12 July 2013

Pacific islands as global frontier for seabed mining


Foua Toloa
Foua Toloa

by Aliki Faipule Foua Toloa*

APIA: MONDAY 24 JUNE 2013: Pacific islands are set to become the global frontier for a new industry—the mining of minerals from the seabed. The industry carries plenty of potential for controversy, for reasons that should be obvious to anyone familiar with mining on land, in our region and elsewhere.

How much of the proceeds will flow to the people of the Pacific? How will the industry affect communities? How many local people will be employed, and on what grade of job, with what working conditions? What will be the impact on nature? Who will really be in control?

Pacific islands governments have been discussing and debating these questions for several years, and we have some proposed answers in the form of the Secretariat of the Pacific Community’s Regional Legislative and Regulatory Framework. Even so, the concerns I raised above are very real. They are, for example, causing significant delay to the Solwara 1 project in Papua New Guinea.

This indicates that mining companies as well as governments need to take the peoples’ issues seriously. If they do not, operations will be disrupted and perhaps even cancelled. Last month, at the kind invitation of Minister Anthony Lecren of New Caledonia, I had the honour of discussing these issues with representatives of other Pacific states and territories at the Oceania21 environment meeting. I outlined what I see as the issues and challenges facing Pacific islands as we address this new frontier. And I was struck by the level of concern, both for local communities and for the environment. But I was also struck by the potential of the industry to help our islands, if it is done properly.

Prices for copper, silver and palladium rose fivefold between 2004 and 2011; if the right deals are struck with companies mining these minerals from our seabed, some of these high prices can benefit our people. The so-called “rare earth” elements such as neodymium, dysprosium and samarium are especially important in the “green economy”, in technologies such as wind turbines and electric cars, which can help industrial countries to reduce their carbon dioxide emissions.

Prepare for seabed mining

So I would endorse the views expressed at various times over the last year by a number of senior figures in our region, including Tonga’s Deputy Prime Minister Samiu Vaipulu; SOPAC Director Dr Mike Pettersen; and SPC Director-General Dr Jimmie Rodgers.

We need to prepare for the era of seabed mining; we need a tough set of rules on social and environmental criteria, preferably turned into national laws.

As Dr Pettersen expressed it a couple of months back: “We need to know how to negotiate and drive a hard deal. We have to prepare ourselves as best we can by developing our negotiating skills, along with a network of people that we trust and know…and for our communities to benefit while the environment is protected as best we can.”I would also argue that as far as we can, we should harmonise standards across the region to prevent companies “picking off” countries that are less able or less willing to enforce strict rules.

But there are other things that we can and should be doing that entail looking beyond our own region. One takes us into the international parts of the seabed, beneath the high seas, that are regulated by the International Seabed Authority (ISA). When companies mine minerals from the international seabed, the ISA’s constitution says that some of the profits have to flow to the developing world, to aid economic and social progress. But the rules on benefit sharing have not yet been agreed.

The first ISA mining concessions are likely to come in the next decade, and to be in the Pacific. So we have a strong interest in how the rules are written and in ensuring that environmental standards are upheld. Pacific governments can and should be involved in that process and be active and vocal participants in ISA’s deliberations.

Another issue that has been highlighted through my role as a Commissioner on the Global Ocean Commission, a new independent initiative on governance and management of the high seas, is the extraction of biological resources from the ocean. Following the agreement made at the UN Convention on Biological Diversity (CBD) meeting in 2010, companies cannot simply take biological resources, make products out of them and keep the profit; they have to acknowledge and reward the place of origin.

But there is one huge part of the world where this benefit sharing does not apply: the international waters of the high seas, which make up nearly half of the Earth’s surface. Last month saw the launch in Paris of a new “Appeal for the High Seas”, backed by the French government; among other things, it argues that high seas biological resources should come under ISA rules and be subject to the same benefit sharing regime as seabed minerals. Maybe that is something the Pacific should endorse, maybe not; but it is certainly a debate in which we should be engaged.

Not powerless and I would make one point very strongly; we are not powerless before commercial interests, as we once were.

For example, we are progressively regaining control of our fisheries. Establishing marine protected areas, kicking out illegal vessels and setting science-based quotas are three of the measures we are taking forward in our own waters. In the Nauru Agreement, we are ahead of the rest of the world in establishing a mechanism designed to ensure that foreign fleets act responsibly in areas that are technically beyond our national jurisdiction.

If we can do this with fish, we can do it with seabed minerals. But there is one key difference: whereas fish are a renewable resource if we manage them properly, minerals are not. They are a once-in-forever opportunity to build wealth for our islands and our children. If we are to make that wealth last beyond a single generation, we must look further afield for best practice.

We can look to Norway, for example. Decades ago, it made a far-sighted decision to place a proportion of revenue from exploiting its North Sea oil and gas fields into a special fund. It is commonly known as the Oil Fund and is now worth US$700 billion. It is the largest pension fund in Europe, despite Norway having a population less than 10% of France’s or the UK’s. When money from the fund is invested, it has to follow ethical guidelines; companies that contribute to torture anywhere in the world, for example, are banned. The capital sum, boosted by some of the return on investment, is retained for the benefit of future generations of Norwegians.

This might not be precisely the right model for us, but its existence shows that there are ways to turn a non-renewable resource into something that yields consistent, sustainable benefits for future generations. This is something for which we should all be striving, and I would urge Pacific peoples and Pacific governments to begin discussions soon. The era of seabed mining is coming; we need to be ready for its arrival.

*Aliki Faipule Foua Toloa is Minister for Energy of Tokelau, former Ulu (head of government) and Commissioner on the Global Ocean Commission. This statement was made by Faipule Foua Toloa in his capacity as a Commissioner of the Global Oceans Commission. It was not made on behalf of the Government of Tokelau and should not be taken as representing the means of the Government of Tokelau.