Subject: Request for Corrections

Dear Editor: 

I am writing to request correction of the deliberate misleading omissions and inaccuracies in your January 31, 2024, article "How a US mining firm sued Mexico for billions – for trying to protect its own seabed” by Laura Paddison.

The article omits significant information and context that resulted in materially misleading conclusions and made certain inaccurate statements, both in clear violation of the arguably most important of The Guardian’s editorial standards: 

• Accuracy: “Journalists must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text”. Guardian News & Media Editorial code of practice, clause 1(i)

• Accuracy and Objectivity: "Journalists should take care to be accurate. Significant errors must be corrected as soon as possible, and if a piece of journalism misleads, it should be clarified. Journalists working in news should always strive to be fair and objective in their reporting.” Guardian News & Media Editorial code guidance, clause A

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I have not included all of the article’s inaccuracies, misleading statements, and omissions in this letter, but the following are the most significant. 

Omission of Mexican federal court order 
The most glaring – and telling – omission in the article is that the Tribunal Federal de Justicia Administrativa (TFJA), Mexico’s highest federal administrative court, ruled unanimously in 2018 that the Mexican environmental agency (SEMARNAT) had unlawfully denied Odyssey’s subsidiary, Exploraciones Oceánicas S. de R.L. de C.V.’s (ExO) environmental permit in 2016. The TFJA ordered the agency to retake its decision. This ruling was the first time in 20 years that the 11-member tribunal had issued a unanimous decision. The article also failed to mention that just days after the TFJA ordered SEMARNAT to conduct a wholesale review of the permit and the scientific evidence it had ignored, SEMARNAT issued a press release proclaiming it would deny the permit again, which it did six months later. ExO attempted to use the administrative process but, when SEMARNAT again violated Mexico’s laws, Odyssey determined it needed to start the arbitration in order to protect its shareholders’ investment. The omission of these key facts regarding SEMARNAT’s denial and the TFJA ruling is misleading and demonstrates the lack of objectivity of the article.

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Misleading headline 
The article's headline is misleading and lacks support from the facts presented and the text of the article. Contrary to the suggestion that Odyssey's arbitration claim was a response to Mexico "trying to protect its own seabed," it was actually the result of SEMARNAT’s manifestly arbitrary and discriminatory denial of the permit based on a politician’s directive. Specifically, SEMARNAT rejected a fully compliant environmental permit application in what appears to have been a
politically motivated decision. Odyssey's post-hearing brief filed in the arbitration provided evidence to substantiate this claim and was not convincingly or credibly refuted by Mexico. The article also does not refer at all to Mexico’s efforts to “protect its own seabed,” as the title states, although the article implies obliquely that Mexico had environmental interests in denying the permit. 

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Other inaccurate statements and other misleading omissions 

1.   Environmental assessments and deficiencies in SEMARNAT’s denial

The article states, “At last, six years later in  2018, Mexico’s government eventually rejected the mine because the potential environmental impacts would be too  damaging” but omits the inaccuracies and deficiencies in SEMARNAT’s decision, including its misapplication of industry and scientific literature, that was ruled unlawful by the TFJA. 

 

For example, SEMARNAT’s denial of ExO’s permit relied on literature and journal-published opinions related to deep-sea mining and for mineral types different than those considered for the ExO project, which SEMARNAT incorrectly associated with the ExO project. SEMARNAT’s denial also incorrectly interpreted valid scientific literature for the Pacific coast of Baja California Sur, greatly misidentifying the population density of loggerhead turtles. 

 

ExO’s publicly available arbitration briefing also includes details about the extensive environmental assessment that ExO conducted over three years, the results of which refute any argument that the project would have had an adverse impact on the seabed or marine environment. The environmental assessment included input from marine dredging experts and 
environmental scientists with global experience to craft a sustainable development plan. The 
article fails to mention this work or its results.

 

The article also overlooks SEMARNAT's approval of other projects in the region using dredging technology. Notably, the technology proposed by ExO's operating partner has been safely employed in Mexican waters for over 20 years on more than 200 projects. ExO's dredging plan includes extensive measures to limit environmental impacts, surpassing the conditions described in approved permits for dredging projects in Mexico, some of which overlap with sensitive  ecosystems and habitats for species with special conservation status. 

 

Reasonable diligence and objective reporting by the journalist would have considered these details, which are public and readily available. 

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2.  The Ship 

The article states, “The Ship. When it first appeared, it looked like a floating city.” This is inaccurate or misleading in multiple ways. 

First, Odyssey's vessel, the Odyssey Explorer, showcased in a photograph accompanying the article with the caption, “A hulking, confusing presence,” was never utilized for the ExO project or any other mineral exploration during its ownership by Odyssey. 

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Instead, Odyssey and ExO carried out the exploration and environmental analysis on a leased research ship specifically equipped for marine mineral and environmental exploration known as the Dorado Discovery. This vessel was a nondescript, plain blue ship without any Odyssey branding.

 

Second, it is unclear whether Mr. Aguilar could have seen the ship and, if he had, how he concluded that it differed from other research vessels. The article doesn’t specify whether Mr. Aguilar purported to make his observations from onshore or on a fishing boat but, based on the article’s text, “Like many others in the tiny fishing towns of San Juanico, Las Barrancas and others in north-west Mexico,” one would infer that Mr. Aguilar’s observations were from land. However,
the Dorado Discovery could not have been routinely visible by persons on the shore of Baja California Sur, as the phosphate deposit within which ExO’s license area is located is 20-40 kilometers (11-22 nautical miles) offshore.

• The fishing town of San Juanico, which faces southeastward, is hindered by mountains to the west, preventing a view of the license area. 

• Las Barrancas, which is roughly nine kilometers (five nautical miles) away from the license area, also does not afford visibility of the license area from the shore. 

• The ship would not have been observable by persons standing near sea level during its transits between the license area and ports of call to and from the license area and ports of call. The ship primarily operated in and out of San Diego, CA, USA, with a few port calls for crew transfers in Los Cabos, Mexico – south of the license area. 

• Even under the right conditions, without an obscured view, the Earth's curvature restricts visibility from sea level to less than 3.7 kilometers (approximately two nautical miles). An average-height person can see up to approximately five kilometers (2.8 nautical miles) at sea level if their eyes are six feet above sea level and the weather is good1. So, although it may be technically possible to see a ship from shore with the right height or elevation, a ship operating that far offshore would be very small from the shoreline and not “a hulking, confusing presence off the Pacific coast of Baja California Sur” as claimed by Mr. Aguilar. 

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Had Mr. Aguilar been making these observations from a fishing boat within range to view the ship, he would not have had grounds to claim that "the enormous ship wasn't one of the research vessels that edged along the Baja coast to survey the rich marine life." At 96 meters long, the Dorado Discovery is of a similar size and configuration as an average-sized research vessel with open ocean capability and was conducting exploration and environmental baseline studies. 

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3.   The short seller 
Further calling into question Ms. Paddison’s sources, the article cites Ryan Morris’ 2013 report without acknowledging Mr. Morris’ widely known status as a short seller of Odyssey’s common stock with a vested interest in driving down Odyssey's stock price.

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4.   Protection for fishing operations 
The article does not objectively portray the support of local fisheries or Odyssey’s and ExO’s engagement with the local fishing community; instead, it relies on one misleading point of view as representative of the entire fishing community. Engaging with and managing potential impacts on local communities and sea users, especially fisheries, is an important part of Odyssey’s work and a core component of its mission. Accordingly, in exploring the license area and preparing the 
project work plan, Odyssey and ExO sought to minimize and mitigate interference with the local fishing concessions. Odyssey actively engaged with the five local fishing cooperatives and ultimately achieved the support of four. The Puerto Chale Fishing Cooperative, referenced in the article, is the only one that opposed the project. While the article mentions that Odyssey received support from other fisheries, it does not report that Puerto Chale does not represent most fishers
in the region. The letters from other cooperatives expressed interest in the project and in working cooperatively with Odyssey so that the country could realize the economic and agricultural benefits from the project and agreed that it would have little to no impact on their activities. We confidentially provided letters of support to Ms. Paddison for background and would be happy to send these letters again for background. A fair and balanced story would have shared the views 
of a broader community in the region.

The article also omits the project work plan’s detailed outlined measures to prevent interference with fishing operations, including its voluntary relinquishment of a majority of ExO’s original concession granted in 2012. 

Finally, the article ends with, “If Odyssey wins a second look at the mining project, he says they are prepared to keep fighting.” This misleadingly implies that Odyssey’s pending arbitration could result in the arbitration tribunal forcing Mexico to grant the environmental permit, which is not the case.

Ms. Paddison contacted Odyssey in June 2023 with a series of questions and statements to fact￾check relating to the article. Odyssey responded fully to her questions in writing, provided corrections to several inaccuracies in her initial statements, and shared extensive information about our company and the NAFTA claim, as requested. All of the items noted above were among the information provided to Ms. Paddison. We were, therefore, surprised at the lack of objectivity and misleading omissions and inaccuracies. 

We request that you make the factual corrections to the article outlined in this letter. We hope The Guardian will be more responsible in its reporting regarding Odyssey Marine Exploration in the future.

Sincerely,

Mark D. Gordon 
Chief Executive Officer and Chairman of the Board of Directors 
Odyssey Marine Exploration, Inc

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