Cook Islands taps ADB as ‘honest broker’ to refine deep-sea mineral framework

Prime Minister Brown.

Cook Islands intends to utilise the Asian Development Bank (ADB) as an ‘honest broker’ to refine regulatory and financial frameworks for deep-sea minerals, amid concerns raised by environmental advocates.

Prime Minister Mark Brown highlighted this during an interview with CNBC (Consumer News and Business Channel) on the side-lines of the Asian Development Bank’s 59th Annual Meeting in Uzbekistan this week.

“The ADB has started this initiative to support member countries that have critical metals. A little bit different in our regards because our critical metals are in the deep ocean,” Brown told CNBC.

“But the work that we see the ADB assisting us with is, in providing, as an honest broker, credibility in things like peer review, assistance on legislative development, sovereign wealth fund development.”
The Prime Minister stated that the government would seek support from the ADB for areas surrounding the minerals industry, rather than direct investment in the industry itself.

“We would look at private sector coming into that area (investment).”

According to Brown, the Cook Islands is in a fortunate position within the seabed minerals industry.

“We’ve developed our own regulatory framework. We have put in place legislation, regulations, standards and guidelines, which basically govern how activities are undertaken in our deep ocean and on our ocean,” he said.

“What we look to do with the Asian Development Bank is further assistance in things like cross-boundary taxation measures and in specialist legislation that perhaps we could seek assistance from the bank in supporting and financing.”

PM Brown views critical minerals as a key part of the Cook Islands economy in the next decade or so, citing COVID-19 as a hard-learned lesson in the necessity of economic diversification.

“Our heavy reliance on tourism where we came from a high-income country to a low-income country overnight really lends itself now to us looking seriously at diversification,” he said.

“Our minerals programme is an area where we can build and support the economy and build economic resilience to the impacts of external shocks.”

However, concerns have been raised regarding the government’s projected economic benefits from seabed mining, with critics arguing that the Cook Islands would not see significant gains from the industry.

According to Te Ipukarea Society (TIS), a non-government environmental group, deep-sea mining has been framed as a rare and timely opportunity to generate revenue and strengthen economic independence.

In a recent op-ed published in this newspaper, TIS also noted that these minerals are increasingly valued for strategic and military purposes, raising new ethical and geopolitical concerns.

“Deep-sea mining is often portrayed as a lucrative opportunity, yet the financial realities remain uncertain,” TIS stated. “Operating at depths of around 4000 metres below sea level presents enormous technical challenges and costs.”

“Much of the processing and economic benefit is likely to occur offshore, raising serious questions about how much value will actually remain within the Cook Islands.”

According to TIS, the environmental consequences, potentially long-lasting and irreversible, will be borne by local communities and ocean-dependent livelihoods.

Cook Islands Seabed Minerals Authority (SBMA), the government agency tasked with the management and regulation of all seabed minerals activity, said the country is still in an exploration-only phase.

“It does not give a company permission to harvest minerals,” SBMA said. “It allows research, mapping, sampling, and environmental work to continue while the country builds its understanding of what is in our deep ocean and what the risks may be.”

“SBMA has stated publicly that no commercial extraction can happen without separate and extensive approvals.”

PM Brown also reiterated that the government has been very clear that the exploration phase must be completed before any mining could be considered.

“The exploration phase is an opportunity for licence holders to answer the questions that we have. Questions on the biodiversity that exists in our deep ocean. Questions on the impacts that it may have on our deep ocean,” he told CNBC.

“This allows us to make a much more informed decision going forward on whether we do go ahead with the extraction of minerals from our deep ocean.”

According to SBMA, if the Cook Islands ever consider mineral harvesting, strict conditions would need to be met, adding that it does not make such decisions independently.

“SBMA would assess whether any proposed activity is technically, financially, and socially sustainable for the Cook Islands,” it said. “The National Environment Service would determine whether environmental risks can be properly managed.”

The SBMA has officially extended its seabed mineral exploration for five years, effective upon the expiration of the current term in February 2027.

The three companies granted five-year licences for seabed mineral exploration in the Cook Islands, as of 2022 are Cook Islands Cobalt (CIC) Limited, Moana Minerals Limited and CIIC Seabed Resources Limited (sometimes referred to as Cobalt Seabed Resources or CSR).

Written by Losirene Dasalusalu | Published in Economy, Environment, National