Finance and the high seas

Drafting a report of this nature from a fiscal lens raises more questions than answers. The report could be organized according to the different types of high seas zones, namely international versus national waters and waterways. It could be organized according to depth of water, such as the exclusive economic zones, the continental shelf, the deep sea and the deep seabed. It could be organized according to the uses or misuses of international waters, such as transportation, military testing, research, tourism waste disposal, energy generation, Internet infrastructure (i.e. data centres and undersea cables), mining (both on and in the seabed), water harvesting and mineral extraction from water. Lastly, it could be organized by the fiscal implications of high seas activities on all human and planetary rights.

The United Nations Decade of Ocean Science for Sustainable Development, proclaimed for the period 2021–2030, has mobilized considerable effort towards generating and applying knowledge of the oceans. However, that mandate has been cast almost wholly in scientific rather than fiscal terms, leaving the question of who pays for the ocean and who profits from its exploitation largely unexamined. As human rights remain the normative bedrock of the United Nations system, the fiscal social contract offers a ready vehicle through which the obligations attached to the use of the high seas might be articulated and enforced. The environmental degradation now spreading across these areas, designated as “global commons”, strengthens the case for a compensatory approach grounded in common but differentiated responsibility. Read through the lens of a human rights economy, in which planetary health and the protection of those who live and labour at sea become fiscal questions, rather than humanitarian afterthoughts, international waters and international finance fall within a single analytical frame.

Given this conundrum, at the midpoint of the Ocean Decade, this report attempts to tease out the fiscal implications of the use of the seas and why the decade should not end without a resolution to the issue of revenue collection and its redistribution within the context of the current international fiscal architecture. The report sets out what has been settled, while pointing to the as-yet unsettled, in an attempt to further support the case for an international fiscal authority and architecture that can address these issues.

When many Indigenous coastal communities think of their “country”, they make no distinction between land and sea, having an intimate understanding of both and of the processes that connect them. For many, the distinction between coastal waters and the high seas does not exist. Ocean voyaging traditions, trade winds, migratory species and ancestral responsibilities span vast distances, mirroring the wide expanse of the ocean itself. Indigenous knowledge systems offer deep insights into ocean connectivity, seasonal cycles and sustainable relationships with the sea – insights that are essential for effective marine protection. The current, although contested, legal concept of the high seas emerged from centuries of contestation between specific maritime powers seeking access thereto and coastal States seeking control thereof. The doctrinal frameworks that still structure international maritime law were forged in the service of competing Western commercial and, often, imperial powers, and this instrumentalism should inform any critical assessment of their contemporary operation. Consequently, the Grotian position largely prevailed, establishing “freedom of the seas” as the default rule.¹

1. Hugo Grotius, Mare Liberum (1609); and John Selden, Mare Clausum (1635). ↩

This outcome served the interests of the dominant maritime trading powers of the time, known today as the Kingdom of the Netherlands, the United Kingdom of Great Britain and Northern Ireland and the United States of America, which benefited from the freedom of navigation and access to distant fishing grounds. Freedom of the seas was not a neutral principle; it was a framework that advantaged those with the naval capacity to project power across oceans and the commercial, financial and, later, technical capacity to exploit distant resources. For weaker States, colonized peoples and landlocked nations, freedom of the seas meant freedom for others to extract their coastal resources and to traverse their waters in pursuit of imperial objectives. Even today, controls over access to the freedom of the seas remain in place and are continuing to increase unchecked, such as in the case of the Global Sumud Flotilla. The absence of a form of global coast guard is no longer out of reach with modern technology administration and management with respect to human and planetary rights.

In the twentieth century, jurisdiction over the continental shelf,² often termed “creeping jurisdiction”, developed as the progressive extension of coastal State claims over adjacent maritime spaces. Latin American States asserted jurisdiction over 200-mile territorial seas, and African and Asian States newly independent from colonial rule sought to secure their coastal resources against the distant-water fleets of former colonial powers. The “exclusive economic zone” concept emerged from this contestation, representing a compromise that granted coastal States sovereign rights over natural resources to 200 nautical miles, but preserved freedom of navigation for maritime powers. However, the question of use and misuse has now begun to show cause for concern, for example, with regard to transportation for military purposes, the testing of military equipment and wars. This transformation was not a departure from the colonial inheritance but its reconfiguration, a restructuring of the rules of extraction that incorporated new players but preserved fundamental asymmetries.³ Financially and technologically weaker States and landlocked States remained outside this conversation. To date, many States do not benefit from their share of the high seas resources as other States do.⁴

2. United States of America, Presidential Proclamation No. 2667 (28 September 1945). ↩
3. B. S. Chimni, “Third-world approaches to international law: a manifesto”, International Community Law Review, vol. 8, No. 1 (January 2006). ↩
4. Submission by Uzbekistan. ↩

Indigenous Peoples, however, have their own form of oceanography. An example of this is the 2001 Croker Island case, which sought to determine the extent of native title at sea.⁵ The case found that the Croker Island communities had names not only for specific formations, such as reefs, rocks and sand bars, but also for different zones of the sea, based on their depth. Certain individuals within the community also inherit special knowledge and responsibilities for given areas of the ocean.

5. High Court of Australia, Commonwealth v Yarmirr, Decision, 11 October 2001. ↩

How these two approaches are linked so as to come up with a solution is a question with fiscal implications. Does freedom of the seas allow for military activity and for mining and extraction? With regard to the current focus on human rights of people and planet, where does protection for the marine environment in its entirety come in, in conjunction with respecting the right to culture? Science needs to stay ahead of use in order to prevent misuse. Deep seabed mining by British Petroleum in the Gulf of Mexico, for which environmental impact assessments were missing from files, led to a major oil spill that merits careful handling.⁶ Pension managers in Norway removed their investments in British Petroleum due to absence of that document, thus saving their pension funds, unlike other fund managers and investors who lost significant investments. Marine life was destroyed, and coastal areas are only now slowly recovering. Delinking the land from the sea is clearly not possible, either physically or fiscally.

6. See https://www.rightsofnaturetribunal.org/wp-content/uploads/2018/04/CASE-British-Petroleum-Oil-Spill-in-the-Gulf-of-Mexico.pdf. ↩

The position of the least developed countries warrants separate treatment, because their relationship to the high seas is not merely one of exclusion from a conversation, but also one of structural incapacity to participate in it. The freedoms of the high seas, such as navigation, fishing, scientific research, the laying of cables and the construction of installations, are formally available to every State, yet their exercise presupposes the vessels, the capital, the insurance and the technological sophistication that the least developed countries, and many landlocked and small island developing States, do not possess. Formal equality of access therefore coexists with a profound material inequality of capacity, so that those freedoms operate, in practice, as freedoms for the few and deepen global inequalities. Nevertheless, landlocked and developing States continue to pay for the right to access many, if not all, of those services. Customs duty, for example, is waived in many regions for goods moving to landlocked countries, but those countries do not receive a share of the revenue gained from commercial activity in the high seas, which needs to be rectified through fiscal interventions.⁷

7. United Nations Convention on the Law of the Sea, arts. 69, 70, 124–132, 140, 144, 148 and 150, and annex III, art. 8. ↩

The challenge here is that those entitlements have remained largely notional. None of the least developed countries has conducted deep seabed exploration on its own account, and the 31 exploration contracts issued by the International Seabed Authority are held overwhelmingly by, or sponsored on behalf of, technologically advanced States and their corporate partners, with the participation of developing States being confined, for the most part, to lending their sponsorship and, with it, their potential liability. The question this report poses is, therefore, not whether the least developed countries are entitled to benefit from the high seas – for in law they plainly are – but whether the fiscal and institutional architecture has been designed in a manner that converts that entitlement into a measurable flow of revenue, technology and capacity. Based on the present evidence, it has not, and the silence of landlocked developing States and the least developed States, and the differing positions of some small island developing States,⁸ in these debates are better understood as a symptom of that design than as an absence of interest. A wide body of human rights guidance recognizes this issue as a structural problem. Without finance, technology transfer and scientific support, formal equality in negotiations does not translate into influence over rules that determine access.⁹ Additionally, as seen in the past decade with regard to the Authority, projected revenue from deep seabed mining will be channelled through contractors to sponsoring States and the Authority, thus away from redistributive mechanisms, meaning that States, collectively, would lose resources that should be available for common benefits.¹⁰

8. Naoero is in favour of mining in the deep sea, while other States in the Pacific are not. ↩
9. See https://www.un.org/oceancapacity/UNFSA. ↩
10. Submission by the Deep Sea Conservation Coalition. ↩

The high seas form part of what international law designates as the “global commons”, which are spaces and resources lying beyond national jurisdiction and available, in principle, for the use and benefit of all humanity. In addition, deep sea pockets add complexity to the space, as the only access is through territorial waters, such as those in the Pacific Ocean.¹¹ Today, the seas are divided as follows:
(a) Territorial sea. Covering 12 nautical miles, coastal nations possess full sovereignty over this area, including airspace and seabed, although vessels are allowed innocent passage;
(b) Exclusive economic zone. Covering 200 nautical miles, coastal States have special rights to explore and exploit natural resources (fishing, mining) in this zone, while other nations enjoy freedom of navigation and overflight;
(c) The Area (deep seabed). Defined as the sea floor beyond national jurisdiction, it is considered the “common heritage of mankind”, with resource mining controlled by the International Seabed Authority;
(d) Maritime safety and the marine environment. This includes regulations to prevent pollution and promote safety at sea.

11. Indonesia has negotiated access to one deep sea pocket in the Pacific Ocean, through an agreement with the member States bordering the exclusive economic zone waters. ↩

The challenge that remains, however, is that the United Nations Convention on the Law of the Sea has been signed by only 63 States, with some States refusing categorically to accept the concept of exclusivity. In addition, waterways that once allowed free movement are now coming under control due to military conflict, as seen with the war by the United States and Israel against the Islamic Republic of Iran and the question of innocent passage through the Strait of Hormuz.¹² In addition, despite ongoing negotiations at the International Seabed Authority, States are authorizing and debating deep seabed mining,¹³ despite the growing number of States (currently 41) that are in favour of a moratorium.¹⁴ In addition, ownership of islands remains contested, giving additional exclusive economic zone access to former imperial States, who were the original negotiators of the Convention, beyond what was understood, for example, with regard to Diego Garcia, Saint Helena and the Falkland Islands (Malvinas).¹⁵

12. Open letter from the Independent Expert addressed to the Security Council on the current war in the Persian Gulf, available at https://www.ohchr.org/sites/default/files/documents/issues/iedebt/ actitivies/2026-03-ie-foreign-debt-open-letter-ongoing-war-persian.pdf. ↩
13. The fiscal mandate of the International Seabed Authority is fragile, as The Metals Company USA, LLC, had formally initiated a process with the National Oceanic and Atmospheric Administration under the United States Department of Commerce to apply for exploration licences and commercial recovery permits under existing United States national legislation, namely, the Deep Seabed Hard Mineral Resources Act of 1980, bypassing the Authority (see https://investors.metals.co/news-releases/news-release-details/metals-company-apply-permits-under-existing-us-mining-code-deep). The United States is not a party to the United Nations Convention on the Law of the Sea. Similar conversations are taking place in Norway. ↩
14. See A/HRC/58/59; and https://deep-sea-conservation.org/solutions/no-deep-sea-mining/. ↩
15. A dispute exists between the Governments of Argentina and the United Kingdom of Great Britain and Northern Ireland concerning sovereignty over the Falkland Islands (Malvinas). ↩

International law designates as “global commons” the spaces and resources that lie beyond national jurisdiction and that are available, in principle, for the use and benefit of all humanity. The concept encompasses four primary domains: the high seas; the deep seabed and ocean floor beyond national jurisdiction; Antarctica (governed by the Antarctic Treaty System); and outer space. Arguments are also now being made with regard to extending the concept to data on the world wide web).¹⁶ These domains share common characteristics, identified as the five core elements of the common heritage principle, that distinguish them from national territory and that generate distinctive governance challenges.¹⁷ First, no State may appropriate the global commons or subject them to sovereignty, which distinguishes them from territory subject to acquisition through occupation, cession or prescription. Second, their governance requires international assistance and cooperation because unilateral action cannot effectively regulate them, as the high seas are too vast for any single State to police and activities in one area affect conditions elsewhere. Third, their use by one State affects the interests of other States. For example, overfishing depletes stocks for all; pollution degrades the marine environment globally; the testing and use of weapons affects marine life and tourism, as well as marine biodiversity; the laying of undersea cables and the construction of data centres leads to huge profits, but the effects remain unclear; and resource extraction in one area reduces what remains for others. Fourth, they contain resources such as fisheries, minerals, genetic material and orbital slots that generate questions of access and benefit-sharing. Fifth, their degradation creates intergenerational obligations: the commons must be preserved for future generations, not merely exploited for present advantage by the wealthy and able.

16. Submission by the Independent Expert to the Intergovernmental Negotiating Committee on the United Nations Framework Convention on International Tax Cooperation, February 2026. ↩
17. Kemal Baslar, The Concept of the Common Heritage of Mankind in International Law (Martinus Nijhoff Publishers, 1998). ↩

Measured ocean activities beyond the high seas include shipping, shipbuilding and marine equipment; capture fishing and fish processing; maritime and coastal tourism; conventional offshore oil and gas exploration and production; dredging; and port facilities and handling. Emerging ocean-based industries and activities are characterized by the key role played by cutting-edge science and technology in their operations. They include offshore wind, tidal and wave energy; the offshore extraction of oil and gas in deep sea and other extreme locations; seabed mining for metals and minerals; marine aquaculture; marine biotechnology; and ocean monitoring, control and surveillance. Future activities include carbon capture and storage and the management of ocean-scale protected areas. Unmeasured ocean activities include the dumping of waste; criminal activities such as piracy; military uses; weapons testing and research; general science and research; and digital use (undersea cables). All have fiscal and human rights implications.

The Organisation for Economic Co-operation and Development (OECD) assessed the contribution of the ocean-based industries to global gross value added at $1.5 trillion in 2010 and projected that this would more than double, to over $3 trillion, by 2030.¹⁸ More recently, in its 2025 report, OECD concluded that, if the ocean economy were a country, it would rank as the fifth largest economy in the world.¹⁹ The United Nations Conference on Trade and Development (UNCTAD) valued global ocean trade at $2.2 trillion in 2023 alone, with tourism, the single largest sectoral contributor, generating $725 billion of that amount, and shipping accounting for a further 22%.²⁰

18. See https://www.oecd.org/content/dam/oecd/en/publications/reports/2016/04/the-ocean-economy-in-2030_g1g6439e/9789264251724-en.pdf. ↩
19. See https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/03/the-ocean-economy-to-2050_e3f6a132/a9096fb1-en.pdf. ↩
20. See https://unctad.org/osgstatement/united-nations-ocean-conference-2025-ocean-action-panel-6. ↩

The next question to be answered is how fiscal resources are to be assessed, managed and shared as part of the global commons and the common heritage of mankind. The fiscal architecture of deep sea mining creates direct and indirect international financial obligations for States, as these obligations shape fiscal space and influence States’ ability to progressively realize human rights.²¹ The high seas are governed by a dense but fragmented network of sectoral institutions that were designed around navigation, fisheries and environmental protection rather than fiscal accountability.²² The absence of a sovereign taxing authority is structural, not incidental. In the context of subsidies, global fisheries subsidies totalled approximately $35.4 billion in 2018, with two thirds of that directed towards capacity-enhancing activities, namely, fuel, vessel construction and port access, that essentially provide public money to make commercially unviable deep-water and high seas fishing operations profitable for private fleets.²³ OECD itself has framed the problem plainly: regulatory and enforcement gaps on the high seas mean that economic incentives are systematically misaligned with sustainability, let alone fiscal equity,²⁴ making a case for a global fiscal authority to govern the high seas in its entirety.

21. Submission by Hannah Lily. ↩
22. Robert Blasiak and Joachim Claudet, “Annual review of environment and resources governance of the high seas”, Annual Review of Environment and Resources, vol. 49 (2024). ↩
23. See https://s3-us-west-2.amazonaws.com/legacy.seaaroundus/researcher/dpauly/PDF/2019/ Journal+Articles/Sumaila+et+al+2019+Updated+global+subsidies.pdf. ↩
24. See https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/03/the-ocean-economy-to-2050_e3f6a132/a9096fb1-en.pdf. ↩

By the end of 2025, marine protected areas covered fewer than 10% of the ocean, and the area that was highly or fully protected stood at under 3%, with the figure for the high seas themselves close to 1%, set against roughly 17% for terrestrial environments and an internationally agreed target of 30% of marine and coastal areas by 2030.²⁵ This protection deficit is compounded by uses of the commons that impose costs without attracting any liability. The dumping of waste at sea is prohibited or strictly controlled under the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter of 1972 and the 1996 Protocol thereto, yet it continues. In addition, the high seas have become the de facto disposal ground for the residue of another commons, with decommissioned satellites and spent rocket stages directed to re-enter the atmosphere over the remote South Pacific. The significance of this is not merely environmental, but also affects human rights.²⁶ Each of these phenomena, namely, the underprotection of marine biodiversity, the persistence of dumping and the use of the ocean as a sink for the debris of outer space, represents a transfer of cost from those who profit by the activity to a commons that has no institution empowered to demand compensation. The fiscal consequence is that the ocean is absorbing these liabilities.

25. The commitment to protecting 30% of marine and coastal areas by 2030 is set out in target 3 of the Kunming-Montreal Global Biodiversity Framework (see https://www.cbd.int/gbf/targets/3). ↩
26. See A/HRC/58/59. ↩

The United Nations Convention on the Law of the Sea defines the high seas as a negative: the high seas are what remains after coastal States have exercised their entitlements to claim adjacent maritime spaces. They are residual waters, that is, the ocean beyond the reach of national jurisdiction. This reflects a fundamental choice in international law to preserve certain spaces as common, rather than permitting their enclosure. The high seas comprise approximately 64% of the ocean’s surface and 43% of the Earth’s total surface and lie beyond the sovereign control of any single State.²⁷ Article 89 provides that no State may validly purport to subject any part of the high seas to its sovereignty. This prohibition distinguishes the high seas from national territory, where States exercise full control and jurisdiction, from the exclusive economic zone and continental shelf, where coastal States possess sovereign rights over natural resources. The high seas exist as a domain of freedoms rather than of sovereignty, but the content and distribution of those freedoms, as this report shows, are neither natural nor neutral, and they have huge financial effects on nations.

27. Food and Agriculture Organization of the United Nations, The State of World Fisheries and Aquaculture 2024: Blue Transformation in Action (Rome, 2024). ↩

Within the maritime domain, two distinct legal regimes apply, and their differences are significant. The first regime governs the water column of the high seas, where article 87 of the Convention establishes the freedoms of navigation, overflight, the laying of submarine cables and pipelines, the construction of artificial islands, fishing and scientific research. The same article states that these freedoms must be exercised with due regard for the interests of other States in their exercise of the freedom of the high seas. The “freedom regime” permits States and their nationals to exploit the resources of the high seas by allowing them to fish, navigate and conduct research without sharing the benefits thereof with other States or with humanity as a whole. The principle governing the water column is thus liberty rather than equity: access is open, but so is appropriation. That legal regime has, however, been abused due to the inability of existing international institutions to measure, monitor and evaluate the water column and beyond.

The freedoms of the water column show the contrasting treatment of passage through artificial and natural waterways. The Panama and Suez canals are human-made channels, constructed, dredged and maintained at continuing expense. The States that own and operate them are entitled to levy tolls for their use: the Suez Canal within the framework of the Convention respecting the Free Navigation of the Suez Maritime Canal of 1888; and the Panama Canal under the arrangements that returned it to Panamanian administration at the close of the twentieth century. Natural straits used for international navigation are treated otherwise. Under the Suez Canal Convention, a coastal State may not levy a charge upon foreign ships by reason only of their passage, charges being permissible solely as payment for specific services rendered, and the regime of transit passage through straits such as Gibraltar, together with the right of passage through international straits as affirmed by the International Court of Justice in the Corfu Channel case,²⁸ may not be impeded or made conditional upon payment.²⁹ A parallel logic governs the airspace above. The Convention on International Civil Aviation, concluded at Chicago in 1944, secures freedoms of navigation for civil aircraft, while treating State aircraft, among them military, customs and police aircraft, as subject to authorization rather than to those freedoms; above the high seas, the rules of the air are those established collectively rather than by any single State (arts. 3, 5 and 12). The governing distinction is, therefore, not the strategic value of the corridor, but whether a State has invested in creating and maintaining it, such that payment may be charged for the use of artificial works, but not for the use of natural channels that were not built by human intervention. The relevance of this to the present analysis is that the international community already accepts, in the law of canals and the law of the air, that the use of a shared corridor can legitimately attract a charge where a cost has been incurred or a service rendered, and that such a charge can be reconciled with a regime of free passage. The high seas water column has no comparable mechanism. The value extracted from it, unlike the value of transit through a canal, is captured without any corresponding payment to the community in whose interest the space is held. The absence of a charge does not reflect principled objection to charging, but simply the fact that no institution has been constituted either to levy a charge or to receive one. However, the world has now entered an era of economic warfare associated with both military warfare and technological advancement. The question has now arisen as to whether freedom of the seas should be allowed for military purposes, as seen with the recent war of the United States and Israel against the Islamic Republic of Iran and with the establishment of an environmental tax on the use of the Strait of Hormuz.³⁰

28. Corfu Channel (United Kingdom of Great Britain and Northern Ireland v Albania), Judgment, I.C.J. Reports 1949, p. 4. ↩
29. United Nations Convention on the Law of the Sea, arts. 26 and 37–44; and Torrijos-Carter Treaties. ↩
30. See A/80/173. ↩

The second regime, governing the seabed and ocean floor beyond national jurisdiction, designated as “the Area”, operates on a fundamentally different principle. Article 136 of the United Nations Convention on the Law of the Sea declares the Area and its resources to be the common heritage of mankind. This designation was the product of sustained advocacy by developing States, culminating in the Declaration of Principles Governing the Sea-Bed and the Ocean Floor, and the Subsoil Thereof, beyond the Limits of National Jurisdiction, adopted by the General Assembly on 1 December 1970.³¹ It was also championed by the then Permanent Representative of Malta, Arvid Pardo, whose 1967 address to the Assembly remains foundational.³² In his statement, he warned that, without international regulation, the dark oceans would become the preserve of the technologically developed countries and urged that the seabed be declared the common heritage of humankind and its resources administered by an international authority for the benefit of all States, taking into particular consideration the interests and needs of the developing countries.

31. General Assembly resolution 2749 (XXV). ↩
32. See A/C.1/PV.1515. ↩

Article 140 of the Convention operationalizes this principle. The common heritage principle thus differs fundamentally from the freedom of the high seas. The latter permits exploitation without sharing; the former requires that benefits be distributed equitably. The latter treats the commons as open for appropriation by whomever has the capacity to extract; the former treats the commons as held in trust for all humanity. It was an attempt to embed redistributive norms into the governance of international spaces, aligned with the broader project of the New International Economic Order that sought to restructure global economic relations in favour of the developing world.³³

33. General Assembly resolution 3201 (S-VI), preamble. ↩

The freedoms of the high seas are exercised by ships, and ships are worked by people; yet the human dimension of the high seas regime remains conspicuously underexamined. Seafarers labour in a space where the protections that States guarantee within their own territory are attenuated, because jurisdiction at sea runs principally through the flag State, and the flag State, under the open registry system examined later in this report, is frequently the entity least equipped, or least inclined, to enforce them. The consequences are concrete. Many vessels still lack reliable ship-to-shore communication, leaving crews isolated from family, from legal advice and from any external means of raising a complaint. Abuses of labour rights, the right to health and the right to safe working conditions are documented across parts of the industry,³⁴ and the mechanisms for monitoring and remedying these abuses are weak, precisely because no institution exercises effective oversight of the high seas. This report has already identified that as a deficiency in the fiscal context, and it is mirrored in the social one. The welfare of seafarers is, therefore, not a matter separate from the fiscal argument of this report, but an instance of the same structural failure. The business model that allows a shipowner to register a vessel in a jurisdiction with no genuine connection to its operations, and thereby to reduce its tax to a notional sum, is the very model that allows the shipowner to escape the labour and safety obligations that a meaningful regulatory link would impose. The model therefore requires serious reflection. The human right to work becomes of crucial importance but remains unsettled. The World Bank now argues for the right to electricity; however, the question is whether this extends to those who live and work on the high seas.

34. Zhipeng Cui, Xingguo Cao and Pengfei Zhang, “Myth and reality on human rights at sea in the era of globalization”, Frontiers in Marine Science, vol. 12 (2025). ↩

The third and most recent legal regime is that of the Agreement under the United Nations Convention on the Law of the Sea on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction. It is the first legally binding global agreement dedicated to protecting biodiversity in international waters. At its core, the Agreement provides tools to conserve and sustainably use marine biodiversity on the high seas, contributing to the “30 by 30” target of the Kunming-Montreal Global Biodiversity Framework. These include the creation of marine protected areas, requirements for environmental impact assessments, mechanisms for sharing marine genetic resources and commitments to capacity-building and technology transfer for emerging economies. Governments can now begin formally proposing marine protected areas for the high seas, supported by scientific evidence and traditional knowledge. The Conference of the Parties to the Agreement will oversee implementation as the treaty’s governing body, with the first Conference, to be held in early 2027, expected to set the tone for ambition, transparency and inclusion.

In international shipping and maritime transportation, the 10 biggest global shipping companies recorded $42.9 billion in profits in 2024,³⁵ with Maersk alone reporting $55.4 billion in revenue in 2024³⁶ and the container market reporting $10.2 billion in net income in the second quarter of 2024 alone.³⁷ In marine and coastal tourism, UNCTAD data show that, in 2025, the industry made profits of $725 billion,³⁸ while total turnover of the European Union blue economy was €624 billion.³⁹ Offshore drilling market profits were reported at $39.6 billion in 2024,⁴⁰ with ExxonMobil reporting total earnings of $33.7 billion in 2024⁴¹ and Shell reporting profits of $6.9 billion in the first quarter of 2026.⁴² The global subsea cable market was projected at $17.8 billion in 2025.⁴³ The submarine market size is estimated at $27.44 billion, with the largest market in the United States being offshore wind energy.⁴⁴ Gross profits for European Union offshore wind energy were reported at €4.1 billion in 2022.⁴⁵ The marine biotechnology market reported profits of around $4.2 billion in 2023, which were projected to reach $6.4 billion by 2025.⁴⁶ Global blue biotech market profits were at $5.9 billion in 2022 and were projected to reach $11.7 billion by 2032. Deep seabed mining has no commercial revenue yet, but there are 31 active exploration contracts with the International Seabed Authority.⁴⁷ Although the commercial value of marine genetic resources has not yet been formally quantified, an assessment of pharmaceutical and biotechnology exploitation is ongoing; however, no aggregate revenue figure has been published under this classification. In addition, 75% of the world’s industrial fishing vessels are not publicly tracked, and more than 25% of transportation and energy vessel activities are missing from public tracking systems.⁴⁸ This economy is vast, lucrative and in need of regulation. Profits and gains also need to be managed in accordance with the principle of the global commons and the common heritage of mankind. This report cannot, however, canvass all areas of revenue and regulation; as a result, tax debt and illicit financial flows will be unpacked using specific examples relating to the high seas.

35. See https://opportunitygreen.org/shipping/press-releases/global-shipping-company-profits-and-taxes-2024/. ↩
36. See https://www.forbesmiddleeast.com/industry/transport/danish-shipping-giant-maersk-post-87-rise-in-2024-to-%24555b-forecasts-lower-earnings-for-2025. ↩
37. See https://indiaseatradenews.com/container-shipping-industry-sees-surge-in-profits-amid-global-trade-challenges/. ↩
38. See https://unctad.org/osgstatement/united-nations-ocean-conference-2025-ocean-action-panel-6. ↩
39. See https://oceans-and-fisheries.ec.europa.eu/news/eu-blue-economy-report-2024-innovation-and-sustainability-drive-growth-2024-05-30_en. ↩
40. See https://www.precedenceresearch.com/offshore-drilling-market. ↩
41. See https://corporate.exxonmobil.com/news/news-releases/2025/0131_exxonmobil-announces-2024-results. ↩
42. See https://globalwitness.org/en/press-releases/shells-profits-obscene-as-european-oil-majors-profits-surge-by-43/. ↩
43. See https://www.marketreportanalytics.com/reports/hvac-subsea-cable-221290. ↩
44. See https://www.mordorintelligence.com/industry-reports/submarine-market. ↩
45. See https://op.europa.eu/webpub/mare/eu-blue-economy-report-2025/blue-economic-sectors/ marine-renewable-energy.html. ↩
46. See https://convexin.com/wp-content/uploads/2025/02/Convex_DO_Latam_ENG.pdf. ↩
47. See https://isa.org.jm/wp-content/uploads/2026/02/2601566E.pdf. ↩
48. Fernando S. Paolo, David Kroodsma, Jennifer Raynor and others, “Satellite mapping reveals extensive industrial activity at sea”, Nature, vol. 625 (4 January 2024). ↩

Tax subsidies for shipping, flags of convenience and open registries in Panama, Liberia and the Marshall Islands offer shipping companies corporate tax rates of practically zero, which has driven a race to the bottom to which established maritime nations have responded by introducing tonnage tax regimes that substitute a notional and highly concessional levy for normal corporate income tax.⁴⁹ Tax avoidance via flags of convenience does not appear in any national account as a tax subsidy, but it clearly represents revenues foregone on a significant scale.⁵⁰ This is supported by the systematic underreporting of corporate profits through structures made possible by jurisdictions with no genuine link to the economic activity being conducted.⁵¹

49. Olaf M. Merk, “Quantifying tax subsidies to shipping”, Maritime Economics & Logistics, vol. 22 (5 November 2020). ↩
50. Ibid. ↩
51. See http://digamo.free.fr/zucman152.pdf. ↩

An analysis of the registry choices of the top 25 container lines across 26 flag States between 2008 and 2019 found that shipping lines deliberately used subsidiaries in low-taxed flag-of-convenience countries to eliminate their tax burden and that only the introduction of country-by-country reporting requirements reduced this practice.⁵² As the arrangement of using open registries creates a disconnect between the location where economic value is generated and the jurisdiction exercising regulatory and fiscal control, developing countries lose revenues associated with activities, thus eroding tax bases, discriminating between who benefits and limiting States’ ability to finance public policies aimed at guaranteeing respect for human rights.⁵³ The maritime shipping sector, which alone transports 90% of global trade and generates revenues of billions of dollars annually, pays effective corporate income tax at rates that are a fraction of those applicable to land-based industries of equivalent profitability – an outcome that is structurally produced by the flag State system rather than by individual corporate misconduct.

52. Chun-Yi Chen and Ming-Jiu Hwang, “Impact of anti-tax avoidance rules on factors influencing the choice of registry for the self-owned vessels of the shipping lines”, Maritime Policy & Management, vol. 51, No. 1 (2024). ↩
53. Submission by the National Aquaculture and Fisheries Authority of Colombia. ↩

A study using satellite data and machine learning to track individual fishing vessels on the high seas showed that up to 54% of current high seas fishing grounds would be economically unprofitable without government subsidies.⁵⁴ Fuel subsidies in particular allow fishing vessels to continue operations, despite declining revenues or even net losses, distorting both economics and ecology simultaneously.⁵⁵ In fishing, 97% of all industrial fishing efforts detectable on the high seas and within exclusive economic zones comes from vessels flagged to higher-income nations, while the fish stocks being depleted are disproportionately located adjacent to lower-income coastal States.⁵⁶ The combination of absent resource rent, subsidized extraction and concentrated corporate ownership represents what the emerging literature on ocean fiscal sociology describes as a structural transfer of wealth from the global commons to a small number of powerful States and corporations.

54. See https://www.science.org/doi/10.1126/sciadv.aat2504. ↩
55. See https://www.frontiersin.org/journals/ocean-sustainability/articles/10.3389/focsu.2025.14 99494/full. ↩
56. See https://gfintegrity.org/the-direction-of-illegal-unregulated-and-unreported-fishing/. ↩

The governance of deep seabed mining is formally more developed than that of fishing or shipping, because the United Nations Convention on the Law of the Sea designated the international seabed as the common heritage of mankind and established the International Seabed Authority to collect royalties and distribute benefits.⁵⁷ The question remains as to whether the Authority’s regime is ready for benefit-sharing. The regime contains five core elements: peaceful use; non-appropriation; the reservation of areas for developing States; equitable benefit-sharing; and environmental protection.⁵⁸ In theory, this framework should ensure that profits from seabed mineral extraction flow to humanity as a whole, with particular attention paid to developing countries.

57. Submission by Hannah Lily. ↩
58. See https://www.sciencedirect.com/science/article/abs/pii/S0308597X16300744?via%3Dihub ↩

Under the International Seabed Authority’s proposed payment regime, mining companies would receive approximately 70% of project proceeds, the sponsoring State 24% and the Authority only 6%, of which benefit-sharing to other States under the common heritage mandate would represent a further fraction.⁵⁹ The Group of African States at the Authority calculated their projected return at approximately $97,800 per country per year.⁶⁰ The business model as currently structured systematically transfers financial risk to developing States and host communities, while allowing private investors to exit through restructuring when projects fail. In 2011, in Papua New Guinea, a Canadian company, Nautilus Minerals, obtained the world’s first Government-issued deep seabed mining licence to extract copper, gold, silver and zinc from hydrothermal vent sites.⁶¹ The Government of Papua New Guinea was induced to take a 15% equity stake. By October 2019, when the company declared bankruptcy, Papua New Guinea had paid 81.5 million kina ($24 million) in interest on loans, and its total State exposure had reached some $120 million to 125 million,⁶² which had to be written off as irrecoverable State debt.⁶³ The shifting of risk from an investor to a State is against the principles of the fiscal social contract and undermines the fiscal legitimacy of States and the human rights economy.

59. See https://www.sciencedirect.com/science/article/pii/S0308597X23000994?via%3Dihub. ↩
60. See https://j4t.org/toolkit/stories/back-door-privatization-global-souths-share-of-deep-sea-mining-profits-under-scrutiny/; and Justin Alger, Jessica F. Green, Kate J. Neville and others, “The false promise of deep-sea mining”, npj Ocean Sustainability, vol. 4, (2025). ↩
61. See https://www.source-international.org/news/the-first-deep-sea-mining-dsm-project-in-papua-new-guinea. ↩
62. See https://devpolicy.org/how-png-lost-us120-million-and-the-future-of-deep-sea-mining-20200428/. ↩
63. See https://j4t.org/toolkit/stories/back-door-privatization-global-souths-share-of-deep-sea-mining-profits-under-scrutiny/. ↩

Illegal, unreported and unregulated fishing valued at $10 billion to $23.5 billion per year is increasingly conducted by transnational organized criminal groups, with proceeds laundered through falsified catch documentation, transfer pricing within vertically integrated fishing conglomerates and cash payments in port.⁶⁴ The Financial Action Task Force has been conspicuously slow to engage with illegal, unreported and unregulated fishing as a money-laundering risk, having excluded it from successive environmental crime reports on grounds of scope rather than significance.⁶⁵ Such fishing is also systemically connected to other illicit financial flows.⁶⁶ An investigation of 29 illegal, unreported and unregulated fishing networks found that 60% overlapped with trafficking in persons, customs fraud, corruption, organized crime or tax evasion.⁶⁷ The European Union Global Facility on Anti-Money Laundering and Countering the Financing of Terrorism has separately highlighted that beneficial ownership transparency in the fishing sector remains severely inadequate, with the opacity of vessel ownership structures forming the central enabler of money-laundering from illegal fishing.⁶⁸ The Royal United Services Institute estimated that, globally, illicit financial flows linked to illegal, unreported and unregulated fishing reach $50 billion annually.⁶⁹

64. See https://www.apgml.org/news/apg-issues-paper-illicit-financial-flows-generated-illegal-fishing-november-2023. ↩
65. See https://www.rusi.org/explore-our-research/publications/commentary/swimming-dirty-money-its-time-dive-below-surface. ↩
66. See https://gfintegrity.org/the-direction-of-illegal-unregulated-and-unreported-fishing/. ↩
67. See https://c4ads.org/wp-content/uploads/2019/08/StringsAttached-Report.pdf. ↩
68. See https://www.global-amlcft.eu/wp-content/uploads/2024/06/EUGlobalFacility-BO-and-IUU-June2024-2_compressed.pdf. ↩
69. See https://www.rusi.org/explore-our-research/publications/commentary/hot-water-climate-change-iuu-fishing-and-illicit-finance. ↩

Beyond fishing, flags-of-convenience vessels serve as conduits for maritime drug trafficking, bulk cash smuggling and trade-based money-laundering. In 2020, United States federal agents seized $27 million in undeclared cash from a Togolese-flagged freighter in the Caribbean.⁷⁰ By its own research, the Financial Action Task Force estimates that trade-based money-laundering accounts for approximately $1.6 trillion annually across all channels.⁷¹ This practice drains public avenues, hides profits and depletes marine resources that small-scale fisher and coastal communities, already politically marginalized and highly vulnerable to overfishing and ecosystem decline, rely on for food and livelihoods.⁷²

70. See https://www.justice.gov/usao-pr/pr/agents-seize-27-million-us-currency-inside-boxes-bound-st-thomas. ↩
71. See https://imtf.com/blog/when-trade-becomes-a-cover-unpacking-trade-based-money-laundering/. ↩
72. See A/HRC/55/49. ↩

There is no overall body looking into monitoring the international fiscal architecture, whether by conducting evaluations or by governing it. Progress made since the adoption of the United Nations Convention on the Law of the Sea through the International Seabed Authority, however, faces numerous challenges with regard to redistributing the share of fiscal resources gained among Member States. The Authority⁷³ has a mandate that is inherently fiscal. That mandate requires the Authority not only to regulate who mines the seabed, but to ensure that financial returns are collected and distributed equitably to all States. After more than a decade of negotiations on exploitation regulations, the mandate remains substantially unimplemented. Commercial mining has not commenced, exploitation regulations have not been adopted, and the international fiscal architecture through which the common heritage principle would be translated into actual revenue flows to developing States does not yet exist.

73. Repeated requests to attend Authority sessions as an observer have, to date, not been accepted; however, there are discussions ongoing with regard to conducting a mission to the Authority in early 2027. ↩

At the thirtieth session of the International Seabed Authority, held in March and July 2025 in Jamaica, the Council of the Authority completed the second reading of the revised consolidated text of the draft exploitation regulations.⁷⁴ Five fiscal issues dominated the proceedings:⁷⁵ revenue-sharing and a review mechanism; an equalization measure; an environmental compensation fund; a common heritage fund; and an economic planning commission. The international fiscal architecture proposed by the Authority at the session in March 2026 led to substantive but inconclusive discussions across four of the five fiscal questions, with partial agreement arising only with regard to the planning commission. The International Maritime Organization attempted to establish environmental taxes in the form of mandatory levies for large ocean-going ships over 5,000 gross tonnage, which emit 85% of the total carbon dioxide emissions stemming from international shipping; however, the proposal was not adopted.⁷⁶

74. See https://enb.iisd.org/international-seabed-authority-isa-council-30-2-summary. ↩
75. See https://enb.iisd.org/international-seabed-authority-isa-council-30-2-8july2025. ↩
76. See https://news.un.org/en/story/2025/10/1166131. ↩

Understanding the concept of the global commons of the high seas is crucial to ensuring the equitable and fiscally legitimate governance of our shared planet. The Independent Expert makes the following recommendations:
(a) Accountability: the International Covenant on Economic, Social and Cultural Rights requires States to demonstrate that they are taking steps to maximize available resources. Flag States that operate open registries enabling fiscal arbitrage and States that have shaped international arrangements to minimize benefit-sharing should be held accountable for the resulting constraints on resource mobilization. States should establish, through the United Nations framework convention on international tax cooperation, minimum effective tax standards for maritime activities, with reporting mechanisms that hold States accountable for revenues foregone through permissive registration regimes. Accountability within the International Seabed Authority itself requires institutional reform beyond external reporting. Conflicts of interest between Authority officials, members of the Legal and Technical Commission, sponsoring State representatives and contractors have been identified as a structural problem that compounds beneficial ownership opacity and undermines the Authority’s capacity to function as an impartial administrator;
(b) Transparency: current transparency initiatives focus on entity ownership but fail to capture the economic substance of maritime operations. States should require real-time reconciliation of automatic identification system data with customs and tax filings, enabling authorities to verify that declared voyages, cargo values and port calls correspond to reported taxable activity. Satellites and drones can monitor this. Classification societies and protection and indemnity clubs, whose certifications and coverage are preconditions for commercial operation, should be required to disclose the fiscal jurisdictions through which insured vessels route their profits. The International Seabed Authority should independently audit this information;
(c) Responsibility: States whose nationals benefit from flag registries, seabed exploration contracts or shipping profits routed through permissive jurisdictions should bear corresponding responsibility. Data from the Bank for International Settlements could be used;
(d) Efficiency: the current system of regulatory competition among flag States needs to be reformed. States could exercise jurisdiction at commercial chokepoints to ensure that port access is conditioned on compliance;
(e) Effectiveness: the right to adequate food under article 11 of the International Covenant on Economic, Social and Cultural Rights is impaired when coastal developing States lose fishing revenues to distant water fleets and when catches are landed without domestic fiscal contribution. A buffer zone or a no-fishing zone or season should be considered, to allow fish to reach to all parts of their normal routes and grow fully and to ensure equitable sharing;
(f) Fairness: States should establish a global governance institution, with a fund for the commons to collect revenues from activities beyond national jurisdiction, including royalties on seabed mining, levies on high seas fishing and charges on shipping tonnage, with distribution prioritizing the least developed countries and small island developing States;
(g) Justice: structural reform of the international fiscal architecture is required. The governance of the global commons could be addressed within the international fiscal architecture, to ensure clarity on how the resulting profits, externalities and fiscal obligations are to be allocated.