Of ‘crooked timbers’ – and crooks: Part 3, global governance

A pirate ship attack, (painting by Ambroise Louis Garneray, Public domain, via Wikimedia Commons)

Parts 1 and 2 of this series looked into issues of governance, public and corporate. Let’s now consider what happens at a global level when states and corporations are also involved.

[Shortly after I wrote this piece, The Economist published a story about Chinese interest in mining the seabed in the CCZ. The story attributes it to strategic interests even more than commercial ones. This story looks like an example of the tragedy of the commons (Hardin, 1968), an issue I’ll return to soon.]

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Until the late 19^th century, and for centuries before that, shipwrights had to make do with crooked timbers as they sculpted the vessels that plied the oceans looking for treasure, yes, and lands to conquer. The crooked timbers of humanity (Berlin, 2013), the complex, messy things we know as people, were also on board. Those ships and their crews also brought spices to give food exciting flavours, and raw materials to enable the other craftspeople in their home countries to turn ideas into objects. When the ships left their home waters they entered a lawless zone, a zone not of crooks but of pirates. Crooks break the law. Pirates operate where there is no law.

Decades ago, as a young journalist in New York, my beat involved writing about mining for the obscure metals – titanium, molybdenum, manganese, lithium, cobalt and rare earths – the stuff that makes steel stronger, aircraft lighter, batteries smaller and much more powerful. The third of those functions is even more in demand now, as we switch so many of our activities to electricity. But even all those decades ago, there was a scramble on to find new sources of those metals, including under the oceans.

A lot of my reporting then concerned the United Nations Conference on the Law of the Sea. One of its aims – and the most contentious one – was to regulate undersea mining, in effect to turn pirates into crooks. The negotiations quickly became bogged down, stuck in the swamplands of global governance. It took a decade to reach any sort of agreement, a “convention”, and another decade to establish the International Seabed Authority, which now brings together the governments of 167 countries. But even with their agreement, it can’t control the high seas. Why? The United States didn’t sign the convention. It’s only an observer. China didn’t either – and it isn’t even observing.

These memories came flooding back as I watched an episode of John Oliver’s “Last Week Tonight”, which aired where I live on June 9. It’s too long and complex a story to detail here. (There’s a review of the show on the Guardian website[i], if you’d like more details.) It generated a lot of controversy.

Oliver is a political comedian, and this episode is seriously funny, with emphasis on seriously. He reports on the interactions between TMC The Metals Company, with International Seabed Authority (ISA) to mine nodules under the Clarion-Clipperton Zone (CCZ) in the Pacific. TMC won support from several Pacific island states and gained ISA favour. The project says it will contribute to how the world deals with climate change, by recovering metals vital to electrification of society. It will avoid the messy politics of sovereignty in mining for them in conventional ways. Much of the known rare earths on land are in China and Mongolia. Much of the world’s cobalt sits in the Democratic Republic of Congo.

But the mining the ocean floor threatens seabed life. The life forms, especially those present in the CCZ, contribute much of the ocean’s ability to absorb carbon dioxide from the atmosphere. Without them, temperatures on land could rise much faster. Mining undersea could soon prove a self-defeating proposition, though a lucrative one in the short term. The island states supporting TMC’s plan are among the most threatened by rising sea levels owing to climate change. There’s further context in footnote [ii], below. Our concern here is the sort of process we can use to sort out such messes. It is important, and not just for this incident. And it isn’t easy.

Regulation fails when the regulator identifies too closely with companies it is meant to oversee. Scholars call that “regulatory capture” (Hiatt & Park, 2013; Laffont & Tirole, 1991). It’s hard enough to manage this when the regulation takes place in one country, with one set of laws, answering to one version of sovereignty. But when the problem affects everyone and we have to move beyond corporate and even national governance to global governance, the possibilities for capture rise exponentially. If Oliver’s reporting is correct, this is a great, or rather terrible, illustration of it.

Is there a way out of regulatory capture when the issue at stake is global? Two senior members of the Berggruen Institute in Los Angeles suggest this approach, one that involves states accepting that they may not be competent and yielding sovereignty over certain issues to others:

How can we organise such a complex system of governance? How should we decide which authorities should be allocated where? Our answer builds on the centuries-old principle of subsidiarity. The principle of subsidiarity states that in a multilayered governance system, larger-scale institutions shouldn’t intervene in a decision or task unless and until a smaller-scale institution cannot do it themselves. In other words, the authority to make decisions should be made at the smallest scale capable of functionally governing the issue at hand. …

To be sure, sovereign states can then decide to delegate certain authorities, if they wish, to international organisations, subnational governments or private actors, but the international system today puts nation-states in the driver’s seat. … By contrast, subsidiarity understands that while states are good for some things, they aren’t good for everything. States should have authority over the issues that fit them, but authority over other issues should move to institutions at other scales with a better fit (Blake & Gilman, 2024).

Those ideas might well work for more localised disputes, ones that don’t matter that much, where ceding sovereignty isn’t such a big issue.

But would that approach work when climate change is the issue, or when superpowers invoke “national security” to seize bits of uninhabited oceanic rocks? Fat chance, when two decades of attempts to bring sovereignty under a UN agency fail to gain support of the two superpowers, and when small states give their support – or did they sell it? – to an effort that could threaten their existence. Crooked timbers or crooks? This looks like another case of …

Berlin, I. (2013). The Crooked Timber of Humanity: Chapters in the History of Ideas (Revised, 2nd ed.). Princeton, NJ: Princeton University Press.

Blake, J. S., & Gilman, N. (2024, July). Governing for the planet: Nation-states are no longer fit for purpose to create a habitable future for humans and nature. Which political system is? A contribution to Aeon.co. Retrieved from https://aeon.co/essays/why-planetary-problems-need-a-new-approach-to-politics

Hardin, G. (1968, December 13). The Tragedy of the Commons. Science, 162, 1243-1248. Retrieved from http://www.sciencemag.org/cgi/reprint/162/3859/1243.pdf

Hiatt, S. R., & Park, S. (2013). Lords of the Harvest: Third-Party Influence and Regulatory Approval of Genetically Modified Organisms. Academy of Management Journal, 56(4), 923-944. doi:10.5465/amj.2011.0128

Laffont, J.-J., & Tirole, J. (1991). The Politics of Government Decision-Making: A Theory of Regulatory Capture. The Quarterly Journal of Economics, 106(4), 1089-1127. doi:10.2307/2937958

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[i] The Guardian reported on the segment the next day. The programme itself is on YouTube, but access to it is geographically limited.

[ii] TMC’s news release for the first quarter of 2024 said: “The Company through its subsidiaries holds exploration and commercial rights to three polymetallic nodule contract areas in the Clarion Clipperton Zone of the Pacific Ocean regulated by the International Seabed Authority and sponsored by the governments of Nauru, Kiribati and the Kingdom of Tonga.” None of these island states in the Pacific Ocean is particularly close to the CCZ, but all three are threatened by rising sea levels, and thus have a profound interest in mitigating the effects of climate change owing to carbon emissions.

In December 2022, TMC was delisted from Nasdaq after its share price traded below $1 for 30 consecutive days. On that occasion, Arlo Hemphill, Greenpeace USA Deep Sea Mining campaign lead, said: “In 2021, we sounded the alarm about TMC and the dangers of the deep sea mining industry to our oceans, climate, and communities. Today those concerns have only grown as we learn more about TMC’s questionable relationship with the deep sea mining regulatory body, the International Seabed Authority, which allowed it to gain control of some of the most valuable tracts of the ocean floor. This is in addition to TMC’s concerning neo-colonialist approach that disregards the impact the industry will have on the lives and livelihoods of Indigenous Peoples in the Pacific. The planet and communities are already suffering the consequences of the climate crisis and biodiversity loss.  The last thing we need is a new extractive industry that would only make things worse.”

But times change. Like a yo-yo. In February 2023 it won the right to resume trading on Nasdaq, then had to delist again in April. After ups and downs, TMC recently – March 12, 2024 – got a boost from a bill introduced in the US House of Representatives (H.R. 7636) with the purpose: “To support international governance of seafloor resource exploration and responsible polymetallic nodule collection by allied partners, strengthen domestic processing and refining capabilities, and for other purposes.” It was introduced by Rep. Carol Miller, a West Virginia Republican, and five co-sponsors, all Republicans.

The Environmental Justice Foundation issued a briefing for investors about the period of deep sea mining.