Making “Space” for Private Enterprise in the Final Frontier: A Legal Analysis

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Public sector organisations dominate the space industry. Recently, however, significant interest grew the private sector in the $354 billion global space economy. This spurt in interest is a cumulative result of various factors such as:

What are its Legal Limitations?

Despite the promising returns of this untapped market, certain legal ambiguities handicap privatisation of the space industry. The most significant of these is the ambiguity surrounding the property rights of minerals extracted from celestial bodies. There are three contributing factors to this ambiguity. 

Firstly, it is unclear whether the non-appropriation principle as laid down under Article 2 of the Outer Space Treaty, prohibits property rights of private enterprises over extracted resources.

Secondly, there exists dichotomy on the applicability of the ‘common heritage of mankind’ principle to outer space.

Thirdly, the International Community did not accept the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies,1979 (herein, referred to as “Moon Agreement”), which provided clarity on the aforesaid issues. Thus, not only do the legal ambiguities persist, but new questions around the role of the Moon Agreement in interpreting the applicable law have also arisen.

To circumvent the mentioned and provide an impetus to the privatisation of the US space industry, the US government took the following steps:

This article seeks to analyse these government actions in the context of the applicable international space law. The article performs the analysis in a twofold manner. The first part sets out the core principles governing human activity in space relevant to our discussion. In the second part, it analyses government actions by:

(i) describing government action; 

(ii) explaining the rationale for action taken; and 

(iii) analysing the implications of the same.

What are the Fundamental Principles Governing Activities in Outer Space?

The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial. Bodies, better known as the Outer Space Treaty (“OST”) forms the cornerstone of space law. Adopted in 1967, the OST can be now said to have achieved the status of customary international law or jus cogens. It enumerates the fundamental principles which govern human activity in space. Following are the ones relevant for us:

Freedom of use and exploration of outer space

Art. I of the OST confers the right of free exploration and use of the outer space to all nations. Such use and exploration will be on the basis of equality, irrespective of the economic or scientific development of a nation. Moreover, the Article further obligates State Parties to help and encourage international cooperation in scientific investigation in outer space and ensure the existence of such freedom. It also declares outer space as the province of all mankind. Furthermore, the use of outer space will be for the benefit of mankind and in the interests of all states. This right is then qualified by Article IV which mandates the use of space resources only for peaceful purposes.

Non-appropriation of Outer Space

Art. II of the OST furthers the rights enshrined under Art. I and lays down the principle of non-appropriation. This principle prohibits the national appropriation either by a claim of sovereignty or by means of use or occupation, or any other means. The prohibition extends to all outer space including the Moon and other celestial bodies. 

In practice, this provision is ambiguous and the States have further interpreted this to allow exploitation of resources of outer space. This is not only by public entities but also by private parties under the aegis of municipal law established to govern such rights. The landmark example of the same being the enactment of the U.S. Commercial Space Launch Competitiveness Act of 2015.

Space as Common Heritage of Mankind

The principle of ‘Common Heritage of Mankind or global commons applies to the deep sea bed and is sought to be extended to Antarctica as well. Without an explicit definition of the phrase, we look at the characteristics common to geographies enjoying this status. They are:

  • Prohibition of national appropriation;
  • Freedom of use given to all and such use must be for the benefit of mankind i.e. for common good;
  • Fair sharing of benefits. This characteristic can also imply a cooperative management system must further advance the exploitation of such spaces;
  • The use must be only for peaceful purposes (i.e not for military purposes).

A cumulative reading of Article I, II, and IV of the OST reflects these characteristics in the space regime. 

What Actions have the US Government Taken So Far?

Trump Executive Order dated 6th April 2020

The Executive Order addresses the mentioned issues in a threefold manner:

  • Firstly, it dismisses the recognition of Space as a global commons.
  • Secondly, it dismisses the applicability of the Moon Agreement. It further states that the US will object to any attempt at treating the Moon Agreement as customary international law.
  • Thirdly, it promotes entering into bi-lateral and multi-lateral agreements between nations for deciding issues arising out of commercial exploitation of space.

If outer space is further recognised as global commons, the exploitation regime of outer space will reflect characteristics of the regime established for the deep sea bed. In brief, these include,

  • an independent international body which administers and regulates the activities of State Parties in the area;
  • the miner must then divide revenues generated from such activities among all State Parties.

Complete details of the regulatory regime for exploitation of the deep sea bed can be found here

What Are the Issues That May Culminate?

Issues culminating due to adoption of such regimes can be summarised as follows: 

  • International consensus for establishing such a regime is a rule. Achieving such a global consensus is a matter of geopolitical alliances and interests. Moreover, it is a lengthy process. Additionally, the risk of not reaching any successful conclusion is very high.
  • Practical adoption of such paper-based models may have a different set of difficulties and timelines attached to it. The International Seabed Authority FAQ’s reveal that no actual mining of minerals from the deep sea bed has been then done till date. It also states that the mining code which would provide a holistic regulatory framework for the exploitation of the resources in the area is still work in progress. Thus, it evidences the aforesaid argument.
  • Such models compromise the return on investment for private enterprises. Moreover, it compromises the share sought by nations having neither space programs nor the likelihood to have one. The revenues from such exploitation may be then seen as ‘enrichment without efforts’.

What are the Reasons for Dismissal of the Moon Agreement?

One of the most important reasons for dismissal of the Moon Agreement is the explicit declaration of outer space as the common heritage of mankind and denial of ownership rights to any public or private, person or entity. Additionally, it imported features such as an international regime and fair distribution like the ones seen in the case of the deep sea bed. Thus, importing the limitations as discussed before into the exploitation of outer space.

But, the Moon Agreement has failed to gather extensive international support. It is often referred to as a failure. Moreover, silence can be interpreted as acquiescence for determining international customary law. Thus, a clear and unequivocal public stand is important.

Furthermore, the proposal for bilateral and multilateral agreements for commercial exploitation has a twofold effect. Firstly, state practice opposing the view of the ‘common heritage of mankind’ will start developing. This will buttress the USA’s stand on excluding space from the global commons. Secondly, the long-drawn process of getting an international consensus on a framework for exploitation is then avoided. 

What are the B. Artemis Program and Artemis Accords?

NASA announced the Artemis Program, a mission to send the first woman and next man to the moon by 2024. This program seeks the initiation of a new era of space exploration and use. The emphasis on commercial activity along with scientific discovery and exploration is evident. The Artemis Accords aim at establishing a common set of principles governing the civil exploration and use of outer space. These would be applicable to both public and private players.  

Furthermore, a core rule of the Artemis Accords is that all activities be conducted for peaceful purposes, per the tenets of the Outer Space Treaty. It is poignant to note that while such statements are promising, they are also misleading. This is because there exists an ambiguity about the meaning of the term ‘peaceful purposes’ as mentioned in Article IV of the OST. In a restrictive sense, the term means ‘non-militarisation’; whereas, on liberal construction, the term means ‘non-aggressive’. Non-militarisation of space would imply that no space resource utilised to further military objectives. Non-aggressive use of outer space means passive use of outer space for military purposes. The most important example of such use is reconnaissance satellites.

Conclusion

The legal ambiguities around ownership rights handicap growth of private players in the space mining industry. The Moon Agreement further compounds the issues. The US government has sought to sidestep the same and create a framework for providing the impetus to its space industry. It will be interesting to see which nations join the Artemis Program and what is the stand of the international space community in respect of the validity of such actions.


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