## Facts

- The International Seabed Authority (ISA) regulates exploration and exploitation of mineral resources in the international seabed (“the Area”), which is beyond national jurisdiction and designated the common heritage of mankind.
- Entities seeking to conduct activities in the Area may contract with the ISA only if they are sponsored by a State Party to the United Nations Convention on the Law of the Sea (UNCLOS).
- The ISA Council requested an advisory opinion from the Seabed Disputes Chamber concerning the legal consequences for States that sponsor contractors conducting activities in the Area.
- The request arose against a background of sponsorship for exploration applications, but the proceeding was advisory rather than a contentious dispute between States.
- The Chamber addressed its competence to provide the opinion and proceeded to answer the Council’s questions under UNCLOS, the 1994 Implementation Agreement, and relevant ISA regulations.

## Issues

1. What responsibilities and obligations do sponsoring States have regarding activities in the Area carried out by sponsored entities?
2. What is the extent of a sponsoring State’s liability when a sponsored entity fails to comply with applicable obligations?
3. What “necessary and appropriate measures” must a sponsoring State adopt to meet its responsibilities under UNCLOS and related instruments?

## Decision

- The Chamber concluded that a sponsoring State has a stringent obligation of conduct—due diligence—to ensure that sponsored activities conform to UNCLOS, the 1994 Implementation Agreement, and ISA rules and contract terms.
- The Chamber held that sponsoring-State liability is not strict; it arises only if (i) damage occurs, (ii) the contractor’s noncompliance caused the damage, and (iii) the sponsoring State breached its own due diligence obligations and that breach contributed causally to the damage.
- The Chamber stated that the contractor bears primary liability; State liability is secondary and depends on the State’s own failure to act with due diligence.
- The Chamber determined that sponsoring States must adopt and maintain laws, regulations, and administrative measures reasonably appropriate to control contractors, and such measures must be no less effective than ISA rules.
- The Chamber recognized that multiple sponsoring States each have independent due diligence duties; responsibility and liability may be apportioned according to each State’s failure to comply.

## Legal Principles

- Sponsorship creates a “responsibility to ensure” compliance by the sponsored entity, functioning as an obligation of conduct requiring due diligence rather than a guarantee of zero harm.
- The content of due diligence is variable and may intensify with higher risks and advancing scientific knowledge.
- Sponsoring States must apply the precautionary approach, require best environmental practices, and ensure environmental impact assessment before authorizing activities likely to cause significant harm.
- A sponsoring State avoids liability if it has taken all necessary and appropriate measures within its legal system to secure effective compliance by the sponsored entity.
- National measures must provide effective oversight (licensing, monitoring, and enforcement) and include verification that contractors have adequate technical and financial capacity to comply with environmental and operational obligations.

## Conclusion

The Seabed Disputes Chamber clarified that States sponsoring deep seabed activities must exercise stringent, risk-sensitive due diligence through effective domestic regulation and oversight, and that State liability for contractor misconduct is fault-based and secondary, attaching only when the State’s own breach of due diligence contributes to environmental or other damage.


Responsibilities & Obligations of States with Respect to Activities in the Area, Case No. 17, 2011 I.T.L.O.S. Rep. 10 (Seabed Disputes Chamber Feb. 1, 2011)