Consideration of Bill, as amended in the Public Bill Committee
Amendments of Deep Sea Mining (Temporary Provisions) Act 1981
I beg to move amendment 1, page 5, line 32, insert—
‘In section 5 (Protection of the marine environment) leave out sections (1) and (2) and insert—
“(a) In determining whether to grant an exploration or exploitation licence the Secretary of State must not grant a licence unless and until it can be demonstrated that there are no indications for likely irreversible and or significant adverse effects as defined by the United Nations’ General Assembly / UN Food and Agricultural Organisation on the marine ecosystems and communities impacted by one or more of these operations. The absence of any such indications must be demonstrated through full and transparent prior environmental impact assessments and strategic impact assessments, which are required to be publicly evaluated and reviewed.
(b) In determining whether to grant an exploration or exploitation licence the Secretary of State must take into consideration the environmental definitions and designations of international bodies, including but not limited to the Convention on Biological Diversity (CBD) scientific criteria for ‘Ecologically or Biologically Significant marine Areas (EBSAs)’, the CBD guidance for the design of representative networks of Marine Protected Areas (MPAs), and the food and Agricultural Organisation (FAO) criteria for the identification of ‘Vulnerable Marine Ecosystems’ (VMEs) and any other related treaties which may come into force.”.’.
The amendment seeks to improve the environmental requirements of the licences that come through the UK state system. I thank the World Wildlife Fund UK for its help in drafting the amendment, which it stresses is not “wildly ambitious”. It does not express environmental ideals that are impossible to achieve, but it is consistent with environmental definitions in existing international treaties.
The deep seas are poorly understood ecosystems and no one knows exactly what is down there. The findings of environmental assessments are not shared, so scientists and non-governmental organisations do not know whether there are things that are new, rare, endangered, or indeed that could be used for other extractive purposes—for example, the pharmaceutical industry might well be interested in what is on the sea bed.
I was concerned that on Second Reading some Government Back-Bench Members who did not see a need to improve environmental safeguards were working on a misguided assumption that, as one said, the environmental effect of mining is not permanent
“and the habitat will return to its normal state after the mining ceases in an area.”—[Official Report, 6 September 2013; Vol. 567, c. 610.]
As we discussed in Committee, however, without better measures in place to protect deep sea ecosystems, mining could cause irreversible damage or have serious adverse effects on marine communities, specifically hydrothermal vent communities, which were only discovered in 1977, and seamounts, which have taken 10,000 years to develop and have low resilience to change. As home to the largest reservoir of marine genetic resources, hydrothermal vent communities are of huge interest to science and pharmaceutical companies, some of which have patents on their products. Mining could destroy those resources before they are understood or even discovered.
The amendment would reverse the burden of proof in section 5 of the 1981 Act, in line with the precautionary principle that if there are indications of likely but uncertain significant adverse environmental impacts, an activity should not be authorised to proceed. The amendment would require environmental impact assessments to be carried out before exploration or exploitation takes place, and for the process to be transparent so that it can be publicly evaluated. That would also address the serious weakness in the system that if a contractor considers the environmental risk of mining to be too high prior to the environmental impact assessment, that concession could still be offered to another contractor.
Greater transparency in the system would also help to address weaknesses in monitoring the compliance of companies with environmental regulations and the terms of licences. It is difficult, as one can imagine, to make site visits in deep sea areas to ensure that work is carried out correctly, and the current process is not properly independent of contractor influence. NGOs will not know whether an activity authorised by licence is damaging, and it would be up to the contractor to stop and self-assess.
I was pleased that in Committee, the Minister—on that occasion the Minister for Europe—confirmed that the Government want a coherent system between the International Seabed Authority’s regime and other international treaties. The amendment also seeks to align the Bill better with environmental definitions and designations of international bodies, which the Bill currently does not consider. For example, the Food and Agriculture Organisation’s committee on fisheries defines vulnerable marine ecosystems in the high seas where bottom fishing cannot take place. Those include breeding grounds for orange roughy, which are often fished for around hydrothermal vents—the same areas that could be open to deep sea mining.
Although the Bill’s promoter, the hon. Member for North East Cornwall, has said—
The hon. Member for South East Cornwall (Sheryll Murray) has said that the UK needs to amend the 1981 Act to impose stringent and clear environmental conditions, but the Bill will not actually strengthen, or indeed make any changes to, the environmental provisions set out in section 5. That is the nub of our concern. In fact, section 5, which states that the Secretary of State
“shall have regard to the need to protect (so far as reasonably practicable) marine creatures…and other organisms and their habitat”,
is even weaker than the ISA’s current environmental thresholds, which set a threshold of “serious harm” to the marine environment to disapprove a licence.
Section 5 is very outdated, with its use of words such as “regard”, “reasonably practical” and “creatures”. It allows for subjective interpretation and is not specific enough. I am surprised that the Government have not sought to update it. To quote the Minister who spoke on Second Reading, the right hon. Member for North East Bedfordshire (Alistair Burt),
“environmental protection is at the heart of the application that is made by the United Kingdom when sponsorship applications are made.”—[Official Report, 6 September 2013; Vol. 567, c. 633.]
My hon. Friend the Member for Brent North (Barry Gardiner) put forward the need for the section to be improved. The right hon. Gentleman made a commitment that the Foreign and Commonwealth Office would take a “hard look” at whether section 5 needed to be strengthened. The Minister did not elaborate further in Committee. I am not sure whether the Minister present today can respond to my amendment by giving further evidence of the findings of any investigation that the FCO carried out after Second Reading. I got the impression in that debate, as did others, that the Government might be open to improvements along those lines.
It was made clear on Second Reading that companies wishing to exploit minerals on the sea bed had the opportunity of essentially shopping around the world and that they could apply for a licence wherever they wanted to. Is the hon. Lady concerned that if we have provisions in our legislation that are more onerous and demanding than those of other countries, we might be doing the sea bed a disservice, because those companies might obtain a licence elsewhere in order to avoid our legislation?
The hon. Gentleman makes a valid point. Indeed, my understanding is that at the moment a company does not even need a licence to explore. Ideally, we would want everyone to go through the ISA regime, and a respectable and reputable company would want to do that and follow the correct procedures, but I understand that there is nothing stopping them doing that. It is an ideological debate that we could have at great length in relation to many different areas of policy. We could look at labour terms and conditions, for example, or health and safety rules. I do not think that we should be involved in a race to the bottom—actually, perhaps that is exactly what we are talking about. We want to ensure that the UK sets an example by requiring companies to act responsibly. Our natural resources are incredibly precious, and I think that we should be taking the lead in trying to ensure that we protect the environment.
The timing of the Bill is slightly strange, as was the timing of the 1981 Act. The Act was introduced a year before the United Nations convention on the law of the sea was finalised, although it then took about eight years to come into effect. The ISA will look at its regulations, which will obviously apply on a wider basis, next year, so in some ways the Bill pre-empts that. Perhaps there could have been better co-ordination. It is also slightly strange that we have been talking about updating the 1981 Act since 1982, so it has taken an awfully long time to reach this point. I think we need to drive the agenda forward. I accept that we do not want to disadvantage British companies, but we want to ensure that there is a reputable and reasonable regime in place.
The Government have said that
“the environmental protections in section 5 of the 1981 legislation have proved entirely sufficient, as have the inspections”,
but only two licences have been issued so far, both for exploration. Exploitation of resources is an entirely different matter, and the very purpose of the Bill is forward thinking, to cover licences for exploitation that is at least five years away. In the case of oil and gas, which it will also open the doors to, it is still further away in the future.
If the amendment is made, I do not think that it would make the regime overly burdensome. As I have said, the proposal is moderate and consistent with other international designations. However, it would boost one of the Government’s reasons for introducing the Bill, which is to help to increase the UK’s influence in current negotiations and in determining standards, as I said to the hon. Member for Bury North (Mr Nuttall). I appreciate that the ISA regulatory framework is of greater importance because it applies to all deep sea mining, not just those activities that get sponsorship from the UK. In which case, let us apply the environmental standards that we would like to see agreed in the negotiations, rather than keep the 1981 version. They are workable standards that we hope will be applied at ISA level to enable sea bed mining to go ahead without causing irreparable damage. As I mentioned, I did not get a direct response from the Minister in Committee on the level of environmental safeguards that the Government are seeking to get common agreement on during the ISA negotiations, although I was pleased that he made it clear that the international framework can and should be improved, as can section 5.
I thank the hon. Member for Bristol East (Kerry McCarthy), who, along with her colleagues the hon. Members for Brent North (Barry Gardiner), for Stoke-on-Trent North (Joan Walley), for Scunthorpe (Nic Dakin), for North Ayrshire and Arran (Katy Clark), for Inverclyde (Mr McKenzie) and for Edinburgh North and Leith (Mark Lazarowicz), and the hon. Member for Brighton, Pavilion (Caroline Lucas), tabled the amendment. I know that they all feel strongly about the need to protect the environment.
Coming, as I do, from what I consider to be the beautiful county in Cornwall, I of course sympathise strongly with those hon. Members. [Interruption.] The Minister indicates that I might come from the second most beautiful county, so perhaps I should have referred to the wider south-west. Furthermore, I come from a fishing background, so I know well the impact that pollution can have on fishermen and their livelihoods. I also know that in some of the areas that the Bill relates to it would be very difficult to fish for species such as orange roughy, as the hon. Member for Bristol East indicated.
Since I have been in charge of the Bill, I have learned a lot about deep sea mining. In particular, I have become very conscious of the importance of environmental conditions, which will have to be taken into account once deep sea mining becomes a reality. Of course, we are looking only at exploration. I understand that the UK has issued one licence for exploration, and another one is going through, but exploitation, as the hon. Lady mentioned, is a long way off. I know that the Government are very aware of environmental issues and am sure that they will keep to their commitment to ensure the application of the highest environmental standards. I can assure Members on both sides of the Chamber that I, too, will be very astute to ensure that happens.
Section 5 of the 1981 Act will not be amended by the Bill, except for technical changes to include references to Scottish Ministers. I believe that that is a real benefit to Scotland and the United Kingdom. Section 5 already includes provisions to ensure that protection of the marine environment is taken into account, and indeed is at the forefront of the Secretary of State’s mind, when licences are issued. While I sympathise with the hon. Lady’s concerns, I do not think the amendment is necessary. I understand also that the Minister will raise some technical objections to it and that the Government will not support it. In those circumstances, I hope that she will not press the amendment, so that the Bill can make progress.
I was interested to hear some of the suggestions made this morning, as I have attended some, although not all, of the consideration of the Bill as it has made progress. The Government completely understand the sentiments that have led the hon. Member for Bristol East (Kerry McCarthy) and the hon. Member for Brent North (Barry Gardiner) to table the amendment —the hon. Gentleman is not in his place today, but he has been an assiduous attendee previously. The Government are committed to ensuring that the highest environmental standards are followed when exploration and exploitation of the deep sea bed take place. As the hon. Lady said, we are often—pardon the pun—in uncharted waters: this is new and exploratory, so environmental considerations need to be at the forefront of our proposals.
As hon. Members will know, the Government were approached 18 months ago by a major commercial company, Lockheed Martin, to sponsor its application to explore for minerals on the deep sea bed. When we received that approach, we took great pains to ensure that the environmental standards were the best that could be devised. The Department for Environment, Food and Rural Affairs was closely involved, as were two eminent scientists from outside the Government. When the application reached the council of the International Seabed Authority, the environmental aspects were generally praised by delegations. At the meeting of the council last year, when the first discussion of the possible shape of future regulations took place, the Government made it clear that they would expect those regulations to incorporate environmental provisions of the highest standards.
The British Government have already spoken and acted in a manner that will ensure that the highest environmental standards are adhered to, and I know that the need to protect the natural environment has universal support across the House. However, the Government cannot support the amendment, and I shall try to explain why.
Section 5 of the 1981 Act, to which the hon. Member for Bristol East and my hon. Friend the Member for South East Cornwall (Sheryll Murray) referred, already includes clear provisions on the need to protect the marine environment. I know that on Second Reading the hon. Member for Brent North suggested that section 5 might not be sufficiently up to date, but we do not believe that to be the case. Section 5 is worded in a general manner and can accommodate changes to environmental perspectives.
The point that my hon. Friend the Member for Brent North and I have been making is that post 1981 it has been clearly established that the precautionary principle, agreed at Rio, should apply, and it is missing here. It is the reversal of the burden of proof that will be missing if we stick to the 1981 Act. It is important to reflect in the Bill the extent to which the precautionary principle has been accepted.
The hon. Lady is right, but we also want companies to come here, and therefore we want to ensure that our environmental protections are the best and are in place. We are convinced they are and that section 5 of the 1981 Act is worded in a general manner that can accommodate changes to environmental perspectives. We do not believe that the amendment would add anything to the legislation.
On Second Reading, the hon. Member for Brent North referred to the precautionary approach in principle 15 of the Rio declaration. But the International Tribunal for the Law of the Sea made it clear in its 2011 advisory opinion that sponsoring states should comply with the terms of principle 15, as well as best environmental practices. In exercising his functions to issue licences under the Act, the Secretary of State would have to comply with those provisions.
In addition, by replacing the whole of the current section 5, the amendment would lose two key elements. The requirement at the end of subsection (1) for the Secretary of State to consider any representations would be lost, as would the power in subsection (2) for the Secretary of State to include in licences provisions about protection of the marine environment. On those two technical grounds alone, the amendment cannot be supported.
More substantively, the amendment would require a full environmental impact assessment, even before exploration is carried out. However, as the hon. Member for Bristol East conceded, exploration of the deep sea bed involves minimal disturbance of the marine environment and no commercial company would be expected to undertake a full environmental assessment in those circumstances. The Bill should not be about preventing responsible companies from undertaking responsible exploration. On the contrary, the Government believe that we should actively encourage exploration of the deep sea bed. That is because the scientific information obtained through exploration will be an essential element in considering the environmental aspects of mining when it does take place. As the hon. Lady acknowledged in Committee, mining on the deep sea bed will eventually take place.
The amendment refers to a number of other international instruments. The Government are entirely conscious of the current developments in international environmental law, and have for example been at the forefront of international action on climate change—as is well recognised. It is clear therefore that international developments will be, and will have to be, taken into account when decisions on whether to issue licences are eventually made. But we should not limit ourselves in this way. There may be national developments, or developments in the European Union, that should also be taken into account. The current text of section 5 of the 1981 Act already allows for this and indeed, in this respect, is wider in its ambit than the amendment. For that reason, the Government do not support the amendment.
I remind the Minister that the amendment says
“including but not limited to”.
We were conscious when drafting the amendment that we did not want to limit it to just those treaties cited, so that other laws and treaties agreed over time would be included.
I am grateful to the hon. Lady for clarifying that point.
Of course the Government will continue to expect that the International Seabed Authority, in its decision-making process, should work towards meeting agreed international standards with respect to protection of the environment, and should utilise the latest information about the importance of marine areas. The Government recognise that the work being carried out under the convention on biological diversity to identify ecologically and biologically significant areas, along with the identification of vulnerable marine ecosystems, provide authoritative information that needs to be taken into account within the processes of the International Seabed Authority. Furthermore, let me assure hon. Members that the secretariat of the ISA is highly expert and, in particular, well aware of international developments in the environmental field. I think, therefore, that the House can have confidence that these developments will not be overlooked.
In conclusion, the Government sympathise with the reasons that have led the hon. Members for Bristol East and for Brent North to table the amendment. We have had an interesting debate, but as I have said, the Government cannot support it and are satisfied that section 5 of the 1981 Act is sufficient. In the light of this, I hope that the hon. Lady will feel able to withdraw her amendment.
I thank the Minister for his response, although he has not entirely set my mind at rest. I would have liked the Bill to build on the environmental protections set out in the 1981 Act, given that we have moved on considerably since then, and I would have liked the precautionary principle firmly established in the Bill, because that is where we are at now with environmental protection internationally, but I do not intend to press the amendment. With respect to the Minister, however, he is the third Minister to deal with the Bill—there was one Minister on Second Reading, one in Committee and now another on Report and Third Reading—and there will be yet another Minister in the Lords. Furthermore, I am the second Labour spokesperson to deal with it. I hope in the Lords, therefore, there will be an opportunity for detailed scrutiny to ensure that we tie things together and take the Bill forward properly.
Certainly, we have moved on from the stage when probably not a single Member knew what was meant when we referred to hydrothermal vents, polymetallic nodules, a cobalt-rich crust or any of the other things we have been discussing, so we have been significantly enlightened. Nevertheless, I hope that the Lords will further scrutinise the environmental provisions and perhaps pull some of this together and table some amendments. As I have said, however, I do not intend to press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to move, That the Bill be now read the Third time.
This is a good Bill and an important one for the UK economy. It is also timely. As my hon. Friend the Minister mentioned, in 2012 the UK sponsored its first licence application to the ISA for a UK company to explore the deep sea for polymetallic nodules in the Pacific ocean. No one has learned more than I have about not only polymetallic nodules and cobalt-rich crusts but polymetallic vents and how some of them are dead, while others are smoking and look like they have their own ecosystems—those are the ones we all want to protect.
The UK Government sponsored the last licence issued under the 1981 Act, but that Act is restricted to exploration for polymetallic nodules; it does not allow exploration for other things, which is why it is essential that it be updated. As the hon. Member for Bristol East (Kerry McCarthy) mentioned, the Act predates the UN convention on the law of the sea and the subsequent implementing agreement on part 11 of the convention on deep-sea mining. In some small, niche areas, it is not entirely consistent with the convention, such as on the enforcement of decisions on sea bed disputes in the chamber of the International Tribunal for the Law of the Sea, established under the convention.
It is important for the UK that we put our legislation in good order, not least because we are strong proponents of the convention. It is also important economically. As many UK companies have expertise in the area, it could provide many benefits to the UK economy. I was delighted, therefore, that in Committee we extended the Bill to cover Scotland, which also has a lot of expertise gained through our exploration and exploitation of North sea oil. It will also benefit my own part of the country in the south-west and south of England. Plymouth university and Southampton university have departments looking into and gaining a lot of expertise in this area, which is unknown to many of us.
Sea bed mining has enormous potential. Scientists know that lying on the sea bed, at great depths, are valuable new sources of nickel, copper, cobalt, manganese and rare earth elements. These metals are being mined to extinction on land, so we need to find new sources. Metals such as nickel, used in superalloys, cobalt and manganese, used in energy storage technology, which will obviously benefit everybody, and rare earth elements, which are strategically important, are used in low- carbon technology, lasers, sub-conductors and many telecommunication applications. There are large quantities of these metals, and it is right that the UK benefit from its share of this groundbreaking new technology, which I hope will benefit UK companies considerably.
On 11 March last year, the Prime Minister attended an event at the ExCeL centre celebrating the granting of an exploration contract by the ISA to the UK. He spoke of the benefits to the UK and of the supply chain jobs likely to be created across the UK. As I mentioned, he said that jobs could be created not just in Plymouth and Southampton but in Portsmouth, Bristol, Liverpool, Newcastle and Aberdeen, in sectors such as engineering and the manufacture of high-tech remotely operated underwater vehicles and ship stabilisation systems. He also said that that was estimated to be worth up to £40 billion to our economy over the next 30 years. At this point, I should correct some information that I gave in Committee: I said that it would be worth £30 billion by 2030.
The Prime Minister welcomed the identification of more than 80 United Kingdom companies with relevant expertise with which the UK contractor might be able to work. He also welcomed the industry workshop event that had been arranged to follow the ceremony of the granting of the contract.
I thank the Government and individual Ministers for supporting my Bill, and I thank experts in the Department who have taught me an awful lot about deep-sea mining—about a world that lies at an even greater depth than that in which my late husband used to tow his fishing nets. I also thank the staff of the Public Bill Office for assisting me again. This is the second time I have spoken on Third Reading of a private Member’s Bill: I did so last year as well.
I can assure Members that deep-sea mining is not fracking, and does not involve any of the techniques that are associated with land-based mining. Specifically, deep-sea mining for polymetallic nodules involves no excavation of rock. It involves no use of explosives, and the nodules lie on the sea bed very much like the fish that my husband used to harvest in his nets. The techniques that are used to mine the nodules are likely to involve scooping or vacuuming them up. I do not pretend that the process will be environmentally neutral, but it is potentially less environmentally damaging than land-based mining for the same minerals.
I appreciate what the hon. Lady is saying about the mining of polymetallic nodules—she may well be about to deal with this point, which I believe she covered on Second Reading—but are not the additional forms of exploration and exploitation allowed by the Bill potentially more environmentally damaging, given that they would involve a great deal more than just scooping nodules off the sea bed?
The hon. Lady is obviously psychic. I was indeed about to deal with that point.
Mining for polymetallic sulphides and cobalt-rich crusts is a different matter, because it would involve the excavation of rocks. Mining for those minerals is even further off than mining for polymetallic nodules, and in that context the principles that might apply to nodules would have to be considered again. I am determined, and I know that the Government are determined, to ensure that the highest environmental standards will be applied to any exploitation of the minerals to which the hon. Lady has referred, and she has implied that she shares that determination. I can inform her that international regulations governing the exploration of those minerals have been agreed and were in place in advance of the issuing of any exploration contracts, and that various regulations have continued to be reviewed and updated in the light of new developments and considerations.
I think that I speak for both this Government and previous Governments in saying that the United Kingdom prides itself on taking a close interest in these matters. We have observed that interest since the passing of the 1981 Act. The Bill updates and modernises our existing legislation following the ratification of various treaties. The United Kingdom was one of the first states to sponsor a commercial company to undertake exploration, and I trust that we shall be able to demonstrate the highest regard for international law by passing my Bill.
This is a good Bill, and it is important for the United Kingdom’s economy. It is all the better now following the passing of amendments to extend its provisions to Scotland. We engaged in some interesting and thought-provoking discussions on Second Reading and in Committee, which were all the better for the points raised by the hon. Member for Bristol East. There is clearly a common understanding of the fact that the exploitation of minerals in the deep sea is beyond any state’s jurisdiction, and will inevitably take place in the future. It is, therefore, important for the United Kingdom to be at the heart of it, and to assist the development of international regulations on deep-sea mining. I am glad that the Bill appears to have general cross-party support, and I hope that that support will continue in the other place.
I am sure that my hon. Friend the Minister will be able to deal with some of the technical aspects of the Bill when he sums up the debate.
I do not intend to speak for long. Let me begin by congratulating the hon. Member for South East Cornwall (Sheryll Murray). It is always challenging to take a private Member’s Bill through all its parliamentary stages, not least when the Bill contains as much technical detail and covers as many new areas as this one. However, I understood from the hon. Lady that this was her second experience of the process. She is a great deal luckier than I have been, because in my nine years as a Member of Parliament, I have never been successful in the ballot for private Members' Bills.
We on the Labour Front Bench do not oppose the Bill, because we accept that deep sea mining is inevitable. We could not prevent or even delay it even if we wanted to. We agree with the Government and the hon. Lady that it is important for the United Kingdom to be at the forefront of the benefits to be had from the industry. However, we want to be at the forefront not just because of the business opportunities afforded to the UK, but in order to be able to determine standards for ourselves rather than leaving it to others who may not consider environmental protection as important as we do.
I understand that the Government conceded privately that the Bill was not needed quite yet, and perhaps was not quite ready. A number of amendments in Committee extended its provisions to Scotland because discussions had not yet taken place. We accept that this Bill is a work in progress, but we think that it is, perhaps, a little bit rushed. It could perhaps have been dealt with as a Government Bill. We know the Government have supported it from the outset and, given that we have very little legislation going through Parliament at the moment, we had an ideal opportunity to discuss this as a Front-Bench Bill on the Floor of the House with several days of debate.
May I clarify a point the hon. Lady has made? This Bill was going to be presented with or without Scotland measures. The amendments to include Scotland were introduced because that would be of great benefit. It is my Bill and I am leading it through, and it would have been presented without Scotland measures if necessary.
My point was not specifically about the Scottish amendment. I was just using that as one example to make my point. The discussions with Scotland took place, or were finalised, after the Bill had been introduced. My understanding was that the Government had conceded that, and, because the ISA regulations are being debated next year and because of other developments, the Bill might be slightly premature and a little bit rushed. It might have been given more consideration. We are where we are now, however, in terms of the parliamentary process. I hope the other place has the opportunity to scrutinise the Bill in detail and perhaps make further amendments that would improve it.
I want to make one further point, which arose from the Committee discussions. It remained unclear how the finances of this will work and whether the UK would in fact get a share of the profits. We have been told that this is very much about wanting the UK to benefit from being in the vanguard of the exploration. As has been mentioned, the Prime Minister has claimed that sea bed mining could be worth a staggering £40 billion to the UK economy over the next 30 years, although I have not seen any detailed analysis to support that estimate.
I appreciate that it is slightly jumping ahead of even where the ISA is currently at, because it has not drafted its regulations yet, but the issue of operator profits is critical to this debate. I understand that the UK would benefit from corporation tax from those UK companies or foreign companies, such as Lockheed Martin, with UK subsidiaries which get sponsored by the UK, although once their profits have been understandably offset by their exploratory costs and the costs of environmental assessments, this amount could be quite limited. Certainly in the case of UK subsidiaries, profits may go to the parent company, but unlike the tax regime on North sea oil revenues, the British Exchequer will not be plugged into the profits, as the riches of the sea bed do not belong to the UK; they belong to what is described as the “common heritage of mankind” and those resources do not belong to any one state, and no one state would have the right to claim ownership.
Returning to my point about this Bill being slightly premature, I understand that there are discussions about a possible sovereign wealth fund, created from a fee that could be charged on output. That could be used for the benefit of developing countries, but again discussions on this are at an early stage and we do not yet know much about it. Again, I would have liked to have had more clarity on this. More than 30 years have passed since we last considered legislation on this topic with the 1981 Act. Given that it has taken us so long to get to the point where we are revisiting the matter, I would have liked to have had more clarity on that issue and on the environmental issues. We are where we are, however, and I hope when the Bill gets to the Lords there can be more clarity. We will support the Bill at this stage, however, because we think that if deep sea mining is to go ahead, there ought to be some sort of licensing system in place.
It is a pleasure to follow the hon. Member for Bristol East (Kerry McCarthy), who speaks from the Opposition Front Bench. She raised an interesting point about what would happen to the proceeds of mineral exploitation, and it deserves further consideration because the situation is not as straightforward as it was with North sea oil. We should examine exactly how this country will be able to benefit. Are we going to benefit directly, or jointly with other countries across the globe?
I rise to support the Bill. I supported it on Second Reading, and I thank my hon. Friend the Member for South East Cornwall (Sheryll Murray) for piloting it through to Third Reading. To do that once is quite an achievement, but to do it twice is particularly remarkable, and she should be congratulated on that, and on succeeding in the ballot twice.
My hon. Friend may be interested to know that the reason I believe I was selected twice was because I used the same number twice: 336. Our first fishing boat which we had brand-new was FY 336. I do not want anybody to steal that number in future ballots.
When I enter the ballot next year, if I get into the Lobby before my hon. Friend, I will specifically not choose 336, and I will urge all Members on both sides of the House to try to avoid that number because it has obviously brought my hon. Friend great success. I know it is particularly poignant for her.
The deep sea bed is one of the last unexplored areas of our world. In previous centuries mankind has gone off exploring the world in pretty much an unregulated and uncontrolled manner, but that is not the way the modern world operates. It is right that in the 21st century before mankind goes digging around on the deep sea bed causing who knows what sort of damage, a framework needs to be put in place to ensure that the exploration is carried out in a carefully controlled manner and causes as little damage as possible to the delicate ecosystems of the deep sea bed. The plethora of international agreements and our own domestic legislation seek to do that.
There is a danger, however, that in putting together our own domestic legislation, we put in place licence conditions that companies see as too onerous, too complicated and too prescriptive, and consequently those companies will not come to the UK to obtain their licence approval; they will go to countries whose legislation is, perhaps, less prescriptive than ours.
There is that risk if exploration companies decide and form the opinion that our legislative framework is too onerous, prescriptive and complicated. I hope that that is not the case. Certainly, it would not have my support or the support of the Government or anyone in the House if we felt that it was the case. There is a delicate balance to be struck between trying to protect the environment, maximising revenues and encouraging exploration for the benefit of mankind. They are all worthy things to do, and the Bill in its own way seeks to strike that careful balance. It is not an easy task to pull off, because if we go too far in one direction, we will upset something else. There is a balance to be struck between mankind exploiting for the benefit of us all the resources that are in the deep sea in the other parts of the world and protecting the environment that is down there. I sincerely hope that this Bill will receive its Third Reading and that when it reaches the other place, it will have a speedy passage. I wish it well.
I wish to put on record my thanks to my hon. Friend the Member for South East Cornwall (Sheryll Murray)—and not, as she was erroneously called, the hon. Member for North East Cornwall. I think North Cornwall currently belongs to our coalition partners, but I am sure that at the next general election she, like all of us in the south-west, will be doing everything to ensure that if she does not actually personally occupy that part of Cornwall, there will be a member of the same party who does. It is worth putting on the record that it is the only seat in Cornwall—[Interruption.] There is of course St Ives, which is extremely vulnerable to the Conservative surge.
Order. The hon. Lady will resume her seat. Before the Minister continues, let me say that that has nothing to do with the Third Reading of this Bill. I know that it is Friday and that the right hon. Gentleman and the hon. Lady are looking forward to getting back to Cornwall, so if we could concentrate just on the Bill I would be a very happy Deputy Speaker.
Madam Deputy Speaker, I apologise. I share your agitation and excitement. Mine was only the excitement about May 2015 and what might happen thereafter. I will certainly not be tempted further down that exciting route.
I also thank other right hon. and hon. Members who have served their time on this Bill. The hon. Member for Bristol East (Kerry McCarthy) referred to the fact that it has been handled by a number of different Ministers throughout its passage. That is a factor of life here sometimes, but, as I said to her, it does mean that there will be a wide understanding of the legislation. As it is new and quite complicated, the more people who understand what it is about—the new technology and the new exploration way below the sea—the better.
It is of course entirely appropriate, as hon. Members have said, that it should be a Back Bencher from a constituency in Cornwall, which is the second most beautiful part of England after Devon, who has brought the Bill to the House. Cornwall not only has been involved in mining for generations—indeed, from before Roman times—but is of course a great maritime county. My hon. Friend has always been a strong advocate of her native county. Certainly, the fishing industry and her constituents are represented extremely well by her. I do not know anyone here who has a greater understanding of the marine environment, from which she has derived both pleasure and tragedy.
I am pleased that my hon. Friend has taken the Bill forward with such aplomb. She has the distinction, as we have heard, of having been in charge of private Member’s Bills in two consecutive Sessions, which is certainly an unusual achievement. As to her revealing the secret of how she was balloted for two Bills, she gave the figure “336”, but said that she did not want people to know that it was her secret number. I remind her gently that recordings of this place are, as we speak, being broadcast to the four corners of the world. Who knows, one day they might be broadcast to the sea bed as well, so Captain Nemo can watch them. Quite a lot of people will remember 336 now and, with her indulgence, I shall be tempted to use some of those numbers when I next fill in my national lottery form as they have brought her such luck in the past.
Why is deep sea mining such a prominent issue just now? One or two comments have been made to the effect that the Bill is in some way premature and that the industry is in its infancy, and some have asked why we are doing this now. It is worth recalling that in the 1980s there was a great deal of interest in deep sea mining, although I must confess that I was not aware of that myself. There were expectations then of a major boom in deep sea mining and pessimism in many quarters that an internationally agreed regime could not be achieved. It was against that background that the Deep Sea Mining (Temporary Provisions) Act 1981 was passed.
The addition of the words “Temporary Provisions” to that Act now seems ironic, as here we are 33 years later and the Act is still in force. That, presumably, gives a new definition to the word “temporary”. Let us hope that the same use of the word does not apply when we talk about other parties “temporarily” holding on to seats that should be ours in the south-west—we do not envisage that going on for 33 years, Madam Deputy Speaker. In recognition of the fact that deep sea mining is here to stay, we will remove those words from the short title. I imagine that that is probably the most uncontentious thing I could say.
Going back to the 1980s—and many of us would like to—
Order. With respect, we do not need to go back to the 1980s. We are on the Third Reading of a Bill that apparently has support in the House and the debate is about the provisions of the Bill. We have moved beyond needing context from the 1980s. There are a lot of Bills still to come this morning, so I would be grateful if the Minister referred to this Bill and its provisions.
I am making as much haste as I possibly can, Madam Deputy Speaker, given the complexities of some parts of the Bill. I was alluding back to the ’80s because of the commercial side of the issue. The commercial companies that showed an interest in deep sea mining at that time ceased to do so and although the idea lived on, it did not seem likely to become a reality any time soon.
I think that is for two reasons. First, such ideas are becoming a reality, whereas in the 1980s they were a distant prospect, and, secondly, our understanding of the management of the environment, not least the marine environment, has improved in leaps and bounds. Marine conservation zones and ecological balancing mean that we are way ahead of where we were then. No doubt you would rightly stop me going down memory lane to the 1980s, Madam Deputy Speaker, so I shall not continue along that line, but I hope that I have answered my hon. Friend’s questions as best I can.
The other part of the prediction also turned out to be incorrect. We were able to achieve an internationally agreed regime for deep sea mining. However, the road to achieving that was not straightforward. When the United Nations convention on the law of the sea was first adopted, the United Kingdom, in common with other industrialised countries, could not accept the provisions on deep sea mining. Those were included in part XI of the convention and were not attractive to commercial companies. The industrialised countries stood aloof from the convention, even though—apart from part XI—the provisions were satisfactory. Indeed, they were of great advantage to industrialised countries.
As the date for the convention’s coming into force grew closer, the developing countries appreciated that a convention with no participation from industrialised countries would not be to their advantage. Negotiations began to revise part XI or, in the diplomatic speak of the time, to set out how it would be implemented. I am pleased to note that United Kingdom representatives played a prominent role in those negotiations. The result was the so-called part XI agreement, which met the concerns of the industrialised countries and paved the way for the United Kingdom and other industrialised countries to ratify the convention.
Let me say now that the British Government consider that the convention, read with the part XI agreement, represents an excellent platform for the future development of deep sea mining. There is a need to ensure that the commercial terms encourage commercial companies, which are rightly hard-headed about the process, to invest the large sums necessary to make deep sea mining a reality. My hon. Friend the Member for Bury North (Mr Nuttall) elegantly made the point, in a well-balanced argument, that there is a balance to be struck. We want to encourage deep sea mining and ensure that companies come here to register for the licences, but we do not want to give them false expectations; they can spend huge amounts of money before they mine anything. That is one reason why we were unable to accept the amendment.
Ultimately, the deep sea is, as the convention says and as the hon. Member for Bristol East said, the common heritage of mankind; that is the phrase that has been universally used. It is a ringing phrase, which means a great deal to many people around the world, particularly those who are nervous about the concept of touching the sea bed. Ultimately, the benefits of deep sea mining should be shared with all members of the international community. That is recognised by the convention, and we are happy to endorse it.
The hon. Lady and my hon. Friend talked about profits and which country should benefit from any money made, which is perhaps slightly putting the cart before the horse. Apart from the licence fees, the issue of what direct benefits will accrue to sponsoring states is one of the many that will need to be considered during the development of the exploitation regulations. However, the indirect benefits are likely to be substantial. Deep sea mining is a significant opportunity for UK industry, especially in the light of the technological advances made during the development of the oil and gas industry in the North sea. We look forward to UK industry making full use of that opportunity.
As for the International Seabed Authority, its council will have to produce in due course rules about the
“equitable sharing of financial and other economic benefits deriving from activities in the Area”,
taking into particular consideration the interests and needs of the developing states. In other words, the ultimate intention, although we are probably a long way away from this, is that the economic benefits of deep sea mining should, rightly, be shared with developing countries. Talk of the precise nature of how the money will be held and disbursed, and of where sovereign wealth funds should be located and who should be involved with them, is somewhat premature.
Nevertheless, a balance is needed between the requirements of the commercial companies and those of the beneficiaries in the international community as a whole. It would be counter-productive to fix payments to the international community at a level that would deter the commercial companies. In other words, we must ensure that the international community secures a reasonable rate of return without putting off the commercial companies without which there would be no mining at all—ergo no revenue, no sovereign wealth fund and no ability to share any profits with developing countries because, by definition, there would be no profits to share.
I am perhaps getting a little ahead of myself because, at present, there is no mining on the deep sea bed—that is a statement of fact. There have been only applications to explore for minerals. So far the International Seabed Authority has approved 19 such applications. Four more were held over from its 2013 session, and at least three new applications will be considered during the coming year.
The pace of applications has increased markedly in the last few years, as we might expect. There may well be many reasons why, but there is no doubt that there are two in particular: first, the development of technology, much of it by British companies that have been working in the North sea for many years, as their unrivalled expertise in deep sea drilling has a knock-on effect for their understanding of deep sea mining; and, secondly, the exponential economic growth in certain countries, which I need not name, that has fuelled a significant increase in their demand for metals and precious minerals. It follows that deep sea mining for mineral deposits on the sea bed is close to becoming technically and economically viable. It is also a truism that, with an increasing world population and finite resources, we will need to look to the oceans to provide additional sources of support for our growing needs and demands. We need to be acutely aware of changes in our ability to produce energy and extract minerals. I refer the House to the need for a serious look, from an environmental perspective, at the exploitation of shale gas, which has had hugely beneficial effects, especially regarding the cost of energy, in countries such as the United States that are well ahead of us on that practice.
Perhaps I should explain to the House how the system set out in the United Nations convention on the law of the sea works. Any application to explore for mineral resources on the deep sea bed requires sponsorship by a state party, which must be able to exercise sufficient jurisdiction over the company it is sponsoring. It is worth saying that an advisory opinion in 2011 by the International Tribunal for the Law of the Sea helpfully elucidated the duties cast on a sponsoring state by the convention, which include a requirement to adopt a precautionary approach to environmental issues.
Once a company has secured the sponsorship of a state, its application goes to the International Seabed Authority. I am pleased to note that the authority’s headquarters are in Kingston in Jamaica, a fellow Commonwealth country. I am the Minister for the Commonwealth, so I have a further excuse to go and inspect the headquarters personally—if the cold weather continues, I shall be going sooner rather than later.
The application will then be considered by the legal and technical commission of the International Seabed Authority, which is composed of experts from across the world and gives technical advice to the ISA’s council. Once approved by the commission, the application is forwarded to the council, which is composed of a number of member states that have a particular interest in deep sea mining. It is then for the council to approve the application.
The final step is that the contractor and the International Seabed Authority enter into a contract that has a number of standard provisions, including on the reports that the contractor must make to the authority. Effective regulation of the contractor will be secured through a combination of those provisions and the domestic law of the state sponsoring the application. The authority is at present concerned only with the exploration of the deep sea bed.
The Minister may be aware that the original convention on the law of the sea established a body called the Enterprise, the purpose of which was to serve as the authority’s mining operator. As far as I am aware, no steps are being taken to bring the Enterprise into operation. Is he aware of any moves in that direction? Will the ISA take control of this itself?
I am not aware of any such rules, but I commit to writing to my hon. Friend once I have clarified that point. I am pleased that the ISA’s secretariat is thinking about the regulations that will be necessary once exploitation begins. The United Kingdom delegation at the authority’s most recent session made clear the importance that we attach to the development of those regulations, which will be an important step for the authority and one in which the United Kingdom is determined to play its full part. There are important environmental issues to be resolved, but there is also a financial issue relating to the amount of any payment to the ISA, to which I have already alluded.
What of British involvement in deep sea mining, which is really what the Bill is about? I am pleased to say that the United Kingdom has now sponsored two applications. The first was approved by the ISA’s council in 2012, and consequently a British company will cover an area of sea bed twice the size of Wales and 4,000 metres deep. Disappointingly, the legal and technical commission did not have time to consider the second application at its sessions last year, but we hope it will approve the application at its session beginning in February, and that the council will approve the application when it meets in July.
Deep sea mining is a very exciting and pioneering industry, and the Government are pleased that the United Kingdom is at the forefront of its development. Last year, my right hon. Friend the Prime Minister spoke at an event in London to celebrate the signing of the contract between the United Kingdom’s sponsored contractor, UK Seabed Resources Ltd, and the ISA. Our colleagues in the Department for Business, Innovation and Skills organised an industry day at which more than 80 British companies participated. British companies have developed expertise and technology through their activities in the North sea, much of which is transferable to deep sea mining. We hope that significant benefits to the British economy will be forthcoming over the next 30 years. We have heard figures of anything up to £40 billion bandied around this morning. In the Government’s view, it is essential that the United Kingdom does not ignore these potential benefits. As I have said—it is also the assessment of the International Seabed Authority—we are at the threshold of a new era of deep sea mining. This new frontier presents a valuable opportunity to contribute to the prosperity of the British people, of British companies, and of the United Kingdom as a whole.
Polymetallic nodules, as I am sure we are all now fully aware, contain a higher concentration of valuable metals—up to 28% more, or 10 times the proportion usually found on land. Many of the metals contained in these sea bed deposits are considered to be valuable “technology metals”, which are increasingly important in high-technology industries that benefit us all, including electronics, clean technologies such as hybrid cars and wind turbines, and the construction and aerospace industries. The strategic importance of this source of minerals and metals should not be underestimated, not least as they contain trace metals such as rare earth elements used in electronics, where it is important that land-based sources should face competition from potential sources on the deep sea bed. Such an amount of previously untapped wealth can create vital jobs for the British economy, not only in deep sea mining but in the supply chain supporting the industry, such as the engineers developing machines to harvest polymetallic nodules in an environmentally sensitive way.
As my right hon. Friend the Minister for Universities and Science has pointed out, this new industry plays to the UK’s strengths as a world leader in maritime engineering and innovation—which, incidentally, is of increasing importance to us in the south-west, as my hon. Friend the Member for South East Cornwall will be well aware. As I mentioned, last year my right hon. Friend the Prime Minister attended and spoke at an event to welcome the award of an exploration licence to British company UK Seabed Resources, secured with the support of the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills. There can be no greater demonstration of the Government’s commitment to this rapidly developing industry.
Turning to the Bill, I would first like to emphasise—
Order. The right hon. Gentleman has been speaking for some considerable time now. We have covered everything. We have covered the international authority, prime ministerial speeches and agendas for Government Departments. I would now like him to focus specifically, and briefly, on his comments with regard to the Bill.
Order. With respect, the right hon. Gentleman covered that right at the beginning of his speech when he outlined the originating of the 1981 Act, the fact that it was temporary, the fact that it did not need to be temporary now, and the increased interest in deep sea mining. I think we have covered why it is important; we have covered the money and the jobs. The Minister just needs to finish off on the Bill.
Indeed, Madam Deputy Speaker. In that case, I will abbreviate my concluding remarks to address a specific point that was raised about Scotland, on which I owe the House an answer.
I am pleased that we were able to reach agreement with the Scottish Government to extend the Bill to Scotland. Amendments to that effect were moved in Committee by my hon. Friend the Member for South East Cornwall, supported by the Committee. This was a very technical change that took some time to sort out, but we got there. As with other British companies, Scottish companies are well placed to take advantage of the opportunities presented by the development of deep sea mining. Many of them have been active in the North sea and can therefore adapt their expertise and the technologies they have developed into the new and exciting world of deep sea mining.
We have enjoyed—at least, I have enjoyed—an informed and productive debate that has demonstrated a real understanding of the economic and strategic importance of this Bill for the United Kingdom, balanced with the need to ensure safeguards for the environment. One of the important issues we have rightly discussed is the environment of the deep sea and the potential impact of mining on the species living on the sea bed. All of us—Governments, parliamentarians and private companies alike—must be conscious of our shared responsibility for the stewardship of the deep sea bed.
I hope I have answered the majority of points raised. My right hon. Friend the Prime Minister has shown how this issue is an example of the UK leading the way—both in legislation for the awarding of licences and in the support we will give—in an exciting new industry. The industry is expected to be worth up to £40 billion to the British economy over the next 30 years. The United Kingdom is open for business, competing in the global race.
This Bill has been improved by amendments and has been met with general approval from Members throughout the House. I am confident that when future generations look back at what we have done, they will see that we have done everything we can to strike the right balance between protecting the environment and exploiting this valuable resource in support of our country’s prosperity.
I thank all those who have taken an interest in and contributed to the excellent discussions as the Bill has progressed. In particular, I reiterate my warmest congratulations to my hon. Friend the Member for South East Cornwall on introducing the Bill. I hope the House will join me in supporting the Bill’s Third Reading and wishing it a speedy and successful passage through the other place.
With the leave of the House, I just want to put on the record once again my thanks to the Minister and the Department’s helpful officials. I am also very grateful for the help I received from the Public Bill Office and thank the hon. Member for Bristol East (Kerry McCarthy) for her contribution.
Question put and agreed to.
Bill accordingly read the Third time and passed.