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View this email in your browser <https://mailchi.mp/law/perspective-377?e=dd153d6a25> 哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看: https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f6c7317f5a&e=dd153d6a25> . *Columbia FDI Perspectives* Perspectives on topical foreign direct investment issues Editor-in-Chief: Karl P. Sauvant ([log in to unmask]) Managing Editor: Chioma Menankiti ([log in to unmask]) *The Columbia FDI Perspectives are a forum for public debate. The views expressed by the authors do not reflect the opinions of CCSI or our partners and supporters.* No. 377 February 19, 2024 *Deep seabed mining in international waters* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=5d6c358c8e&e=dd153d6a25> by Diora Ziyaeva and Cody Anthony* <#m_-6375701462074934245__edn1> The seabed floor is increasingly becoming commercialized in response to global demand for battery components. However, regulations concerning mining the deep seabed have not kept up with the increased interest. Accordingly, MNEs do not currently have clear guidance on how to structure potential deep sea FDI. The deep sea minerals located outside national jurisdictions are subject to the rules of the 1982 UN Convention on the Law of the Sea <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=89ed216f14&e=dd153d6a25>, which subsequently created the International Seabed Authority <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=efbe55f17f&e=dd153d6a25> (ISA) to govern the international seabed (waters outside the territorial bounds of states , the focus of this *Perspective*). In practical terms, the ISA governs more than half of the oceans. The ISA’s framework differs for explorative or exploitative investments. Exploration covers searching for resources; exploitation, the process of collecting and refining minerals. The ISA adopted regulations in 2013 that cover exploration projects. They spell out who, where and how investors can explore. As a result, exploration contracts <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=901d23d228&e=dd153d6a25> have now been granted to over 30 contractors, comprising many MNEs from varied sponsor states. But, ultimately, this is only half the equation. The ISA has not yet developed the framework on how to exploit the seabed minerals located by ISA-approved exploration projects. Despite significant pressure from MNEs to conclude a definitive Mining Code, the ISA is yet to clearly address the terms of exploitative investments. In 2021, Nauru—a small island nation in Micronesia—triggered a provision <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=bbaec44a00&e=dd153d6a25> in the ISA Implementation Agreement that gave the ISA two years to finalize a Code before provisional contracts could be awarded. Nauru is interested in mining the Clarion-Clipperton Zone (a resource rich area between Hawai`i and Mexico). Despite this pressure, the ISA concluded <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=52fe71c1ee&e=dd153d6a25> its July 2023 meetings without finalizing a Code. The consequences of not finalizing the Code are not yet clear. Under current law, the ISA must provisionally consider mining applications based on provisional rules, regulations, procedures, and norms. However, provisional rules are provisional for a reason, and many aspects of the provisional rules are hotly contested. The framework has massive implications because of the value of deep seabed resources, in particular nickel (in nodules) and cobalt and magnesium (in crusts). These resources are increasingly important as the lithium-ion battery market <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=37fe77efa7&e=dd153d6a25> is projected to rise to US$129 billion by 2027 <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=5cde62e182&e=dd153d6a25>—more than tripling since 2019. Investors surely will continue to push for access to seabed resources. It will be up to the ISA to determine which projects will be allowed. Agreement on the Code must address an important question: how can developing countries ensure that they get the best deal out of the arrangements and/or contracts they conclude with investing MNEs? And, as of now, it is not entirely clear how developing countries can do so. Without a defined Code, it is unclear exactly what role states will play, as opposed to private parties. In the interim, there are still a few important considerations: - Partnering with established contractors with experience in deep sea mining and with the ISA, because contracts will ultimately be concluded involving the ISA, the contractor and the sponsor state. - Exploring options for projects involving multiple sponsor states, leveraging resources of partnering developed countries while retaining control over the project. - Ensuring that the goals of any partnering MNE align with those of the sponsor state(s). Interestingly, the ISA has a duty to ensure that access is shared among all states, even less developed countries not currently equipped to conduct large-scale seabed mining operations. (Potential gains by developing countries can be subverted in practice <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=c997328470&e=dd153d6a25>, particularly by MNEs utilizing developing countries as sponsor states with little actual input in the project.) In fact, one of the ISA’s central responsibilities is to ensure that the deep seabed remains a shared resource. Here, the equitable path forward is to ensure that developing countries are not precluded by virtue of many of them having less negotiating power and experience, as a general matter, when entering into contracts with MNEs. <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3832422bf7&e=dd153d6a25> Developing countries, and MNEs looking to partner with them, should work to hold the ISA to its mandate on this issue. Thus, applications for contracts by developing countries should be framed in a way to highlight the equitable benefits of supporting those applications over those from developed countries. Such clauses should expressly reference the ISA’s duty to ensure equitable sharing. Developing countries, and MNE-partners, could also seek to build upon the work done by others. This work would include observing the rationale given by the ISA when rejecting or approving prior applications. As the ISA continues to review applications, precedent will naturally develop regarding how the ISA views certain aspects of potential projects. This precedent will serve as a useful guide for later applications. The ISA’s deep seabed mining regulations present a unique opportunity for developing countries to gain equal footing with developed countries in the extraction of deep seabed resources. Whether or not the ISA finalizes these regulations will have significant ramifications for foreign investment and economic growth globally. ------------------------------ * <#m_-6375701462074934245__ednref1> Diora Ziyaeva ( [log in to unmask]) is a Partner at Dentons LLP; Cody Anthony ( [log in to unmask]) is an Associate at Dentons LLP. The authors wish to thank James Otto, James Sebenius and Lou Wells for their helpful peer reviews. *The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Diora Ziyaeva and Cody Anthony, ‘**Deep seabed mining in international waters,**’ Columbia FDI Perspectives, No. 377, February 19, 2024. Reprinted with permission from the Columbia Center on Sustainable **Investment (*http://ccsi.columbia.edu <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=36f77f41e8&e=dd153d6a25>*).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at *[log in to unmask] <[log in to unmask]> For further information, including information regarding submission to the *Perspectives*, please contact: Columbia Center on Sustainable Investment, Chioma Menankiti, [log in to unmask] *Most recent Columbia FDI Perspectives* <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=04b99378f6&e=dd153d6a25> - No. 376, Kraijakr Thiratayakinant, ‘Investors’ obligations under IIAs: toward a practical solution <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=4fcabf92d0&e=dd153d6a25>,’ *Columbia FDI Perspectives*, February 5, 2024 - No. 375, Reuven Avi-Yonah, ‘The global corporate minimum tax and MNE home countries <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=6cb451a8d9&e=dd153d6a25> ,’* Columbia FDI Perspectives*, January 22, 2024 - No. 374, Catharine Titi, ‘Why public policy exceptions have not delivered and how to make them more effective <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=b7891aca3d&e=dd153d6a25>,’ *Columbia FDI Perspectives*, January 8, 2024 *All previous FDI Perspectives are available at https://ccsi.columbia.edu/content/columbia-fdi-perspectives <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=5f063f24b7&e=dd153d6a25>* . *Other relevant CCSI news and announcements**:* - *Applications are now open* for our virtual 2024 Executive Training Program on Sustainable Investments in Agriculture <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f716d45bb1&e=dd153d6a25>, which will be held from *May 7-17*. The interdisciplinary program explores challenges and solutions for advancing sustainable investments in agriculture. It includes asynchronous and synchronous components, including short and interactive live sessions dedicated to engagement with course lecturers and participants from around the world. Applications will be considered on a rolling basis until March 15, 2024. *For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=8e26caa6e7&e=dd153d6a25>.* - *Apply by April 30th* for our virtual 2024 Executive Training on Extractive Industries and Sustainable Development <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=76c9881fcd&e=dd153d6a25> to be held *June 3-14. *The two-week training emphasizes the interdisciplinary nature of resource-based development. By working through case studies and with practitioners and experts in the field, participants will be able to apply analytical tools and frameworks to the unique context of the extractive industries in their country. *For more information, and to apply, visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=625e807b8b&e=dd153d6a25>.* - *Enroll now for free:* CCSI's newly-launched Massive Open Online Course (MOOC) on Mining and Materials for Sustainable Development Transformations <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=0da1ee1ac2&e=dd153d6a25> will address challenges and opportunities for mining and materials value chains in the energy and digital transitions. *Visit our website <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=7c9992c4e8&e=dd153d6a25> to learn more and enroll*. Karl P. Sauvant, Ph.D. Senior Fellow Columbia Center on Sustainable Investment Columbia Law School - Columbia Climate School *Copyright © 2024 Columbia Center on Sustainable Investment (CCSI), All rights reserved.* [log in to unmask] *Our mailing address is:* Columbia Center on Sustainable Investment (CCSI) Columbia Law School - Columbia Climate School, Columbia University 435 West 116th Street New York, NY 10027 Add us to your address book <https://columbia.us6.list-manage.com/vcard?u=ab15cc1d53&id=a61bf1d34a> unsubscribe from this list <https://columbia.us6.list-manage.com/unsubscribe?u=ab15cc1d53&id=a61bf1d34a&t=b&e=dd153d6a25&c=ed62e03594> update subscription preferences <https://columbia.us6.list-manage.com/profile?u=ab15cc1d53&id=a61bf1d34a&e=dd153d6a25&c=ed62e03594> [image: Email Marketing Powered by Mailchimp] <http://www.mailchimp.com/email-referral/?utm_source=freemium_newsletter&utm_medium=email&utm_campaign=referral_marketing&aid=ab15cc1d53&afl=1> -- *Karl P. Sauvant, PhD* *Senior Fellow* *Columbia Center on Sustainable Investment* Columbia Law School, Columbia University 435 West 116th St., Rm. JGH 825, New York, NY 10027 | p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask] | w: www.ccsi.columbia.edu | t: @CCSI_Columbia <https://twitter.com/CCSI_Columbia> "How to Get the Best Deal for Massive FDI Incentives <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4616026>", "The New WTO Investment Facilitation for Development Agreement <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4531684>", "The Limits of Capacity Building for Investment Contract Negotiations <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4474456>", "Establishing an Advisory Centre on International Investment Law: Key Challenges Ahead <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4386436>", *Investment Facilitation for Development: A Toolkit for Policy Makers. Second Edition <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3830031>,* "Agenda for Practice-oriented Research <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4103768>", "More Attention to Policies! Improving the Distribution of FDI Benefits <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3818974>", "Facilitating Sustainable FDI in a WTO Investment Facilitation Framework: Four Concrete Proposals <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3496967>", "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? How? <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3739179>" (third edition) are available at https://ssrn.com/author=2461782 . ____ AIB-L is brought to you by the Academy of International Business. For information: http://aib.msu.edu/community/aib-l.asp To post message: [log in to unmask] For assistance: [log in to unmask] --- You must be an active AIB member to post to AIB-L . 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