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The Challenge of Regulating Japan’s Deep-sea Mining Experiment

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Tokyo Report | Environment | East Asia

The Challenge of Regulating Japan’s Deep-sea Mining Experiment

As Japan gears up to mine its extended continental shelf, serious questions remain about whether international regulators will be ready. 

The Challenge of Regulating Japan’s Deep-sea Mining Experiment
Credit: Depositphotos

The deep seabed contains significant stores of minerals such as copper, nickel, and yttrium. As the world transitions away from fossil fuels, the global demand for these minerals – which are required to produce batteries and other technology – is projected to soar. Simultaneously, a deteriorating global security environment has increased the incentive for countries to diversify their supply chains for critical minerals. 

Japan, in particular, is the world’s biggest importer of critical minerals, while China is the world’s top exporter, comprising 56 percent of Japan’s imports.

Japan has long been a leader in the deep-sea mining space. As a result of its geography, it has an expansive maritime zone consisting largely of deep waters in the Pacific, likely to hold significant stores of critical minerals. In 2022, Japan successfully conducted a test of technology to pump rare earth mud from depths of over 6,000 meters, and its 2020 Strategy and R&D Plan on Building a Maritime Security Platform indicated an intention to begin industrial-scale mining in around 2027. 

The 2023 Ocean Policy Master Plan confirms Japan’s intention to commercialize deep-sea activities in the late 2020s, while its 2023 National Security Strategy re-emphasized the importance of these endeavors not only for technological gain, but to secure resource independence in an increasingly tense Indo-Pacific.

As Japan progresses its plans at a rapid rate, however, significant questions remain about whether the world is ready. Not only are the environmental impacts of deep-sea mining still highly uncertain, but the regulatory regime is incomplete and ambiguous.  

The rights and rules surrounding deep-sea mining are primarily set out in the United Nations Convention on the Law of the Sea (UNCLOS). Under that treaty, states have the exclusive right to explore and exploit natural resources within an area of the seabed extending out from their coast, known as their continental shelf. All states are entitled to a continental shelf extending 200 nautical miles from their coast. Beyond this, states can use a complex geographic test to establish an extended continental shelf, which may protrude significantly further into deep ocean areas. 

The seabed beyond states’ continental shelves is known as the Area, and its resources cannot be claimed by any state. Mining in the Area is subject to a specific regulatory regime governed by the International Seabed Authority (ISA), involving substantial royalty payments.

Although states own all natural resources within their continental shelf, additional requirements apply to the exploitation of resources in their extended continental shelf. Article 82 of UNCLOS establishes a benefit-sharing scheme that requires a proportion of mining profits from activities in states’ extended continental shelves to be paid to the ISA. An exemption applies to developing states who are net importers of the minerals produced. The ISA is required to distribute these profits between all countries on the basis of “equitable sharing criteria.”

Although Japan (alongside other countries including Norway and Canada) is moving ahead with plans to commence deep-sea mining in its extended continental shelf, how this scheme will work in practice remains unknown. Negotiations on the implementation of Article 82 largely stalled in the late 2010s as the ISA focused on deep-sea mining in the Area. The item was last discussed in the 2023 session of the ISA, when parties simply agreed to leave it on the agenda. It was not raised in the April 2024 session

Article 82’s implementation remains a long way away, and the difficulties of establishing an effective benefit-sharing regime are significant. There has been ongoing criticism of the ISA’s proposals, including that they do not reflect the aims of the UNCLOS common heritage regime.

At present, there is still no clarity about the extent of the ISA’s authority to implement Article 82. For example, it is not yet clear whether the ISA or the contributing state will determine the amount of royalties to be paid; whether there will be a uniform approach to its implementation between states, or whether implementation will be agreed on a state-by-state basis; and whether the ISA will have any standing to bring disputes over the payments to the International Tribunal of the Law of the Sea or other dispute resolution bodies. And although the ISA agreed in 2023 that payments should be made as royalties, rather than payments-in-kind, it is unclear how this decision will be enforced. 

Beyond the uncertainty about how Article 82’s benefit-sharing requirement will be imposed, there are other outstanding issues for the regulation of deep-sea mining in states’ extended continental shelf (ECS). Unlike mining in the Area – which will be regulated by the ISA and subject to a Mining Code, a set of rules and procedures that regulate exploration and exploitation of marine minerals – mining in the ECS is not subject to the Mining Code or any external regulation. 

Japan has, nonetheless, indicated an intention to abide by the Mining Codes while mining its ECS. However, while exploration regulations have already been developed for the main extraction methods, exploitation regulations remain under development. In 2021, the ISA was compelled to urgently develop and finalize the Mining Code within two years. It failed to reach this goal, and is now aiming to finalize the Code by 2025. At the ISA’s 29th Session in April this year, the difficulties in agreeing on these rules became abundantly clear, with significant debate remaining over the environmental regulation required.

In addition, where a states’ claim to an extended continental shelf is contested, both the ISA and the state itself will be paralyzed in their regulatory capacity. This may be particularly relevant to Japan, whose claim to an ECS offshore Okonotorishima in the Philippine Sea was contested and has not been finalized

Finally, mineral fields may straddle the boundary of the ECS and the Area. In such circumstances, it is unclear whether states would have full extraction rights to the field, and whether the additional obligations which apply to mining in the Area would also apply to mining of the straddling fields from within the ECS.

As Japan hurtles toward the commencement of commercial-scale deep-sea mining in its ECS, serious questions remain about whether the world’s regulators are ready. Commencing mining without clear regulations and rules about profit-sharing, environmental management, and other governance requirements will come with significant legal risk. More importantly, it will risk permanent and irrevocable damage to marine environments.