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

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, seems to have 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:

• “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 feasibl 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.