FOR A STUDY OF THE POTENTIAL IMPACTS OF POLYMETALLIC NODULES PRODUCTION FROM THE AREA ON THE ECONOMIES OF DEVELOPING LAND-BASED PRODUCERS OF THOSE METALS WHICH ARE LIKELY TO BE MOST SERIOUSLY AFFECTED
The International Seabed Authority (the Authority) is an autonomous international organization established under the United Nations Convention on the Law of the Sea of 10 December 1982 (the Convention) and the Agreement relating to the Implementation of Part XI of the United Nations Convention on the Law of the Sea (the 1994 Agreement). The Authority is the organization through which States Parties to the Convention shall, in accordance with the Convention, organize and control activities in the Area, particularly with a view to administering the resources of the Area.
In accordance with Section 1, paragraph 5(e) of the Annex to the 1994 Agreement, one of the tasks that the Authority shall concentrate on, before the approval of the first plan of work for exploitation, is to undertake a study of the potential impacts of mineral production from the Area on the economies of developing land-based producers of those minerals which are likely to most seriously affected with a view to minimizing their difficulties and assisting them in their economic adjustment.
At the twenty-fourth session of the Authority in 2018, the Council requested that the Legal and Technical Commission, together with the secretariat initiate a study pursuant Section 1, paragraph 5(e) of the Annex to the 1994 Agreement to ascertain the potential impacts of mineral production from the Area on the economies of developing land-based producers of those minerals which are likely to be most seriously affected.
In March 2019, during the first part of the twenty-fifth session, the Legal and Technical Commission endorsed terms of reference for the study (Annex 1 to this document). In accordance with the terms of reference, the scope of the study is to examine the potential impact(s) on developing land-based producer economies of metals production from the future exploitation of polymetallic nodules in the Area.
The Authority requests that all proposals should be submitted via email to ola@isa.org.jm on or before Friday 4 October, 2019. Proposals should not exceed 1,500 words and should thoroughly and sufficiently demonstrate the competence and expertise of the applicant to meet the requirements contained in Annex I. Proposals should equally reflect a clear methodology on the deliverables for the study as well as proposed costs.
All proposals will be reviewed by an internal committee and the outcome will be communicated thereafter to applicants using contact details provided.
Annex I
Terms of reference for a study of the potential impact of polymetallic nodules production from the Area on the economies of developing land-based producers of those metals which are likely to be most seriously affected
Introduction
1. In accordance with the 1994 Agreement (Annex, Section 1, paragraph 5(e)), and prior to the approval of the first plan of work for exploitation, the Authority is required to perform a:
“Study of the potential impact of mineral production from the Area on the economies of developing land-based producers of those minerals which are likely to be most seriously affected, with a view to minimizing their difficulties and assisting them in their economic adjustment, taking into account the work done in this regard by the Preparatory Commission”.
2. During the first part of the twenty-fourth session, the Council requested that the Legal and Technical Commission, together with the secretariat initiate a study pursuant to the requirement above (see ISBA/24/C/8 at para. 26). Such study will be compiled by the secretariat (using external consultants where required), and in accordance with these terms of reference
Objectives of the study
3. The study purpose is to inform the Commission, in performing the functions of the Economic Planning Commission, with a preliminary assessment[1] of the potential magnitude of any impact on developing land-based producers who may suffer serious adverse effects on their export earnings or economies as a result of a reduction in price or reduction in the volume of an affected metals, and where such reduction could be caused by activities in the Area.
4. The study is also expected to make an important contribution to the development of an economic assistance policy by the Authority in accordance with the principles established by the 1994 Agreement (Annex, Section 7), and to recommend areas of further study or research.
Scope of the study
5. The scope of the study is to examine the potential impact(s) on developing land-based producer economies of metals production from the future exploitation of polymetallic nodules in the Area.
Approach to the study
6. The study should:
i. Review and summarise the work done by the Preparatory Commission in connection with the potential impact(s) on the economies of developing land-based producers;
ii. Make “best guess” assumptions on likely metals production (volume, value of production, number of operators and timeline) from the mining of polymetallic nodules in the Area;
iii. Take account of the assumptions made in the economic model for polymetallic nodule mining developed by the Massachusetts Institute of Technology,[2] in particular, assumptions relating to metallurgical processing and the supply cost curves and metal pricing for the affected metals or product;
iv. Consider trends and development in world metal market conditions and metal prices, future supply and demand prospects, and potential effects of transfer pricing, drawing on the above work undertaken by the Massachusetts Institute of Technology;2
v. Compile tables ranking mine production and exports (including primary product and finished products) (value and volume) for each affected metals or product by country and by metric tons (latest year and average production trend over say last 10 years), together with country GDPs, to establish which developing land-based producers could be impacted by mineral production from the Area, and using best available information (e.g. US Geological Survey data etc.);
vi. Suggest indicative criteria for determining serious adverse effects;[3]
vii. Highlight the uncertainties in the information presented, and possible effect on report conclusions;
viii. Make preliminary conclusions of the impact(s) on relevant developing land-based producer economies;
ix. Make recommendations for further analysis and research.
Content of the study
7. The report to be delivered under these terms of reference shall be guided by the content headings set out in the annex to these terms of reference.
Timing
8. The secretariat is to provide the Commission with an update on the progress of the study and its preliminary findings at its July 2019 meetings, and to provide a final draft of the study for consideration by the Commission at its March 2020 meetings.
[1]At this stage, the study will be indicative of the potential magnitude of any impact, and consideration of how this is properly traced through the value chain at the later stage of exploitation activities.
[2] The study should also take account of relevant assumptions in the economic models proposed by the African Group, Germany and China.
[3] To check whether a definition or criteria was considered by the Preparatory Commission.