Deep sea mining, developing legal regime, bonus bidding and the sharing of economic rents

Abstract

The 1970s proposals to create a new international economic order led to the present, inefficient, deep sea mining legal regime. The 1994 Implementation Agreement aimed to maximize shares in economic rents for low-income countries. However, the still incomplete distribution of lease blocks system, based on administrative allocation by the International Seabed Authority, is unlikely to achieve this. Much of the economic rents may well accrue to private companies and countries such as China, who have been allocated the 31 existing lease blocks. It is argued here that a system of lease block first-price bonus bidding should be given serious consideration as it could increase the share of rents going to low-income countries, as well as bring them forward in time.