 Overview ..................................................... 17 6.1.2 Status of DSM in Tonga ............................. 17 6.1.3 Legislative Context ..................................... 18 6.1.4 Consultations ............................................. 19 6.1.5 Regulatory and Capacity Challenges: EIAS Monitoring, and Collection of Fees ........... 19 6.1.6 Concerns about Impacts ............................ 21 6.1.7 Legislative Analysis .................................... 22 6.1.8 Conclusion .................................................. 26 6.2 PAPUA NEW GUINEA ...................................................... 27 6.2.1 Overview ..................................................... 27 6.2.2 Status of DSM Legislation .......................... 29 6.2.3 Consultations/FPIC ..................................... 29 6.2.4 Regulatory Capacity, Corruption, and Accountability ............................................. 30 6.2.5 Lack of Promised Revenue and Benefits .. 32 6.2.6 Impacts ....................................................... 33 6.2.7 Other Potential Impacts: Fisheries, Tourism, Marine Pollution, and Civil Conflict ........................................................ 34 6.2.8 Legislative Analysis .................................... 35 6.2.9 Conclusion .................................................. 38 6.3 FIJI .................................................................................... 39 6.3.1 Overview ..................................................... 39 6.3.2 Lack of Consultations and FPIC ................. 40 6.3.3 Precautionary Principle ............................. 41 6.3.4 Insufficient Regulatory Capacity ............... 42 6.3.5 Concerns about Corruption, Transparency, and Intimidation Tactics ... 43 6.3.6 Lack of Adequate Clean-Up and Remedy Enforcement ............................................... 44 6.3.7 Legislative Analysis .................................... 44 6.3.8 Conclusion .................................................. 49 7 REPORT RECOMMENDATIONS .......................................................... 49 8 CONCLUSION .................................................................................... 51 9 ANNEX: INTERNATIONAL LAW DISCUSSION .................................... 51 1| EXECUTIVE SUMMARY Introduction presented by industry, and Deep sea mining (DSM) is an imminent venture foreign governments. While understanding and respecting the desire to develop an alternative source Guinea (PNG), Tonga, Fiji, and the Solomon of national revenue, we question whether the Islands (SI). Despite DSM’s experimental nature expecte and a dearth of knowledge about hydrothermal overcome the challenges inherent in regulating vents and deep sea ecosystems, companies are multinational companies (MNCs) operating in vast already prospecting in PI nations’ waters with an Exclusive Economic Zones (EEZs) in such a new aim to begin mining as early as 2018. Model and untested industry. legislation being touted around the region focuses Policy Discussion more on ensuring a clear licensing regime and conditions favourable to industry than While DSM is a global proposition, its launching ards for PI citizens. In particular, there is a general failure to incorporate nations. Yet PI nations and their people are particularly dependent on ocean resources for their the norm of free, prior, and informed consent livelihoods, and rely on the conservation of the same (FPIC) for indigenous peoples, who are most to ensure their present and future wellbeing and likely to be impacted by DSM. In the 21st survival. Cultural traditions stretching back millennia century, and under well-established norms of and sustainable indigenous resource practices international law, these omissions represent characterize the entire region, whose island nations serious violations of international legal might aptly be renamed “big ocean states.” obligations. Unfortunatel of life has been threatened by numerous outside , providing an overall forces, including nuclear testing, colonization, mapping of the legislative status of DSM in eleven climate change, and extractive industry. DSM, PI nations and additional in-depth case study heralded by fortune-seeking MNCs and mineral- analyses of Tonga, Papua New Guinea, and Fiji. seeking institutions such as the European Union (EU) months, the case studies al International Monetary Fund (IMF), and their tively monitor DSM and manage partners, is being presented as a low-risk venture resource revenue, as well as concerns about with high returns for PI nations, many of whom corruption, negative impacts, and lack of consultation with local communities. framing ignores several potent realities, the most pertinent of which concerns the risks and to encourage PI nations to consequences of DSM, whose nature is as take a step back and assess the prospect of DSM in unknown as the deep seabed and waters where it their waters from every angle, not only those being will take place. i Ignorance of deep ocean conditions has allowed Islands), instead producing only environmental supporters to characterize DSM as low-impact, contamination, conflict, and other social ills. but even a cursory look at the existing scientific literature establishes the following as likely Furthermore, resource revenue brings with it the outcomes of DSM: 1) species extinction and loss prospects of greater corruption, instability, and of biodiversity; 2) sediment plumes and tailings economic challenges such as Dutch Disease and having the potential to pollute the entire water heightened vulnerability to external shocks. column; 3) the uptake of heavy metals and toxins While it is theoretically possible to manage some by marine animals, including commercial of these phenomena through transparent fisheries; 4) the disturbance of marine mammals institutions, most small island states simply lack from constant noise and light in the water; 5) the the manpower and resources to do this, despite risk of oil spills and accidents from increased otherwise good intentions. vessel and surface traffic; 6) the destruction of coral reefs through increased acidity of water; 7) DSM is being considered as the provenance of the potential for induced volcanism or seismic governments and industry, but the activity; and 8) increased carbon emissions. aforementioned impacts will be felt by communities—most notably, vulnerable ones, For nations that depend so heavily upon fisheries, including indigenous groups, women, and ecotourism, and marine

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