Space Law: Private Companies And Their Legal Boundaries

The question of whether existing space law applies to private companies is a complex one. While the United Nations has adopted five treaties on outer space, including the Outer Space Treaty of 1967, these laws are largely insufficient to cover all legal issues arising from private activities in space. For example, the issue of liability for potential damages caused by space activities is not fully addressed in the existing treaties. The Outer Space Treaty states that bound states shall be liable for both governmental and non-governmental activities, but this could cause considerable damage to states if private companies can simply pass off risks.

The emergence of private space companies and the increasing privatisation of space exploration have created legal ambiguities regarding the status of these companies in orbital space. The US, for instance, recently passed the SPACE Act, which enables US citizens to privately possess, own, transport, use, and sell resources obtained in outer space. This has led to concerns about the reinforcement of Earth-bound wealth inequalities and the commodification of space.

The lack of clear regulations and the need for exhaustive national regulations are evident in other areas as well, such as the attribution of property rights in space and the protection of the space environment from contamination. The increasing involvement of private companies in space activities underlines the need for elaborated national space laws or exhaustive international regulations to provide legal certainty in this field.

The Space Commerce Free Enterprise Bill and the Outer Space Treaty

The Outer Space Treaty, or OST, was ratified into international law in 1967. It is considered the most relevant piece of legislation for analysing state and non-state activity in outer space. The treaty is widely accepted as an authoritative document and has formed the basis for all other space treaties that have succeeded it. The OST was designed to prevent the militarisation of space and national appropriation of celestial bodies at the height of Cold War tensions.

The Space Commerce Free Enterprise Bill, passed by the House of Representatives in 2018, works off the OST. The bill says private companies don't have to abide by the OST, which the United States and dozens of other countries signed in 1967 and serves as a basic framework for keeping space safe and accessible for every country. The bill grants the Office of Space Commerce of the Department of Commerce the authority to issue certifications to US nationals and nongovernmental entities for the operation of human-made objects launched from Earth and the items carried on them.

The bill also bundles almost all space mission approvals under the Office of Space Commerce to encourage as many companies as possible to launch objects into space. The office would be in charge of everything from a theoretical asteroid mining industry to private space stations, which have been proposed as tourist attractions by companies like Blue Origin.

The passage of the bill means that the US is completely ignoring what’s outlined in a 51-year-old treaty designed to keep space peaceful and war-free. It also means that the US does not believe that it’s liable for activities of private space companies like SpaceX or Blue Origin. This could create an unfavourable interpretation of international law and set a bad example for other nations who are enacting private space activities.

The role of the Office of Space Commerce

The Office of Space Commerce (OSC) is a unit within the National Oceanic and Atmospheric Administration, which is part of the United States Department of Commerce. Its mission is to foster the conditions for the economic growth and technological advancement of the U.S. commercial space industry.

The OSC is the principal unit for space commerce policy activities within the Department of Commerce. Its vision is for a robust and responsive U.S. industry that is the world leader in space commerce. To achieve this, the OSC focuses on various sectors of the space commerce industry, including satellite navigation (GPS), commercial remote sensing, space transportation, and entrepreneurial activities.

The OSC coordinates with a variety of organizations across the Department of Commerce, including the Office of the Secretary of Commerce, NOAA Satellite and Information Service (NESDIS), NOAA’s National Geodetic Survey (NGS), International Trade Administration (ITA), Bureau of Industry and Security (BIS), National Telecommunications and Information Administration (NTIA), National Institute of Standards and Technology (NIST), and Bureau of Economic Analysis (BEA).

In addition to its primary mission, the OSC also has a secondary mission of hosting the National Coordination Office for Space-Based Positioning, Navigation, and Timing (PNT). This interagency staff, co-located with the OSC in Washington, D.C., focuses on GPS policy issues.

The OSC has also developed the Traffic Coordination System for Space (TraCSS), a civil space traffic coordination system. When fully operational, TraCSS will enhance space situational awareness by providing frequent conjunction data messages to satellite operators. TraCSS is expected to replace the United States Space Surveillance Network's Space-Track service by the end of 2025.

Liability for potential damages caused by space activities

The United Nations' (UN) 1972 Convention on International Liability for Damage Caused by Space Objects establishes liability for damages caused by space activities. The convention was developed in response to the increasing number of rocket launches and cases of space objects falling back to Earth, posing dangers to people, the environment, and property. It regulates the liability of states for activities related to outer space.

The convention defines "damage" as loss of life, personal injury, or damage to property, and "launching state" as the state that launches or procures the launch of a space object or from whose territory or facility a space object is launched. It establishes several types of liability for damage, including absolute, conditional, and joint and several liability. The absolute responsibility of the launching state arises without the need to establish fault, while conditional liability depends on fault. Joint and several liability applies when damage is caused to a third state or its nationals by the harmful interaction of space objects from two launching states.

The convention has been applied in several cases, but only a few have become public. One notable example is the 1960 case where a rocket launched from Cape Canaveral, United States, exploded, and its debris fell on Cuba, killing a cow. The Cuban and US governments agreed to settle the damage claim for 2 million USD.

However, the convention does not address the liability of non-governmental actors, such as private companies, for their space activities. This gap in the convention has led to the development of national regulations and bilateral treaties to address the liability of private entities for damages caused by space activities.

The increasing involvement of private companies in space activities has raised concerns about potential damages to other entities. The current multilateral treaties of international law, adopted between 1967 and 1979, are outdated and do not comprehensively regulate the responsibility in relations between states and private entities. These treaties generally give responsibility to states for damages caused by private entities, which seems unfounded in today's world.

To address these concerns, some states have shifted liability to the operating companies through national regulations. For example, Russia and the United Kingdom have already made this shift, while China and Germany have not. Additionally, states can conclude bilateral treaties on space projects involving private entities, which may include liability clauses. However, the lack of specific norms dedicated to the liability of private launchers toward potential victims of damage caused by space objects remains a challenge.

The emerging space industry, driven by digitalization and technological advancements, requires a clear and comprehensive legal framework to address liability for potential damages caused by space activities. The existing UN treaties, such as the Outer Space Treaty of 1967, are insufficient to cover all legal issues arising from private space activities. While the Outer Space Treaty addresses state responsibility for both governmental and non-governmental activities, it does not align with the private space economy.

In conclusion, while the UN convention regulates state liability for damages caused by space objects, it does not address the liability of private companies. The increasing involvement of private entities in space activities has highlighted the need for updated and comprehensive national and international regulations to address liability for potential damages.

The legal issue of attribution of property rights in space

Article II of the OST declares that outer space is not subject to national appropriation, but this provision fails to address the exploitation of space for financial gain or the property claims of commercial enterprises. Article VI of the OST states that states shall be responsible for national space activities, whether carried out by governmental or non-governmental entities, and this has been interpreted in different ways. Some scholars argue that this clause significantly restrains private space corporations by incentivising states to regulate their domestic organisations for fear of liability concerns. However, the US government recently enacted the 2015 SPACE Act, which enabled US citizens to privately possess, own, transport, use, and sell the resources they obtain in outer space.

The OST's lack of specificity surrounding private property rights over extraterrestrial resources risks reinforcing Earth-bound wealth inequalities and US dominance in space. Many so-called 'NewSpace' actors frame their long-term ambitions in space with strong anthropogenic undertones, offering the salvation of the human race from impending extinction through off-world colonial developments. However, this discourse disguises the highly exclusive nature of these missions. While they suggest that there is a stake for ordinary citizens in the vast space frontier, the reality is that these self-described space pioneers are a member of a narrow 'cosmic elite'.

The US government's support for private space companies is likely to lead to the reinforcement of Earth-bound wealth inequalities in space. By exclusively siphoning off extraterrestrial resources for American gain, the nation's soft power is extended at the expense of spacefaring adversaries such as China.

The emerging need for exhaustive national regulations regarding the legal issue of attribution of property rights in space is evident. The moon and asteroids are rich in natural resources, particularly metals such as iron, nickel, tungsten, and cobalt. The US and Luxembourg have enacted national laws granting companies the legal right to acquire space resources. However, as space activities increasingly impact the growing role of the private sector, international space law dictates that all commercial activities in space must obtain the authorisation and ongoing supervision of a state, which typically takes the form of a license. U.S. space companies are therefore beholden to U.S. space policies and regulations.

The need for national space law

National space law-making is crucial in view of the increasing participation of non-governmental entities in space activities. Appropriate action at the national level is needed, particularly concerning the authorization and supervision of space activities. The regulatory frameworks for national space activities should consider issues such as the launch of objects into and their return from outer space, the operation of a launch or re-entry site, the operation and control of space objects in orbit, the design and manufacture of spacecraft, the application of space science and technology, and exploration activities and research.

The influence of digitalization on the private space industry has also highlighted the need for national space law. Digitalization has helped improve the production process of spaceships, rockets, and satellites, making it more effective, faster, and cheaper. Data pools help companies exchange knowledge and data, and working with technical simulation software and artificial intelligence reduces default quotas.

Furthermore, the question of liability for potential damages caused by space activities needs to be addressed. While the Outer Space Treaty states that bound states shall be liable for both governmental and non-governmental activities, this full state liability is not tailored to the private space economy. A more realistic approach is to change the existing risk distribution, making national regulations indispensable.

The emerging need for exhaustive national regulations is also evident regarding the legal issue of attributing property rights in space. While the Outer Space Treaty states that space is not subject to national appropriation, this wording does not expressly prohibit the claiming of ownership of resources. The moon and asteroids are rich in natural resources, particularly metals such as iron, nickel, and tungsten cobalt. The US and Luxembourg have already enacted national laws in this regard, granting companies the legal right to acquire space resources.

The private space industry is far from ready from a legal perspective, and elaborated national space law or exhaustive international regulation is key to legal certainty in this upcoming field.

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