Regulatory Framework

In order for the Cook Islands to benefit from its rich seabed mineral resources, it will need to attract investment in the exploration for and exploitation of those resources. To attract the desired investment, it must first establish an enabling environment for investors which is based upon international best practices and modern regulatory arrangements.

The economic and social impact of large-scale mining operations in the Cook Islands is likely to be significant and far-reaching. Therefore the Cook Islands must act with prudence and caution in seeking to encourage seabed mineral activity. Necessary measures must be undertaken to ensure that the country is prepared for the commencement of seabed mineral activity and that such activity is properly regulated and conducted responsibly.

Regulatory Bodies
Under the Seabed Minerals Act 2009, the Minister for Minerals and Natural Resources has responsibility for the overall management of the seabed minerals sector. The day-to-day regulation of seabed minerals activity is the responsibility of the Seabed Minerals Authority, headed by the Seabed Minerals Commissioner. In addition, the Act establishes a Seabed Minerals Advisory Board - a body created to operate as the formal avenue for the representation of the interests of the Government and society in decision-making concerning the management of aspects of the seabed minerals sector.

Licensing System
The main regulatory tool for the management of the seabed minerals sector is a standardised licensing system under which private sector participants (seabed mining companies) will be apply for licences to be authorised to carry out seabed prospecting, exploration and exploitation operations in return for the performance of explicit and enforceable obligations. The objective of the licensing system is to ensure that mineral rights are allocated only to mining companies that possess the requisite finance, expertise, experience and reputation to support the conduct of seabed mineral exploration and exploitation in the Cook Islands.

A standardised licensing system enables mineral operations to be conducted on a stable, predictable basis and ensures equal treatment of investors. It also enhances the capacity of Government authorities to administer the system efficiently and transparently. This, in turn, forms the basis for accountability to the people of the Cook Islands.

There are four types of seabed mineral licences available to suit the various phases of seabed mineral activity. These are: prospecting, exploration, retention, and exploitation licences. A seabed mineral licence holder is guaranteed security of rights, including the right to proceed from exploration to minerals exploitation once the commercial feasibility of mining has been established, in return for the satisfactory performance of the required specific and enforceable commitments by licence holders, as set by the Seabed Minerals Authority and recorded as terms and conditions of the licence..

The Authority will be undertaking an international tender bidding process for the issue of exploration licences in 2013, based on best international practices. The Commonwealth Secretariat will be assisting with this process.

RESERVE AREAS
The additional option for the Cook Islands is to reserve parts of the seabed minerals nodule zones for national strategic purposes. This can permit the undertaking of special arrangements which are of superior national benefit to the Cook Islands, over and above the standard Tender Licencing process in the area reserved for Tender Applications. All Applications will be required to fulfill the standard Application requirements under the Act.
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