Comments of Southern Cross Cables Limited on the International Seabed Authority s Exploitation Regulations

Southern Cross Cable Network Level 5, Resimac House 45 Johnston Street, Wellington 6011 PO Box 5340 Wellington 6140, New Zealand Facsimile +64 4 499 7232 Telephone +64 4 496 3250 20 December 2017 BY ELECTRONIC SUBMISSION International Seabed Authority 14-20 Port Royal Street Kingston, Jamaica consultation@isa.org.jm Re: Comments of Southern Cross Cables Limited on the International Seabed Authority s Exploitation Regulations To the International Seabed Authority: Southern Cross Cables Limited ( Southern Cross ) respectfully comments on the draft Regulations on Exploitation of Mineral Resources in the Area of the International Seabed Authority (the Authority ) and issued for public comment. 1 Southern Cross is a submarine cable developer and operator in the Pacific Ocean region. It owns and operates the existing Southern Cross Cable Network ( SCCN ), which connects Australia, New Zealand, Fiji, and three landing points in the United States (Hawaii, California, and Oregon). it is also developing a new submarine cable system, Southern Cross NEXT, which will connect Australia and New Zealand directly with California and will likely traverse Contract Areas, Reserve Areas, and/or Areas of Particular Environmental Interest in the Clarion-Clipperton Zone. Southern Cross is pleased to see that the draft Exploitation Regulations seek to address the issue of submarine cable protection and coordination between submarine cables and Contractors. Installation of submarine cables is a key high-seas freedom established in article 87 of the United Nations Convention on the Law of the Sea ( UNCLOS ) and one expressly authorized in the Area. Southern Cross nevertheless believes it critical for the Authority to revise the Exploitation Regulations to include practical and forward-thinking provisions that ensure identification and 1 ISBA/23/LTC/CRP.3* (8 Aug. 2017) ( Exploitation Regulations ); Note by the Secretariat, Draft regulations on exploitation of mineral resources in the Area, ISBA/23/C/12 (10 Aug. 2017) (seeking comment on the Exploitation Regulations and posing general and specific questions for comment); Announcement from the Secretariat, Regulations on Exploitation of Mineral Resources in the Area (25 Aug. 2017) (establishing a 20 December 2017 comment deadline), https://www.isa.org.jm/news/draft-regulations-exploitation-mineral-resourcesarea.

protection of existing and planned submarine cables and that avoid foreclosing vast portions of the Area to new submarine cable installations. 2 Specifically, Southern Cross believes that the Authority should revise the Exploitation Regulations to: Recognize expressly the high-seas freedoms to install and maintain submarine cables and pipelines; Protect existing submarine cables and pipelines and repair thereof through inclusion of practical measures and avoid overly general or vague language that could be difficult for the LTC or applicants to apply; Require the LTC to assess mining Contractor Plans of Work to account for submarine cable and pipeline protection and decline to recommend Council approval for any Plan of Work that fails to include effective submarine cable and pipeline protection measures; Create a default separation distances from any existing submarine cable or pipeline that would apply absent agreement between the submarine cable owner and the mining Contractor for more proximate operations based on exchange of location information and equipment location technology; Revise the performance guarantee requirement to incorporate an obligation by the mining contractor to protect proximate submarine cables and pipelines in or adjacent to Contract Areas or suffer financial consequences; Ensure that LTC recommendations and Council actions on applications for exploitation activities do not foreclose protected routes for future submarine cables and pipelines through the Clarion-Clipperton Zone and other mining areas; and Require mining Contractors to perform due diligence to identify in-service and planned submarine cables and address their protection in any Plan of Work. Southern Cross addresses these views in further detail below. 1. Background on submarine cables and Southern Cross Paramount importance of submarine cables. Submarine cable connectivity is critical for enabling economic activity and safeguarding national security. This is particularly true for island nations in Oceania and the Pacific Ocean. Surrounded by oceans and geographically distant from many of the world s other population centers and economies, they must rely on submarine cables to connect to the rest of the world. Contrary to the popular misunderstanding, submarine cables not satellites, which are more expensive, less secure, and offer less than real-time communications carry approximately 99 percent of the world s intercontinental Internet, data, and voice traffic. Submarine cables ensure real-time access to web pages and Facebook content, 2 Southern Cross has long been a member of the International Cable Protection Committee ( ICPC ) and endorses ICPC s comments in this proceeding. See International Cable Protection Committee s Comments On International Seabed Authority s Draft Regulations On Exploitation Of Mineral Resources In The Area (filed 17 Nov. 2017). 2

processing of financial and credit-card transactions, seamless transmission of video conferences, and connectivity for government, military, and law enforcement personnel engaged in the most sensitive of activities. Southern Cross s submarine cable networks. At present, a significant percentage of the Internet, data, and voice traffic of between Australia, New Zealand, Fiji, and the United States travels over Southern Cross s SCCN, a highly-secure, high-speed network forming a figure eight, with a southern ring connecting Australia, New Zealand, Fiji, and Hawaii, and a northern ring connecting California, Oregon, and Hawaii. In 2017, Southern Cross announced that it would augment its original network by building Southern Cross NEXT, an industry-leading network with the fastest and most direct connectivity between Sydney, Auckland, and Los Angeles. SCCN and NEXT are owned by a group of investors in Australia, New Zealand, Singapore, and the United States. Southern Cross NEXT and the Clarion-Clipperton Zone. When SCCN was designed in the late 1990s, fiber-optic technology did not support the construction of fiber pairs within the cable connecting directly between Australia or New Zealand on one end and the United States on the other. Consequently, SCCN lands at Fiji and Hawaii. As of 2017, however, it is possible to construct an express fiber pairs between Australia/New Zealand and the United States (along with local fiber pairs connecting other jurisdictions in the Pacific Ocean). The most direct routing options for Southern Cross NEXT would all traverse the western portion of the Clarion- Clipperton Zone and one or more of the Contract Areas currently authorized for minerals exploration activities. Some route options also traverse Reserve Areas and Areas of Particular Environmental Interest ( APEIs ). Uncoordinated minerals exploitation poses a significant risk to submarine cables. Uncoordinated deep seabed mining activities including both exploration and exploitation activities pose a significant risk of damage to submarine cables and continuity of communications through: Direct physical disturbance by equipment on the seafloor, sampling and coring activities, and exploitation of minerals through extraction of tons of seafloor sediment per hour; Abrasion of the cable through contact with minerals and sediments in the course of mineral extraction; Disturbance of out-of-service telecommunications and telegraph cables, over which active submarine telecommunications cables may be laid; and Destabilization of the seabed, which could suspend the cable above the seafloor and increase the risks of damage from abrasion and contact with other mining equipment. Contact between submarine cables and mining equipment could also damage that mining equipment. Although treaties establish the liability rules for damage to submarine cables, it is in the interest of submarine cable operators and Contractors to establish coordination mechanism that avoid resort to such liability rules. 3 Some mining contractors, however, have taken the 3 See, e.g., Convention for the Protection of Submarine Telegraph Cables, art. II (Paris, 14 Mar. 1884) (establishing an offence for willful or culpably negligent damage to submarine 3

position that they have a right and a duty to explore and exploit every meter of their contract areas, regardless of the presence of submarine cables. This is particularly concerning given the experience with the Honotua submarine cable system, where the Authority entered into a Contract for exploration directly over the submarine cable even though the cable had already been in operation for nearly eight years. Submarine cables are best protected through spatial separation from other marine activities. Submarine cables in deep sea areas have the diameter of a garden hose and are unarmored. Even if it was possible to armor them with steel wire rod at such depths, such layers would not fully protect submarine cables from contact with mining equipment and mineral harvesting activities currently contemplated by mining Contractors. As with risks from other marine activities, risks from deep seabed mining are best mitigated through spatial separation and coordination between the submarine cable operator and mining contractor. 4 Most recently, the International Hydrographic Organization ( IHO ) adopted revisions to IHO Resolution 4/1967 (Submarine Cables) providing for physical separation of submarine cables and vessels of 0.25-nautical mile on either side of submarine cable. 5 Submarine cable repair activities, which are rarely needed in the deep ocean because most cable damage occurs at shallower depths in coastal areas, require much greater spatial separation from other marine activities. 6 These recommendations for cables); UNCLOS art. 113 (directing each State to adopt laws and regulations establishing liability for willful or culpably negligent damage to submarine cables caused by ships flying its flag or persons subject to its jurisdiction). 4 See, e.g., ICPC Recommendation No. 2, Issue 11, Recommended Routing and Reporting Criteria for Cables in Proximity to Others (3 Nov. 2015) (recommending spacing of three times the depth of water between parallel submarine cables); U.S. Federal Communications Commission, Communications Security, Reliability, and Interoperability Council, Final Report Protection of Submarine Cables Through Spatial Separation (Dec. 2014), https://transition.fcc.gov/pshs/advisory/csric4/csric_iv_wg8_report1_3dec2014.pdf (recommending default separation distances between submarine cables and other marine activities of (a) 500 meters in water depths of less than 75 meters and (b) two times the depth of water at greater depths). 5 List of Decisions, 1st Session of the IHO Assembly (24-28 April 2017), available at https://www.iho.int/mtg_docs/council/c1/en-list%20of%20decisions%20a1_final.pdf (stating that in view of the serious consequences resulting from damage to submarine cables, vessel operators should take special care when anchoring, fishing, mining, dredging, or engaging in underwater operations near areas where these cables may exist or have been reported to exist. In order to minimize the risk of such damage as much as possible, vessels should avoid any such activity at a minimum distance of 0.25-nautical mile on either side of submarine cables. ). 6 A damaged submarine cable is retrieved using grapnels and cut, if is not already severed from the cable damage (as cables are laid under tension), so that it may be repair on board the cable ship. A section of new cable typically two-and-a-half times the depth of water in length) must be spliced in as part of the repair to reconnect the cable ends brought to the surface. This final configuration (known as a bight) must be carefully placed back on the 4

spacing to accommodate repairs recognize that ideal separation is often not achievable, and they are therefore flexible and encourage coordination among marine activities as early as possible in project planning. Southern Cross believes that the reasonable regard obligations of UNCLOS article 147(1) should be implemented in practical terms through spatial separation and coordination principles. 2. Recommended revisions to the Exploitation Regulations a. Regulation 1(4) should expressly recognize the freedom to install Submarine Cables and Pipelines Southern Cross recommends that the Exploitation Regulations should expressly acknowledge the freedom to install submarine cables, along with all high-seas freedoms enumerated in UNCLOS. As presently drafted, Regulation 1(4) appears to privilege marine scientific research ( MSR ) above other high-seas freedoms enumerated in UNCLOS article 87. That regulation also omits any reference to UNCLOS article 112(1), which provides that all States are entitled to lay submarine cables and pipelines on the bed of the high seas beyond the continental shelf. Southern Cross recommends that Regulation 1(4) be revised to state: Nothing in these Regulations restricts the exercise by States of high-seas freedoms enumerated in Articles 87, 112, 143, and 256 of the Convention, including the freedom of navigation, the freedom of overflight, the freedom to lay submarine cables and pipelines, the freedom to construct artificial islands and other installations permitted under international law, the freedom of fishing, and the freedom of marine scientific research. b. The Authority should require that the applicant identify existing and planned submarine cables and pipelines, consult with the operators of such infrastructure, and develop a Plan of Work to mitigate the risks of damage to any such submarine cables and pipelines Southern Cross recommends that the Authority revise the Exploitation Regulations and associated application and contracting documents to address an applicant s obligations to identify and protect submarine cables and pipelines. While the general statements and references in Regulation 26 ( each Contractor shall exercise due diligence to ensure that it does not cause damage to submarine cables or pipelines in the Contract Area ) and Sections 6.2.6 and 9.2.1.6 of the Environmental Impact Statement Template (Annex V) (requiring the applicant to identify and assess impacts on telecommunications cables ) are helpful in terms of general principles, they provide insufficient practical guidance to applicants and could deprive the LTC of critical information needed for its deliberations (as addressed further in part 2(c) below). The Environmental Scoping Report (Annex IV) should require identification of submarine cable and pipeline infrastructure in or adjacent to the proposed Contract Area. seabed in a direction perpendicular to the line of the original cable so that the cable lies flat on the sea floor and does not throw loops. 5

Section 6.2.6 of the Environmental Impact Statement Template (Annex V) should require the applicant to identify existing and planned submarine cables and pipelines in or adjacent to a proposed Contract Area using nautical charts and other publicly-available information. Section 9.2.1.6 of the Environmental Impact Statement Template (Annex V) should require the applicant to assess the potential impact of exploration activities on existing and planned submarine cables and pipelines in or adjacent to a proposed Contract Area and to propose submarine cable and pipeline protection measures, including default separation distances and/or the details of any mitigation agreed with the submarine cable or pipeline owners, including the use of equipment locating technology such as acoustic beacons. Section 13.2 of the Environmental Impact Assessment Template (Annex V) Should require the identification as stakeholders the operators of any submarine cables or pipelines identified in Sections 6.2.6 and 9.2.1.6. The obligation to address submarine cable and pipeline protection in the Environmental Scoping Report and the Environmental Impact Statement should be cross-referenced in Regulation 4(3), to call out the specific obligation of submarine cable and pipeline protection, and in Annex X, Section 3.3, to require Contractor compliance with any submarine cable and pipeline mitigation measures submitted as part of a Plan of Work approved by the Council. c. Regulations 7(4) and 10(3) should require the LTC to evaluate the potential impact of a Plan of Work on existing and planned submarine cables and pipelines To address the reasonable regard obligation of UNCLOS article 147 in practical terms, taking into account the rights and freedoms in UNCLOS articles 87 and 112, the Exploitation Regulations should require that the LTC assess protection of submarine cables and pipelines in any Plan of Work before making a recommendation to the Council. Regulation 7(4) should require the LTC to evaluate whether a Plan of Work involves a Contract Area traversed by or adjacent to an existing or planned submarine cable or pipeline and if so whether the Plan of Work includes mitigation measures that would be sufficient to protect any such submarine cable or pipeline. Regulation 10(3) should direct the LTC should decline to recommend that the Council approve a Plan of Work if it would fail to provide sufficient protection to an existing or planned submarine cable or pipeline. d. Regulation 9 should require the use of a performance guarantee to ensure protection of submarine cables and pipelines Regulation 9 provides for the possibility of a performance guarantee from the Contractor in respect of the performance of its obligations, undertakings or conditions in a Plan of Work or proposed exploitation contract. Consistent with the submarine cable protection objectives identified in the existing draft of the Exploitation Regulations, Southern Cross believes that the Authority should revise Regulation 9 to require a performance guarantee for Contractor activities 6

conducted in proximity to an existing submarine cable or pipeline and the withholding of repayment or release of the Performance Guarantee in the event the Contractor damages a submarine cable or pipeline. e. Regulation 41 should include a two-way notification process for suspected contact by a contractor with a submarine cable or pipeline Because a submarine cable or pipeline operator may learn of contact with a Contractor s equipment before the Contractor does, the Authority should revise Regulation 41 to permit notifications to the Secretary-General of suspected physical contact with a submarine cable or pipeline. As drafted, Regulation 41 contemplates only that the Contractor will notify the Secretary-General. The network management systems used by submarine cable operators would immediately detect any damage affecting the communications stream or conduct of electrical power on the submarine cable. The possibility of notification by the submarine cable operator would ensure that the Authority receives timely notification of contact incidents, including situations in which the Contractor is unaware of such contact or fails, for whatever reason, to notify the Authority of such contact. f. The Exploitation Regulations should protect future submarine cables and pipelines and avoid route foreclosure Southern Cross notes that it is impossible for any party operating in the marine environment to anticipate future events and circumstances. The Exploitation Regulations, however, use the term update only in connection with the Closure Plan (Annex VIII) in spite of the fact that Regulation 13 contemplates an initial 30-year term for exploitation. Southern Cross believes that the Authority should include in the Exploitation Regulations a mechanism for updating Environmental Management and Monitoring Plans to address the potential for future submarine cables and pipelines, and perhaps other changes in the marine environment of a Contract Area. Specifically, Contractors should update their Environmental Management and Monitoring Plans at specified intervals and also in response to occurrences such as the subsequent installation of new infrastructure. The Exploitation Regulations should interpret the reasonable regard obligation of UNCLOS article 147(1), the high-seas freedoms of articles 87, and article 112 right to install submarine cables and pipelines in the Area to avoid foreclosure of routes for future submarine cables and pipelines. In the case of the Clarion-Clipperton Zone, active Contract Areas and Reserve Areas form an unbroken band of potential mining activity across more than 4,000 of the Pacific Ocean. Regulation 10(3) should be revised to provide that the LTC should decline to recommend Council approval of a Plan of Work if the Plan of Work would result in an excessively large area of contiguous Contract Areas that could impair the installation of new submarine cables and pipelines on particular service routes. Southern Cross commends the Authority for seeking input from interested stakeholders in on the Exploitation Regulations and would be grateful for the Authority s careful consideration of the 7

points raised in this submission. Southern Cross will continue to engage with the Authority and other stakeholders as the Authority further develops the regulatory regime for exploitation. Respectfully submitted, Attachment Dean Veverka Director Networks and Vice President Operations Southern Cross Cables cc His Excellency Michael Lodge (Secretariat) Dr. Christian Reichert (LTC) Ms. Gaia Puleston (Government of Australia) Ms. Alice Revell (Government of New Zealand) Mr. Graham Evans (International Cable Protection Committee) Mr. Keith Schofield (International Cable Protection Committee) Mr. Kent Bressie (Harris, Wiltshire & Grannis LLP, counsel for Southern Cross Cables Limited) 8