Bridging the Regulatory Gap in the Area Regime: Unilateral Deep Seabed Mining Claims and the Complementary Role of National Laws
By Yavuz Arda Yakut and Anaïs Rémont
Published on 23 June 2025
Introduction
On 29th April 2025, The Metals Company (‘TMC’), a Canadian-based deep-sea mining firm, announced that it had officially applied for exploration licenses and commercial recovery permits following the Executive Order of the US on 24th April 2025, which calls for creating a system for US companies to locate and access offshore critical minerals and resources in marine areas beyond national jurisdiction. The application was made by TMC’s US subsidiary, TMC USA LLC (‘TMC USA’) under US law, more specifically the 1980 Deep Seabed Hard Mineral Resources Act (‘DHSMRA’), in a clear attempt to bypass the legal regime established for the Area under the 1982 United Nations Convention on the Law of the Sea (‘UNCLOS’). The US is a non-party to the UNCLOS.
Under the UNCLOS, the Area and its mineral resources are governed by the International Seabed Authority (‘ISA’). The ISA’s Secretary-General issued statements in response to TMC’s announcement and the US Executive Order in an effort to stress that all exploration and exploitation activities in the Area must be carried out under the ISA’s control and that any unilateral action by TMC would be contrary to international law. The ISA Secretary-General also underscored the potentially significant adverse environmental impacts of commercial mining, including habitat removal, biodiversity loss, and noise and light pollution, also documented extensively in the literature (here, here, and here).
Whether the US can lawfully conduct exploration and exploitation activities in the Area, under its national law, is discussed in detail here and here. This post looks at the issue from a different angle and instead focuses on the question of what enforcement action can be taken against non-contractors to prevent them from conducting activities in the Area outside the ISA regime. It argues that this current (and unexpected) set of circumstances highlights a regulatory gap at the international level that can be bridged by implementing international law at the national level.
Identifying the Regulatory Gap at the International Level
This post argues that enforcement action can be taken against several actors. Logically, TMC USA is the first actor to consider, given that it has applied for a permit through the American agency – National Oceanic and Atmospheric Administration (NOAA) and appears to be the actor planning to conduct mining in the Area. However, to understand whether the ISA can take enforcement action against a non-state actor like TMC USA, one first needs to take a step back.
Mining operators who enter into contracts for deep-seabed mining (‘DSM’) activities in the Area are called contractors. The ISA has broad contractor compliance functions, empowering it to issue written warnings, monetary penalties, and emergency orders. The ISA can also suspend or terminate a contract, or even bring a contractor before the Seabed Disputes Chamber (‘SDC’) of the International Tribunal for the Law of the Sea for alleged liability (UNCLOS, Article 187 and Annex III, Articles 18 and 22).
However, TMC USA is not a contractor. Consequently, the ISA cannot take direct enforcement action against it. However, the ISA might take such actions against other actors. Despite its attempt to bypass the Area regime, TMC USA’s parent company operates under it. The parent company, TMC has two wholly owned foreign subsidiaries in Pacific Island States: Nauru Ocean Resources Inc. (‘NORI’) in Nauru and Tonga Offshore Mining Ltd. (‘TOML’) in Tonga; both of which have exploration contracts with the ISA (here and here). TMC’s announcement shows that the application of TMC USA covers these same exploration sites, but precise information is lacking.
Enforcement Action Against NORI or TOML
This post argues that there might be two potential actions. Firstly, all contractors under the Area regime currently have obligations of conduct (i.e., due diligence obligations, here and here), and obligations of conduct are always positive obligations (i.e., obligations to do something). As long as NORI and TOML do not terminate their contracts with the ISA, they must take necessary measures to prevent TMC USA from damaging the Area, its resources or the marine environment. It appears plausible that from the moment TMC USA announced its application to the NOAA, NORI, and TOML should have acted in a manner to distance themselves from any action that contravenes the Area regime. Any action to the contrary breaches, inter alia, their obligation to fulfil their obligations in good faith (Regulations on Prospecting and Exploration for Polymetallic Nodules, Annex IV (Standard Clauses for Exploration Contract ‘Standard Clauses’), Section 13.2(d)).
Secondly, the Standard Clauses state that a contractor is liable for any damage caused by wrongful acts and omissions, including those of its ‘employees, subcontractors, agents, and all persons engaged in working or acting for’ (Section 16.1). The phrase ‘all persons engaged in working or acting for’ might be open to interpretation on whether TMC USA’s acts or omissions can be attributable to NORI or TOML. However, one must note that similar provisions in civil liability regimes are interpreted (here and here) to reflect a kind of employment relationship in which the other entity becomes subject to directions. In any case, to invoke liability, damage must occur. An alternative option for the ISA may be to resort to seeking provisional measures before the Seabed Disputes Chamber (‘SDC’) of the International Tribunal for the Law of the Sea, on the grounds of ‘preventing serious harm to the marine environment’ (UNCLOS, Article 290(1)). This might result in applying pressure on NORI or TOML to distance themselves from TMC and thereby comply with the UNCLOS framework. Another option could be suspending or terminating the contracts (Standard Clauses, Section 21). However, recall that the contract is the link to any enforcement action.
Also, what happens if NORI or TOML terminate their contracts? In such a scenario, the Standard Clauses provide that they ‘remain liable for all obligations accrued prior to the date of such renunciation and those obligations are required to be fulfilled after termination in accordance with the Regulations’ (Section 19). The precise meaning of this clause is unclear; it could refer to decommissioning or closure obligations if contractors conduct test mining. However, the grounds for taking enforcement action against contractors are significantly diminished in the post-termination scenario. Consequently, notwithstanding the limited options referred to above, a regulatory gap at the international level persists.
Bridging the Regulatory Gap at the National Level
In her detailed analysis, Dingwall submits that the language ‘no State or natural or juridical person’ contained in article 137 of the UNCLOS, which prevents unilateral mining in the Area, should apply to contractors directly as a treaty obligation and as a matter of customary international law. Thus, nothing prevents TMC or TMC USA from being subject to enforcement action at the national level in Canada or the US. In fact, in Nevsun Resources Ltd. v. Araya, the Supreme Court of Canada accepted that since customary international law is part of Canadian common law, direct liability of a Canadian parent company for its complicity in its foreign subsidiary’s breach of customary international law can be established (pages 169-170).
Implementation of international law at the national level thus has the potential to protect the Area regime from attempts to bypass it. For Member States of the ISA, this should equally convey the message that national laws on deep-seabed mining should be developed and contain similar measures to prevent unilateral actions by their nationals (also see here).
Enforcement Action Against Nauru or Tonga
NORI and TOML are sponsored by Nauru and Tonga, respectively; sponsorship is essential for mining operators to apply for contracts from the ISA (UNCLOS, Annexe III, Article 4(3)). Similar to contractors, sponsoring States also have due diligence obligations. However, an essential difference to contractors is that the ISA’s compliance power over its Member States is lower. The ISA can only suspend the exercise of voting rights if a Member State is in arrears in the payments of its financial contributions, and, under specific conditions, suspend the rights and privileges of membership – the latter is only possible upon a finding by the SDC (UNCLOS, Articles 184-185). Moreover, the 2011 Seabed Disputes Chamber Advisory Opinion on Responsibilities and Obligations of States Sponsoring Persons and Entities With Respect to Activities in the Area (‘2011 Advisory Opinion’) confirms that a sponsoring State can only be liable if its wrongful act or omission is causally linked to damage caused by its contractor (para. 201).
Nevertheless, the SDC observes that if a sponsoring State breaches its obligations under the UNCLOS, but no damage occurs, it can still be held responsible under customary international law (2011 Advisory Opinion, paras. 178 and 210). Protection of the marine environment has customary international law status, which likely also applies to the precautionary principle (see, 2011 Advisory Opinion, para. 135). Moreover, the Area and its resources are governed by the common heritage of humankind principle, which establishes that no deep-seabed mining activity can occur outside the regime created under the UNCLOS (Articles 136 and 137(4)). As Lathrop suggests, there is compelling evidence to accept the common heritage of humankind principle as customary international law.
However, taking action against NORI, TOML, Nauru, or Tonga carries significant equity considerations. If action is taken against these actors, which would align with international law, questions arise about whether the true culprit escapes punishment while the small island developing State is left to pick up the pieces. This equity conundrum has been amply discussed in the literature here and here.
Conclusion
The prospective unilateral deep-sea mining attempt by TMC USA challenges the UNCLOS and the Area regime, which lacks direct enforcement mechanisms against such non-contractors. At the same time, this post shows that there are several options for enforcement actions against TMC USA’s sister companies, NORI and TOML, and their sponsoring States, Nauru and Tonga. However, such options present complex legal and ethical dilemmas and may not always be effective against TMC USA or its parent company, TMC. This leaves a regulatory gap at the international level, which could be partly remedied through action at the national level. This underlines the critical message that national implementation of international law might be vital in ensuring the integrity of the Area regime.
Yavuz Arda Yakut is a PhD candidate at the Australian National Centre for Ocean Resources and Security (ANCORS), University of Wollongong. He is an attorney at law in Türkiye (Ankara Bar Association).
Anaïs Rémont is a PhD candidate at the Australian National Centre for Ocean Resources and Security (ANCORS), University of Wollongong. She has significant experience in international environmental law with a recent focus on Antarctica and its geopolitics through her PhD.