Reclaiming Authority: Forcing Seabed Mining Contractors to Choose between the ISA and the USA

Vouloir le beurre et l’argent du beurre

Aspiring Canadian mining firm, The Metals Company, Inc. (TMC), through its wholly-owned subsidiaries (p. 10) Nauru Ocean Resources, Inc. (NORI), Tonga Offshore Mining, Ltd. (TOML), and The Metals Company USA, LLC (TMC USA) (together, the TMC Group), is pursuing two incompatible avenues to access and exploit polymetallic nodules in the seabed beyond national jurisdiction (the Area).

1. Through NORI and TOML, and under the sponsorship of Nauru and Tonga, the TMC Group holds exploration contracts issued by the International Seabed Authority (ISA or Authority). NORI and TOML’s exploration contracts expire in July 2026 and January 2027, respectively, and may be extended for five years at the contractor’s request and upon the recommendation of the ISA’s Legal and Technical Commission (LTC).

2. Through TMC USA, the TMC Group has applied for two exploration licenses and a commercial recovery permit (covering the same areas as its NORI and TOML exploration contracts (p. 48)) from the US National Oceanic and Atmospheric Administration (NOAA) in response to President Trump’s April 2025 Executive Order resurrecting a 1980 US statute (Deep Seabed Hard Mineral Resources Act (DSHMRA, 30 U.S.C. 1401 et seq.)) which authorizes the issuance of such licenses and permits in respect of polymetallic nodules in the Area. The United States is not a party to UNCLOS.

The TMC Group is the only entity to have submitted an application under DSHMRA since 1984. Its applications are pending at the time of writing. This approach may breach US international law obligations (as discussed here), may be unworkable (for reasons discussed here and here), but, if successful, will severely undermine the Convention and the Authority – the institution established to, among other things, “exercise such control over activities in the Area as is necessary for the purpose of securing compliance with the relevant provisions of [the United Nations Convention on the Law of the Sea (UNCLOS or Convention) Part XI] and the Annexes relating thereto” (UNCLOS, Art 153(4)) (emphasis added). The Authority can and must take action to defend itself, the Convention, and the international order of the oceans from this emerging, possibly existential, threat.

Wing Flapping?

The TMC Group’s pursuit of NOAA approval threatens the integrity of the Convention. If the TMC Group continues to pursue US authorization, the ISA should banish the mining firm, in all its forms, from the UNCLOS ecosystem. Indeed, the ISA appears to be moving in this direction, calling for the LTC “to pay specific attention to possible non-compliance of Contractors […]. . . in particular where such possible non-compliance may arise out of direct or indirect actions related to activities in the Area, including contractual obligations to act in accordance with the multilateral legal framework established by the Convention and the [Part XI Implementing] Agreement” (ISBA/30/C/19, para. 10). TMC Group CEO, Gerard Barron, called this initiative “nothing but wing flapping.” 

It is against this backdrop that the ISA must consider the TMC Group’s continuing participation in exploration or exploitation of the mineral resources in the Area pursuant to ISA contracts. Such consideration could arise in two ways: 

(a) A NORI or TOML request to extend their existing exploration contracts which “shall be approved by the Council, on the recommendation of the [LTC]” (ISBA/19/C/17, Regulations on Prospecting and Exploration for Polymetallic Nodules in the Area (PMN), Reg 26.2); or 

(b) A sua sponte deliberation regarding contract suspension or termination based on whether the contractor “has conducted its activities in such a way as to result in serious persistent and wilful violations of the fundamental terms of this contract, Part XI of the Convention, the [Part XI Implementing] Agreement and the rules, regulations and procedures of the Authority” (UNCLOS, Annex III, Art 18).

TMC has stated (p. 44) that both NORI and TOML intend to submit extension applications. They will need to do so by January and July 2026, respectively (see PMN, Reg 26.2), and the LTC will need to recommend either approval or denial of the requests. The separate questions of suspension or termination should be placed on the Authority’s agenda as early as possible.

Faced with the TMC Group’s direct and potentially system-breaking attack on the multilateral system of ocean governance adhered to by 170 states and in place now for three decades, the Authority must take into account the inextricable and undeniable links between TMC and its wholly-owned subsidiaries, and the links among those subsidiaries, when assessing the future participation of the TMC Group in ISA contracts.

Extreme Remedies for Extreme Diseases 

Hippocrates did not have rogue Canadian corporate mining interests in mind when he jotted this aphorism some 2400 years ago, but it is apt nonetheless. The remedies suggested below may be reserved for and triggered by extreme threats to the health of international ocean governance, such as mining activity undertaken pursuant to permission by a non-state party to UNCLOS to exploit the common heritage of humankind. Disease onset appears imminent (p. 11). If left untreated, further spread is likely.

The Authority is under a broad mandate to “exercise such control … as is necessary” to secure compliance with the Convention. What might the ISA do to strengthen its exercise of control and to defend against the TMC Group’s assault on the Convention and on the Authority itself? 

Here are some ideas.

Inaction may have consequences

First, the Authority should remind its member states of their affirmative legal duty to ensure that juridical persons effectively controlled by their nationals do not participate in activities in the Area unless in conformity with the Convention. A breach of this obligation could prompt compulsory dispute settlement before the Seabed Disputes Chamber of the International Tribunal for the Law of the Sea (see, UNCLOS, Art 187; UNCLOS, Part XV, § 2).

Ȏ Canada: “effective control”

Second, the Authority should interpret “effective control” broadly to mean actual economic control in fact. “Effective control” is an alternative to nationality when identifying the state responsible for private activities in the Area (see, e.g., UNCLOS, Arts 139(1) and 153(2)(b) (“natural or juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals”) (emphasis added)). The state of nationality and the state exercising effective control may be different. Indeed, any applicant for an ISA contract “shall be sponsored by the State Party of which it is a national . . . unless the applicant is effectively controlled by another State Party or its nationals, in which event both States Parties shall sponsor the application” (UNCLOS, Annex III, Art 4(3) (emphasis added)). The effective control concept extends beyond the sponsoring state-contractor relationship. It also encompasses the relationship between any state party and any natural or juridical person effectively controlled by that state or any of its nationals.

Effective control and state responsibility for activities in the Area were core issues of the Authority’s advisory opinion request from the ITLOS Seabed Disputes Chamber and remain important issues for the ISA since the issuance of that 2011 opinion, including in the work of the Legal Working Group on Liability for Environmental Harm from Activities in the Area, the Informal Working Group on Institutional Matters, and the ongoing development of exploitation regulations. Advocates have argued for two possible tests of effective control: a regulatory control test, which asks only which state has the ability to exercise regulatory jurisdiction, and an economic control test, which delves further, asking in which state does actual control (e.g. ownership and decision-making authority) reside. (For more on effective control, see this excellent 2024 article.). 

With TMC USA’s applications for US exploration licenses and a commercial recovery permit, the effective control debate has taken on new urgency. Here, de jure regulatory control over the juridical persons, NORI, TOML, and TMC USA, resides in their states of incorporation, Nauru, Tonga, and the United States, respectively, while de facto economic control resides in Canada, the state of incorporation of the parent company, TMC. 

Should TMC, under a regulatory control test, be allowed to hide behind articles of incorporation in three foreign jurisdictions and continue to benefit from ISA exploration contracts through NORI and TOML while simultaneously benefiting from US unilateral permission through TMC USA? For an Authority interested in self-preservation, the answer must be “no”.

For the narrow purpose of addressing this discrete issue, applying the de facto economic control test is the only viable option. The ISA must dispense with the tenuous legal fiction that Nauru and Tonga effectively control NORI and TOML and must invoke Canada’s state responsibility for these reasons: 

• Canada effectively controls the Canadian juridical person, TMC. 
• TMC, a Canadian national, effectively controls juridical persons NORI, TOML, and TMC USA. 
• Canada is under a treaty obligation “to ensure that activities in the Area, whether carried out by … juridical persons which possess the nationality of States Parties or are effectively controlled by them or their nationals, shall be carried out in conformity with this Part” (UNCLOS, Art 139(1)). 
• Canada will play a key role in remedying this disease by ensuring that neither TMC nor any of its subsidiaries carries out activities in the Area in conflict with UNCLOS.

Detecting “broader patterns of conduct”

Third, the Authority should institute more demanding reporting requirements in order to mitigate information asymmetry and better understand the corporate group structures of applicants and contractors. After the TMC threat emerged in early 2025, the Authority acknowledged that its “regulations and contract provisions allow the ISA to consider broader patterns of conduct when deciding on enforcement actions” (ISA FAQs, p. 12 (emphasis added)). Current ISA regulation reporting requirements set a low bar for approval (see PMN, Part III, § 2, Regs 10-18) and extension of plans of work (see PMN, Reg 26.2) and a high bar for suspension or termination of contracts (see PMN, Annex IV, § 21; UNCLOS, Annex III, Art 18). 

These “light-touch” requirements may have been sufficient before TMC USA submitted applications under DSHMRA, but the new threat environment demands a change in the Authority’s exercise of control over activities in the Area.

Current exploration regulations require “[s]ufficient information to determine the nationality of the applicant or the identity of the State or States by which, or by whose nationals, the applicant is effectively controlled” (PMN, Reg 10.3(a) (emphasis added)). This ignores UNCLOS, Annex III, Art 4(3) by allowing nationality (control in form) to obscure effective control (control in fact). When considering extension requests, the LTC could rely on the text of the Convention to require information sufficient to determine the state by which or by whose nationals the extension requestor is effectively controlled, could investigate further whether the requestor is controlled by an entity that is also operating outside UNCLOS rules, and could recommend denying the extension request based on this information. 

As for the TMC Group’s corporate structure, it is well known that NORI, TOML, and TMC USA are owned and controlled by Canadian national TMC. Additional reporting requirements might not add to TMC’s regular Security and Exchange Commission filings and press releases, but they could be essential to detect actual control in other, more complex corporate group structures. 

Disqualifying connections

Fourth, the Authority should clarify what level of connection with entities involved in non-ISA-approved activities in the Area would:

• be disqualifying for those seeking an ISA contract,
• result in a denial of an extension request, or 
• constitute a willful violation of the Convention with the possibility of contract suspension or termination in conformity with UNCLOS, Annex III, Art 18.

Borrowing from existing and contemplated UNCLOS definitions for “affiliated parties” (see PMN, Annex IV, § 18) and “related parties” (see ISBA/30/C/CRP.1, Draft Regulations on Exploitation of Mineral Resources in the Area, p. 255), NORI and TOML, with close ties to their sister subsidiary TMC-USA through their parent TMC, would clearly fail either “connection test”.

Conclusions

TMC “believe[s] that the pursuit of licenses and permits with NOAA under DSHMRA by TMC USA should not adversely affect the ISA exploration contracts held by NORI and TOML” (p. 31). Will the Authority disabuse TMC of this belief?

The Authority has the opportunity to link the privileges enjoyed by NORI and TOML under ISA contracts to TMC USA’s conflicting actions under US statute and to prohibit any TMC Group member from participation in ISA-sanctioned activities in the Area. If the Authority does not take a stand here, it will open the door for group entities to profit from both ISA and US authorizations without suffering any consequences for threatening the integrity of international ocean governance. Denial, non-renewal, suspension, and termination of exploration and exploitation contracts offer strategic tools for the ISA to reassert its authority and secure compliance with the Convention. 

In order to protect itself and the Convention, the Authority must force states and contractors to disavow, disconnect, and divest from entities that intend to enrich themselves through the exploitation of the common heritage of humankind. Will the Authority merely flap its wings in the face of this brazen attack on the Convention, its history, rules, and institutions? Or will it quarantine bad actors and relegate them to the pariah status they deserve?