PACIFIC SMALL ISLAND DEVELOPING STATES REGIONAL TRAINING AND CAPACITY BUILDING WORKSHOP

1. Pacific Small Island Developing
States Regional Training and
Capacity Building Workshop on
Deep-Seabed Mining
12 – 14 February 2019
Nuku’alofa, Kingdom of Tonga

2. Map of the Pacific

3. Review of National Legislation
13 February 2019
International Seabed Minerals Act
2015
By Graham Leung
Secretary for Justice
Republic of Nauru

4. Commencement and Purpose
• Act came into force on 23 October 2015
• The objective of the Act was to establish a legal framework for
the sponsorship, and for the effective control, by Nauru of
contractors to undertake Seabed Mineral Activities in the
seabed and ocean floor and subsoil beyond the limits of
national jurisdiction (“the Area”)

5. Objectives to be Achieved by Act
• Create a regulatory system and designate a responsible
Authority to licence, monitor and manage Nauru’s involvement
with Seabed Mineral Activities.
• Establish a system for Sponsorship Applications, and the grant
of Sponsorships Certificates under which Sponsored Parties will
be authorised to engage in Seabed Mineral Activities under
specific and enforceable conditions.
• Provide for Nauru to receive payments for its Sponsorship of
Seabed Mineral Activities.

6. Nauru Seabed Minerals Authority
(Establishment and Objectives)
• Established as a body corporate under the Act.
• Provides a regime within Nauru for the sponsorship and
supervision of Seabed Mineral Activities.
• Maintains effective control of Seabed Mineral Activities and the
protection and preservation of the Marine Environment.
• Ensures compliance by Sponsored Parties or any sub-
contractors engaged with relevant rules and internationally
agreed standards.

7. Nauru Seabed Minerals Authority
(Establishment and Objectives)
• Maximise the economic and development benefits from Seabed
Mineral Activities for Nauru.
• Ensure adequate consultations are conducted.
• Act in a way that is compatible with principles of best regulatory
practice.

8. Main Functions of the Authority
• Develop standards and guidelines, and provide advice and guidance
in relation to applications and Seabed Mineral Activities.
• Conduct due diligence enquiries into Sponsorship Applicants or
Sponsored Parties.
• Receive and evaluate Sponsorship Applications.
• Recommend to Cabinet whether Seabed Mineral Activities are to be
permitted or not, and on what terms.
• Liaise with the ISA and any other relevant international organisations
to facilitate a Sponsored Party’s application to the ISA for a contract.

9. Main Functions of the Authority
• Assist the ISA in its work to establish, monitor, implement and
secure compliance with the Rules of the ISA.
• Undertake any advisory, supervisory or enforcement activities in
order for Nauru to meet its obligations under UNCLOS as a
Sponsoring State.
• Establish contractual arrangements with any parties sub-
contracted by Nauru, and ensure the terms and conditions of
those contracts will hold the contractor to necessary standards
to ensure compliance with the Rules of the ISA.

10. Obligations of Sponsored Party in
Conduct of Seabed Mineral Activities
• Adhere to the provisions of the Rules of the ISA.
• Provide sufficient training, supervision and resources to employees,
agents or officers so as to ensure compliance with the Rules of the
ISA.
• Facilitate the ISA’s regulation and the Authority’s monitoring of
Seabed Mineral Activities in accordance with the Rules of the ISA.
• Apply the Precautionary Principle, and employ best environmental
practice in accordance with prevailing international standards.
• Offer to Nauru opportunities for training in relation to, and
participation in, the Seabed Mineral Activities.

11. Obligations of Sponsored Party in
Conduct of Seabed Mineral Activities
• Maintain appropriate insurance policies for identified risks and
costs of damages or otherwise satisfy Nauru of its financial and
technical capability to respond to potential Incidents.
• Report to the ISA and the Authority immediately in the event of
an Incident occurring and respond efficiently to the Incident.
• Submit to the ISA and the Authority in writing, notice of any new
information arising or data collected that materially affect: the
Qualification Criteria; the programme of work contained in the
contract between the Sponsored Party and the ISA; or the
Sponsored Party’s ability to adhere to the terms of the Rules of
the ISA.

12. Obligations of Sponsored Party in
Conduct of Seabed Mineral Activities
• Ensure any vessels engaged are in good repair and comply with the
laws of the flag state relating to international vessel standards.
• Ensure working conditions for personnel meet applicable
employment rules and health and safety standards and comply with
the laws of the flag state relating to the safety of life at sea.
• Not dump mineral materials or waste from any vessel except in
accordance with relevant international law or the Rules of the ISA,
• Not proceed without obtaining prior specific written consent from the
ISA to proceed, if evidence arises that to proceed is reasonably likely
to cause significant adverse impact.
• Upon submitting data, reports or other information to the ISA, ensure
that the contents of those documents are true, accurate and
comprehensive.

13. Liability of Sponsored Party
• A Sponsored Party is responsible for the performance of all
Seabed Mineral Activities carried out within the Contract Area,
and will be liable for the actual amount of any compensation,
damage or penalties arising out of its failure to comply, or out of
any wrongful acts or omissions in the conduct of the Seabed
Mineral Activities.
• Nauru is indemnified against all actions, proceedings, costs,
charges, claims and demands which may be made or brought
by any third party in relation to a Sponsored Party’s Seabed
Mineral Activities.

14. Role of Nauru as Sponsoring State (State
Responsibility)
Nauru as a sponsor of a Sponsored Party which holds a contract
with the ISA to conduct Seabed Mineral Activities, will:
• ensure that its conduct in relation to the ISA, the Area and
Seabed Mineral Activities adheres to the requirements and
standards established by general principles of international law;
• take all appropriate means to exercise its effective control over
Sponsored Parties, seeking to ensure that any Seabed Mineral
Activities are carried out in conformity with the UNCLOS, the
Rules of the ISA and other requirements and standards
established by general principles of international law.

15. Role of Nauru as Sponsoring State (State
Responsibility)
• Do all things reasonably necessary to give effect to its
sponsorship of a Sponsored Party.
• Not impose unnecessary, disproportionate or duplicate
regulatory burden on Sponsored Parties.
• Promote the application of the Precautionary Principle and best
environmental practice.

16. Role of Nauru as Sponsoring State
Monitoring Powers)
The Authority has the power to make such examinations,
inspections and enquiries of Sponsored Parties and the conduct
of Seabed Mineral Activities, which includes the:
• sending of an observer to the site of the Seabed Mineral
Activities and vessel or premises of the Sponsored Party; and
• inspection of relevant books, records and other relevant data,
from time to time, upon giving reasonable notice to the
Sponsored Party.

17. Fiscal Arrangements (Payments by
Sponsored Parties)
• Sponsorship applicant pays US$15,000 on the lodgement of a
sponsorship application with the Authority.
• The holder of a sponsorship certificate must pay to the authority
an annual administration fee of US$20,000.
• After the fifth year of the Sponsorship Certificate term, may
review and increase the annual administration fee for the
remainder of the term of the Sponsorship Certificate.
• A Sponsored Party holding an ISA contract for exploitation
under Nauru’s sponsorship must pay the authority, such sums
as agreed to before the commencement of exploitation.

18. Other Fiscal Arrangements
• Establishment of a ring-fenced Seabed Minerals Fund, where
all funds paid to the Authority are to be deposited.
• A sponsored party is responsible to make prompt and full
payment of any sums due to the ISA, under the rules of the ISA.
• The Authority may after an exploitation contract has been
granted by the ISA to the Sponsored Party, and prior to
commencement from of exploitation require a deposit security
as a guarantee of performance of its obligations under the
Rules of the ISA.

19. Nauru Ocean Resources Inc.
• Incorporated in the Republic of Nauru
• Subject to the Nauruan International Seabed Minerals Act 2015
• Wholly-owned subsidiary of DeepGreen
• Received certificate of sponsorship from the Republic of Nauru
in April 2011
• ISA Exploration Contract signed in July 2011
• First ISA contract sponsored by a Developing State
• NORI-Nauru Sponsorship Agreement signed in June 2017

20. Nauru Sponsorship Agreement
• Signed June 2017
• Parties to the Agreement: Republic of Nauru, The Nauru Seabed Minerals
Authority & Nauru Ocean Resources Inc (NORI)
• NORI will pay a Seabed Mineral Recovery Payment during exploitation
• “The Seabed Minerals Recovery Payment will be paid to the Seabed
Minerals Fund, in accordance with the Act to provide benefits to Nauru’s
current and future generations in a transparent manner. In this way, the
Seabed Mineral Recovery Payment paid by NORI during Exploitation is
intended”
• NORI pays an annual administration fee to the Republic of Nauru to cover
the costs associated with the Republic’s administration of its Sponsorship
• Reporting: NORI submits an annual report and the parties will meet to
discuss the report and the performance of both parties to ensure the
Agreement is being fulfilled as intended

21. Nauru Engagement
NORI and Nauru’s engagement and relationship continues to increase and evolve, 2018
was a productive year for NORI and Nauru’s role in 2018 was valued and appreciated by
NORI.
• Nauru delegation attended offshore Campaign 3 launch in San Diego, USA.
• NORI partnered with Nauru Rehabilitation Corporation to sponsor a rehabilitation study
• Nauru hosted a seafloor mining side event during the Pacific Island Forum in Nauru –
NORI and ISA participated in the event
• NORI Country Manager recruitment began
• NORI and Nauru met with the Government of Taiwan to discuss seafloor mining
• Collaboration on communications materials – Development of two videos, media articles
& social media
• NORI and Nauru participated in both ISA meetings in 2018
• Nauru and NORI attended an Industry Common Heritage of Mankind workshop
• Nauru became a shareholder in DeepGreen

22. TUBWA
• Comments and Questions