The $16 TRILLION Race to Mine the Ocean

(brooding music) (watermelon thudding) (suspenseful music) – I just bought this
watermelon for like $8. Maybe a little expensive
to pay for a watermelon, but not bad. I was curious about the
price of a watermelon because recently, I saw
a photo of a watermelon on a supermarket shelf that
costs 61 Australian dollars, which is like 37 US. $37 for a watermelon. This photo was taken right here in this supermarket on this island, a country called Nauru, that sits in one of the most remote
patches of the South Pacific, a world of just ocean. (suspenseful music) That watermelon had to travel
a long way to get to Nauru, and that’s because they
can’t grow watermelons on the island itself. In fact, these days they can’t really grow much
on their island, not anymore. Most people don’t know much about Nauru. It’s a tiny little country, but I’ve become obsessed with their story. They used to be one of the
richest countries in the world, and then they lost it all. And in their desperation,
looking for an economic miracle, they made some pretty sketchy deals. I’m making this video because Nauru is in the process of their next big deal, their next economic miracle, and it has to do with these
apple shaped metal balls. And this guy who is the CEO of the company that wants to harvest these
from the bottom of the ocean. (suspenseful music) Hey, Gerard, how you doing? I see the tiniest island
nation in the world and just wonder how they
will be able to stand up for themselves when they really
don’t have any other option. – Well. – Billions of these apples
sit on the ocean floor, four kilometers under water. So, we’ve been mapping
this patch of ocean, looking at all the lines and
boxes that different countries and international bodies have been drawing around this patch of ocean as they prepare to potentially harvest
all these metal apples. (brooding music) And while these little
metal rocks sit quietly on the ocean floor, the
humans up on the surface are debating fiercely
about what to do with them, who’s entitled to them, who’s allowed to make money off of them, what will happen to this ecosystem that we don’t really know much about if we harvest these little balls. And right when we were
about to publish this video, the new administration
in the United States changed everything, saying
that they’re making plans to potentially bypass
the rest of the world and just go down here
with no one’s permission to harvest all of these metal balls. – And I think people’s
patients are running out. If they overplay their hand,
then it will be on their watch. That lawlessness might
come back to the high seas. – Wow. I mean, I would love some
more specifics on that if you could gimme anything else. – That’s what I got for you now. – This is from an
interview like months ago, and I didn’t know what Gerard
meant by that, but now I do. – President Trump signing
an executive order to fast track deep sea
mining off the US coast. – Bypassing a global review process, which is still under debate. – And strangely, Nauru with
their expensive watermelons and remote location is right
at the center of this debate, even though there are
thousands of kilometers away from this patch of ocean. I promise it’ll all make sense soon. We have been working on this
story for like a year now, have gone deeper and deeper
than I ever thought we could. We’ve been talking to all sides, to people who deeply
disagree with each other, from the environmental experts to the international law experts, to a billionaire ocean explorer, to the president of French Polynesia. – There are so much at at stake. I mean, yeah, it’s the last frontier, but the last frontier of human madness. – And of course, to the CEO of the company that most eagerly wants to
harvest these little metal balls. I had a lot of help for this
story from my friend Joss over at Howtown and my producer Mariana, who has been investigating this for years. We’ve been working on it
for a really long time, and I wanna show all this to you. So, let’s start with the
story of Nauru itself, because understanding that
explains how this island, this patch of ocean, and this company all got wrapped up with one another. And ultimately, I’m trying to figure out if going after all these
little metal apples on the sea floor is a great
idea or a horrible one. (suspenseful music) Let’s really quickly go way
back like millions of years ago and look at what was happening here in this deep ocean. Today, it’s called the
Clarion-Clipperton Zone but back then, humans and
their labels didn’t exist yet. But deep underwater,
something was forming. (mysterious music) Get ready to have your mind blown at how deep the ocean really is. There’s the World Trade Center. And soon after here at a thousand
meters, there’s no light. So, we’re gonna fake the light just so that you’re not
looking at a black screen. And now, we’re kind of in an alien world and you see some weird looking fish and yet we just keep on going. Here’s what the Titanic
eventually would end up once humans come. 3,800 meters below the surface. We keep going and eventually, we arrive. At this zone about five
kilometers under the water, the water is almost freezing down here and it’s incredibly quiet
because of course it is. There’s not much going on. The weight of all of this water makes the pressure down here unfathomable. So, does anything live down here? – There’s a low abundance of
life, but a high diversity. – That’s my friend Joss. Her and Adam Cole run the
YouTube channel, Howtown, and they made a video about life down here and how we know it
exists, how we study it. We’ll be talking more to Joss later on. But for the purposes of this video, a lot of what you find here on the seabed are these lumpy, often apple sized balls of metal just
chilling on the sea floor. These are called polymetallic nodules. And look, there’s just
billions of them down here. (gentle music) These things have been slowly growing a millimeter or two every million years as flex of metal float to this
deep sea and clump together layer by layer for millions of years. (dolphin squealing) But back up on the surface, some clever primates
are shedding their fur and standing upright. They’re growing remarkably large brains and before long, they’ll
take over the whole planet. They’ll map it and control it, and they’ll start fixating
on this remote ocean, on these little balls down here, partly because they think they need them to save themselves from a disaster in the climate, but not yet. (suspenseful music) So while all these little
metal balls were forming, another very slow process is
happening up on the surface, birds are pooping on an island. This island will someday be called Nauru and this bird poop will
someday be very valuable. Because this island is the only land for hundreds of kilometers, it’s a popular rest stop for seabirds. So over thousands and thousands of years, all these bird droppings start to pile up into white mountains
that grow on this island layer after layer. And with time, the bird poop starts to harden and chemically transform into a rocklike formation. Okay, we’re now at the point of the story where the humans enter the scene. – Our ancestors came on
those double hill canoes and they cross the biggest
ocean in the world. We are people of the ocean. There’s no separation
between the land and sea. – Micronesians and Polynesian
settlers, they come to Nauru. They live off the ocean. They cultivate the land. But with time, adventurous Europeans would be exploring the world and they would happen on this
impossibly remote island. It’s the late 1700s and
Germany has an empire. And in the late 1800s, they
annexed this little island and they do what Europeans
are doing everywhere at this point, bringing
with them city diseases, wiping out traditional customs
and leadership structures, and telling themselves that
they’re civilizing these locals. And after a while, they start focusing on this mountain of bird
poop, realizing that time has turned this white
mountain of droppings into rich phosphate, which is
a valuable form of fertilizer to make their farms way more productive. Here’s a survey map of
Nauru, tiny little island. It’s got this lagoon, but
this shape right here, everything within this shape is phosphate. It’s almost the entire island. Most of the people live
out here on the periphery. Now again, there was phosphate here, but there was also, you
know, trees and shrubbery and it was a lush island. But once they discovered
how valuable this phosphate was for farming, I mean,
you know what happens next. (upbeat music) Germany lets a British company come in and start chiseling off this phosphate to ship it to the farms in their empire. Then, Germany gets defeated in World War I and the British Empire takes
over Nauru, continuing to mine this white gold bird
droppings turned phosphate hundreds of thousands of tons every year by the early 1900s. And this wasn’t like a
small drop in the bucket. One historian summarizes it by saying, “Without access to phosphate, neither Australia nor New Zealand, would have been able to establish the industrial agricultural
systems that were fundamental to their demographic, economic,
and societal expansion.” Going so far as to say,
“Without this phosphate, agriculture in Australia and New Zealand may not have been viable. Like the British Empire
is growing their colonies in Australia and New
Zealand with this phosphate that they’re getting
from this tiny island. – Nauru was able to get those
countries to where they are, obviously at the expense
of their own country. – When you read the accounts of all the people doing this
mining, the British folks, you see that they’re giddy
about all of this phosphate. “Here in Nauru, we have
an unlimited supply and that it is coming in at the lowest possible cost to the user.” Cheap, unlimited
phosphate fueling the rise of the British Empire in
Australia and New Zealand. What did the strip mining
do to the landscape? – Completely destroyed it. It remove what they said
was like the lush flora. All of the trees,
everything that was there. They essentially like
destroyed all of that and it made the land completely useless. – A National Geographic
photographer visits the island in the ’20s and documents
it, documents the people, their customs, and explores
what all this phosphate mining is doing to this island. He describes how phosphate
mining is turning this lush island into a quote,
“dismal ghastly tract of land with its thousands of
upstanding white coral pinnacles from 10 to 30 feet high.” People were making a lot
of money off of phosphate, but those people were
not the locals of Nauru, but rather British businessmen. That isn’t until 1968 when
Nauru gains its independence and alongside it, it gains
control of the phosphate trade. And what happens next is
Nauru gets rich and fast. ♪ Bam ♪ ♪ Be ♪ – This little island went
from exploited colony to super rich phosphate producer. And by the 1970s, Nauru literally has the second
highest GDP per capita in the world, only behind Saudi Arabia who’s cashing in on their
own resource gold rush. So, this gray is how much
phosphate had been mined by 1967, and here is how much
had been mined by 1998. Basically everything, 80% of this island, completely stripped away. – If you even look on Google Maps and you like drop the little man there, it’s just the most beautiful
thing I’ve ever seen. ‘cause you’re in the
middle of the Pacific. The sand, the coconut trees,
the palm trees all there, and then suddenly it’s just a big nothing to take into account that like
the country should look like. That little plot that’s left,
it would’ve been incredible. – The phosphate totally depleted and where once there was
lush island vegetation, now stood only desolate
jagged limestone spikes, some up to 15 meters high. And here on the periphery of the island, a population that had grown
accustomed to being rich, the government scrambled attempting to use the money reserves from the phosphate trade
to make investments in luxury real estate in Australia. They made some bad bets like
funding a play in London that was a total disaster. These investments were poorly managed and resulted in failure. So for a century, it was empires who cashed in on this resource and the money that the locals got when they finally got their hands on the resource quickly evaporated, leaving them with nothing else. Almost no ability to grow
anything on this island. (suspenseful music) But somehow this story gets worse because Nauru with no good options now had to find something to replace their phosphate economy. (brooding music) – They ended up making a
lot of bad investments, which led them to then be in
a situation of desperation. – People in our isolated island nations sometimes think that salvation
will come from outsiders. – So, they start selling
passports to their country, which attracts everyone
from Russians to Chinese to even alleged Al-Qaeda terrorists, who were seeking visa-free
entry, or lower taxes, or escape routes from oppressive regimes. They began offering
offshore banking licenses with minimal regulatory oversight, turning their island
into a giant tax haven. Like this tiny island at one point was operating 400 offshore banks that eventually attracted
$70 billion of Russian money. A lot of it thought to be money laundering by the Russian mafia. Then, came Operation Weasel, which boy, I could make an entire video about Operation Weasel. Not much is known about it. It’s this top secret operation reported by this Australian newspaper. But allegedly in 2003,
the US offered Nauru cash to set up an embassy in China. But the embassy was apparently
only staffed by Westerners and it ended up being a front to help smuggle North Korean defectors. Again, probably a lot more there but remember, we’re focusing on how Nauru tried to save its economy
after phosphate went away. So, let’s keep going. They also started taking
money from countries in exchange for recognition. Recognition is a big deal within the international community. Countries only exist if other
countries recognize them. So, China pays Nauru to
stop recognizing Taiwan and to recognize China as the real China. Russia pays Nauru to join in
on the few other countries that recognize the
territories that they declared after they invaded Georgia in 2008. Another clever way to get cash, I guess. Again, they didn’t have
anything else here. And then, of course, their biggest deal that lasted more than 20 years. – And then, Australia just swooped in and they were like, “We
have a solution for you. It’s gonna dump all these refugees that we have in interior land.” – Nauru took an estimated
$3.3 billion from Australia to set up these prison
looking camps on the island. (gong clanking) This is where Australia sent
refugees or asylum seekers that they didn’t wanna hold on their land. So, they sent them to this tiny island. These camps have become notorious for the deplorable conditions. We’ve got incident
reports, tons of documents, tons of photos, and primary
sources from people here. – [Detainee] The detention center that we are living in Nauru is like a prison. We are living behind fences. – But again, we are not
going into this right now. It’s a total story and one
that’s been reported on. I tell you, all of these things to show you what Nauru was willing to do in search of a new economy
after phosphate went away. Eventually, each of these
schemes failed or were shut down. The US labeled Nauru a
money laundering state, made them get rid of
their tax haven banks. (gentle music) And the country slipped deeper and deeper into a financial depression. GDP per capita went from
50,000 in the seventies to 12,000 today, a
quarter of the population lives under the poverty line. The island is rife with pollution and they basically can’t grow anything, making it very difficult
to eat fresh food, most of which has to be imported. Which gets us back to this $61 watermelon that we started the video with. It’s kind of a symbol
of where Nauru ended up after this troubled
history of exploitation, and then desperation. Today, the local’s diet is
mostly cheap processed food, which is why they have
some of the highest rates of obesity and diabetes. The smallest island nation in the world is going through a hard time,
and this is the context. They’re looking for their
next economic opportunity. (solemn music) And that gets us back
to this patch of ocean, where billions of apple shaped metal balls sit five kilometers under the water. These are suddenly really valuable and I’m gonna explain why in just a sec. But the upshot is that Nauru has unique rights to this bed of ocean. And once again, they’re making a deal with a powerful outsider,
a company who stands to make a lot of money off
of these little metal apples. It looks a lot like a repeat of history. It looks like a big powerful
organization coming in and Nauru in its desperation, ceding power to a much
more powerful entity. How do you respond to that idea that this is just a repeat
of the same dynamic? – Well, I’d respond to say
I think you’ve got it wrong. – Do I have it wrong? I’ll let you determine that
once we move on with this story, which by the way gets really juicy because there’s a bunch of updates. I’m recording this
moment like months later, because there’s a bunch of updates and you’ll see those soon. Okay, so that’s our context here. It’s a big story and originally, I kind of wanted to just
focus entirely on Nauru and its history. Alas, we must move to present day, because Nauru is making its next big bet to try to save its economy. And that’s where these little metal apples finally come back into the story. By the way, I’m gonna stop calling these little metal apples, because they’re not called that. They’re called. – Polymetallic nodule. – Or just nodules. It is a word we should
become familiar with, because we’re gonna be
hearing about ‘em a lot more. (playful music) So, billions of nodules are sitting four and a half kilometers under the ocean surface on the seabed. Enter The Metals Company. That’s literally what they’re called, The Metals Company, TMC. They’re Canadian based company
founded to do one thing, which is to harvest these nodules, which as you will see is
incredibly controversial. – So, this is what it looks
like with light shine on it. – I’ve been talking with the CEO of TMC to try to understand how
they plan on even doing this. He’s been showing me imagery of how they send these huge
vacuums down to the sea floor to suck these nodules up. – You can see how the nodules get sort of plucked off the surface. – Now, TMC is not allowed to
harvest these nodules yet. No one is. So, what they’ve been doing
for the last 10 plus years is investing a half a
billion dollars in preparing, in researching, in developing technology, and undergoing all of the
complicated rules and requirements necessary to start this harvesting. To fuel all this investment, they went public on Wall
Street a while back. They raised more money. But the way capitalism works is when you raise money from investors, those investors want a return. TMC has a lot of pressure to
make money off of this venture that they’ve sunk a half
a billion dollars into. How much money is down there if you were to translate
that into dollars? – I’ve heard estimates of
something like $16 trillion. ♪ Oh, me ♪ – Now, these nodules have been down there for millions of years as we saw, but only recently have
they become super valuable. And for this, I turned
it to my friend Joss. – They’re nodules down there and they’re basically lumps of metal that are sitting in the dark
on the floor of the ocean. The nodules are valuable, because they contain nickel,
cobalt, copper and manganese. Nickel and manganese are used
mostly in steel production. Copper is in basically
all of our electronics. And cobalt is actually used in jet engines and like our phone and laptop batteries. But the reason why there’s a lot of urgency
around this right now is that all four of those metals are currently used to build electric cars. What’s attractive to a mining companies is that it’s kind of
like you get four mines for the price of one, because
you’ve got four big metals that you can sell into markets. – We need more of these metals. We need billions of tons
more of these metals. And so, the question that
society has to answer is where are we going to get them from and what will be the
impact of getting them both to the environment and to the people living on the planet. – This is not about we need these metals and we can’t find them anywhere else. This is about whether we wanna have another source of the metals as they expect the demand
to continue in the future. – So, you’ve got TMC and a couple dozen other mostly government
subsidized companies out there in this zone, where there’s a ton of these nodules preparing to harvest
them, but they can’t yet. They’re really close to
being able to go down there, but they can’t yet for two main reasons. The first is that we’re
not sure what damage this will do to this ecosystem that we’ve just barely started studying. – They are putting down
harvesters, those heavy machinery that will just scrape
the bottom of the ocean. – You know, anything that gets sucked up with the nodules will die. – What happens if humans start kicking up storms of sediment? – There’s gonna be a cloud of dust. – Oh, there’s creatures
that live on the nodules. Clouds of dust. – Dust clouds. – Cloud of mud, a cloud of sediment. – [Mariana Castro] Behind
this collector vehicle. – Noise. – Noise. – Noise pollution, a
bunch of artificial sound, where it’s been totally silent forever. – That’s a vast area to expose
to a new industrial activity. – Vibrations are introduced
into the ecosystem. A plume. – The plumes.
– Plumes. – The plumes. – Plume flows, – [Johnny Harris] Plumes coming from the discharge from the ship. Doesn’t sound good. – That ecosystem is gonna be impacted. – And then there’s all of the microbes. – Oh, a bunch of microbes. – You know, there’s a big. – [Johnny And Joss] Microbial communities. – Inside the sediment that play a role in, you know, how our carbon
cycle works, actually. – Carbon absorption. – Oh, and this is a carbon sink. – The ocean’s absorbed
about 25% of the carbon that we pump into the atmosphere. – Usually when humans mess with things, we find that one thing triggers another that we didn’t anticipate. This is an untouched part of the world. We don’t have a lot of those left going, you know, 4,000 meters
down to mess with that after everything that we’ve already done. There are creatures that
live directly on the nodules. So every time these researchers go down there to take a look. – How do they even research
all this stuff in the dark? – [Joss Fong] They’re
basically coming back with some new cool looking invertebrate that no one has ever named or seen before. – My God, the creatures
down here are wild looking. – These aren’t things with faces. – Things like corals, and
sponges, and sea anemones. – Translucent and slow growing. – Whoa. Squid worms, gummy squirrels, Gummy squirrels, sounds like a candy. – And all kinds of weird
and interesting fish and other sorts of creatures. – We haven’t found these
anywhere else on the planet. – And so, the idea of possibly
destroying some of them before we’ve even known
them, I think rubs a lot of biologists the wrong way. – Okay, yeah, there’s a lot going on down there. I mean, it’s not a lot of density of life, but the complexity, diversity, and potential domino effects
here are not well understood and potentially way bigger
than first meets the eye. It’s not just a desert down there. Thank you to Joss who actually taught me (upbeat music) But there’s another reason why companies aren’t allowed to start
mining the nodules yet, and it has to do with who gets the money. There’s a lot of value in
these little metal balls and the question is who has the right to exploit them for profit? Back in the old days, the answer
to that question was easy. Whoever was the most powerful and technologically capable country would just go down and
take all the resources, but our modern world is
one of international laws, however weak they sometimes are. We have a framework
for deciding what we do with a patch of ocean like this. A patch of ocean that by the way, doesn’t belong to any one country, okay? (upbeat music) So this document, this is
basically the rule book for how the Law of the Sea should work. It’s called UNCLOS, the UN
Convention Law of the Sea. We talk about this a lot on the channel. It’s a big part of this
story starting now. This treaty that only the
entire world has signed besides a few countries,
including the United States, who doesn’t like to be constrained by international organizations, says that anything found in this water is the common heritage of mankind. It belongs to everyone.
It’s the world’s resource. And to that end, any
money made off of this should benefit everyone. “The benefit of mankind as a whole,” is the verbatim language. “Benefit of all mankind
as a whole,” there we go. The law says that anything
found out here in the deep ocean that doesn’t belongs to any other country, belongs to the whole world. Everyone should benefit anything mined or exploited from this area,
this international seabed Must be to the benefit of everyone, and it specifically puts
emphasis on developing nations. This is trying to level the playing field and make sure that we don’t just repeat the same old story of the past. Now, they have a couple ways of making sure that this happens. Number one, in this law, it says that if a rich
country wants to go out here and explore for nodules, they have to explore not
just the area they want, but an additional area
that has nodules in it that will be reserved
for developing country. This frankly took me a
minute to get my head around how it actually works. And here’s Mariana drawing a graphic during one of our calls
to help explain it. The point is, if you’re
developing country, you are entitled to one
of these reserved areas that’s already been
explored by a rich country. You are entitled to exploit it. Okay, that sounds like
leveling the playing field. The other big rule is
anyone who goes down here into this part of the ocean that the whole world owns and exploits it and makes money off of it, has
to pay a bunch of that money to the International Seabed Authority, who then distributes it out to
all of the member countries, which is another way
that developing countries are supposed to get in on
the riches of the ocean, even if they don’t mine it themselves. The other big rule here
that affects Nauru and TMC, and you’ll see why in a second is that if a corporation like TMC wants to go out here and
harvest all these nodules and make a bunch of money, they can’t just do that on their own. They need to be sponsored by a country, a country that is a member of this treaty. It’s like 170 of ‘em. That country has to be their partner. The corporation can’t
just like do it alone. The sponsor country is very important and stands to benefit
from this relationship, but also has a big responsibility to regulate the corporation to make sure that they’re
following all the rules. That they’re making sure that it doesn’t destroy the environment. Okay, so that is how
this is supposed to work. That is how this treaty
says that the nodules and any resources we find
in this international water is to benefit all mankind and level the playing field
for developing countries, but those rules are currently
being stress tested. (suspenseful music) So, TMC really wants these nodules, but they’re gonna have to play by all these international
rules we’ve talked about and one of those rules is
that they need a sponsor. The corporation can’t just go
out and do this on their own. They need a country to sponsor them. And remember, how developing countries are entitled to these reserved patches of already surveyed ocean floor? Well, TMC made the
rational business decision and instead of choosing
its home country of Canada to sponsor them, they chose
three developing countries, these three tiny island nations. Tonga, Kiribati, and one country whose story
you know very well now. A desperate and exploited island nation who is looking for their next
potential economic miracle. – By getting a developing country and in this case, Nauru, to sponsor them for an exploration licenses that they would be
guaranteed nodule-rich areas without having to go look
for any nodules whatsoever. – So, here are all the
countries that are out here. Most of these again are
state run enterprises. And here are all the patches of ocean that TMC has been allocated. Thanks to their sponsors, it’s nearly half of the reserved areas that have been allocated
to developing countries. So, they’re all out here
surveying, preparing, doing a bunch of research, while the ISA is
finalizing the regulations, the environmental protections that any mining operation needs to follow. They can’t mine yet. They’re getting close, but they can’t yet. – So, this is what it looks
like with lights on on it. – [Johnny Harris] Well,
geez, there’s a lot of them. – [Gerard Barron] Yeah. (brooding music) – The whole point of this
sponsorship arrangement is it’s a layer of accountability for TMC. Nauru is liable to keep TMC compliant with any environmental regulations
in mining the deep sea. So, Nauru is required to have
enough people, and experts, and infrastructure to be out there, checking in on their operation, visiting them out of the blue to make sure that they’re compliant. It’s a big job and it’s an important job. If they don’t do it, they could be screwed if TMC doesn’t comply and
someone else catches them. The ISA emphasizes this
point over and over. They say that the sponsoring country must have effective
control over the company. Effective control, effective controlled, effectively controlled,
it says this everywhere. You can’t kick them
outta the driver’s seat. Effective control just means that Nauru has to be in the driver’s seat on how this goes down. Effective control, I swear I’ve been hearing
the word effective control as I fall asleep at night, because I have been looking
at so many documents about the definition and interpretation of what effective control means. What does it really mean for Nauru to effectively control this
big Canadian corporation? – All the issues somehow go
back to effective control. – There’s no international
police force in the high seas and so effective control is the mechanism we will use to make sure
that the big corporation doesn’t destroy the ecosystem. The sponsors are responsible for this. Nauru is responsible for this. Now, Gerard insists to
me that despite Nauru being this tiny country, they have effective control over TMC. – Effective control is very
clearly defined in UNCLOS. It’s regulatory control. You know, Nauru ones do
have a seabed authority. – But others worry that this relationship is actually a recipe for disaster. – The main reasons that TMC went to Nauru to sponsor it was number one, it would not be able to
exercise effective control over the activities of TMC. – A lot of question marks have been raised about sponsorship arrangements
with the likes of Nauru and whether or not they’re
actually in charge. – To what extent is the sponsoring
state liable for damage? – Hello? – Hey, how’s it going? – So I got like, I got a hold of this ‘cause I was interviewing Pradeep and his whole thing is
he knows about ocean law. There’s the International
Tribunal of the Law of the Sea – Tribunal Law the Sea. – And in 2011, they put out an opinion specifically on
responsibilities and obligations of sponsoring states. And in one of the articles, they mention essentially this term that is the sponsoring
states of convenience. A company that is from
a developed country, a wealthy country, will
partner with a smaller country to get sponsorship for
something like deep sea mining. But what they say is the
sponsorship is essentially a setup where they will like register something, be that like a local address, one house that like is that
company have one employee, and that’s sort of it. And it boils down to like a financial deal that it’s like I give you
money, you give me sponsorship. And they mention it there that like these developing
nations don’t have the resources, they don’t have the
systems to essentially do the job of a sponsoring country. And I think bigger than that, like it sort of breaks
the system as a whole ‘cause suddenly, you’re impacting like the global regulations that you have. “The spread of-” – [Johnny And Mariana] “Sponsorship
states of convenience.” – “Would jeopardize uniform application.” – [Johnny Harris] “Of the
highest standards of protection.” – “Of the marine environment, the safe developments of
activities in the area and the.” – “Protection of the common heritage.” – [Mariana Castro] “Of mankind.” – Now, here’s what’s tricky is that TMC hasn’t broken any rules here, but the reason why the ISA raises this idea of sponsorship of convenience is because the word
that a big corporation, like TMC gets sponsored by Nauru and that Nauru won’t actually be able to hold them to account. – Do you think Nauru has the
capacity to effectively monitor and regulate TMC the way they
should as a sponsoring nation? – Well at the moment, I think they are pretty
weak in that sense. They’ve not set obligations in
their sponsorship agreement. – Pradeep Singh is really
deep in all of this. He’s sort of the bullseye
expert for this very topic. So, Mariana posed the question to him. – At the moment, it’s just
about getting their sponsorship and doing the minimum
possible domestically, but really not being the
type of sponsoring state that would actually go out
there, conduct surprise visits. It does not have the capacity
to be a proactive regulator. – So, Gerard says that
this is effective control. Pradeep says it’s not. The best way to answer this question would be to talk to the
government of Nauru. Yeah, they won’t talk to us. – It’s basically impossible
to get ahold of Nauruans. No response. The clerk on the website,
I email them, no response. Every person that I
could click on LinkedIn, Instagram, TikTok, no response,
no response, no response. – We’re not gonna hear
from Nauru, unfortunately, for this story.
– I feel not optimistic. – It is a bummer ‘cause that, ultimately that is a central voice here and like we’re gonna have to
just read between the lines. Yeah, so it looks like
we’re not talking to Nauru, which we asked TMC to connect us and they said that
Nauru doesn’t wanna talk to Western journalists,
because they’re tired of being portrayed in a negative light and in an unfair light,
which maybe that’s fair. I think there is some like
caricature coverage of Nauru. But in this case, we are
earnestly trying to understand and ask the question of
how this small country is planning on effectively controlling and regulating the mining
operation of a massive corporation that is gonna potentially be
a billion dollars in the whole with a lot of investors who
want a return on their money. It is a big job, but it looks
like we’re not gonna hear from now. So in addition to talking to experts, we’ve been deep in every
document we can possibly find that paints a picture
of whether or not Nauru has effective control over TMC. Now, we’ll put all this
stuff in our citation so you can look at it for
yourself and love your feedback if you have different interpretations. But from SEC filings to the
agreement between TMC and Nauru to the lawsuit where TMC
investors sued the company for misleading claims, all of this paints a
picture of a corporation who is not giving up much
control at all to little Nauru. And of course, they’re not. We should assume that TMC’s lawyers are going to do their job and protect TMC as much as they possibly can
without violating the rules. It’s like an accountant tries to get you the maximum
tax return you possibly can going right up to the
line without crossing it. This is rational behavior. And because effective control
is up to interpretation, lawyers could argue that Nauru
does have effective control. Not to mention Nauru by its
own free will and choice entered into this agreement with TMC. They calculated that this
was worth it to them. No one twisted their arm. But the picture this all paints to me is not the effective control
that the ISA envisioned, which could spell a lot
of trouble for Nauru. If TMC does break the rules
and Nauru doesn’t catch it. – One can see a lot of NGOs
like the World Wildlife Fund, like Greenpeace filing lawsuits, not just against the companies that are going to extract the minerals, but the countries that
are sponsoring them. So, while Nauru and other countries that are sponsoring deep sea mining may think that there’s zero risk to them and maybe if it works out, they’ll get a little bit of money, but the issue is they
could become legally liable for some of the damages. These NGOs are gonna be
extremely aggressive legally when these operations begin. – It looks a lot like a repeat of history. It looks like a big powerful
organization coming in and Nauru in its desperation, ceding power to a much
more powerful entity. How do you respond to that idea that this is just a repeat
of the same dynamic? – Well, I’d respond to say,
I think you’ve got it wrong because let’s think about the benefits that Nauru were getting. It took this opportunity to Nauru to allow them to have
a participation in it. And so, you know, the benefits
will include as I outlined, jobs, training opportunities,
royalties, and taxation. So, those benefits are
gonna be quite enormous. – I actually went into this
interview kind of pushing Gerard on whether or not Nauru itself will actually benefit
from this relationship, and I’m actually convinced
that they will to some degree. Again, they don’t have a lot of options. What being in all these
documents has done for me though has created a much bigger worry
about the system as a whole, this international framework that was meant to safeguard
this part of our world that belongs to all of us. I worry that a relationship like this, yes, it might benefit both parties, but it might lead to substantial harm, irreparable harm to a part
of our marine environment that we don’t really understand. And I’m not even saying that I think TMC will commit this harm. It’s more that it sets a
precedent on how this should work. My biggest worry is one shared by the former ISA
representative from Belgium, who told the New York Times that TMC is, “relying on a illegal loophole here. They’ve chosen a tiny
island nation to gain access to the reserved areas. It is exactly the opposite of what the Law of the Sea intended.” And I’ve been focusing a lot on TMC because they are like the
biggest private company I hear, but there’s other private companies too. There’s four private companies, all four of them based in rich countries. And three of them have partnered
with developing nations, which gets them in on an
already explored patch of ocean, like Jamaica, the Cook Islands. I mean the Cook Islands has 15,000 people. It’s a teeny tiny country, and they will be
responsible for regulating and having control over
these private corporations raising concern that these companies are choosing these small nations
as sponsors of convenience. The rest of the companies out here are state-owned enterprises
from rich, powerful countries. So, there’s a lot of critique that the way that this deep
sea mining stuff is playing out is like not actually in
the spirit of the treaty. – It’s a complete corruption of the vision that the negotiators in the 1970s had about something that was
gonna benefit everybody. Something that would
allow an equal opportunity for all countries to benefit
from and to get involved in, and that simply ain’t happening. – But some critiques go even further. Like listen to this clip of the president of the small Pacific
Island nation of Palau. – And the small Pacific Island nations, we find ourselves once again at the mercy of powerful external forces, reminiscent of colonial exploitation that has scarred our history. With big mining businesses leveraging the economic vulnerabilities of small Pacific Island states to gain access to our ocean floors. – Okay, we are done with ISA language effective control interpretation. International law is complicated and we’re done talking about it. I’m glad we did talk about it. It was a necessary journey, because this is our policemen. We don’t have any other
authority governing what we do with this patch of water. So, I’m glad we did it
but I wanna zoom out and the last point I wanna make is a reminder of the bigger issue here. We live in a world that needs
a lot more of these metals. It’s a lot of countries that
are gonna need lots of steel, a lot of electronics, and then, of course, the bazillion electric
car batteries that we need to make to decarbonize our transportation. This has to come from somewhere. And a really valid point
that TMC often argues is that currently where nickel,
for example, comes from, looks like this. This is Indonesia. It’s home to this rich
biodiverse rainforest that is currently being destroyed to make way for these massive mines. These things are growing very quickly. – We’re having to go and destroy, well, we’re choosing to go
and destroy those ecosystems, push out the indigenous
people living amongst them to be able to dig up that rainforest, move it aside to look for the metals containing the nickel particularly, which is what this
resource is very rich in. – I kind of agree with the
CEO of The Metals Company that land-based mining
is a worse way for us to get our minerals. It has lots of problems,
you know, toxic pollution. It happens where people live and often, the poorest people are the ones that have to deal with the pollution. It’s cutting down trees
that suck up carbon. Their processing the nickel in Indonesia with power from coal-fired power plants. So you know, sometimes the quality of those minerals is lower, which requires more energy to process it. There’s lots of problems with
terrestrial based mining. (suspenseful music) – A major talking point for TMC is that we need to be
less precious and slow about this place, where
there isn’t as much life. Less precious about the
worms and the sponges living five kilometers under the ocean and start harvesting these nodules sooner. It’s less destructive than
doing it in Indonesia. And in a world where
harvesting the nodules would significantly slow down or even stop terrestrial
mining in Indonesia, that would be a very compelling argument. It’d be a hard trade off, but it would be a pretty logical one. – But he’s trying to give the impression that we have a choice between
these two and we don’t. The way these things work is that prices decide what gets mined. And so if the deep sea mining operations were to ramp up really quickly and be pretty cost effective, then maybe they would
slow the growth of mines in Indonesia, for example. It’s hard for me to imagine that that’s gonna be
just like a slam dunk, shut down all the mines. Probably we’ll have just
both going at the same time. – Even the most optimistic projections don’t show terrestrial mining declining in any meaningful way if we start mining from the deep sea. Might be able to slow the expansion. But especially because the
economics of deep sea mining are so fraught with all
these international hoops to jump through, it’s gonna
be hard to shift the market to the deep sea instead of the rainforest. – I think we can certainly slow down Indonesian nickel laterite expansion and our plan is very much to do that. You know, we don’t think we
can stop what’s already moving, but we think we can slow
down or stop expansion. – So instead of rushing into this, the member countries of the ISA have preferred to take it slow, to keep studying the marine environment, to keep working on the details
of how enforcement will work, what effective control means,
how the money will be split up and how we do all of this
without destroying the ecosystem and causing domino effects that
we can’t foresee right now. So as the ISA slowly works
through the complicated rule book of how deep sea mining
should go down in the CCC, TMC is eager to get going. In June, 2021, TMC’s sponsor Nauru officially triggered a rule in the treaty that would force the ISA
to finalize regulations within two years. The clock started ticking
and after two years, even if they don’t
finalize the regulations, TMC or anyone could apply for
a license to start mining. Now, why would Nauru
trigger this two-year rule? I asked TMC if they put pressure
on their sponsor to do so. – Of course, we were consulted on it. Of course, we had some role to play in it, but this was a decision
taken by the people of Nauru. – But others don’t believe it. – I can tell you this 100% for sure, that if TMC didn’t request Nauru to do it, Nauru wouldn’t have invoked it. So, you know, it’s very obvious where the pressure is coming from. – Anyway, the two-year rule got
triggered one way or another and guess what? The ISA didn’t finish the rule book, They didn’t finish the regulations. So now, as of 2023, people can start applying
for provisional licenses to start mining these
nodules in the deep sea. There would still be
some process around it, but the fact is like
it would start the race for actually starting to mine these things before we have all the
regulations worked out. – Why are we rushing the whole process just because one private company wants to start deep sea mining? – And TMC has said that
they’re gonna do it. They say that by the end of June, 2025, like in a few months from
when I’m filming this, they’re gonna apply for license. Meanwhile, the ISA is
gonna keep trying to create the regulations necessary to
protect the marine environment. But when you’ve got hundreds
of nations in a room trying to agree on something,
it doesn’t move quickly. I don’t imagine them agreeing
on all of this anytime soon. Okay, there’s new developments like we were just about
to publish this video and something big has happened. First off, Kiribati cut ties with TMC, so they’re no longer sponsoring TMC and apparently they’re talking to China about deep sea mining. But the bigger news is that
the Trump administration has come out and issued
an executive order, paving the way for the US to
go after deep sea minerals without any approval from the ISA. Wait, wouldn’t that be illegal? Technically, depends who you ask. The United States, if you
remember, hasn’t signed UNCLOS. They’re one of the few
countries in the world that is not a member nation of the ISA. So yes, this would be illegal
under international law. Back in the 1980s, the US passed a law that would technically let US
companies apply for licenses to go mine in international waters not having to go through the
ISA, but they’ve never used it. It’s sort of this US policy of being like, “We’ll
play by UNCLOS rules, but we’ll have this in our back
pocket in case we need it.” Well, the Trump administration
has deemed that we need it, the need to secure rare earth minerals and TMC is first in line to apply. This is a huge blow for
international maritime law and it’s getting a lot of backlash from the international community. And now, I finally understand
this moment in this interview that I had with Gerard a few months ago when we were talking about the ISA. And what do you think? Do you think that it is on a track to be the proper regulatory body to make sure that it is
done safely and fairly? – It could go either way. And I think people’s
patients are running out, because some of the wrong people are asserting too much control and they’re going to
have to be very careful, because if they overplay their hand, then it will be on their watch that lawlessness might
come back to the high seas. – Wow, I mean I would love
some more specifics on that if you could give me anything else. – It’s what I got for you now. – And he’s right. If the US decides to give TMC and other corporations
licenses to go mine in the CCC, this water that most of the
world has signed a treaty saying it belongs to everyone and that needs to be subject
to very specific regulations. If the US does this, then
it kind of represents some version of lawlessness. By some technical definition, they would be considered pirates, at least according to those
who signed the UNCLOS treaty, which is most countries in the world. So, this story which started
out as an interest in Nauru, and then got into deep sea
mining and ISA regulations is kind of ending with the US challenging the very basis of
international maritime law. Looking back at my conversation
with President Brotherson, it sounds like he also
kind of saw this coming. – We live in very challenging times. We don’t really know what’s
the next decision will be. Will ISA or the UN be able to prevent deep sea mining in international sea? Now, we might very well become the stage for a conflict around those resources that are at the bottom of the ocean. (solemn music) – Okay, so all of this gets us back to where we started this
story, the story of Nauru, a country that was left devastated after years of exploitation by outsiders rushing in for resources and mining them in an unsustainable way, leading them to become a party to another rush for resources, this time at the bottom of the sea. A rush that many worry will have similarly unforeseen, devastating impacts on our environment, this time
with global ramifications. It’s an irony that’s actually not uncommon in a post-colonial world, where even though we have changed a lot of the system, the effects and the power
dynamics still reverberate between the powerful and the weak. I haven’t seen anything
that says that Nauru or TMC or anyone out here in the CCC is acting nefariously or illegally. They’re acting rationally,
responding to the incentives and pushing up against the regulations that govern this
international body of water. And if anything, they’re
exposing the weaknesses in this framework of trying
to protect the environment and trying to make sure that
this benefits all of mankind. And nothing is for certain. We don’t know how this is gonna play out. We don’t know the environmental impacts and we don’t know if mining the deep sea will be an economically viable endeavor that will actually change
where we get these metals that we do indeed need for our future. So now, we wait and see how this little country, this big corporation,
and everyone out there teams up to go after
these little metal balls. And whether or not that does
end up benefiting all mankind or if as many fear this is a repeat of the exploitation and
destruction of an ecosystem that has unforeseen effects, effects that will not
be good for all mankind, here happening in this piece of ocean that belongs to all of us. – I’ll leave you with
one of the many legends that we have in our country. There’s an island and it’s the island from which the, all the migrations studied to populate Otuhaereroa, New Zealand,
Hawaii, Easter Island and the Thailand is called (indistinct). So back in time there were
two brothers, two fishermen. So, they went out on their
canoe and they started. They got fish, they caught fish, but they thought it was not enough. So, they went to a another
place and continued to fish and you know, their
canoe was already full, but they, it was not enough. They wanted more fish. So they went to another place, but they didn’t know that
was the sleeping ground of Rua Hatu, the god of the ocean. And he was taking a nap at
the bottom of the ocean. And Rua Hatu has this very curly and abandoned hair. So, they were fishing just above Rua Hatu and the lines got caught in his hair. So, he rose up from the ocean, very angry because he was awakened and he told the two fishermen, “Who are you to disturb
the god of the ocean? Who are you?” They got scared and
they presented excuses, but it was not enough. And Rua Hatu tell them,
“I’m going to punch you and I’m going to flood the island up to the highest mountain
called Mount Te-mehaniave. So he told them, “You
go back to the island and you tell all the population that they should gather
on the small islands. All the people who won’t
go to that small island will be flooded and die.” So they went back to the island of Raiatea and went to see Princess Airaro. And Princess Airaro listened
to them, but they didn’t care. They went home and ate all the fish. But Airaro she started
to gather her people and tell them, you know, “We’ve angry the God of the ocean, we should go and we should listen to him.” And so her people, a small group of people went to that small island and surely enough, it started
to rain and the ocean rose. And the whole island was
flooded and everyone died. Everyone but that small group of people around Princess Airaro that listen to the words
of the god of the ocean ‘cause that island was in fact a canoe that floated as the water rose. The question to us, children of humanity, is who do we want to be? Do we want to be those greedy fishermen that never had enough, or do we want to be the
followers of Airaro, who listen to the God of the ocean?