Investor-State Dispute Settlement mechanisms could allow mining companies to sue governments over decisions made to protect the environment [Photo: File]

Pacific governments could face costly legal challenges from foreign investors if they move to restrict or abandon deep-sea mining projects, according to a new report released by the Pacific Network on Globalisation.

The report warns that Investor-State Dispute Settlement, or ISDS, mechanisms could allow mining companies to sue governments over decisions made to protect the environment, regulate the industry or act in the public interest.

PANG Deputy Coordinator Adam Wolfenden says the issue presents a serious and growing threat to Pacific sovereignty as interest in deep-sea mining increases.

The report, authored by Professor Emeritus Dr Jane Kelsey, identifies five pathways through which ISDS commitments could affect Pacific governments.

These include bilateral investment treaties, deep-sea mining contracts with private companies, sponsorship agreements under the International Seabed Authority, domestic legislation and potential disputes linked to United States-issued deep-sea mining permits.

Dr Kelsey says mining companies are increasingly using ISDS provisions to challenge government decisions that may affect corporate profits.
She warns that the tribunals operate largely behind closed doors, with no appeal process, and that the cost and length of legal battles could pressure governments into abandoning public-interest policies.

The report highlights concerns for Tonga, Nauru, the Cook Islands and Papua New Guinea.

Civil society representatives from the region say communities need greater transparency over deep-sea mining agreements and the potential legal and financial liabilities they create.

The report also raises concerns over United States efforts to secure critical minerals through deep-sea mining, including its granting of extraction permits without international backing.

PANG says the issue of ISDS must be urgently addressed, not only in relation to deep-sea mining, but also as part of wider climate action and climate justice across the Pacific.