Insights

The Exclusive Economic Zone Act (the “EEZ Act”), as enacted in 2021, catered for the establishment of an Exclusive Economic Zone (“EEZ”) adjacent to Malta’s territorial waters. In principle, the UN Convention on the Law of the Sea (“UNCLOS”) dictates that an EEZ shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. The EEZ Act also specifies that any boundary with any State which has a coast opposite that of Malta, shall be determined by agreement between Malta and such other State, or in the absence of any such agreement, the boundary shall be considered as being the median line.

The establishment of an EEZ will, inter alia, grant Malta:

• sovereign rights for the purpose of exploring, exploiting, conserving and managing natural resources found in the EEZ;
• sovereign rights for the exploration and exploitation of the EEZ, such as for the production of energy from the water, currents and wind;
• jurisdiction with regard to the establishment and use of artificial islands, installations and structures;
• jurisdiction regarding marine scientific research; and
• jurisdiction regarding the protection and preservation of the marine environment.

Bill No. 62 of the Fourteenth Legislature, ‘the Exclusive Economic Zone and Various Laws (Amendment) Bill’ (the “Bill”), which is currently being discussed in Parliament, proposes various amendments to the EEZ Act and ancillary legislation.  The Bill, if approved by Parliament, will require that the economic exploration or exploitation of the EEZ be subject to the issuance of a licence authorising such exploration or exploitation (with the said exploration or exploitation being subject to the requirements or conditions of any such licence).

While Article 10 of the EEZ Act limitedly extends Malta’s criminal and civil jurisdiction to any artificial island, installation, structure or device, (with the Bill also proposing to include “equipment” in this list), the Bill endeavours to amend various other laws in order to specifically extend their applicability to the EEZ.  By way of example, the Criminal Code, the Code of Organization and Civil Procedure, the Civil Code, and any subsidiary legislation made thereunder, shall also apply to an EEZ area, with the Bill further clarifying that for the purposes of these Codes, any artificial island, installation, structure, equipment or device shall, solely for the purposes of these Codes, be treated as if they were situated in Malta.

The Bill proposes amendments to various other laws, either by extending their applicability to artificial islands, installations, structures, equipment, or devices found in the EEZ, or alternatively by catering for the possibility of regulations to be issued under specific laws for the purpose of regulating their applicability to the EEZ.  The laws being amended include customs, fiscal, health, safety, immigration, business promotion, fishing, transportation, intellectual property, employment, and environmental laws.

While the establishment of an EEZ will be an innovative development for Malta, and while various resources could be tapped into as a result of the EEZ Act (such as floating renewable energy projects), the underlying concepts of the EEZ Act and of the Bill are not entirely new to the Maltese legal system. Indeed, the Continental Shelf Act, enacted in 2014, has already adopted most of the above concepts in Maltese law, albeit solely in relation to the seabed and subsoil of the submarine areas that extend beyond the territorial waters of Malta. Similarly, the Fisheries Conservation and Management Act has also already extended Malta’s sovereign rights, for fishing purposes, beyond Malta’s territorial waters to 25 nautical miles from the baselines from which the breadth of the territorial sea is measured.

While the scope for investing in Malta has always been limited due to Malta’s size, the establishment of an EEZ will offer a new dynamic.  Once an EEZ is declared, one will be able to look beyond Malta and its territorial waters, albeit limitedly in relation to the rights which Malta will obtain over any such area in accordance with international law.  The obvious projects which come to mind would be offshore or floating renewable energy projects (even due to the ongoing advancement in the technology which these projects make use of), though other opportunities for investment, research and conservation should not be discarded.

This article was first published in the Malta Business Weekly on 31/08/2023.

Authors: George Bugeja (Senior Associate, Ganado Advocates) and Chantal Borg (Intern, Ganado Advocates).