When Pacific leaders gather to discuss the future of deep-sea mining, the conversation often centres on economic opportunity. For Tonga, that promise has come with a complicated legal trade-off now drawing scrutiny across the region.
A recent legal analysis by the Pacific Network on Globalisation, or PANG, raises questions about a sponsorship agreement between Tonga and Tonga Offshore Mining Ltd. The report suggests the deal may grant sweeping protections to the investor while limiting Tonga’s ability to regulate its own resources.
“It is not possible to select just one provision, as the package of rights, plus jurisdiction, enforcement and termination, cumulatively create a deeply problematic agreement,” said Adam Wolfenden, PANG’s deputy coordinator.
“The additional provision that requires Tonga to do all things reasonably necessary to give effect to TOML having the full benefit of the agreement is the broadest, most uncertain and most unpredictable.”
The agreement comes at a time when Pacific Island countries are weighing the potential benefits of deep-sea mining against environmental risks and evolving international rules. Discussions are ongoing at the International Seabed Authority, which is still developing a regulatory framework for the industry.
One of the most significant concerns raised in the analysis involves the location for dispute resolution. Under the agreement, legal challenges would be heard in Singapore under the UN Commission on International Trade Law.
“By moving disputes, Tonga’s legal sovereignty is affected because it removes the final authority of Tongan courts to interpret and decide disputes arising from the agreement,” Wolfenden said. “It also weakens domestic accountability because arbitration processes tend to be more private than court proceedings, which limits public access.”
The agreement also limits the application of domestic law. Wolfenden noted that Tongan law may be set aside if it conflicts with the company’s rights under the contract, except for the Seabed Minerals Act as it existed at the time of signing. Future amendments that could affect the company’s interests may be restricted.
Arbitration proceedings under international law are generally less public than domestic court cases, which could limit oversight by both the public and lawmakers. “There is no accountability for government to its people or parliament,” Wolfenden said.
“That includes what arguments are made, any settlements reached and the fiscal commitment of taxpayer funds as damages.”
The analysis places the agreement within a broader global context, describing it as similar to older investment treaties that prioritise investor protections.
“Investors bring most disputes under old bilateral investment treaties because that is easiest,” Wolfenden said. “But statistics from (U.N. Trade and Development) show that disputes under old and new agreements are increasing in number and scope, especially on natural resources and extraction.”
He added that some countries, such as New Zealand and Australia, have dropped investor-state dispute settlement mechanisms in newer agreements, signaling ongoing concerns about the system.
Those mechanisms allow investors to bring claims against governments in international tribunals. According to Wolfenden, the financial stakes in such cases can be significant.
“About 60 percent of all (investor-state dispute settlement) cases involved damages claims of US$100 million and higher, including cases where investors sought more than US$1 billion,” Wolfenden said. “The past decade shows a shift toward higher damages claims and awards.”
Central to the agreement is a clause requiring “fair and equitable treatment” of the investor. Wolfenden said the wording could limit Tonga’s ability to adapt its laws over time.
“This requires a stable and predictable legal framework, meaning laws, regulations, policies and even judicial interpretations do not change from the time of the original agreement,” he said. “It also requires alignment
with the investor’s legitimate expectations, which can be based on formal or informal statements by officials.”
Wolfenden said the effect is to lock in the regulatory environment at the time the agreement is signed, regardless of future developments.
Another provision highlighted in the report relates to the concept of “full protection and security.” Wolfenden said the clause could be interpreted broadly, potentially affecting how governments respond to protests or legal challenges.
“The legal protection provisions requiring the blocking of legal action are in direct conflict with the right to dissent,” he said, adding that such provisions could have a chilling effect on both public participation and government decision-making.
“Chill can come from direct threats by the investor, self-censorship by officials or reference to disputes in other countries,” he said. “This is especially likely in areas like critical minerals, where risks are still being understood.”
Supporters of deep-sea mining have pointed to its potential to generate revenue and support economic development. But the analysis emphasises the need for caution, particularly given the limited scientific understanding of deep-sea ecosystems.
“In situations where risks are not known, a precautionary approach is essential because harms to ecosystems and fisheries cannot be undone,” Wolfenden said.
“Governments taking short-term approaches to secure revenue will have to deal with those longer-term consequences.”
Civil society groups in Tonga have echoed those concerns. Latai Halafihi of the Civil Society Forum of Tonga warned that moving too quickly could expose the country to legal and environmental risks.
“Tonga must not be rushed into deep-sea mining at the expense of our sovereignty, environment and future generations,” Halafihi said.
Reverend Ikani Tolu of the Tonga National Council of Churches also called for a cautious approach, citing knowledge gaps and potential long-term impacts.
“No doubt deep-sea mining poses significant, largely irreversible ecological risk and socio-economic uncertainties for Tonga,” he said.
Looking ahead, Wolfenden said Pacific nations should take a more cautious and locally grounded approach when entering similar agreements. “Pacific nations have the right to determine their own safeguards and regulatory approach, grounded in Pacific values rather than those imposed by external forces,” he said.
He recommended measures such as ensuring free, prior and informed consent from affected communities, improving transparency in negotiations and conducting independent environmental and scientific assessments before approval.
Wolfenden also noted that many countries in the region support a pause on deep-sea mining until more is known and clearer international regulations are in place.
“Governments are seeing the risk of deep-sea mining and want to ensure that clear regulatory frameworks are established before even considering if it should proceed,” he said.
