Capitalism’s big blue expansion

Under the cover of the blue economy, oceanic resources are being exploited, geopolitical rivalries played out and climate-harming schemes hatched.

Adam Wolfenden, Maureen Penjueli, India Logan-Riley and Laisa Nainoka

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THE need for the expansion of markets and materials under hyper-capitalism has seen a renewed interest in oceans and their exploitation. The push for ocean market expansion is also happening hand in glove with the securitisation of ocean governance. Global powers including developed countries and transnational corporations, backed up by multilateral financial institutions, are all competing to obtain and secure access to a new frontier of maritime resources. 

Framing this race for exploitation as the ‘sustainable blue economy’¹  and ‘blue growth’ offers a perfect cover to justify their interests in terms of gaining food security, expanding carbon emissions, and obtaining minerals for ‘green technology’ and renewable energy for the economies in the Global North and emerging powerful economies in the South, such as China. 

Long seen as a vast blue void, the world’s oceans are now viewed as sites of enormous economic potential. The United Nations Conference on Trade and Development (UNCTAD)’s Trade and Environment Review 2023 report claims that the world's ocean economy is worth an estimated $3–6 trillion, with about three billion people relying on the ocean for food and income. 

This article looks at how ocean exploitation and militarisation is taking place under the guise of development and the blue economy framework. It explores infrastructure financing, particularly deep-water ports, to secure access to ocean resources as well as provide safe harbour for military vessels. It also highlights how deep-sea mining (DSM) is being promoted as a saviour for a transition to a climate-friendly future despite its impacts on climate regulation, biodiversity and ecosystem destruction having the opposite effect. It details how the World Trade Organization (WTO)’s Agreement on Fisheries Subsidies fails to achieve the sustainability issues it set out to address while letting those most responsible for overfishing and overcapacity off the hook. Finally, it examines the push for ‘blue carbon’, an expansion of the failed carbon market approach to climate action, in the context of the blue economy.

Infrastructure financing fuelling debt to resource the Global North

Oceans can offer high reward to those looking to exploit their natural resources. The Pacific Ocean is home to highly valuable and healthy straddling stocks of tuna and other living organisms such as sea cucumber and giant clams as well as a range of ocean mineral nodules which have enormous commercial and strategic military value.

Infrastructure funding, and the movement of goods and people that it facilitates, always holds an interest for exporters seeking to gain market entry to the recipient countries, and colonial powers seeking geopolitical alignment as well as reliable and safe harbours for their military vessels. As the post-COVID world shifts to a greater focus on securing supply chains, control of and access to port infrastructure and sea lanes becomes crucial for accessing critical minerals and resources.

Infrastructure is critical for the movement of goods and transportation of people in and out of countries. This is especially important for Pacific small island developing states (PSIDS) as these countries comprise small land masses spread out over large ocean distances that are far from global market centres. PSIDS have sought donor partner assistance through bilateral and multilateral agreements to obtain funding and technical support for building, expanding and maintaining ports, roads and airports. Significant loans and grants have been obtained for infrastructural development, especially ports. For example, the approximate total loans from international financial institutions (IFIs) for four Pacific island countries from the year 2000 are: the Cook Islands – $138.32 million; Papua New Guinea – $2,719.81 million; Tonga – $344.56 million; and Vanuatu – $185.8 million.² Papua New Guinea, Tonga and the Cook Islands are all located in proximity of extensive deposits of seabed minerals.

The colonial powers had traditionally been the dominant, and at times only, donor funders in the Pacific islands, giving them a privileged position of geopolitical influence. This resulted in significant advantage in geopolitical affairs as their aid funds could be leveraged to pressure and influence the decisions of the Pacific island countries. The entry of new donor governments, particularly from emerging economies, has now diluted and challenged the level of influence that the former colonial powers can exercise through their aid programmes. In any case, the wielding of donor influence is consistent regardless of whether it is framed by Western powers as a nefarious agenda or a hand of friendship.

The growth of China’s economic power, the advent of its Belt and Road Initiative and its subsequent investment in infrastructure funding across the so-called ‘Maritime Silk Road’ challenged the traditional domination of colonial donors. China’s ease in providing financing for infrastructure projects made it a welcome donor partner in the Pacific region. Its rise as a major new player in the development world by financing projects with loans to Pacific governments has however led to concerns over debt sustainability and allegations of China pursuing ‘debt trap’ diplomacy.

Despite China’s decisions to cancel some PSIDS debts and the shift to more grant-based financing, the US and its allies continue to raise concerns anytime there is port funding in the Pacific, especially for deep-water ports. This induced a major political reengagement from Australia, the United Kingdom, New Zealand, France and the US.

Some former World War II (WWII) naval bases in the Pacific used by the US and its allies, especially Australia and New Zealand, have come into prominence as controversy surrounded overtures relating to port development. Both Efate and Espiritu Santo in Vanuatu received a massive influx of American military personnel, equipment and infrastructural support during WWII. Roads, wharves and landing strips were built to facilitate the war against Japanese occupation of neighbouring Pacific islands. Luganville, in Vanuatu, was a strategic military post during the 1940 ‘Pacific War’, with 100,000 personnel located there. Given its strategic location northwest of Australia, whoever controls Vanuatu de facto controls the sea lanes between Australia and the US. The Australian government and media, as well as many security commentators, have expressed concerns on the building of a large wharf in the deep-water port in Luganville. Media reports quoted security analysts in Australia and the US who claimed that China was aiming to establish a naval base at the port, something categorically denied by both the Vanuatu and Chinese governments. However, these concerns about military presence in the Pacific islands fail to acknowledge and expose the reality of the many US bases in the region.

Other former WWII deep-water ports have drawn similar interest and contention from the US and its allies, and the institutions they command, like the Asian Development Bank, have been looking for opportunities to be the ones financing their redevelopment. This has been the case with Lombrum port in Papua New Guinea, Pehnryn port in the Cook Islands, and Port Vila in Vanuatu, among others.

In light of all this, port infrastructure development in the region has been bound up with geopolitical concerns, besides considerations of proximity and access to raw materials and minerals. As geopolitical competition heats up, the protection of sea lanes, and by extension the supply chains, that connect Australia and New Zealand to Asia and the Americas is seen as critical by those countries to challenge Chinese access and control of strategic ports. Buried within the rhetoric of the blue economy, therefore, is the realpolitik of ensuring access to resources through the provision of infrastructure for their extraction, and the use of ports for facilitation of military presence if and when needed.

Deep-sea mining

The exploration of deep-sea mining as a frontier extractive enterprise is driven primarily by the demand for metals and minerals required for technologies, particularly those associated with renewable energy and infrastructure. Companies and industry players often tout resources such as cobalt, nickel, manganese and other rare earth metals as ‘green metals’ in global efforts to combat the climate crisis, positioning DSM as a key component of a just transition towards decarbonisation. However, this narrative is deeply misleading.

The growing demand for these metals, fuelled by the global energy transition, perpetuates the false idea that deep-sea minerals are critical for achieving a green transition. In reality, DSM represents the continuation of exploitative resource extraction, a phenomenon deeply connected to Pacific histories and legacies but now being advanced under the guise of saving the planet despite extraction methods that may be devastating for the ocean's ability to act as a climate regulator.

In 2021 at the International Seabed Authority (ISA), Nauru, a small island developing state, triggered the ‘two-year rule’ under the 1994 Implementing Agreement,³ which gives the ISA two years to finalise regulations that will allow exploitation of the seabed or DSM; if it fails to do so, mining will still be allowed to go ahead without the regulations. With the trigger period having expired in July 2023, this untried, untested and highly risky activity could see contractors begin full-scale exploitation as early as 2025. This comes despite the international community acknowledging that there is very limited understanding of the deep ocean, the ecosystems targeted for mining, the mining process and the related technology, as well as the potentially devastating ecological and climatic impacts.

Research suggests that deep-sea mining would disrupt the seabed by extracting mineral nodules from the ocean floor some 4,000–5,500 metres deep. These nodules took millions of years to form and mining them could cause severe harm and extinction to thousands of species, many of which are endemic to these sites. Industry players have long claimed that these are empty deserts, but the deep sea, far from empty, is teeming with life and rich biodiversity from bacteria to megafauna. Despite growing research, still little is known about deep-sea ecosystems and the impacts of mining on deep-sea habitats and the ocean as a whole. However, scientists have established that a healthy ocean is vital to human life. It provides the oxygen we breathe, sequesters approximately one-third of human-generated carbon dioxide, offers protection against severe storm events, and sustains food sources and employment for billions of people.

The Clarion-Clipperton Zone (CCZ), also known as 'the Area', a region spanning some 4.5 million square kilometres in the North Pacific, is considered a common heritage of humankind. However, the ecosystems within this region, which are highly vulnerable to long-term damage, have been targeted for deep-sea mining. While scientists continue to warn that the impacts and severity remain largely unknown, initial studies have indicated that the effects of DSM will likely be irreversible and that recovery will not be possible within human timescales. In addition to severely harming deep-sea biodiversity and ecosystems, mining could create disruptions in the water column that affect the pelagic food system and cause sedimentation plumes that alter the nutrient composition of the water. The ecology of the deep sea impacts the health of the entire ocean. The destruction of the deep sea by mining will likely create irreparable harm not only at the CCZ but across the entire Pacific Ocean. 

With the real possibility that mining could start as early as 2025, there are growing calls by a wide range of actors including civil society organisations, Indigenous communities, scientists, academics, industry players, parliamentarians and some governments for a precautionary pause, moratorium or an outright ban on deep-sea mining. Oceanic and coastal peoples from the Pacific who have already suffered from nuclear testing and are on the frontlines of the climate crisis consider deep-sea mining as the newest threat – one that is already proving harmful to Pacific communities, particularly in Papua New Guinea and Tonga, and their livelihoods, cultural practices and wellbeing. They have joined the growing calls for an outright ban on DSM.

Fisheries negotiations

Subsidies for fisheries have long been used to develop a domestic fleet capacity and then export that fleet elsewhere to fish foreign waters. These established fleets are however using the World Trade Organization’s negotiations on prohibitions on fisheries subsidies as a way to secure their commercial position against the threat of others.

In June 2022 at the WTO Ministerial Conference, the Agreement on Fisheries Subsidies (AFS) was agreed upon.⁴ The AFS prohibits a range of subsidies to fishing and fishers related to overfished stocks, illegal, unreported and unregulated (IUU) fishing, as well as fishing in unregulated waters. While the outcome was lauded by some, its failure to hold accountable those historically most responsible for global overfishing, undermining the sustainability of fish stocks while placing additional burdens on developing countries, represents an empty harvest.

The negotiations on fisheries subsidies have a long history in the WTO but were intensified following adoption by the UN of the Sustainable Development Goals (SDGs). The SDG target 14.6 is to ‘prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognising that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part’ of the WTO negotiations.⁵

The AFS however remains fundamentally flawed and in favour of those countries with large capacity for subsidising and reporting. Its failure to target those historically most responsible for overfishing is ensuring that the burdens of the agreement are being carried by those least responsible. The minimalist special and differential treatment for developing countries fails the SDG mandate. Furthermore, the lack of commitments on technical assistance and capacity building represents yet another failure as well as an obstacle for developing countries, particularly least developed countries, to be able to meet the burdens of this outcome. Instead, resources will have to be either diverted from other purposes or, once again, provided through an overreliance on external assistance. In conclusion, the AFS fails its intended mandate and should be rejected.

Sadly, we're seeing this trend continue with the ongoing negotiations on subsidies that contribute to overfishing and overcapacity. The current negotiations in the WTO continue to avoid adopting the principle of ‘common but differentiated responsibilities’ and targeting those with the historical responsibility for overfishing.

The problem is clear: the estimated 45,000 large-scale vessels (with an overall length of 24m or more and usually associated with over 100 gross tonnage) which represent only under 5% of the world’s motorised fishing vessels but account for an estimated one-third of the total engine power of the global fishing fleet.⁶

The countries with the largest capacity are being let off the hook in many ways. This is firstly seen through the ‘sustainability flexibility’ which will effectively only be available to those with the capacity to measure, manage and subsidise their fleets, as well as meet the notification requirements of the WTO – often the same countries historically responsible for overfishing. Secondly, the proposed prohibitions on subsidies for distant-water fishing are only of a ‘best endeavour’ nature, meaning that while discouraged (with a request to prove that the fishing is sustainable), ultimately the prohibition is unenforceable.

Despite the SDG mandate stipulating the need for special and differential treatment for developing countries, the way that it is being promised in the negotiations is problematic. Developing countries are being split along the lines of how much fish are caught annually, with greater flexibilities envisaged for those small enough to not be considered a market threat. For those above the line, there is a transition period and then no flexibility available to them that isn't on offer for developed countries. Caught up in all of this too are small-scale fishers who are the least responsible for the problem.

The exemptions for the big fleets and the restrictions on the emerging fleets highlight the real, unspoken aim: to ensure that the dominant players remain so, not jeopardising their position through additional competition from other countries. The end result is that the market power and food security of the major players are locked in while they are praised for their 'blue' credentials. All of this is done through an organisation like the WTO that continues to fail in supporting development and under the rhetoric of ocean conservation.

Marine biodiversity and blue carbon

After almost two decades of negotiations, the legally binding UN treaty on the Conservation and Sustainable Use of Marine Biological Diversity of Areas Beyond National Jurisdiction (BBNJ Agreement) was adopted in June 2023 to much fanfare.⁷

The BBNJ outcome aims not just to conserve the biodiversity of oceans but also to govern how it is to be used. The conservation dimension has placed in a legally binding framework the Global Biodiversity Framework concept of ‘30x30’ – protecting 30% of ocean space through marine protected areas by 2030.⁸  This approach is linked via a climate-ocean nexus with those conservation efforts being connected to the financialised carbon markets, including emissions trading schemes, bonds, insurance, etc., which seek to use these protected areas as stored carbon sinks. Concerns have been expressed that such offsetting projects will be used by those most responsible for historical greenhouse gas emissions to appear to reduce their emissions despite not actually reducing them. This contradicts their actual responsibilities to cut emissions under the principle of common but differentiated responsibilities, ultimately undermining any conservation benefits from the marine protected areas.

Which brings us to the new frontier of capitalist expansion in the Pacific – the promotion of carbon markets in the context of ‘blue carbon’. Blue carbon is the carbon that is absorbed by coastal ecosystems, such as wetlands, salt flats and mangroves, and the benthic sediment on the ocean floor.

Carbon markets have failed to bring down emissions for a range of reasons. A considerable part of the problem is the fabrication of carbon credits from ‘avoidance’ sources. Avoidance credits, sourced from protecting an area that is threatened by damaging activities such as logging, are exceedingly hard to prove as legitimate; in many individual examples, the threat has been proved to be fraudulent. As avoidance credits make up 75% of credits,⁹ a significant majority of carbon credits are likely to be fraudulent and do not represent significant emissions reduction in any form.¹⁰

The second failure of carbon markets is seen in how they are currently used. In the Pacific, we are witnessing Australia securing carbon credit projects in countries like Papua New Guinea to ‘cancel out’ the impacts of its 114 new oil and gas projects.¹¹ Proponents of carbon markets consistently point to the expansion of carbon markets as a good thing for engaging polluters in reducing their emissions, but very little is being done in terms of preventing the ongoing use of (ineffective) carbon markets to avoid emissions reduction.

The oft-cited justification for carbon markets is that they redistribute funds to frontline communities in need. However, the Pacific is littered with examples where carbon project managers from outside the region have failed to fulfil promises of financial benefits for local communities who have responsibility for a site that sequesters carbon. On top of this concerning pattern, using market-based mechanisms leaves the financial circumstances of local communities vulnerable to market dynamics. This is a privatisation of developed countries’ obligations to provide stable, consistent, meaningful and grant-based funding to countries and communities who are doing the most to protect the climate while contributing the least to the climate crisis.

Enabling this state of affairs are international conservation organisations and international financial institutions like the Asian Development Bank and World Bank. These entities are preparing the pipeline of carbon market projects by encouraging Pacific countries to map their blue carbon zones to facilitate bringing more credits to market.¹² Papua New Guinea has signed an agreement with UAE-based company Blue Carbon LLC to sell blue carbon credits.¹³ New Zealand and Australia are mapping their coastal ecosystems to calculate the amount of carbon sequestered. In November this year, Fiji commenced blue carbon assessments in mangrove areas with support from the German government.¹⁴

Countries and communities alike should exercise high levels of scepticism when considering carbon markets and their blue carbon expansion. What we can see from previous experience with carbon markets and the motivations of international financial institutions is an embedding of a new industrial landscape distributed across existing geopolitical dynamics. The Global South farms carbon credits for the Global North to use as an exit door on emissions reduction responsibilities, and this is disguised as a benevolent quid-pro-quo arrangement between wealthier and poorer countries. This arrangement asymmetrically benefits the wealthy countries, further enabling their accumulation of wealth.

Conclusion

Pacific peoples have a spiritual, social and economic relationship with the land and the ocean. The blue economy, and with it the industrialisation of the ocean, allows former colonial rulers, often aided and abetted by some Pacific island governments and elites,  transnational corporations and multilateral financial institutions to reshape the way the ocean’s value is determined. Pacific peoples have a connection to the ocean that goes beyond the commercial valuation promoted through the blue economy paradigm. For them, the ocean holds histories, ancestors, song lines as well as livelihoods, relationships and sustenance.

In contrast, the blue economy aims to enable the exploitation of oceanic resources, promising development but delivering an outflow of resources and profits largely to the Global North. To do so effectively, it requires physical infrastructure that is in close proximity to the abundant natural resources, so as to secure their movement out of the Pacific island countries, as well as governance rules that can be used to enforce this free movement of resources. Infrastructure financing (and the debt incurred) along with WTO and ISA governance mechanisms and the expansion of carbon markets will open the oceans to greater exploitation with little regard for development and conservation.

The quick-fix promises of the blue economy do not align with the custodianship obligations and already-existing economic systems of Pacific peoples. Instead, the countries of the Global North must address the part they play in the current crises that the oceans of the world face, rather than doubling down on that by expanding the marketisation, industrialisation and militarisation of the ocean.        

Adam Wolfenden is Co–Deputy Coordinator of the Pacific Network on Globalisation (PANG), a regional network that envisions a Pacific where peoples’ rights to be self-determining, self-reliant and self-sufficient are recognised and upheld. He has worked in the Pacific monitoring negotiations on numerous regional trade agreements, WTO accessions and working against resource grabbing.

Maureen Penjueli is an Indigenous activist with almost 30 years of experience working on ecological, political, economic and trade justice issues with a focus on elevating gender and Indigenous peoples’ rights. She is the Coordinator of PANG.

India Logan-Riley (Ngāti Kahungunu, Rongomaiwahine, Rangitāne) is the climate campaigner at PANG. They have a background in local Indigenous climate activism and international climate negotiation advocacy. They also work in Māori and climate research and sit on the steering committee for Ngā Toki Whakarururanga, a Māori organisation that monitors Te Tiriti o Waitangi compliance in the trade negotiation space.

Laisa Nainoka is an oceans campaigner with PANG and part of the Pacific Blue Line Secretariat, a campaign that collaborates with like-minded organisations, Indigenous groups and Pacific communities to advocate for a global ban on deep-sea mining.

The above article is adapted and updated from an earlier version that appeared in the journal Development, published by the Society for International Development, titled ‘Blue Economy: Industrialization and Militarization of Oceans?’.

Notes

1.       The ‘blue economy’ concept grew out of the broader ‘green growth’ concept and increased concern about the heavy damage caused to the ocean and coastal ecosystems by manmade activities such as overfishing, habitat destruction, land-based and marine pollution, shrimp farms, oil and gas extraction, large-scale infrastructure, ocean acidification and climate change.

2.       Pacific Network on Globalisation (2022). ‘All That Blue: Re-sourcing, Ports and Geopolitics in the Pacific’.

3.       Singh, P. (2022). ‘The Invocation of the “Two-Year Rule” at the International Seabed Authority: Legal Consequences and Implications,’ The International Journal of Marine and Coastal Law, 37:3, DOI:10.1163/15718085-bja10098.

4.       World Trade Organization (2022). ‘Agreement on Fisheries Subsidies,’.

5.       United Nations Department of Economic and Social Affairs (n.d.). ‘Goal 14,’.

6.       FAO (2022). The State of World Fisheries and Aquaculture 2022.

7.       https://www.un.org/bbnjagreement/en.

8.       United Nations (2023). ‘UN delegates reach historic agreement on marine biodiversity,’ 5 March.

9.       Friedmann, Julio and Matthew D. Potts (2023). ‘Removal, reduction and avoidance credits explained,’ Carbon Direct.

10.     Greenfield, Patrick (2023). ‘Revealed: more than 90% of rainforest carbon offsets by biggest certifier are worthless, analysis shows,’ The Guardian, 18 January.

11.     Four Corners (2023). ‘Is the carbon trade doing more harm than good?’ ABC News In-depth.

12.     World Bank (2023). ‘Unlocking Blue Carbon Development: Investment Readiness Framework for Governments’; PROBLUE (2023). ‘Work Supported by PROBLUE,’ World Bank; Asian Development Bank (2022). ‘ADB Blue Pacific Finance Hub: A Regional Approach’.

13.     Lang, Chris (2023). ‘Papua New Guinea signs a new carbon deal with Blue Carbon LLC at COP28,’ REDD-Monitor.

14.     Secretariat of the Pacific Regional Environment Programme (2024). ‘Fiji Begins Blue Carbon Assessment to Boost Conservation’.

*Third World Resurgence No. 361, 2024/4, pp 22-27