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Welcome to World Ocean Radio…
I’m Peter Neill, Director of the World Ocean Observatory.
Insurance is defined as the “equitable transfer of the risk of a loss, from one entity to another in exchange for payment.” Insurance is a pervasive element in our lives: fire and security, automobile, bank account, savings, mortgage, business, life – there, and everywhere as a purported means of protection against accident, circumstance, that in a litigious society of torts and regulation enables a brisk business in protection, a transfer that is equitable only when one entity has a claim that the other may or may not acknowledge and compensate the loss. We live in a climate of “trip and fall,” hoping that we can be protected by an international system of premium and reimbursement for accident and fate.
Insurance also invented its own protection: re-insurance, where risk is double-covered by a second entity assuming the payout risk of the first. It is one of the great “confidence” schemes of modern times, involving billions of dollars and covertly, sometimes overtly, affirming or denying enterprise and invention, regardless.
A major case in point these days is the challenge of deep-sea mining. Our lust for oil, gas, and minerals has found its last outlet in the ocean where thousands of off-shore platforms drill into the ocean floor where new supply can be found, with the risk of spill and accident now well documented by disastrous consequence measured by the full value of the loss of a coastal or offshore ecosystem. Our inshore supply has been exhausted, thus, to maintain our social expectations, our patterns of consumption and technical utility, offshore, deep-sea exploration and exploitation must inevitably follow. Today, the UN International Seabed Authority, which has jurisdiction to oversee such things, is deliberating standards and regulations ostensibly to protect, indeed assure again the gross national product of proposed drilling into the ocean floor with inevitable destructive impact and ecological disruption.
Often, in the past, the insurers are partner to the proposers, a perverse alliance all too familiar to energy generation in the past. But in this case, things may turn out differently. Why? you might ask. Because in this case the insurers and reinsurers have calculated that the potential loss is so great that there can be no coverage adequate to the cost of consequence, that is there no payment large enough to mitigate the risk, that the measure of damage is so high that there is no “equitable transfer” possible, that the proposition is simply bad business.
In July 2024, during the second round of discussion by the International Seabed Authority, two major insurers – Zurich Insurance Group and Vienna Insurance Group – have joined two prominent reinsurers – Swiss Re and Hanover Re—to announce “official exclusion” of deep-sea mining activities from their future underwriting portfolios, sending a serious message to the industry that insurance as a financial guarantee for such enterprise will not be available.
According to a press release by the Deep-Sea Mining Campaign, an anti-mining advocacy group, “With leading insurers refusing to cover, the financial burden and risks of such activity becomes insurmountable.” Indeed, The Metals Company, the Canadian exploration company that has applied for a license to recover polymetallic (nickel, copper, cobalt and manganese) nodules in the Clarion Clipperton Zone of the Pacific, has already signaled in a report to the Security Exchange Commission that its ability to secure insurance is in doubt. Its stock price is in continuous decline, and yet it perseveres for the chance of exception.
Opponents are arguing before the Seabed Authority that without defined practices and regulation, deep-sea mining is an incontrovertible threat to the most valuable biodiversity and unique ecosystems on Earth, that it has no compensating value for its environmental destruction, and that no license can be awarded as a result. The science argues for such a prohibition, and major insurers now concur.
I often ask the question “what will it take” to stop the downward spiral of the destruction of Nature revealed again and again as a vested interest false economy, the true measure of which is demonstrated by the growing, diverse, and catastrophic effects that climate change has brought as multi-faceted disaster worldwide. But here again, we are faced not with an exception, but with application and tired affirmation of old justifications and old behaviors for ends already proven bankrupt.
What it will take is finally to draw the line, to just say “no,” to decide that enough bad is more than bad enough, and that our need for these metals can no longer be justified by old patterns of consumption and business that have been proven profitless and corrupt. Is it possible now, for once, that we demonstrate the wisdom and courage to protect both the symbol and reality of necessary change and to insure our future? The transfer of risk here at last has no justifiable price, and the most equitable solution is to ban deep-sea mining altogether, and do no more harm to Nature no matter what the cost.
We will discuss these issues, and more, in future editions of World Ocean Radio.
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