Private sector participation in exploration of space: A Legal Analysis

Air & Space Law

Submitted by

Anurag Chaudhari

150101024

Submitted to

Dr. Shakuntala Sangam

Assistant Professor
Introduction

As far back as 1957 the Soviet put a satellite into space; the US follow the suit. As a sovereign
country, involvement in the space activity is a great prestige, honour, and means of making
position before the world community.Immediately the UN reacted and within a few years a
treaty was prepared, The Outer Space Treaty 1967. This treaty largely govern the act of state and
make the respective government responsible for the non-governmental space activity.In 21 st
century, we saw that Nations increasing liberalized the space sector and handing over the
running of space satellite to private sector. Now, private enterprises become active stakeholder,
so the development of new technologies can occur faster and that the technology thus developed
is superior. The private sector possesses leadership, expertise, financial capital with the risk
taking ability which is simply unavailable to most governments and thus the advantages of
working with the private sector is crucial when dealing with Outer Space. The estimated
investment by private sector in all space activities totaled over $350 billion, a huge industry not
only for today but also for the future.1 This included weather and broadcasting satellites sent up
by companies, recovery of space resource, navigation technologies, and transportation of
materials into outer space as well as the relatively recent investment in Space Tourism by
company like space X.

The stepsalready have taken with regard to regulation of these activities. These include
provisions such as Article 6 of the Outer Space treaty that articulates “State is internationally
responsible for its governmental or non-governmental activities and for securing compliance of
these activities with the provisions of the Outer Space Treaty. The space activities of the non-
governmental entities necessitate the authorization and supervision of the appropriate State."
Hence the onus for regulation of the private sector was on the government of that country, they
decided the laws and the regulation however unlike with regard to say the use of the sea, there
are no internationally binding regulations imposed upon the private sector in their use of outer
space.

1
https://www.cnbc.com/2018/06/22/morgan-stanley-space-investment-pattern-forming-like-autonomous.html
accessed on 8 march 2020.
Legal complexity of outer space law for private players

1. Liability

While dealing with the private sector the liability of governmental or non- governmental
agency,outer space treaty makes it clear that national activities includes activities carried
on by non-governmental entities. Art VI of Outer Space Treaty, makes it clear that state
would be internationally liable for the damage caused by space object when it is
launching, procuring the launch or its territory or facility has been used for launching the
object. Thus, state has exclusive power regulate space activities under its territory. Art
VII specifically provides state parties will regulate space activities under their respective
territory. Liability Convention is an expansion of Art VI and VII of outer space treaty.
Thus, in absence of any domestic policy state can be held liable under the liability
convention.Thus, if an accident has been occurred due to any establishment or act by the
private player in the outer space state has been responsible for the act though, it is the
company who is benefitting from the revenue generated and so it is reasonable to hold
them responsible for the causality.

Also, if some damage is caused by a satellite orbiting in space owned by the company
then under current treaties there in no way to fine the company in any manner, as
domestic laws are only ones which apply and we don't know which nations domestic law
we must follow. In such a situation in a high pressure environment the lack of clarity is
likely to cause problem.

Moreover, it is also pertinent to note that there has been no regulation regarding transfer
of space objects, though the selling and purchasing of space objects have been common
in modern period of time.
 2. Ownership of resources

One of the most lucrative opportunity for the private sector in outer space has emerged as
mining of resources from celestial bodies such as the moon and asteroids. This is a
potentially huge industry wherein space mining may provide resources such as gold,
silver and platinum which may satisfy demand for these products on earth. Moreover,
energy demands on earth may also be satisfied using space resources. For Example- use
of helium-3 which is found on lunar surface. As report suggested extraction and the
subsequent use of helium-3 is expected to generate billions in revenue for the private
entities.2The private sector is also interested in extracting water from the moon. By
looking at the potential of space exploitation it is desirable to have regulations to ensure
that extraction is efficient, sustainable and companies are prevented from establishing a
monopoly over any particular space resource.
The Moon Treaty tries to answer some question, this treaty banned any ownership of any
extra-terrestrial property by any organization or private person, unless that organization is
international and governmental. Although, this treaty contains the provision related to
natural resources on moon. This is referred as most controversial provision since it hinder
the activities of the private sector in outer space because it declared the moon and all
other celestial bodies as the, "common heritage of all man-kind" and called for "an
equitable sharing by all states parties in the benefits derived from those resources". Since
Private sector have to share all they obtain, it just take away the incentive of private
enterprises and inevitably lead to slowing down the technological growth of space sector.
However, the treaty hasn't been ratified by a single major space faring nation and the US
has passed a law that directly contradicts this.3So for all purposes the moon treaty is not
law. Thus, it is explicit that we need to have international regulation in relation to status
of the ownership of the extracted resources which cater the need prescribed by the
international community that space activity will be for common interest of all nation.

3. Ownership of territory in outer space

2
Christopher Allen SlocumDefining the Helium-3 Industry for Private Sector<http://azoilgas.com/wp-
content/uploads/2016/10/Defining-Helium-3-for-Private-Sector-Slocum-2016.pdf>accessed on 10 Nov 2018.
3
Michael ListnerThe Moon Treaty: failed international law or waiting in the shadows?
<http://www.thespacereview.com/article/1954/1> accessed on 10 march 2020.
 Private enterprises would be unwilling to pour billions of dollar of investment into
building colonies on planets if they don't own these colonies. As suggested by the outer
space treaty, it expressly forbade any claims of sovereignty in outer space. As Article II
of outer space treaty simply forbids the national appropriation of outer space and the
celestial bodies, by claim of sovereignty, by means of occupation, or by any other mean.
Here, the term ‘by any other mean’ includes activity of private entities. 4 Reading of Art II
with Art VI together, makes it clear that not only states but also private entities are
prohibited from claiming property right.5This is burdensome because building of
colonies, hotel may be illegal under the current laws interpretation. Thus, Ownership of
land in outer space remains a particularly controversial issue, and there is a need to clear
up any potential ambiguity, regarding whether or not property rights exist in outer space.

4. Ensuring the peaceful use of Outer space

Article IV of The Outer Space Treaty delivers regarding prevention of nuclear weapons
and weapons of mass destruction. The provisions of this article only explicitly prohibit
nuclear weapons and WMD, while ballistic missile armed is consciously out of this
qualification.6It does not specifically address the placement of non-nuclear weapons,
devices or those that are not capable of causing mass destruction. This article designates
for a fractional prohibition of arms only. Existing law doesn’t cover the exclusive
prevention of arms in outer space. Moreover, militarisation of space is prohibited. 7
However, law is shaky in this regard as it is not clear as to what constitute military
activities and what comprise of civilian activities or rather peaceful use of outer space. A
satellite can be used for the purpose of providing telecommunication services and can at
the same time be used for military purpose.

4
Shailendra Kumar, Space Legislation in India Immerging Issues, 2015 Regal Publication 118.
5
Shailendra Kumar, Space Legislation in India Immerging Issues, 2015 Regal Publication 118.
6
Christol CQ, “Outer Space: Problems of Law and Policy. By Glenn H. Reynolds and Robert P. Merges. Boulder,
San Francisco and London: Westview Press, 1989. Pp. Xvi, 349. Index. $52.50.” (1990) 84 American Journal of
International Law 805.
7
Article IV of the Outer Space Treaty 1967.
 5. Space Debris
Article IX of The Outer Space Treaty requires launching States to preserve the
environment of outer space in the matter of its space activities. However, there is no
follow-on treaty to further define that responsibility or the role that orbital space debris
plays.8No legally binding treaty addresses space debris and protection of the space
environment as like as the earth environment through using outer space. The United
Nations makes the Space Debris Mitigation Guidelines that have no legal binding under
international law, but States are encouraged to take actions to ensure that the guidelines
are applied.9

Possible Solutions
One of the major reason behind the failure of Moon treaty is that nations support mining space,
they support owning property in outer space, and they support the commercial use of outer space.
And this is area where we need to find out a sustainable solution. Since, resources on the earth
incessantly running out those days are not far when we will have to use natural resources of
space. Thus, it is indisputable that we need the natural resources of space for the benefit of all
mankind. To do this we need regulations which can only be implemented with the negotiation
between the all the major economy of the world.

1. Larger Role of UN or any mutually agreed organization

If a private sector entity intends to build a colony on, say, mars. They should be permitted
to do this. However they wouldn't own the territory they would simply, "rent" it from the
UN or any mutually agreed body as the "owner" of territories in space in order to operate
their space hotels and colonies. Also, a permit has to be taken from the UN to extract the
natural resource and these private sector entities will be required to pay a tax on any
earnings that they make by mining these space resources directly to the UN. Having the
UN as the owner also ensures that the "common interest" principal is full-filled because

8
Listner, M. J. (2011). International Space Law: An Overview of Law and Issues. New Hampshire Bar Journal, 62-7
as cited in Islam, M. S. (2018). The Sustainable Use of Outer Space: Complications and Legal Challenges to the
Peaceful Uses and Benefit of Humankind. Beijing Law Review , 9, 235-254. https://doi.org/10.4236/blr.2020 .
92016.
9
Ibid.
 the revenue generated via this rent will then be used by the UN in its general operations.
Moreover, if such a proposal goes through there have to be strict guidelines and criteria in
place while choosing which company to grant such a lease to bearing in mind the high
risk posed by such colonies to the inhabitants of these colonies and hotels but also to
other space craft due to the potential debris created. This is a more viable option than
simply prohibiting mining, seeing as how states capable of mining are already attempting
to do so, enlisting the help of the private sector as they go along.

Moreover, a central UN administered control center can be established for all space
flight. As the sheer volume of space flight increases the current procedure of informing
the office of the secretary general before each space flight is inefficient. Thus, setting up
a space flight control center will ensure that there is a single point of correspondence for
the private sector and this will encourage more and more of them to get involved in
activities in outer space. This is also crucial in preventing accidents as all states will be
kept informed and space flights be cleared by this control center.

Further, there is need for a committee that reviews applications of companies who wish
to undertake activities in outer space. This committee will evaluate companies based on:
capital employed (can they affordrequisite safety), past history of accidents and
involvement in transportation of individuals among other stringent guidelines.
Resolutions should outline the exact parameters that companies must meet in order to
qualify for space programs. This will again ensure the safety of not only those directly
being transported but of those in outer space in general and again will ensure that a lack
of legislation on these matters in certain states is not exploited by the private sector.
It is also noted that in the international space law enforcement provisions and
mechanisms are uncertain. Hence, with specific mechanism for enforcement of the law
and there has also been a need for space court for dispute settlement among the space
faring nations.

2. Extending mandate of treaties on the private sector

Although, there has been little attempt to exclusively regulate and control the actions of
the private sector in outer space, indeed most treaties in this field deal with states
themselves. However, these conventions have widespread support and are regarded, as
being fairly successful. Thus, extending their mandate is an easy solution. For example,
under the liability convention states must launch spacecraft in such a manner that they do
not damage any other nation’s equipment, if damage occurs they must pay appropriate
compensation. Similarly, under the rescue agreement it is incumbent upon states to rescue
those astronauts that they have the means to do, without threatening the life of their own
citizens.
Conclusion
We urgently need the regulation which are going to bind the all the nations,UN has to play
significant role in regulating the space activities as well as give impetus to the activity of the
private players while catering the common good of the all the nations. This is the great
opportunity to use space as a platform to increase the benefits in the field of economic, social and
environmental development. The use of space application is a fundamental tool for conveying
development throughout the world. The core important matters to ensure the sustainable use of
space and to promote the developing countries to get benefits from space activities are
international cooperation and attitude of good faith towards implementing, regulating the space
law in the exploration and peaceful uses of outer space.So, each spacefaring country should
maintain and make sure they guarantee that all activities will be for the peaceful use and for
humanity which solely depends on the good faith, mutual cooperation, respect to other interest
and equality, and ensure equitable participation of space benefits as well. In this context, to
ensure sustainable uses of outer space, the actual problem is not only the law itself. The genuine
challenge is making the political determination to address the law. Therefore, international
community needs to regulate a set of new rules and principles which can only be achieved with
political will, which is difficult but not impossible.
Bibliography
Primary Source

 The "Outer Space Treaty" 1967.

Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer
Space, including the Moon and Other Celestial Bodies.

 The "Rescue Agreement" 1968.

Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects
Launched into Outer Space.

 The "Liability Convention" 1972.

Convention on International Liability for Damage Caused by Space Objects.

 The "Registration Convention" 1976.

Convention on Registration of Objects Launched into Outer Space.

 The "Moon Agreement"1984

Agreement Governing the Activities of States on the Moon and Other Celestial Bodies.
Article

 Anagh Agarwal Regulating activities of the private sector in outer

space<http://www.daimun.org/pdf/Anagh2.pdf> accessed on 10 march 2020.

This article agrues for the lack of international treaty to govern the private activities in space.
This article also argues what may be possible solutions to overcome the difficulty of regulating
the private players.

 Islam, M. S. (2018). The Sustainable Use of Outer Space: Complications and Legal Challenges to
the Peaceful Uses and Benefit of Humankind. Beijing Law Review, 9, 235-254.
<https://phys.org/news/2017-10-private-companies-space.html#jCp> accessed on 10
march 2020.
This article argues that the existing legal protection towards the peaceful and sustainable uses of
space is not measured satisfactorily well-organized and competent.Particularly, the issue of
commercialization of space is not well agreed. The paper examine the shortcomings of
present regimes and legalchallenges to the sustainable use of space.
 EvaristJonckheereThe Privatization of Outer Space and the Consequences for Space
Law<https://lib.ugent.be/fulltxt/RUG01/002/479/330/RUG01-
002479330_2018_0001_AC.pdf>
This paper argues for the amendment of moon treaty and also support for the development of
efficient international regime to regulate the private activities in space. This paper also deals with
the issue related to tourism in space and exploitation of resources in space.
 Juan Davalos International Standards in Regulating Space Travel: Clarifying
Ambiguities in the Commercial Era of Outer
Space<http://law.emory.edu/eilr/content/volume-30/issue-4/comments/standards-
regulating-space-travel-ambiguities-outer-space.html> accessed on 8 march 2020.
This paper describe the importance of creating uniform and unambiguous definitions for the term
such as militarization, space object, outer space.

Books
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 Ram S. Jakhu and Paul Stephen Dempsey Routledge Handbook of Space Law Routledge
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