EC ONOMIC AND POLICY ASPECTS OF

SPA CE REGULATIONS IN EUROPE

PART I: THE C ASE OF NATIONAL SPACE LEG ISL ATIO N – FINDIN G THE WAY BETWEEN COMMON AND COORDINATED ACTION

Report 21, Seeptember 2009 Maatxalen SÁNCHEZ ARANZAMENDI, ESPI

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Short Title: ESPI Report 21, September 2009 Ref.: P41-C20490-04 Editor, Publisher: ESPI European Space Policy Institute A-1030 Vienna, Schwarzenbergplatz 6, Austria http://www.espi.or.at Tel.: +43 1 718 11 18 - 0 Fax - 99 Copyright: ESPI, September 2009 Rights reserved - No part of this report may be reproduced or transmitted in any form or for any purpose without permission from ESPI. Citations and extracts to be published by other means are subject to mentioning “source: ESPI Report 21, September 2009. All rights reserved” and sample transmission to ESPI before publishing. Price: 11,00 EUR Printed by ESA/ESTEC Layout and Design: M. A. Jakob/ESPI and Panthera.cc

Report 21, September 2009 2 Economic and Policy Aspects of Space Regulations

Table of Contents

Executive Summary 4

1. Introduction: The Setting for Implementing National Space Legislation 7

1.1. The Basis in Space Law and the Rising Need for National Space Legislation 7

1.2. The Effects of National Space Legislation and the International Debate 8

1.3. The Need for Action in Europe 9

2. National Space Legislation in European Countries and Outside: 10 a Comparative View

2.1. European States 16

2.2. European Associated Countries 21

2.3. Other Countries 22

2.4. A Comparative Examination 25

3. Effects of Space Legislation on the Commercial Sector 27

3.1. Authorization: Types, Conditions and Assessment 28 3.1.1. The drivers at institutional level (causes and expected consequences) 28 3.1.2. Consequences for Private Actors 29

3.2. Liability 30 3.2.1. The Institutional approach 31 3.2.2. Private actors approach 32

3.3. Conclusion 33

4. Policy Recommendations for Europe 35

4.1. The Need for Harmonization of Space Laws 35 4.1.1. The European Space Policy 36 4.1.2. Space and Innovation. A new strategic role for space in Europe? 37

4.2. The Ongoing Discussion on Harmonization in the Light of the Lisbon Treaty 37 4.2.1. European space competence as it currently stands 38 4.2.2. Space in the new Lisbon Treaty 38

4.3. Conclusions on the Way to a European Legal Framework for the Commercial Space 42 Sector

List of Acronyms 44

Acknowledgements 45

European Space Policy Institute 3 Report 21, September 2009

Executive Summary

The present study embodies the first of two narrows the concept of space legislation to studies that are aimed at gaining insight into only those laws that implement the the aspects of space legislation and international obligations laid down by the UN regulations on commercial space activities. treaties. Albeit space activities are concerned This study builds on the analysis of existing by many more regulations, these form part of national laws and evolves into a wider concept of space regulations that recommendations addressed to decision comprises legislation implementing makers at governmental level for the international obligations as well as all other adoption of policy measures in order to regulations (such regulations are the subject promote a European approach to space of the second study). In this sense, so far commercial activities and provide for fair only a handful of countries have adopted competition within Europe for European space laws as such. Among them there are commercial operators and a level playing only five EU Member States, together with field in the international arena. Ukraine and Norway among the Associate States. Methodology While countries such as Sweden and the UK endow authorities with ample discretionary To that aim, the methodology chosen is powers, and no limitation of liability or based first on an analysis of the insurance, a second generation of more implementation of international obligations by recent laws such as the Belgian and the existing national space legislations in the EU. Netherlands Space Activities Act aim at It then examines the same questions in EU creating a comprehensive legal framework for associated countries and in five other their nascent commercial space activities. countries to gain insight on those elements These laws are characterized by the that affect commercial decisions and the introduction of innovative mechanisms mostly impact of their adoption/formulation on relating to insurance and liability commercial operators in Europe. In a third (introduction of the concept of maximum step, the study looks into the EU space probable loss, direct recourse or the strategy and the Lisbon goals with a view to limitation of liability to the insured amount) identifying the policy mechanisms and asking but also a strict environmental policy by the why and how measures can be taken to Belgian Law. Most recently, France has support commercial space activities in adopted the long-awaited French Space Europe. Operations Act. This law looks into both satellite operations and launch operations, The study builds on relevant existing encapsulates longstanding practice in space literature as well as the outcome of activities, introduces elements such as the interviews with relevant operators and space State warranty and provides the legal basis industry representatives. The study also to create clear-cut safety regulations and an contains the outcome of the views of experts institutional structure. gathered at ESPI for a brainstorming meeting

alongside the March 2009 meeting of the Many of the existing national laws, especially UNCOPUOS Legal subcommittee. It also the most recent ones, have looked at the US draws from the deliberations and results of and its Commercial Space Launch Act (CSLA) the working group on national space at the time of drafting their national laws. legislation conducted at that session. Terms such as the state warranty or the principle of maximum probable loss have A Comparative Look at been widely incorporated in other laws. Although the US can be taken as the National Laws reference for commercial launch activities, the division between public space For the purposes of this study, space programmes and commercial activities does legislation must be interpreted in a narrow not seem so clear in the case of other sense as a strict definition of space legislation countries such as South Africa and Ukraine.

Report 21, September 2009 4 Economic and Policy Aspects of Space Regulations

open framework laws to be subject to case- The Laws, the Legislators by-case application. and the Operators As a consequence, the concern of operators about these two levels of issues is reflected in Legislation can contribute to both raising and two ways: the existence vs. the non- removing market barriers for economic actors existence of laws and the degree of flexibility and space is not an exception to this. A first of such laws. The very fact that some level of concern is seen at the level of operators are subject to a law while others authorisation, as the existence of conditions are not may already cause competitive for authorisation may equate to market disadvantages or advantages. It may create barriers. In view of the growing commercial competitive disadvantages in those operators activity, legislators have sought the need to that may have to adapt to determined establish governmental control over standards and conditions and be subject to commercial operators in order to ensure time consuming assessments and even the compliance with their international uncertainty that authorisation will be obligations and their own security and safety granted. Adoption of laws based on existing concerns. Attached to the grant of expertise may lead to rubberstamping the authorisation is the safety assessment carried rules for certain well-known operators out by the corresponding authorities that affording them dominance and foreclosing involves compliance with safety standards as the market for new operators. well as with financial standards and insurance requirements; authorities may also decide to While the natural behaviour of commercial include other conditions. In order to ensure operators should be to choose suppliers the compliance with such obligations and according to their commercial reliability and safety requirements legislators have designed servicing, operators may be inclined to take very different authorisation mechanisms decisions on regulatory bases rather than on ranging from case by case assessments to market conditions. Equally, they may be sophisticated licensing systems based on inclined to create company structures in different degrees of authorisation. order to bypass the application of certain laws. A second level of concern is related to liability matters as, contrary to authorisation, the lack of measures regarding liability may be Finding the Way to a considered as a “market killer”. Through the system of authorisations, national laws not sound European Framework only ensure compliance with international obligations and national security but also The time seems ripe for action in the field of serve to pass liability to commercial operators who might be unreasonably legislation for commercial space activities at constrained and placed at a disadvantage if the European level. On the one hand, the EU liability is not limited or state warranties are which is founded on the grounds of a free market and fair competition owns the legal not foreseen. and institutional mechanisms for tackling In adopting their laws, legislators have not such deficiencies and for creating cohesion in the space legal framework in Europe. On the only responded to international obligations and national security interests but have also other hand, as a generator of economic responded to the evolution of commercial growth, space has been called to form a relevant piece of European policy making in space activities in their territories. In this regard, there is a marked difference between the context of the Lisbon Strategy and has countries with long standing traditions in even been introduced as a competence of its space activities, usually countries with own by the Lisbon Treaty.

launching facilities, and those whose laws respond to low degree or prospective However, this competence has been operations, usually only related to satellite somewhat curtailed by the exclusion of any harmonization in space which leads decision operations. makers to the search for alternative means The former have been able to incorporate for the creation of the much praised coherent approach to space law in Europe. Several their expertise into their laws.and also possess well-defined institutional structures means have been put forward with this aim. that permit exhaustive regulation and legal For instance, space law could be tackled on a certainty, whereas the latter lack such sector basis through the adoption of regulations related to space in the context of expertise and infrastructure and provide for other policies. Even if this proved to be an

European Space Policy Institute 5 Report 21, September 2009

effective way of tackling space at a Although the creation of soft law mechanisms regulatory level, it could lead to an extremely may be able to create a coordinated legal decentralized and rather confusing space framework for commercial space activities in regulatory regime. However, Member States Europe, this might not suffice to ensure could still find a way to harmonize their laws competitiveness. A common or coordinated and create European Authorities with space legal framework must also be supported by competence through an enhanced executive infrastructure which must be able cooperation mechanism, whereby a minimum to pool the expertise and ensure the of 9 Member States could take the lead in the implementation of the framework while creation of a coherent “space union” in a serving as a reference to other national and similar fashion to Schengen. Such a “space European authorities. This being said national union” of course would only apply for and European authorities must not be shy in regulation and would not replace the existing taking advantage of the different possibilities mechanisms (such as the European Space offered by the EU when it comes to designing Council and EC-ESA cooperation) in the a coherent legal and regulatory framework framework of the European Space Policy. for the EU. The approach taken until now has Finally, Member States may find a less focused on an all-embracing harmonisation. demanding way out through the Open While approximation of legislation can Method of Cooperation (OMC) whereby the happen through soft in the context of a sui EU would provide guidelines that would then generis competence, the creation of the be monitored by the Commission and institutional instruments related to such implemented within national policies. implementation of space law and support to further supervision may need to be based in a stronger competence. This competence may be found in other policies such as the TransEuropean Networks or may be shaped ad hoc through enhanced cooperation.

Report 21, September 2009 6 Economic and Policy Aspects of Space Regulations

1. Introduction: The Setting for Implementing National Space Legislation

The legal discussion on the need for and the the OST bear international responsibility for shaping of national space legislation is broad national activities and that the appropriate and well documented. At the same time, States [have to][must] authorize and thorough analysis on the economic aspects continuously supervise the activities of their and the political consequences of national non-governmental entities. Art VI OST reads space legislation is strikingly missing. This in full: study tries to close this gap in that it systematically investigates the economic States Parties to the Treaty shall bear consequences of national space legislation in international responsibility for national Europe and decidedly points at the political activities in outer space, including the aspects of how to achieve a harmonized Moon and other celestial bodies, whether legislative setting in Europe. Both issues are such activities are carried on by of high relevance in the current situation, governmental agencies or by non- where the European Union is struggling to governmental entities, and for assuring find effective ways and means to support that national activities are carried out in European space activities in a time of global conformity with the provisions set forth in financial and economic crisis and to use the present Treaty. The activities of non- space as a motor for economic growth and governmental entities in outer space, innovation. including the Moon and other celestial bodies, shall require authorisation and continuing supervision by the appropriate 1.1. The Basis in Space State Party to the Treaty. When activities are carried on in outer space, including Law and the Rising the Moon and other celestial bodies, by Need for National an international organization, responsibility for compliance with this Space Legislation Treaty shall be borne both by the international organization and by the States Parties to the Treaty participating Ranging from data regulations to export in such organization control rules, space activities are subject to

different space regulation and laws. This 2 study is the first part of a set of two studies The idea behind this provision is to make that aim at encompassing them all and is sure that all international obligations under dedicated to the so called Space Laws which international space law (from liability to can be defined as the national legal acts registration and international cooperation) dedicated to the implementation of are not only implemented by governmental international obligations laid down by the UN institutions but that governments also have space treaties and which contain provisions the [foundation][legal basis] to make their on the authorisation, registration, supervision non-governmental entities (industry or non- and liability of space operations. governmental research institutions etc.) follow these provisions. Since a government The establishment of national space can only act on the basis of laws or legislation is a consequence of the provisions respective regulations, the establishment of contained in Art. VI of the 1967 Outer Space national space laws is the most effective way 1 of providing the State with the means to Treaty . It lays down that States Parties to authorize and supervise non-governmental space activities.

1 United Nations General Assembly. Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other 2 Hobe, Stephan; Schmidt-Tedd, Bernhard and Kai-Uwe Celestial Bodies, Resolution 2222 (XXI). Entered into force Schrogl (eds.): Cologne Commentary on Space Law, on 10 Oct 1967. (Vol.1).Köln: Carl Heymanns Verlag, 2009.107-131

European Space Policy Institute 7 Report 21, September 2009

The issue of national space legislation has Blocks” for national space legislation, only recently, i.e. during the past two intended to identify the most relevant decades, become a relevant and visible topic. provisions that should be contained in such This is related to the primarily governmental national legislation. character of space activities for the first thirty to forty years of space-faring. While commercial activities were established quite 1.2. The Effects of early, the privatization of space activities, including satellite launching, dates only from National Space the past two decades. Such private satellite Legislation and the and launch operators (like SeaLaunch or the privatization of the international satellite International Debate operators Intelsat, Inmarsat and Eutelsat) have highlighted a third phase of regulating Commercial operators are mainly concerned space activities (first drafting the treaties, with their business opportunities and the way then the UN General Assembly Resolutions) in which laws and regulations may have an now focusing on dealing with these private impact on the conduct of their business and activities. their commercial relations with their

customers and providers. Regulations related The enacting of national space legislation has to space activities, especially those on been slow from the beginning and has led to frequency allotment and export control, play laws in only around sixteen States so far. In a crucial role in the activity of operators. The addition, the laws which have been enacted nature of national laws is however somewhat so far vary considerably and range from different as they are not as tightly linked to extremely short texts simply dealing with the market issues as they are to security. Having act of authorisation (like Norway) to been adopted as a way of keeping control thoroughly elaborated texts encompassing over private activities, certain elements of almost all possible elements of private space national legislations may affect the decisions activities falling under the supervision of of private operators and those elements are governments (like Australia). This disparity mainly attached to authorisation and liability has triggered the belief that that some kind matters. of “approximation” of the laws is needed in

order to overcome gaps and differences. While such legislation is intended to have two

positive effects, i.e. safeguarding the The need for such harmonization has been interests of the State and in that way of the identified at an early stage in the legal public, it can on the other hand become a discussion. The two broadest based research burden to private entities, which want to activities, “Project 2001 – Legal Framework conduct and invest in space activities. They for the Commercial Use of Outer Space” and have to deal with the uncertainty of “Project 2001 Plus - Global and European administrative procedures, technical Challenges for Air and Space Law at the Edge regulations and the uncertainty of eventually of the 21st Century” both conducted by the being able to gain authorisation, and have to Institute of Air and Space Law of the carry burdens such as providing insurance University of Cologne and the German coverage. In the market place, this usually Aerospace Center DLR, bringing together can only be outbalanced when the burdens almost 100 leading experts on space law, put are the same everywhere. And this again special focus on the establishment of national 3 leads to the requirement for a harmonized space legislation. The result of these regulatory framework on the European as deliberations was the drafting of “Building well as international level.

3 See the two respective working group reports by Gerhard, In the inter-governmental debate, national M and Kai-Uwe Schrogl: “Report of the Project 2001” space legislation found its entrance through Working Group on National Space Legislation. “Project 2001” – Legal Framework for the Commercial Use of Outer the two multi-year working groups on the Space. Ed. Karl-Heinz Böckstiegel. Köln: Carl Heymanns, legal concept of the “launching State” and 2002. 529-564. and Hobe, Schmidt-Tedd,Kai-Uwe Schrogl registration practice,4 which were conducted ed. Proceedings of Project 2001 Plus – Global and in the Legal Subcommittee of UNCOPUOS. European Challenges for Air and Space Law at the Edge of the 21st Century. Towards a Harmonised Approach for National Space Legislation in Europe (vol. 4). 29/30 Jan 2004, Berlin, Germany. University of Cologne: Institute of 4 United Nations General Assembly. Resolution on the Air and Space Law and the Pioneering work by von der Application of the concept of the "launching State" Res. Dunk, Frans. Private Enterprise and Public Interest in the 59/115 of 10 Dec. 2004 and United Nations General European “Spacescape”: Towards a National Space Assembly. Recommendations on enhancing the practice of Legislation for Private space Activities in Europe. Leiden States and international intergovernmental organizations in 1998. registering space objects.Res. 62/101 of 17 Dec.2007.

Report 21, September 2009 8 Economic and Policy Aspects of Space Regulations

The results reached there5 were, first, concerns and where harmonisation agreement on the fact that the trend to would[depart] from the traditional market privatization requires national space oriented concept. By contrast, the delivery of legislation and that States should consider signal and space based services are part of enacting such and, second, that international very competitive markets where there is an (which also includes European) increasing need for the adoption of common harmonization should be strived for. The standards in a wide range of regulatory Legal Subcommittee (LSC) has now entered a aspects, from technical regulations to data new multi-year work-plan, building expressly sharing regulations. For this second market, on the previous two work-plans, which the EU could definitely play an important role focuses on national space legislation as such6 in the harmonisation of such measures through its well established harmonising and paves the way for a possible coordinated mechanisms in a market environment. approach resulting in a harmonized

regulatory environment. This is, however, The current study is the first part of a extremely difficult to achieve considering that broader work that will encompass also a some States have already passed national second part dealing with regulatory issues space legislation and may not be and the possibilities for EU harmonising [ready][prepared] to adapt it in the near actions in this field. This first part deals with future. the first type of space activities which forms the material scope of national space legislations in the strict sense. What then is 1.3. The Need for the role of European harmonisation regarding Action in Europe these space activities? European action [has] particular relevance with regards to this type of activities. Even though European In this setting, Europe is confronted with harmonisation at this level may not be various challenges regarding national space essential, the EU can play an extraordinary legislation. To begin with, harmonisation role in generating guidelines and policies to acquires a particular meaning in the approximate national legislations which would European context as it refers to a specific also serve as a pool of expertise and good means to erode market barriers when the practices for new potential legislation to basic principles of the internal market, such draw. as the principle of common recognition and the Treaty articles on free movement and fair Finally, space plays a leading role in the competition, do not suffice to overcome implementation of a European Plan for obstacles justified by imperative reasons Innovation initiated at the European Council such as safety or public health. Then of 11-12 December 2008, where space European law provides the basis for technology is referred to in the Council approximating laws when this is necessary 8 7 Conclusions. Setting a conducive regulatory for the purposes of the internal market. environment is a basic condition for its success. The recommendations of this report In this context, not all space activities aim at providing an input to this debate. present the same market characteristics. Space activities, understood as launching services and the guidance of objects in orbit, belong to a quite restricted and particular market which is strongly linked to security

5 Schrogl, Kai-Uwe and Charles, Davies. “A New Look at the Concept of the „Launching State“ – The Results of the UNCOPUOS Legal Subcommittee Working Group 2000- 2002.” Zeitschrift für Luft- und Weltraumrecht 51,3 (2002): 359-381. See also Schrogl and Niklas Hedman “The U.N. General Assembly Resolution 62/101 of 17 December 2007 on “Recommendations on Enhancing the Practice of States and International Organizations in Registering Space Objects.”” Journal of Space Law 34,1 (2008): 141-161 6Agenda item “National legislation relevant to the peaceful exploration and use of outer space” LSC. The corresponding working group is chaired by Irmgard Marboe, the working group on the “launching State” was chaired by Kai-Uwe Schrogl and the one on registration practice by Niklas Hedman (first year)/Kai-Uwe Schrogl (last two years). 8 Council of the European Union. Presidency Conclusions. 7 Current articles 94 and 95 TEC. 17271/1/08REV 1. Brussels, 11 - 12 Dec 2008. point 18

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2. National Space Legislation in European Countries and Outside: a Comparative View

Since the entering into force of the Outer impact on the decisions of private and Space Treaty (OST) in 1967, a hundred commercial operators. States have ratified this treaty dealing with the conduct of space activities by States. It For this purpose, a table is provided below sets out the basic provisions, which have with the entire set of European national been consecutively elaborated in other space laws and a selection of four significant treaties, including the two which are relevant jurisdictions outside the European area. to this study, i.e. the Convention on Having as an initial reference the building International Liability for Damage Caused by blocks identified in the framework of “Project Space Objects (LIAB) and the Convention on 2001”11, the table extracts and Registration of Objects Launched into Outer systematically organises the different Space (REG). The basis for national space elements of these national systems. legislation is laid out in Art. VI OST. So far 15 countries have enacted national space laws, A more detailed explanation is provided in 9 with a rise in numbers since the late 1990’s. the paragraphs following the table which systematically focuses first on authorisation As pointed out in the introduction, the types, conditions and bodies, then on control implementation of national space legislation mechanisms and competences and thirdly on is usually a reaction to the growth of liability and insurance matters. It concludes privatized space activities in a country. The with a short recapitulation of the main way it is enacted then will consequently have highlights of each legislation. a decisive influence on how further private space activities will develop, since the type of The section ends with general conclusions in activities developed in a certain country which the different jurisdictions are strongly influences the contents and compared. conditions for the granting of authorisation and the setting of conditions to carry out space activities.

In response to all these factors, the variety of national space laws is as wide as their number, ranging from a single Act containing solely a prohibition on carrying out space activities without permission from the relevant Ministry10 to a set of specific Acts separately addressing launching activities, earth observation or telecommunications.

The following sections contain a brief analysis of a set of national space legislations within and outside Europe. Rather than an exhaustive academic analysis, the following sections aim at highlighting the most characteristic features of the national space legislations which are considered to have an

11 Gerhard, Michael and Kristina Moll “the Gradual Change 9 All laws can be found in Böckstiegel, Karl Heinz, Benkö From Building Blocks” to a Common Shape of National Marietta and Stephan Hobe. Space Law.-Basic Legal Space Legislation in Europe- Summary of Findings and Documents. Utrecht: Eleven International Publishing, 2005. Conclusions. Towards a Harmonised Approach for National 10 Act on launching objects from Norwegian territory into Space Legislation in Europe. Eds. Stephan Hobe, Bernhard outer space of 13 June 1969. Art 1. Scmidt-Tedd, and Kai-Uwe Schrogl. Köln 2004. 7-50

Report 21, September 2009 10 Economic and Policy Aspects of Space Regulations

Elements of National Space Legislations with Potential Effects on the Space Private Sector in a Comparative Perspective.

Sweden UK Belgium The Netherlands France Norway US South Africa Ukraine Australia 1. Authorisation 1.1. Type of Permit per operation Permit per operation Permit per operation Permit per operation General licence Permit per operation Permit per operation Permit per operation Certification of - General Space authorisation certifying capacity. Space Facilities Licence + and licensing of - Launch permit Permit per operation space activities - Overseas Launch (if the licence does certificate nott carry - Authorisation of authorisation for return certain operations)

Art. 10 Secs.3, 4 Sec. 3 Art.4 Sec.3 (1) Sec. 70104 Sec.11 Arts. 11, 12, 18, 26, 35 Sec.1 Art. 12 Art.4 1.2.Material scope Launch, operation, in Launch, operation, in Launch, flight Launch, flight Launch, attempt to Launch Launch, launch Activities directly Space research, Launch, return orbit manoeuvring orbit manoeuvring, operation, guidance operation, guidance launch, control of a services, re-entry, re- contributing to the design and (signal reception and procurement of space objects of space objects in space object during its entry services launch and operation application of space launch of sounding outer space travel in outer space of a spacecraft technology and use rockets expressly [of/in?] outer space excluded) Sec. 70101 Sec.1 Sec. 1 Art.2 Sec.1 (b) Art.1 Sec.1 Sec.1 Art. 1 1.3. Jurisdiction If on Swedish If on UK Territory If on Belgian territory If from Dutch If on French territory If from Norwegian If US citizen If from South African In Ukraine or under From Australia by territory or or territory/ship/aircraft or territory or territory the jurisdiction of someone not holding or if carried out by are property of the or if carried out by or if from US territory Or Ukraine outside its authorisation yet. If carried out by persons of UK Belgian State facultative and persons of French if carried out by or from the territory of borders From overseas by persons of Swedish nationality or wholly/partially nationality persons of if from foreign territory another state on someone not holding Nationality under Belgian applicable if carried Norwegian unless there is an behalf of a of a authorisation yet control/ jurisdiction out by a person of nationality agreement with the person incorporated/ or Dutch nationality government of the registered in the

carried out by or foreign country South Africa persons of Belgian the organisation of nationality. space activities from Dutch territory

Sec.2 Sec. 2 (1) Art.2 Arts. 11, 12, 18, 26, 35 Sec. 2 Art.2 Sec.1 Sec.11 (1) Art. 10 1.4.Bodies with space competence

¾ Governmental Ministry of Secretary of State King, Minister of Minister of Economic Ministry of Research The Ministry of Secretary of Department of Trade Cabinet of Ministers , Minister for level Enterprise, Energy grants licence Science Policy Affairs Trade and Industry transport. and Industry establishes licensing Innovation, Industry, and Communications + proceedings Science and Secretary of State Research for the observance of safety conditions. Art. 10 Sec.4 (1) Arts. 4 & 5 Sec.4 ¾ Executive Agency Swedish National British National Belgian Federal Agentschap Telecom CNES Norwegian Space Relevant executive South African Ukrainian Space Space Licensing and Space Board Space Council Science Policy Office Centre. agencies. Council for Space Agency Safety Office (SNSB) (BNSC) Affairs (SLASO)

Sec. 4 Art. 6

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Sweden UK Belgium The Netherlands France Norway US South Africa Ukraine Australia ¾ Body issuing SNSB BNSC Minister of Science Minister of Economic Ministry of Research Not provided for by Federal Aviation South African Ukrainian Space SLASO authorisation Policy Affairs the space law Administration Council for Space Agency (FAA): launch, space Affairs transport Federal Communications Commission (FCC). Orbit authorisation Department of Defense (DoD): EO activities. ¾ Safety assessment Executive Agency Executive Agency King establishes Agentschap Telecom CNES FAA, FCC, DoD South African Relevant State Minister for general Council for Space Authorities Innovation, Industry, requirements in law Affairs Science and + Research Case-by-case requirements and assessments by the Minister ¾ Security Executive Agency Executive Agency King establishes Agentschap Telecom Ministry of Research FAA, FCC, DoD Governmental Relevant State Minister for assessment general bodies with an Authorities Innovation, Industry, requirements in law interest in the activity Science and + Research Case-b- case requirements and assessments by the Minister 1.5. Conditions for Authorisation. A priori control ¾ Technical and Subject to case-by- Subject to case-by- Prove -technical, Open list in law Proof of the moral, Not provided for by Any necessary To be determined in Prohibition of direct Sufficient funding financial capacity case evaluation case evaluation economic capacity + Subject to case- financial, and space law requirement imposed regulations. threat to health of Environmental know-how and by-case evaluation technical guarantees by the Secretary of humankind and approvals experience (public health, safety State damage to No harm to public of people, property + financial environment health or public and environment) responsibility safety No damage to property Sec. 4 (2) Arts.4, 5, 6 & 7 (6) Secs.3 & 6 Sec.70105 Arts.8 & 9 ¾ Security and Subject to case-by- Subject to case-by- Public order, national General obligation to National defence Not provided for by National security & To be determined by Prohibition on General Licence: safety case evaluation case evaluation security, the preserve, interests, Fulfilment space law. Foreign Policy the Council. - placement of National security equitable use of environment, public of international interests. Secretary nuclear weapons in Foreign policy air/outer space, order, national undertakings by of State may impose outer space International strategic and security. France. any requirement - effects on Obligations economic interests. + + necessary. environment, military Permit: + Subject to case-by- Awaiting further purposes, threat to No nuclear weapon Environmental case evaluation development by humankind of mass destruction studies including use decree Pollution of outer or any other kind. of nuclear power space No fissionable

Costs born by material

private actor.

+

Case-by-case

evaluation Sec. 4 (2) Arts.4, 5, 6 & 7 (6) Arts. 4 & 5 Sec.11 (2) Art. 9 Secs.3 & 6 Arts.18 & 26

Report 21, September 2009 12 Economic and Policy Aspects of Space Regulations

Sweden UK Belgium The Netherlands France Norway US South Africa Ukraine Australia ¾ Insurance No obligation Up to £ 100 M Facultative Compulsory Compulsory Not provided for by $100 M - $ 500 M Facultative ceiling Compulsory. Against any liability (may be contained in + + + space law or + + Min insurance: licence) amount subject to Set by the Minister at Amount to be maximum insurance amount subject to Amount to be maximum probable case-by-case the highest coverage determined by available in the world case-by-case determined by the loss/the amount set evaluation available in the decree market evaluation government. out in regulations Market Criteria: statistical data, period of insurance, insurance market conditions

Sec. 5(1) (f) Secs.3 & 6 Art.6 Secs.14 (1) & (2) Art.24 Art 43 1.6. Assessment procedure

¾ Consultation with National Post and The relevant Case-by-case External parties With the authorities Not provided for by Secretary of Defence To be determined in Ministry of Defence The Ministers shall other bodies Telecom Agency governmental maybe engaged to concerned in each space law. for security issues regulations. of Ukraine. consider any or departments assist in the case Secretary of State Decisions on military submissions other national assessment of the Potentially case-by for Foreign Policy and dual use space received ministries or licence application case. National Aeronautics technology. authorities affected and Space Certification of Administration for military space insurance matters. technology Secretary of Transportation for liability ceilings. Decr. Sec 1 Guidelines E.n. Part II , Se 5 Art.4 Sec.70105 (a) Sec. 22 Art. 20 ¾ Fees and Not provided for by non-refundable fee 1000 € No fee for the time To be determined by Not provided for by 180 days from the Not provided for by Not provided for by Not provided for by deadlines space law. of £6,500 being decree space law application date. space law space law space law

In practice: may take 2-6 months 90 days 4 months 6 months

Guidelines Art.9 (1) E. n Part I, Sec 3(4) Art.4 Sec.70105 (a) Decr. Art.13 Sec 5 1.8.Transfer of Not provided by the Transfer of licence Transfer of Not transferable Transfer of the Not provided for by Not provided for by Not provided by the Not provided by the Transfer of licence authorisation space law activities/real or control of a space the space law the space law space law space law Transferable with personal rights that Minister may object The Minister can Transferable on a consent of the may involve effective authorise change of Transferable on a Transferable on a Transferable on a Transferable on a transfer a licence if case-by-case basis? Secretary of State control of the space registered name Subject to prior case-by-case basis? case-by-case basis? case-by-case basis? case-by-case basis? the transferee is + object authorisation by the eligible for Other circumstances administrative authorisation prescribed Only with authority of the authorisation by the Ministry of Research

Minister

Arts. 22, 31, 38 Sec.6(1) Art. 13 Sec. 8 Art. 3 2. Registration Contained Limited to the Limited to the Limited to the Limited to the Limited to the Limited to the Limited to the Limited to the information Registration Registration Registration Registration Registration Registration Registration Registration Convention Convention Convention Convention Convention Convention Convention Convention

Decr. Sec.4 Sec.7 Decr. Art.5 Art.12 Art.13 Part 5

European Space Policy Institute 13 Report 21, September 2009

Sweden UK Belgium The Netherlands France Norway US South Africa Ukraine Australia 3. Liability 3.1.Ceilings Unlimited unless Not fixed Not fixed The insured sum The insured sum Not fixed Up to the insured Facultative. In conformity with Up to the insured special reasons tell + + + To be determined by amount the existing National amount against it Further elaboration May be determined Maximum probable the implementing Unlimited + Facultative ceiling. law. by statutory by the King on a loss concept decree ( assumption According to the + case-by-case basis instrument case-by-case basis 50-70 M €) maximum loss Unlimited? ( the Case-by-case basis? concept private party must bear the difference)

Sec.6 Sec.10(1) Art. 15(3) Sec. 3.4 Arts.15, 16 & 17 Art. 70112 (a) Sec. 14 (2) Art.25 Art.69 (3) 3.2.Cross waiver Not provided for by Not provided for by Not provided for by Not provided for by Yes Not provided for by Yes Not provided for in Not provided for in Not provided for in arrangements Space Law. Space Law. the Space Law the Space Law the Space Law the Law the Law the Law But see 3.4 But see 3.4 Case by case According to general Case-by-case basis? Case-by-case basis? Case-by-case basis? law case-by –case

basis? Sec. 11 Arts.19 & 20 Art. 70112 (b) Sec.6 3.3.State Not provided for by Not provided for by Not provided for by Not provided for by Yes The government Between ceiling and Facultative ceiling. Not provided for in Not provided for in guarantee after the Space Law the Space Law the Space Law the Space Law shall collect a $1500 M + case-by-case basis the Law the Law ceiling payment owed for damage.

Arts.15, 16 & 17 Art. 70113 (a) (B) Sec. 14 (2) 3.4. Realisation Against the person Against the person Direct action against Direct action against Direct action against Not provided for in Direct action against Not provided for by The responsible Licence can contain who carried out the to whom the act insurer insurer insurer the Law insurer? space law party conditions of liability. space activity applies. but Insurance-warranty, According to national Case-by-case basis? against licensee general law?

Art. 70112 (f) Art. 25 Sec.6 Sec.10(1) Art.15(7) Sec.12 (4) 4. Enforcement 4.1. Sanctions Imprisonment up to Conviction on Penal sanction. Administrative 200.000€ fines Not provided for in Civil penalty ≤ Up to Punishable by Civil penalties up to one year indictment. A Up to 25.000 € sanction. determined by the the law $100.000 R1,000,000/imprison disciplinary, civil law 5000 units maximum time to be Up to 8 days Max 450.000€ / 10% space law. ment up to 10 years or criminal penalties (corporate) determined by imprisonment of sales under general 500 individual) statute Ukrainian Law Potential conviction of offences

Art. 29 Sec. 5 Art. 81 Sec.12(2) Art. 19 Sec.15 Art.11 Sec. 70115 Sec. 23

Report 21, September 2009 14 Economic and Policy Aspects of Space Regulations

Sweden UK Belgium The Netherlands France Norway US South Africa Ukraine Australia 5. Compliance after authorisation. A posteriori control. 5.1. Control mechanisms

¾ Competent SNSB Secretary of State Ad hoc committee Officials designated -Government agents The Ministry to issue The Secretary of Appointment of Launch safety officer authority designated by the by order of the for space, research regulations on State or a delegated inspectors by the Licensed by the Minister in Minister and the environment. control. officer or employee Council minister: accordance with the -Local authorities from the competent competent ministers -Agents authorised executive agency

and the concerned for aircraft and administrations shipping inspections and Shipping Competence to enter Power to inspect any Obligation of the Surveillance of the

¾ Competence Restriction of licence Competence to Mission and mandate Minister may make Competence to sites and facilities, to premises at any time National Space launch notice, if appropriate to the inspect and test term are designated use of administrative collect all information seize objects, / inspections Agency, the security, compliance circumstances. equipment, collect by the Minister. orders and speed and documents records, reports. instigated by the ministries or other with licence. all information, Environmental Study procedures if threat required and access council. central executive Enter premises &

inspect and take may be also charged to safety of goods to all premises. authorities to furnish inspect not without copies of to the committee. and persons, Obligation of detailed prompt and reliable consent documents relating national security or notice of required information on

to the information public order. info. dangers and

required. Obligation to measures to ensure communicate results safety. Secs. 3 & 4 Sec 5 (2) (a) (b) (c) Art. 6 Decr. Sec. 2 Decr. Art.2 Secs. 13 & 14 Arts. 7 & 8 Art 2. Sec. 70115 (b) Sec. 13 Art. 23 Arts. 50-58

European Space Policy Institute 15 Report 21, September 2009

2.1. European States objects by the “National Board of Space Actvities”13 and its role as supervisor of

space activities, and foresees the application For the last decade Europe has been of sanctions for breach of the obligations set experiencing strong activity in the creation of therein. legal frameworks for the growing private

space activity in the EU member States. The adoption of this very short law took place Currently only five EU Member States have after the reorganization of Swedish space Space Laws that implement the obligations 14 set out by the Outer Space Treaties, Sweden activities and during the period when public being the earliest (1982) and France the programmes started to settle. In this context, most recent (2008). The aims and the the Swedish legislation responds more to context in which both these laws have been institutional needs than to a commercial developed differ as much as do the setting. frameworks set by the laws adopted in the period between. This is reflected in the very open formulation of the obligations. The Act imposes the While the Swedish Act on space activities was obligation to obtain authorisation from the adopted in a context where public space Government and appoints the National Space Board as the authority empowered to issue programmes constituted the entire space 15 activity, by contrast Acts such as the UK space licences . However the act neither Outer Space Act or the Dutch Space Activities specifies further formal procedures nor does Act responded to the need to provide a legal it specify explicit control conditions regarding basis for the growing industrial and satellite public interest, security, public health or operation activities. environment16. Instead, the law indicates that the issuing of a licence may be subject The different characteristics of European to conditions to ensure control of activities. national markets have led states to different elaborations, in terms of depth and breadth, Read together with Section 2 of the Decree, of the obligations and principles foreseen in which allocates control competences to the the Outer Space Treaties, particularly those National Board of Space Activities, the Act setting the basis for insurance obligations and establishes the basis for a very open liability requirements. Because of their authorisation system whereby the National uniqueness and strategic character and the Board of Space Activities has the competence difficulty of developing space technologies, to evaluate on an ad hoc basis applications space activities are intrinsically linked to for space activities.17 national security and this is the cause for more or less stringent control requirements. Equally open is the liability regime laid down by section 6 of the Act whereby it is The following subsections aim at highlighting established that persons other than the the main features of the Space Laws in those Swedish State who have carried out space countries by putting them in an institutional activity shall reimburse the amount which and market context. has been disbursed for damages in compliance with the international agreements Sweden unless special reasons mitigate against it. Since, according to Art VII OST and LIAB, Sweden was an early implementer of the States have unlimited liability, private obligations set out by the UN Space Treaties operators may be held unlimitedly liable for in the international context and the first all damages caused to third parties. It is among the current EU Member States (EU unclear what could be encompassed by the MS). In 1982 Sweden adopted the “Swedish term “special reasons”. However, it involves a Act on Space Activities” together with the case by case assessment that is likely to limit “Swedish Implementing Decree on Space private undertakings’ liability according to 12 Activities” (hereinafter: the Swedish Law). their financial capacity.

The set composed by the Act and the Decree 13 Currently the Swedish National Space Board (SNSB) exhausts the Space Law of Sweden with a 14 Nina Wormbs and Gustav Källstrand. A Short History of total of 10 articles dedicated to establishing Swedish Space Activities. ESA (HSR-39). ESTEC, the obligation of private actors to obtain a Nordwijk: 2007. 17 15 Swedish Act on Space Activities. Section 3. licence from the Swedish Government, the 16 creation of a national register for space Project 2001 plus Towards a Harmonised Approach for National Space Legislation in Europe. Proceedings of the Workshop, 29/30 January 2004, Berlin. Niklas Hedman and 12 Swedish Act on Space Activities (1982:963) and Swedish Richard Krauter. 85. Implementing Decree on Space Activities (1982:1069) 17 Ibid.

Report 21, September 2009 16 Economic and Policy Aspects of Space Regulations

In conclusion, by establishing obligations to national security of the UK.21 The inspection obtain authorisation for space activities and by the Secretary of State of the licensee’s registration obligations, by setting the legal facilities is also to be found in this category of basis for control and inspection and by obligations together with the requirement for foreseeing a system of sanctions together the licensee to insure himself against third with obligations related to liability, the party liability. Swedish Law forms a comprehensive framework for space activities. On the other The powers of the Secretary of State do not hand, the [vague][minimal] specification of end in the authority to impose and evaluate such obligations and the use of open on an ad hoc basis the requirements in order formulas such as “unless special reasons tell to grant a licence. Furthermore, the against it” in Section 6 of the Act provide for Secretary of State may even exempt a very flexible framework implying ad hoc activities from licensing if he is satisfied that assessment. a licence is not required for the purpose of complying with UK international obligations. UK Such order is, however subject to annulment by a resolution of either House of The UK Outer Space Act of 1986 (the UK 22 18 Parliament. Act) entered into force on 31 July 1986 and was adopted in order to allow the UK to In addition the Act provides for a posteriori meet its international obligations related to judicial control whereby a person authorised space activities and the operation of space to act on behalf of the Secretary of State has objects. the power to enter the premises of the licensee and use reasonable force if The Act is the consequence of the growth of necessary. If a person is found to contravene commercial space activity in the UK. As the the Act, on conviction on indictment he may UK government lacked the competence to be liable to a fine, and on summary grant authorisation per se, the need was felt conviction to a fine not exceeding the to create the authority to that end. The UK statutory maximum. Act was adopted with the purpose of endowing the Secretary of State with such The Act is characterised by the high margin competence which would then be delegated of appreciation granted to the Secretary of to the British National space Centre State regarding at the time of granting a 19 (BNSC). licence. According to the Act, the secretary of State is to deem which conditions should be Therefore, the UK Act empowers the attached to a licence and whether the Secretary of State to issue authorisation for licensee is fit to carry out the intended space activities and carry out control over activities as well as to carry out control of the such activities. In this regard, the UK Act is operations and facilities. characterized by a double tier control system based on a set of conditions related to public In this vein, also Sec. 10 of the Act on the health, safety of property and persons, indemnification of damages caused to third international obligations and national security parties is drafted in a way that provides wide Space operators do not only have to comply discretion in the determination of liability. with this first tier of obligations at the time of Sec 10 provides that private operators must being granted authorisation but may also be indemnify the Government for all claims required to comply with a set of obligations brought against the Government in respect of that may be included in the Licence.20 damage arising out of the activities carried on by the licensee. This obligation is not Among those facultative obligations, qualified by any cap or other mechanism that operators may be required to conduct would lessen the burden to the private operations in a way to prevent contamination operator. Therefore, Sec. 10 involves of outer space, avoid interference with the unlimited liability for private operators. activities of others in the peaceful exploration and use of outer space, avoid any breach of All in all, the UK Act covers all international UK international obligations and preserve the obligations in an open manner providing for ample discretionary powers of the secretary of State and no qualification of the liability conditions. Although the discretion allowed to 18 Outer Space Act 1986. Order 1989. SI 1989 No 1097. the Secretary of State is a flexibility tool that 19 Julian Hermida. Legal Basis for a National Space Legislation. Kluwer Academic Publishers Dordrecht/Boston/London 2004. 124 21 Ibid. Sec 5. 20 Outer Space Act 1986. Sec 4 (1). 22 Ibid. Secs 3 (2) and (3).

European Space Policy Institute 17 Report 21, September 2009

allows for the adaptation to each particular complemented by a strong control system. case, it may also a imply unpredictability. In The Law only provides for the general addition the UK Act may create highly obligation to ensure safety of people and burdensome conditions regarding liability of property, the environment, the optimal use of private parties. air space and outer space, the strategic, economic and financial interests of the Belgium Belgian State and compliance with the Belgian State’s obligations under On 17 September 2005 Belgium became the international Law (Art 5). With the exception 3rd EU Member State to adopt a Space Law, of the preservation of environment, these the Law on the Activities of Launching, Flight general obligations are not further detailed. Operations or Guidance of Space Objects23 The fine tuning of compliance with such which on 19 March 2008 was complemented obligations is left to the Minister, who is by an implementing decree.24 competent to attach conditions on a case–by- case basis.

The aim of this set of legal instruments To that aim, the Minister can designate (hereinafter: the Belgian Law) is threefold: experts on the basis of the reliability and the law is aimed at complying with experience of the private undertaking as well international obligations; it creates a legal as on financial criteria and can impose framework for existing and emerging conditions such as the technical assistance of activities; and it ensures the application and a third party or the obligation to hold implementation in Belgium of international 25 insurance against damages to third parties. technical norms and standards. Contrary to the very open authorisation The Belgian law was adopted as the regime mentioned above, environmental consequence of a great potential to be held obligations have been conceded special responsible for space activities. On the one attention by the legislature. Art. 8 of the Law hand, Belgium has a long and active tradition lays down that the Ministers shall designate within ESA as the host of the ESA tracking experts with the purpose of assessing the and telemetry centre in Southern Belgium. impact on the environment of the activities in On the other hand, due to the location of the question together with the issuance of studies EU institutions in Brussels and the at the beginning, during and at the end of the particularities of its fiscal system, Belgium space activities. Furthermore, the attracts an intense concentration of space implementing decree dedicates an entire industry and operators. In consideration of chapter laying down the contents of such this critical mass, the Belgian authorities studies. realized the responsibility to become involved in such space activities and the consequent A second distinguishing feature of the Belgian need for legislation in this field. The Belgian regime is the possibility to transfer activities law, therefore, was created not only in to a new operator without seeking the response to existing space activities but also approval of the Minister. According to Art. 13 in foresight of future developments. of the Law, private undertakings are able to transfer space activities as long as the In this context the Belgian law is effective control of the space object is kept characterized by a fairly open basis for by the transferring undertaking. authorisation and a rather precise liability regime. Understandably, the law incorporates Supervision and control of the space activities some innovative clauses related to liability is completed with an a posteriori check of the damage recovery and a strict regime for activities for which the Minister may environmental supervision. designate experts charged with controlling the activities of the operator. If as the result By keeping authorisation conditions very of the assessments carried out during the general, the Belgian Legislature seems to application process or the posterior control have opted for a case-by-case assessment activities, the licensee is found to have not fulfilled the obligations imposed by the law or 23 The Law on the Activities of Launching, Flight Operations attached to the authorisation, the latter may or Guidance of Space Objects. F. 2005 — 3027. Moniteur be withdrawn or suspended. Belge [C − 2005/11439] September 2005. 24 Royal Decree implementing certain provisions of the The third of the pillars of the Belgian regime Law of 17 September 2005 on the cativities of launching, rests on an innovative regime for liability for flight operations and guidance of space objects. F. 2008 — 1182 Moniteur Belge [C − 2008/21031]. damages to third parties. Following the 25 Jean-François Mayence. Presentation of the Belgian obligations set out by Art. VI OST and the Law. COPUOS 52nd Session. June 2009. Liability Convention, the Belgian State shall

Report 21, September 2009 18 Economic and Policy Aspects of Space Regulations

have the right to institute a counterclaim operators.28 In this context and foreseeing against the private undertaking which caused the further development of private space the damage. However Art. 15 of the Law activities, the Netherlands law was adopted qualifies this obligation adding that such as a framework law that would develop along counterclaim may only award compensation with commercial space activities. up to the limit estimated by the King on the conditions that he may determine. Therefore, To that aim, the Netherlands Act provides for private undertakings are not to be held a licensing system according to which any unlimitedly liable. A second innovation in the space activity falling within the scope of the Belgian liability regime comes with the act is prohibited and illegal if carried out involvement of the private party in the without a licence. It is for the Minister of assessment of the damage which will be Economic Affairs to issue a licence. In this estimated by the representatives of the regard, the Act contains a framework of 26 states concerned with the participation of conditions of varying degrees of obligation the operator or of the person designated by with which the licensee must abide. On the him. Finally the Law incorporates the so one hand, there is a hard-core list of called “right of direct recourse” allowing the conditions without which the licence will not State to recover compensation directly from be granted: these are conditions related to the insurer. safety of persons and goods, environmental protection in outer space and public order In conclusion, the 2005 Law is characterized and security (Sec 6). On the other hand, by the provision of an extensive legal basis there are conditions subject to case by case for a flexible space regime. Without creating consideration on which basis the Minister ad hoc procedures or institutions charged may refuse the grant of a licence. These with the application of international conditions are to be assessed in the light of obligations, the Belgian law lays down a the previous or the foreseeable conduct of substantive legal basis comprehensively the applicant and his capacity to fulfil the embracing the different aspects of conditions established in the Act.29 The international obligations while adopting an licence may incorporate regulations and innovative approach towards liability and restrictions related to the “hard-core” environment. obligations, financial security and the fulfilment of the international obligations of The Netherlands the State.

The Netherlands “Rules Concerning Space One key condition for the granting of a Activities and the Establishment of a Registry licence under the Netherlands Act is that the 27 of Space Objects” , the Netherlands Space prospective licensee must maintain insurance Activities Act (hereinafter: the Netherlands cover for liability arising from space activities Act), entered into force on 1 January 2008 for which a licence is requested. The with a twofold objective: the establishment of Netherlands Act brings a remarkable a licensing system for private space operators innovation in this respect as it incorporates including the accompanying requirements, the criterion of the “maximum possible such as those dealing with liability and cover”. According to this criterion the Minister insurance; and the establishment of a shall consider what can reasonably be National Registry for space objects. covered by insurance.30 As will be seen later, this criterion becomes of crucial relevance The Netherlands Act became necessary as when linked to liability provisions. the consequence of recent developments in space related activities. In the years previous Sec. 13 of the Act embodies the legal basis to the adoption of the Netherlands Act, space for supervision of the space activities. related activities in the Netherlands had According to this section, the Minister shall experienced strong change in moving from designate officials charged with the governmental activities including substantial supervision of compliance with the conditions participation in intergovernmental laid down in the Act and also those attached organizations such as INTELSAT, INMARSAT to the licence. Non-compliance with such and EUTELSAT, to the ownership of in orbit conditions results in the revocation of the satellites by private telecommunication 28 Von der Dunk, Frans“The case of the Netherlands.” 26 UNGA. Convention on International Liability for Damage Nationales Weltraumrecht. National Space Law. Caused by Space Objects (The Liability Convention). Development in Europe-Challenges for Small Countries. Entered into force on 1 Sep. 1972. Eds. Christian Brünner and Edith Walter. Wien –Köln-Graz: 27 Law Incorporating “Rules Concerning Space Activities Böhlau, 2008. 93-97. and the Establishment of a Registry of Space Objects. 80 29 Ibid. sec 6 (2) Staatsblad (2007). 30 Ibid. sec 3 (4)

European Space Policy Institute 19 Report 21, September 2009

licence and administrative penalties that Building on the long standing practice of must be commensurate with the seriousness France in the space field, the SOA was then and duration of the infringement and with the adopted as the means to ensure legal extent to which the perpetrator is at fault. certainty for commercial operations.36

Chapter 4 of the Act deals with redress in One of the most remarkable aspects of the case of damages caused to third parties due Act is the system of authorisation and to the space activities. In compliance with licences designed in Art.4. The act requires Art. VII of the OST and the Liability that every operator falling within the scope of Convention, the State is entitled to recover this Act must obtain authorisation, which is from the private undertaking the sum paid by granted by the administrative authority of the the State. Here the Netherlands Act expressly Ministry of Research if the operation does not limits the liability of the private undertaking jeopardize the interests of national defence or to providing redress only up to the value of the fulfilment of international undertakings by the sum insured. France. Authorisation is only granted after the operator’s technical, moral, financial and In conclusion, the Netherlands Act is a professional capacities have been assessed framework law leading to a case by case and proven by the administrative authority. assessment and providing for a flexible The Act does not regulate the authorisation setting as well as the basis for further procedure and does not contain a concrete development of space law as the industry’s list of requirements to be fulfilled but leaves 31 activities and expertise grow. the further elaboration of procedural matters to the “decree on authorisation.”37 France According to this system, operators may be The most recent of the space laws in Europe, granted either a single authorisation per 32 the “French Space Operations Act” (SOA), operation after a full assessment of the was adopted by the French Senate on 22 May guarantees, or they can be granted a licence 2008 and is accompanied by a “decree on attesting to a certain degree of compliance authorisation”,33 the decree on the reform of with the guarantees as follows: the French Space Agency (CNES),34 and the 35 a. A license attesting the moral, financial decree on “space based data management” and professional guarantees coupled with which were adopted by the French Senate on individual authorisations for technical 9 June 2009. The SOA aimed at creating a requirements legal framework that would embrace and provide legal certainty for a growing trend of b. A licence attesting to moral, financial and commercial space activities. professional guarantees and technical requirements coupled with authorisation France is the third major space faring country for other technical requirements. in the world and the main launching state in Europe. From the beginning of the space era, c. A license equivalent to authorisation for France has developed a robust space sector determined operations and a limited through the participation of the public sector period of time. in space activities which led to a favourable environment for the development of According to the “decree on authorisation” commercial activities where governmental the assessment of the requirements laid control through CNES was not present. down by the decree falls within the competence of the Ministry of Research which 31 Von der Dunk, Frans “Implementing the United Nations registers the application and transmits it to Outer Space Treaties- the Case of the Netherlands.” the CNES for technical assessment once the Christian Brünner and Edith Walter (eds.) National Space Ministry is satisfied that all moral, financial Law, “Development in Europe-Challenges for Small and professional conditions are met (Arts. 1- Countries”, Böhlau Verlag. Wien-Köln-Weimar:2008. 81- 104. 3 “decree on authorisation”). Administrative 32 Loi n° 2008-518 du 3 juin 2008 relative aux opérations spatiales. JORF 04.06.2008 33 Décret n° 2009-643 du 9 juin 2009 relatif aux 36 Intervention of Jean-Marc Sauvé during the “Colloque autorisations délivrées en application de la loi n° 2008-518 «Droit de l’espace.»” Conseil d’Etat . 31 Jan 2007. du 3 juin 2008 relative aux opérations spatiales. 37 The assessment of such conditions is within the 34 Décret n°2009-644 du 9 juin 2009 modifiant le décret competence of the ministry of research which is in charge of n°84-510 du 28 juin 1984 relatif au Centre national d’études space affairs. Moral, financial and professional spatiales. requirements are assessed by the ministry while technical 35 Décret n° 2009-640 du 9 juin 2009 portant application des assessment is delegated to CNES. Presentation of the disposition prévues au titre VII de la loi n° 2008-518 du 3 French Space Operations Act, COPUOS legal juin 2008 relative aux opérations spatiales subcommittee 2008.

Report 21, September 2009 20 Economic and Policy Aspects of Space Regulations

requirements are listed in the “decree on The French Space Operations Act has brought authorisation” and technical requirements are to an end the so called “French paradox”39 by left to CNES. designing within a single legal instrument the basis for an entire space regime in The decree also foresees the obligation of accordance with international obligations. The space operators to obtain insurance (Arts 16- Act not only provides inspiring principles for 18) and foresees the possibility to suspend further regulation and institutional such obligation for a limited period of time if development but also creates a new and the insurance market is not cannot provide flexible authorisation system and non- insurance coverage. One additional novelty of stringent liability scheme. the French system consists on the possibility to exempt satellite operators from the Notable exceptions obligation to be insured for operation phases which do not involve the change of orbital The French is as not the only paradoxical position or other manoeuvring. case in the European landscape. In fact two other countries in Europe which are major In addition, the operator may still need to contributors to ESA, i.e. Italy and Germany, comply with additional obligations attached have not yet adopted any space Law. Both by the administrative authority to the have been working for a long time on the authorisation/licence regarding safety of draft of a space law. In Germany the efforts people and property, the protection of public have been focused on the elaboration of a 38 health and the environment. On the other substantive data law before the adoption of a hand, the “decree on authorisation” foresees national Space Law, however administrative the obligation. reasons have impeded it. Whereas so far, administrative reasons have impeded an By contrast with the general formulation of encompassing German space law, executive the obligations to be fulfilled in order to be agents at Federal Ministry level have granted authorisation, the Act elaborates announced that works shall be resumed in extensively on the control mechanisms and the coming legislative period. authorities competent to carry out inspections after the grant of authorisation (Art. 7 SOA). Equally explicit is Art. 11 SOA 2.2. European Associated dedicated to sanctions where lump sums of €200.000 are indicated as the amount of a Countries fine in cases where an operator acts without authorisation or does not comply with the Norway requirements specified by the administrative authority. If the Norwegian act is worth mentioning, this is for its brevity and simplicity. Norway A final highlight of the Act is its compensation passed an act to implement its international scheme for damages caused to third parties. obligations for authorisation of space Art. 6 of the Act imposes a further obligation activities as early as 1969.40 on operators in order to be eligible for

authorisation: operators must be insured up The Law sets out the legal basis for a national to the amount they may be held liable for. authorisation system to comply with the Although this is a common clause in all space obligation set out by Art VI OST. It does not laws, the peculiarity of the French system lies provide for any further legal basis on other in the fact that the amount to be insured is questions such as liability or registration but linked to the amount up to which the private does state in the last indent of Art. 1 that operator shall be held liable. In fact, the Act certain terms can be set for such permission previews that a ceiling will be fixed according “as described in paragraph one”. to the criteria of Art 13 and French financial

law. Finally, the operator benefits from the so called “state guarantee” for the portion of liability exceeding the ceiling whereby the Sate covers the portion of damages beyond 39 Schmidt-Tedd, Bernhard and Isabelle Arnold. “The the ceiling. French Act relating to space activities. From international law idealism to national industrial pragmatism”. ESPI Perspectives 11. Aug 2008 3 Aug 2009 http://www.espi.or.at/images/stories/ dokumente/Perspectives/espi-perspectives_11.pdf and Couston, Mireille “La loi Français sur les opérations spatiales”, ZLW 58 Jg 2/2009. 253. 40 Act on Launching Objects from Norwegian Territory etc. 38 Art 5. SOA into Outer Space, 13 June no. 38.1969.

European Space Policy Institute 21 Report 21, September 2009

With regards to further implementation of competence: the NSAU is in charge of safety, control and sanction mechanisms this licensing and safety certification; the Ministry may be subject to further regulations issued of Defence and other executive authorities by the Ministry. within their competence are involved in safety certification; and the Cabinet of All in all, by its simplicity, the Norwegian Act Ministers is competent for establishing the sets the basis for further development of a conditions for insurance. more elaborated legal regime for space as well as for an authorisation system that may, The Ukrainian Law is an example of a very for instance, include conditions on safety, general law in the evolution that blends the insurance and environment standards. institutions inherited from the Soviet period with the implementation of international Ukraine obligations and the potential growth of private activity. In this context, a number of Space Activities in Ukraine are regulated institutions are in charge of licensing and through the Ordinance of the Supreme Soviet safety, a certification but no regime has been of Ukraine on Space Activity41 adopted on 15 created for new concepts such as liability, November 1996 (hereinafter the Ukrainian and insurance is regulated by other national Law) that is aimed at creating an all laws. embracing regime for all space activities in Ukraine. 2.3. Other Countries Since its foundation as an independent country after the break-up of the Soviet Australia Union, Ukraine has been immersed in a

[constant] effort to join the community of In 1998 Australia adopted the 1998 Space democratic states for which it has embarked 43 on a serious effort to establish its own legal Activities Act aimed at providing legal system which would also contemplate the certainty and a predictable environment for implementation of national treaties alongside the development and operation of Australian coordination with the EU and US. The Space Launch Facilities. Ukrainian law is one example of this effort. In its effort to set a legal framework to provide The Act forms the principal part of the for legal certainty and the basis for swift regulatory framework of private launch economic activity, the Ukrainian Law designs activities and was adopted as the an all embracing framework covering all consequence of the growth of international types of space activities from national commercial launch services. Attracted by the programs through private space activities to combination of an exceptional geographical military space activities. Among other location and high technical expertise as well provisions, the Ukrainian Law establishes a as a long standing tradition in telemetry and set of obligations regarding licensing, safety tracking in cooperation with the US, certification, and the conditions for liability. commercial operations agreements and projects for launch consortia emerged in the Although Article 10 provides for a licensing late 1990’s in Australia. In response to this obligation, further conditions are not private sector interest the Australian necessarily attached to private activities: Government enacted in 1998 the Space 44 safety certification is described by reference Activities Act. to a list of regulations that shall be developed and to national law regarding safety and The Australian Act has created a complex environment and obligatory insurance and licensing system. It provides for authorisation liability are also regulated by reference to in more than four categories of operations national law. In this regard, regulations of including Overseas Launch Certificates, other branches of national law can apply to Authorisations of Return and Exemption space activities and this may not be Certificates. For launches from national completely suited to space activities.42 territory, the Australian Act provides for a

Finally, the 1996 Ukrainian Law expressly 43 charges three different authorities with space Space activities Act 1998. Act No. 123 of 198 as amended. An Act about Space Activities and for Reltated Purposes. 41 Ordinance of the Supreme Soviet of Ukraine on Space 44 Freeland, Steven. “When laws are not enough, the stalled Activity of 15 November 1996 (VVRU, 1997, P. 2). development of an Australian space launch industry.” 42 Frans von de Dunk and Sergei A. Negoda . Ukrainian University of Western Sidney Law Review 2004 vol 4. Space Law from an international perspective. Space Policy. 18 Jul 2009 http://www.austlii.edu.au/au/journals/UWSLRev 18 (2002) 15-23. /2004/4.html#Footnote

Report 21, September 2009 22 Economic and Policy Aspects of Space Regulations

double licensing method based on space amount unless the claim is brought before an licences and space permits. Each space Australian Court. licence is granted by the Government to . cover a particular launch facility, a particular The Australian Space Activities Act is the kind of launch vehicle and particular flight most detailed of the existing space laws. It paths and is a prerequisite for the grant of categorises with great detail the different launch permits, which are required for a types of space launches and regulates specific launch or series of launches of the authorisation and control schemes adapted to same or similar payloads as well as returns. each type. It also presents other particularities such as the creation of the Only commercial space launches not Launch Safety Officer for each operation and threatening Australia’s national security, a liability regime shaped after the US model. foreign policy, or international obligations are granted authorisation. To this end, the US operator must demonstrate a set of conditions that are detailed in the Contrary to other legal regimes which accompanying Regulation of 2001. Among regulate space activities through a single others, the operator will have to demonstrate document on space activities, these are that the launch involves the lowest comprehensively regulated in the US through practicable risk within the bounds of a body of legislation targeting communication reasonable45 cost and that the launch vehicle satellites, remote sensing and commercial 47 is effective and safe for its intended launches. purpose.46 In addition, the operator must 48 obtain all necessary environmental approvals The Commercial Space Launch Act (CSLA) and fulfil all financial guarantees. Operators adopted as early as 30 October 1984 is must also be insured; to this end the Act perhaps the act that most resembles other obliges that insurance be calculated according Space Activities Acts. The CSLA has been the to the maximum probable loss up to a lump model or inspiration for many of the existing sum of AUD $750 million. To this end the national laws on space activities. Acts such as Space Licensing and Safety Office (SLASO) the Australian Act have openly been inspired was created. by CSLA and other more recent laws such as the Netherlands Act or the French SOA have Launch activities will be supervised included mechanisms similar to those of the throughout their life by the Launch Safety CSLA regarding insurance and liability. Officer who is authorised by the government to supervise the launch operations and the The CSLA was directly and comprehensively launch site and give directions concerning the aimed at the prospective and desired launch/return and also order search and involvement of the US private sector in space seizure in cases of possible urgency. operations. Until the 1980’s, the US had no specific agency to regulate the activities of The Act imposes liability on the launch private launch operators. Launch activities operator for damage caused to third parties fell under the competence of NASA or the as prescribed by Art VII OST and qualifies Department of Defense (DoD) and the first this obligation by limiting the operator commercial launch applications were faced liability to the amount insured with any with cumbersome processes. Thus in 1984 excess amount up to AUD$3 billion to be the CSLA was passed creating a clear payable by the government if the third party framework for authorisation and liability is an Australian National. In this case, if the matters. damage exceeds the AUD$3billion amount no further compensation will be payable. The CSLA responds to the growing However the Governmental contribution only globalization in the space industry with an applies to Australian nationals. Consequently, increasingly international supply and demand in the case of a claim brought overseas, the for launch services and related financial and launch operator is entirely liable for the entire insurance services. The Act was drafted with

45 The maximum probable loss methodology has been a 47 Most recently, on February 4, 2009 a bill, incorporating edited by SLASO for determining the risks and potential laws enacted in the 110th Congress, was delivered to the consequences of launch accidents. 15 Jul 2009 Committee on the Judiciary of the United States House of http://www.innovation.gov.au/General/MEC- Representatives with the requirement to engage in a SLASO/Documents/MPLmethodology10702_Sept04_20050 positive law codification process for the creation of Federal 602113641.pdf Statute that would reorganise and restate all existing space 46 Flight Safety Code, SLASO. 15 Jul 2009 related laws in a sole instrument of statutory relevance. http://www.innovation.gov.au/General/MEC- 48 49 USC Chapter 701- Commercial Space Launch SLASO/Documents/FSC_Pubn1__20050602105043.pdf Activities

European Space Policy Institute 23 Report 21, September 2009

the express purpose to develop commercial responsible and liable for its part in the activity and maintain an internationally activity. competitive position. To this aim, the Act seeks to encourage private sector activities The FAA has the authority to monitor the and is drafted within the spirit of limiting compliance with FAA regulations and the regulation only to the extent necessary to terms of the licence. In case of non protect public health and safety, safety of compliance, the licence can be suspended or property, and the national security and revoked and, depending on the infraction, the foreign policy interests of the US. licensee may also be subject to a civil penalty. In this context, an authorisation mechanism is aimed at encouraging and facilitating As mentioned at the beginning of this section, commercial space launches by the private US space law is not only limited to the US sector and the involvement of private actors Commercial Launch Act, regulating Launch, in the commercial sector. The Federal Earth Observation, Satellite Navigation and Aviation Administration (FAA) administers the Satellite Telecommunications. US space law is licensing programme and has the authority to wide and has a longstanding tradition. The licence any person conducting commercial preamble of the Commercial Launch Act launch activities within US territory or launch already clearly states the aim of the act is to activities conducted by US nationals in a support industry and private activities and it foreign jurisdiction. adopts a practical approach responding directly to the needs of the industry. In this The FAA may issue two types of regard, the US Commercial Launch Act has authorisations: a launch-specific license and adopted a liability regime which incorporates a launch operator license. The launch – the principles of “maximum probable loss” specific licence authorizes a licensee to and risk sharing as well as a statutory ceiling conduct one or more launches, having the and the so called state warranty, and has set same launch parameters, of one type of a precedent after which many other space launch vehicle from one launch site. The regimes have been modelled. licence expires upon completion of all launches authorized or the expiration date South Africa stated in the licence. On the other hand, the launch operator licence authorizes a licensee The South African Space Affairs Act49 (South to conduct launches from one launch site, African Act) was assented to on 23 June 1993 within a rage of parameters, of launch providing for the establishment of the South vehicles from the same family of vehicles African Council for Space Affairs. In laying transporting specified classes of payloads. down the basis for the functioning of the The licence expires after 5 years. Council, the South African act deals with the fulfilment of South Africa’s international During the licensing procedures the FAA obligations under the Outer Space treaties. conducts a review to ensure that the operation does not pose a threat to US The South African Act was born as the national security or foreign policy interests consequence of a turbulent political and complies with international obligations. landscape in the early 1990’s. When all other On the other hand, the licensee must provide components of the nuclear programme were analysis and economic parameters to closed, space fell into a governmental demonstrate that the commercial launch does vacuum that led the prime contractor, not pose a threat to the public and the FAA Howteq, to shift the programme’s military reviews the payload proposed for launch. orientation to an explicitly commercial one. The Act was then adopted with the purpose All commercial licensees must demonstrate of formalizing adherence to international financial responsibility to pay compensation obligations and providing for the structures for damages caused to third parties according and liabilities of the future space activities of to the principle of maximum probable loss South Africa. determination. However, the licensee will only be held liable up to a statutory ceiling According to the Act, no space activity shall coinciding with the insurance to be purchased be carried out without a licence, which is to by the licensee. For damages above the be issued by the Council. While empowered statutory ceiling, the government provides to issue licences, the Council also holds the indemnification for third party damages. competence to determine conditions for each Finally, the provisions on financial responsibility determination foresee statutory risk sharing by which each party involved in 49 Space Affairs Act (Act No 84 of 1993), as amended by the commercial launch activity is only held the Space Affairs Amendment Act, (Act No 64 of 6 1995).

Report 21, September 2009 24 Economic and Policy Aspects of Space Regulations

particular licence taking into account safety reflected in a set of common elements standards, the national interests and the (“building blocks”) according to which the international obligations and responsibilities laws are laid down in a more or less explicit of the Republic. The elaboration of safety manner. standards is also a competence of the Council. A significant point of difference consists on the level of exhaustion in which such The Council not only conducts a priori elements are regulated with regards to the evaluations but is also in charge of a conditions and obligations laid down, and the posteriori control by being empowered to designation of authorities and their conduct investigations. If the Council finds competencies. Although authorisation that the conditions of the licence were mechanisms show a certain degree of violated the Council may revoke the licence. similarity51, i.e. the issuance of authorisation Other sanctions include liability on conviction most frequently falls to the Ministry in charge to a fine not exceeding Rand 1 million or to of space matters but this is not the case for imprisonment not exceeding 10 years for the required guarantees. While all laws non-compliance with the licence conditions. stipulate accordance with national security interests, public health, international The Act foresees that the Council may also obligations and with environmental include conditions on insurance and liability standards, some countries leave the when establishing the licence conditions. At assessment entirely on a case-by-case basis this stage the Council may decide on (e.g. Sweden and Norway); others such as limitation of liability as well as on the the Netherlands and the UK are satisfied with conditions to determine the damage. establishing a framework to be fine-tuned according to the specific operators; and In conclusion, by creating the South African others such as France or Belgium with Space Council, the South African Space respect to environmental guarantees Activities Act creates a mechanism whereby a envisage the adoption of detailed decrees. sole body is in charge of all space activities, from setting national programmes to granting A posteriori control mechanisms are not an licences to private operators. The Act confers exception to the differing approaches. Also ample facultative powers to the Council in common is that countries with launching terms of setting safety standards as well as facilities have appointed ad hoc institutions 50 control mechanisms. for the supervision of launching sites and launch operations - a clear example is the Comparable to Ukraine, the South African appointment of Launch Officers under the Law is an all-embracing law which aims at Australian Act. In general, an open clause setting the framework for all space activities allocates this competence to the ministry in in South Africa. However, it differs from the charge of space affairs which is likely to be Ukrainian regime in that it addresses private conditioned by internal competence factors activities by creating a licensing regime, a and the available expert knowledge when control regime that foresees sanctions for the attributing control competences. non-fulfilment of international obligations, and liability is directly addressed by Equally, liability regulations show a wide empowering the Council to decide on suitable variety of combinations: from a priori conditions in each case. unlimited liability qualified by a mere exception based on “special reasons”, to the sophisticated US liability regime which 2.4. A Comparative creates the “maximum possible loss” criterion regarding insurance, establishes it as a Examination liability cap and incorporates state warranty and cross waivers. Most liability regimes have A brief look at the subsections above reveals in one or another way provided an escape a wide variety among the different national clause which could allow the authorities in regimes. However, among their principles all charge to adopt similar conditions and often of them incorporate the aim of implementing they have emulated the US system, e.g. the the international obligations on space affairs Netherlands and Australia have incorporated to which they are signatories. This is 51 Marboe, Irmgard. “Brief overview of national authorisation mechanisms in implementation of the UN international 50 Von der Dunk, Frans. Private Enterprise and Public space treaties” ECLS Practitioners Forum 2008. National Interest in the European “Spacescape”: Towards a National space legislation in Europe-Issues of authorisation in the Space Legislation for Private space Activities in Europe. light of developments in European space cooperation. ESA Leiden 1998. 152. Headquarters, Paris, 15 Dec 2008.

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“the maximum possible loss” principle and French Law encapsulates its long standing France has even incorporated a state practice in a an attempt to adapt it to the warranty mechanism. purely commercial environment.

Despite the disparities, some common The diverging approaches are the features can be observed among European consequence of the level of development and countries, mainly: all European space laws the type of commercial activities in each target private activities and aim at creating country. While the laws respond to the the institutional and legal framework by concrete needs of their economies, they are addressing space operations and not only shaped by the specificities of the national launches (Australia) or also the national legal system and institutional bureaucracies. space programme (Ukraine). Yet the In this regard it is still striking that countries differences are obvious: some laws aim only with a strong space sector such as Germany at implementing international obligations and Italy, still have not passed their national through national law as the consequence of space laws. dualism; some others aim at the creation of a legal basis for prospective activities; and the

Report 21, September 2009 26 Economic and Policy Aspects of Space Regulations

3. Effects of Space Legislation on the Commercial Sector

While international treaties are generally only are translated into an array of bureaucratic binding for states and do not oblige procedures, technical checks and financial individuals per se, States can be held requirements that may cause a burden on responsible for the compliance with private actors or, to the contrary, even ease international obligations by individuals. Most burdens that the lack of a legal framework states then need to adopt implementing may involve (as it is with liability). Although legislation at national level in order to ensure this can be said for any other national law compliance with international obligations by whether implementing international their nationals. obligations or constitutional obligations, such differences are especially relevant in a global In abiding by national laws, individuals will market such as space where operators have have to accommodate their activities to the international presence and provide existing law. As was mentioned in the transnational services and thus may have previous chapter, national laws differ in more manoeuvring space to shift their content and procedures creating a first level operations towards the one or the other of divergences but, further, there is a second jurisdiction. level of divergence between those countries who have passed implementing laws and The investigation carried out during the those who have not. These two levels of preparation of this report has indicated that divergences are translated into substantial authorisation issues together with technical discrepancies in the particular regulatory checks are amongst those obligations which environment concerning each operator. form the major concern of commercial operators, with insurance and liability issues Such regulatory environments shape the occupying a very relevant position. culture of operators. Each main European Registration of space objects is one of the Satellite operator is subject to a different most relevant obligations with the Convention regulatory environment. Hellassat in Greece, on Registration of Objects Launched into Hispasat in Spain and SES in Luxembourg are Outer Space elaborating on the registration not subject to space legislations, Immarsat in regime. There has been much discussion on the UK or Eutelsat in France are subject to the relevance of registration and the space legislations that differ significantly in determination of jurisdiction thereof. their philosophies. Not two operators are However, the aim of the study is not to look subject to the same regulatory framework; into questions of applicable law but to look therefore the workings of operators are into the potential effects of such laws, once differently shaped. The routine of the the law is applicable, as factors that may operators at the commercial level and also at condition business plans and relations with the level of satellite optimisation and launch commercial operators. procurement (and the prospect to access space in a well defined and time secured The following section deals with elements of manner) is strongly conditioned by the authorisation, technical checks, and liability applicable legislation. A fragmented and insurance matters. In so doing, the legislative landscape in the European level following subsections will try to not only threatens to impact the way satellite highlight the issues involved in each of those operators are structured and organised and elements but also the challenges they pose to the way space operators are located legislators and the effects on the behaviour of throughout Europe. commercial operators from the perspective of the causes and consequences of more or less Going further into the contents of space flexible laws. legislations, Space Treaties create a series of obligations comprising authorisation, control, registration and liability. When these obligations are shaped by national laws they

European Space Policy Institute 27 Report 21, September 2009

private standards for safety assessment. 3.1. Authorisation: However such standards must carefully be Types, Conditions chosen as industry and operators already adhere to certain industrial standards that and Assessment 52 may raise compatibility issues . Insurance requirements are a pivotal element in the As demonstrated in the previous analysis, the assessment of financial guarantees - if obligation to grant authorisation to non- technical standards aim at the prevention of governmental entities has been implemented damages, insurance guarantees aim at with great heterogeneity. Although common ensuring that the private operator will be features can be found in all legislations, such capable of covering the damages caused by a as the requirement for certain guarantees to space accident. Strongly linked to third party be assessed by the authorities, the type of liability obligations, laws tend to require authorisation to be granted, the list of insurance coverage which, linked to third conditions to be fulfilled or the authorities in party liability, has caused much distress charge of an a priori assessment are not among insurers. The expectation to cover the defined with equal detail in all laws. In this full damages of a space accident may clearly sense, even the content an authorisation may exceed the financial capacity of any private differ from one legal regime to another. insurer which may lead to the refusal to offer Given the particular background of non- coverage to space operators. Many governmental activities, different modalities legislators have come up with formulas such of authorisations have been adopted. While as the “maximum possible loss” or the operators may be faced with a complex range accordance of the insurance market. of requirements and modalities to be adapted However, other regimes have kept insurance to their particular guarantees and the requirements in an unclear discretion of the specificities of their operations, the same is authorities53. not applicable in countries with a lower commercial tradition where operators are 3.1.1. The drivers at institutional faced with an uncertain case by case type of level (causes and expected authorisation without pre-established consequences) conditions. The relevance of the type of authorisation to be granted is based on how Whatever the degree of exhaustion conceded much a type of authorisation can be adapted by a law, all regimes provide for a certain to the commercial situation of operators. margin of discretion to national authorities as it is in the interest of national authorities to Equally, operators may be faced with only the have some flexibility for assessment. Space knowledge of who is the issuing institution. activities are not characterized for mass National legislators have not always been production and each activity is distinguished capable of creating or appointing ad hoc by its differential particularities. Equally, bodies charged with assessment and have operators differ from each other in offering instead provided for the creation of ad hoc different degrees of guarantee. Therefore, it expert groups to assist the government or is crucial for national authorities to enjoy a the minister. Together with very open certain margin in order to be able to apply formulations of the guarantees to be fulfilled different levels of assessment to different by the operator, flexible systems can be operators. interpreted as either best suited to the specificities of the operators or as generators Flexible regimes are characteristic of of legal uncertainty. Very few regimes, such countries such as Sweden, the Netherlands or as in France, include the elaboration of Belgium, which have to strong space activity detailed regulations and the ex ante but so far this has only been developed in the allocation of assessment competences. framework of public programmes and academic purposes. Both the Netherlands and The obligation to authorize space activities Belgium enjoy a strong international stems from the need for preventing and tradition; one as the host of numerous managing damages they may cause. international institutions and the second as Although all regimes are grounded on the common basis that every space activity must 52 respect national security, public health and According to the frameworks created by the French safety of property and persons, not all Space Operations Act, Technical regulations will be developed by CNES in accordance with ESA standards. regimes seem to come to the same level of UNCOPUOS legal subcommittee 2009. Link definition of safety and security standards. 53 Close, Roger. “UK Outer Space Act 1986: Scope and National legislators may develop independent Implementation.” “Project 2001” – Legal Framework for the safety standards or incorporate or refer to Commercial Use of Outer Space. Ed. Karl-Heinz Böckstiegel. Köln: Carl Heymanns, 2002. 587-589.

Report 21, September 2009 28 Economic and Policy Aspects of Space Regulations

host of the European Institutions and a laws and international laws.56 However, the centre of international industrial birth of commercial activities that would be representation; and both are experiencing a completely detached from public activities 54 growth in space activities. In anticipation created the so called French paradox, of potential future commercial whereby the country with the strongest space developments55 and consequent industry lacked the legal means to administer responsibility under the UN outer space its commercial activities. The main challenge, treaties, both countries have adopted legal therefore, was to create a legal framework frameworks for space activities. capable of blending with existing contractual practices and other technical and financial In this context, the national authorities still regulations in order to ensure legal certainty have not been able to acquire the expertise and compliance with international obligations or the experience to be able to lay down ex and national interests. The result is a well- ante technical requirements to grant informed exhaustive law which builds on authorisation. This, coupled with the existing experience and provides a detailed expectation of a low intensity of commercial legal framework of technical obligations. The applications in the near future, has allowed expertise already exists in house for the legislators to provide for wide frameworks creation of dedicated laws and standards and, whereby ad hoc expert committees can be equally, the assessment mechanisms and set up per operation and provide thorough authorities already exist with an experienced analysis to small operators that at the outset space agency for technical assessment. may find it more difficult to comply with safety and financial guarantees. It is also 3.1.2. Consequences for private believed that a thorough regulation may actors create a straight-jacket which may not be able to provide adequate solutions for small Irrespective of whether authorisation is done operators in particular with regards to on an ad hoc basis authorisation or through insurance arrangements or even new well-defined modalities of authorisation, the activities such as space tourism. governmental authority must be able to assess each case according to its specificities Although the majority of space faring and issue licences or authorisations countries in Europe are small countries in accordingly. It must be borne in mind that terms of space capacity, this is not the case the legislator in countries with open with France, which is considered a space framework laws wants the flexibility to be to power and owns one of the best located adapt the proceedings to each case. An spaceports in Kourou. The commercial particularly relevant point here is that since it landscape in France is far more developed lacks the in-house expertise it may rely on than in other European countries: it has been the already well-established name of the a host since early times of a launch operator, most emblematic companies creating entry a satellite operator and a space industry. barriers for smaller new companies whose From the beginning, the aim of the reliability is not backed by a long tradition. government has been to create a basis that will support commercial development in Discretion is, however, not a characteristic of space. With a visible managing structure flexible regimes but also plays a role in comprised of CNES, the government has exhaustive regimes that have created always been capable of ensuring the systems of sole permits and long duration compliance of commercial activities with licences to be allocated to different cases national interests and international according to the specificities of the operation obligations through a mix of general national or the operator. This system allows the adaptation of an otherwise transparent and strict regime. As has already been explained before, the type of authorisations and procedures mirror the practices carried out 54 Supra 32. and Mayence, Jean-François “Harmonisation actually in the context of real commercial of Authorisation Regimes in space Activities” ECLS activities. In this sense, there is a fear from Practitioners Forum 2008. National space legislation in Europe-Issues of authorisation in the light of developments industry that authorities could tend to favour in European space cooperation. ESA Headquarters, Paris, national operators and industries with whom 15 Dec 2008. Also agenda item on “National legislation they are already familiar. relevant to the peaceful exploration and use of outer space” COPUOS Legal Subcommittee. Mar 2009. 55 In the case of Belgium the potential liability rising form its activities in the ESA Space Center Redu in the South of Belgium . In the case of Sweden the rapid development of 56 Pour un Politique Juridique des Activités Spatiales. Kiruna Spaceport as Spaceport for space tourism could Conseil d’État. Paris: La Documentation Française 2006.50 also arise similar concerns of liability . -62

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One scenario where this could happen is that regime equally applicable to space activities where the national authority ties applicant of completely different characteristics may operators to national industry or launch cause undesirable consequences. While the service providers. National authorities may duration of a launch lasts a relatively short tie operators to national industry and service time and the entire process of operations is providers by refusing authorisation on not prolonged longer than days, the life of a grounds of security or safety when they opt satellite may reach up to twenty years and for foreign providers. Operators may also with it operations can last as long as such a simply be denied a licence and be subject to period. The insurance for such a long period assessment per launch in cases where they of time undoubtedly surpasses that of the do not contract with national industry and launch causing a high financial burden on service providers. State warranty proves also satellite operators. to be a strong tool to protect national industry and launch providers, by denying state warranty to operators, the latter maybe 3.2. Liability forced to contract with national actors in order to be able to obtain state warranty coverage. As mentioned before, authorisation is closely linked to control and liability sharing as it Satellite operators abide by criteria of sets the jurisdiction for carrying out control reliability and competitive servicing at the as well as for risk sharing and liability time of choosing one or other launch service allocation. provider. If obliged to launch with a certain launcher or obliged to undergo cumbersome In providing for liability for damages caused administrative burdens, or denied state by space activities, the Outer Space Treaty warranty, satellite operators are placed at a together with the Liability Convention take a competitive disadvantage with competitors as victim oriented approach whereby victims of launching with other launchers or contracting damages caused by space accidents who are with other manufacturers might often be less not related to the space activity must be costly. In addition, those satellite operators compensated for the full damage. In order to needing ad hoc authorisations may be provide the widest protection possible to the delayed in their business plans and incapable victims of space accidents, the Outer Space of making commitments for competitive Treaties charge States with the liability for services to clients. At last, operators tied to space activities since the State is much more one launch operator are obliged to rely on reliable and solvent than any private entity. only one launch operator and are left without Holding States liable may be the most 57 any alternative resource in case of failure to protective measure for potential victims launch. since States may be the only entities able to cover the vast liability implied by the Outer A second set of questions may emerge at the Space Treaties that establish unlimited and level of technical assessment as the absolute58 liability towards third parties. The application of certain standards strongly liability is also unlimited in time as it covers affects the costs involved in design and damages caused during launch, the entire construction. On the one hand, the adoption period in orbit and the time after termination of the traditionally or most widely applied of the space activity. In this sense, the standards may reduce costs as it is likely that liability can still be alive even as long as operators already abide by such standards. centuries after the space operation is over. The assessment procedure is not only faster and less costly but also operators do not However, Art. VI OST establishes that States need to incur additional costs in redesigning are not only liable for governmental activities their crafts and possibly the services to be but also for space activities carried out by offered. Further effects related to standards non-governmental entities. Coupled to this are to be found in the fact that by adopting obligation is also the power of the State to certain standards national authorities are capable of protecting national manufacturing industries and creating barriers for new 57 Kerrest, Armel. “Liability for Damage Caused by Space entries. Moreover, national authorities may Activities”. Space Law: Current Problems and Perspectives opt for standards that render launching for Future Regulation. Eds. Marietta Benkö and Kai-Uwe services unattractive to operators. Schrogl. Utrecht: Eleven International Publishing, 2005. 91- 112. 58 Finally, insurance matters may seriously Ibid. The Liability Convention establishes an absolute liability in the case of damages caused on Earth as the affect the financial capacity of operators as liability is without a fault and it might me interpreted that no insurance is usually required to cover the exonerations is possible as this is not foreseen in the entire life-cycle of an operation. An insurance wording of the text.

Report 21, September 2009 30 Economic and Policy Aspects of Space Regulations

receive compensation from the non- Building on pre-established practices, governmental entity for the amount paid. governments that have adopted national laws have made an effort to incorporate It has already been pointed out that state mechanisms that will ease the burdens of liability is unlimited and absolute59. The liability. In broad terms, the adopted unlimited and absolute character of space mechanisms are embedded liability caps, liability acquires a particularly wide character state warranty measures providing for state when the risks of space activities are taken support in order to cover all damages, and into account. The nature of launch activities cross waiver provisions aimed at ensuring the and of the preparation of satellites for launch insurance market will be able to cover risks makes them highly hazardous activities. It from space activities. might be argued that a higher investment to enhance reliability of space activities could 3.2.1. The institutional approach involve lower liability, however, beyond a certain point such investments could result in Similar to authorisation systems, liability costs totally disproportionate to the gained regimes have evolved in response to the reliability and, therefore, the current risk commercial evolution of space activities. To level is accepted.60 the extent that states without launching facilities and without commercial space

activities can be held to be launching states In sum, private entities might be obliged to in the case of commercial launches, they compensate for amounts much beyond their have incorporated provisions on liability financial capacity and even beyond the emulating those mechanisms instituted by financial capacity of the insurance market space powers with developed commercial which may refuse to cover space activities. launch activities e.g. the US and France. An added issue is that victims may be able to

claim compensation via the general domestic In the 1980’s, both countries were faced with damage claim procedures or by invoking the increasing space commercialization and the Liability Convention. In this sense it might be need to develop a regulatory environment difficult for the State to get compensation that would allow operators to develop under domestic rules if there are no special commercial activities without the constraints stipulations in national space law or in the 61 of a burdensome regulatory framework. Both licence agreement. the US and France developed in a somewhat different manner. While Arianespace in Traditionally these issues have been Europe was being privatized and left subject regulated through the launch contracts and to French jurisdiction (that lacked a space state coverage of liability ensured by the law) under the Reagan Administration in participation through share holding of state 1984 the US passed the CSLA. This 62 agencies in launch activities , and issues incorporated the “National Security Decision related to insurance have been agreed on a Directive (NSDD-94) “Commercialisation of contractual basis for the cross-waiver Expandable Launch Vehicles” (ELVs) which arrangements. envisaged the commercialization of space activities while also providing for the obligation to obtain insurance to cover loss of 59 However, it must be pointed out that although liability is or damage to US government-owned systems unlimited for damages caused on Earth, air and on outer space, it must be pointed out that damages caused on as well as insurance for third party liability. Earth or air are subject to strict liability while damages Launch operators were left the entire burden caused by accidents in outer space are subject to fault. Art of an unlimited liability that although unlikely III LIAB. to occur would amount to the bankruptcy of 60 Du Parquet, Claude-Alain. “Launch Services Agreement the company in case of a catastrophe. and Inter Party Waiver of Liability.” Towards a Harmonised Approach for National Space Legislation in Europe. Eds. Stephan Hobe, Berhard Schmidt-Tedd, Kai-Uwe Schrogl,. Meanwhile, Arianespace in Europe had been Towards a Harmonised Approach for National Space privatized under French Law and certain Legislation in Europe. Köln: 2004. 129-134. provisions were incorporated into its 61 Kerrest, Armel. Purpose and Modes of State Founding Declaration63 which set a cap on Indemnification. Eds. Stephan Hobe, Berhard Schmidt- Tedd, Kai-Uwe Schrogl,. Towards a Harmonised Approach the liability required from Arianespace and for National Space Legislation in Europe. Köln: 2004. 121- made arrangements for government 128. indemnification above that cap. In addition, 62 E.g. in the case of Arianespace Art. IV of the Ariane Arianespace developed standardized clauses Declaration provides that in case of claim placed by victims introducing cross-waivers of liability whereby for damage caused by any Ariane launch, the French Government will bear the financial burden of the compensation for such damage. When the French Government has been called for compensation for 63 Declaration by Certain European Governments Relating damages, Arianespace has to reimburse for the amount. to the Ariane Launcher Production Phase, 14 April 1980.

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it undertakes not to bring claims against its be limited by the Secretary according to the contractors under the condition of flow-down maximum liability insurance available in the of this waiver into the subcontractors. The market. cross-waiver clauses are also applicable to customers. • State warranty/State indemnification

The competitive difference between the two The liability ceiling may be coupled with the systems - the US system allocating unlimited so-called State warranty/State liability to commercial operators and the indemnification which consists of the State European system providing for limited liability covering the damages over the ceiling. - raised concerns among US operators who According to the CSLA, the US government were afraid that they might not find will pay for “a claim finally decided by a court appropriate insurance coverage and would be of competent jurisdiction.” On the contrary, placed at a competitive disadvantage. In the French law does not limit the state response to this situation, the CSLA was warranty. amended in 1988 introducing several changes such as a ceiling, the state warranty and the • Cross-waivers of liability. concepts of the maximum probable loss and the maximum liability insurance available on Cross waivers of liability have been the world market. commonly contained in launch agreements and are an essential part of them. They are Although it has been believed that the French based on the principle that each party must liability framework comprised of the liability be held liable only for its share of cap determined in the Arianespace Founding responsibility. Cross-waivers consist of Declaration together with the state warranty parties agreeing to a mutual no-fault no- foreseen by the Declaration and the subrogation inter-party waiver of liability standardized cross-waiver clauses, is a between the launch provider and its flexible and favourable framework for the customers and associates, the manufacturers development of commercial activities, the of the vehicle and the satellite, and the recent French Act on Space Operations financial entities. Cross-waiver provisions are dedicates a chapter to liability which contains associated with a “hold harmless” clause by the legal basis for all liability mechanisms which each party undertakes to pass over the developed in the context of Arianespace said cross waiver obligations to its associates launches. and interested parties, and to guarantee and hold the other party and its associates Currently liability regimes present the harmless in the event that its own associates following elements: or interested parties should claim for damages from the other party or associates. • Limitation of the non-governmental entity’s liability towards third parties. 3.2.2. Private actors’ approach

In order to avoid the consequences of Due to their complexity and the high charging non-governmental entities with investment they involve, the development of unlimited liability legislators have devised space technologies cannot offer levels of several ways to limit the liability of such reliability already achieved by other industrial entities. In some cases the legislator sectors. The industry observes that higher determines a blunt amount up to which the investments for enhancing reliability of space non-governmental entity will be required to technologies would amount to costs that reimburse the State. In others, the cap may would be nearly unbearable and the results be established according to the insurance would hardly outweigh investment. available in the market. A third scenario would be where the licensing authority Therefore as it stands now, space determines the maximum probable loss while technologies must involve a certain degree of setting it as the ceiling up to which the risk, which in the case of space has the company is obliged to be insured and will particularity of being an unlikely risk that if have to pay in case of accident. A materialized can cause unimaginable combination of several of these options is damages. In this regard the passing of State also possible as in the case of Sec 70112 liability onto non-governmental operators CSLA whereby the licensee needs to acquire places a heavy burden on them as they need insurance or demonstrate financial to be insured for the entire liability they must responsibility up to the maximum probable hold. The reform of the CSLA made this clear loss. In any case, the licensee will not be when launch operators were concerned about obliged to reimburse the State over the blunt the finance market not being able to cover amount of $500million, an amount that can such risks and, in any case, about the high

Report 21, September 2009 32 Economic and Policy Aspects of Space Regulations

premiums they would have to bear in order the formulation of authorisation conditions to be insured. Private operators felt they and the creation of governmental services to were “betting the company” per launch and that end as well as the regulation of liability asked for a law that would provide for liability depend on the available expertise. All of ceilings and state indemnities. these factors lead to a variable degree of discretion conferred to national authorities Currently, the state indemnification is being across the different jurisdictions. It would put to the test in the US. Launch operators seem that while favoured by certain national have expressed their concerns about the authorities, flexibility could be regarded as a possibility of reform or the abolition of the factor of legal uncertainty and potentially state warranty. State warranty has become discriminatory. Commercial operators may an international standard and the removal of therefore favour more detailed legal such a measure would be considered a frameworks that may provide legal certainty. “market killer” because the system that removed state warranty would not offer the However, due to the fact that the conditions level of insurance that others do and would laid down by laws are based on existing be placed at a competitive disadvantage. On commercial practice, it may well be that by the other hand, the state warranty plays an stringent regulations, authorities may be important role in outweighing other rubberstamping the practices of certain regulatory barriers such as those posed by private operators and in this way favouring export control regulations. national operators. Technical regulations may often be so narrow that they limit licensees in However, the existence of a law is not so their freedom to choose their providers and important as the existence of workable and partners. A second level of concern is practical liability mechanisms. Before the attached to the fact that in some countries Space Operations Act was passed in France, space laws may be enacted after commercial the industry had already elaborated cross- space activities have developed to certain waiver mechanisms on a contractual basis. extent, as has been the case of France or This system was regarded as flexible but maybe the case of countries such as Italy, reliable and capable of adapting to new Germany or Spain. In such cases the fact contracts but also providing legal certainty that a law is adopted is already a source of for newcomers. Although not regarded as uncertainty since previous to the adoption of necessary, the adoption of a law may allow a the law operators would launch solely level playing field with regard to countries according to their own commercial that offer a state warranty in legislative form. commitments whereas after the law has been adopted operators may not be sure about It has been mentioned above that the laws being granted authorisation. on liability have been developed as the consequence of the practices of states with Similarly, in principle, the inclusion of launching capacities. Therefore, the liability provisions limiting liability of commercial regimes mirror the specificities of launch operators is positively regarded. The inclusion operators and run the risk of not being of cross waiver mechanisms and state adapted correctly to satellite operators. This warranties creates attractive conditions for may be the example of the French Space operators. It therefore supports the Operations Act that only foresees liability proliferation of space activities and a limits and state warranty for damages caused competitive environment by easing the on earth or in the air. Damages in orbit are burdens for national commercial operators not subject to the same measures but yet and also by attracting foreign operators to need to be authorized and need to comply launch with national launch service providers. with insurance obligations. The risks of Such provisions often the mirror of launch damages caused by the operation of in orbit contract clauses adapted to the usual satellites is considerably smaller than the risk operators. If such causes are mirrored in the involved by launch activities, given the long national laws without care, they could even life of a satellite, insurance for unlimited be a deterrent to newcomers. On the other liability seems disproportionate. hand, a flexible formulation of liability limits and the omission of every reference to state warranties creates disparities among 3.3. Conclusions countries and therefore competitive dis- advantages.

When implementing international obligations, It is claimed that state warranties support national space laws pay attention to the national commercial space activities. It is this actual and the prospective development of very fact that has been put in the spotlight of national commercial space activities. Equally, state aid regulations. While it does not seem

European Space Policy Institute 33 Report 21, September 2009

to have raised issues in the context of the WTO, the French Act was submitted to the EC Competition authority for assessment under EU State Aid rules. The state warranty mechanism was considered a state aid as it is selective, involves a direct transfer of resources from the State to the private operator, and may have an impact on competence. The aid was exempted however, as it is an appropriate, necessary and proportional measure for the achievement of Community objectives. In this analysis, the EC noted, inter alia, that the state warranty as set by the French law provides for legal certainty and provides for a licensing procedure equally open to all operators in the market and is, therefore, non discriminatory.

In this line, laws providing for clear-cut authorisation procedures that incorporate standardising regulations and limits to the operators’ liability support the development of national space activities. Their inclusion in national legislation should not be seen however as providing competitive advantages, they should rather be seen as mechanisms to avoid competitive disadvantages in relation to other jurisdictions that also incorporate them.

Report 21, September 2009 34 Economic and Policy Aspects of Space Regulations

4. Policy Recommendations for Europe

4.1. The Need for international obligations at national level and the creation of administrative infrastructure Harmonization of to support the implementation of the law. A “European Space Law “would be capable of Space Laws filling the gaps between national legislations.67 As we have seen above, despite the developments of the past decade in the The traditional approach to a potential regulatory area, or perhaps because such European space law framework has turned developments have taken place disconnected around the idea of harmonisation of national from one another, the space sector faces legislations. However, a few questions need severe inconsistencies at regulatory level that to be pointed out in this regard. Space laws have nourished market deficiencies. It implement international obligations that are seems, therefore, that common regulatory binding on States. The European Union is not conditions are desirable in order to bring the addressee of such obligations but its space legislation into shape and provide for Member States (MS) are. In this regard, the legal certainty and comparable conditions for implementation of any space law at European operators in different countries.64 level would need to take into account also the international obligations of its MS while Ideally, such coherence would be attained at providing for a scheme whereby they would international level, however, the current still have responsibility for their space international legislative setting does not seem activities and could respond accordingly. A to facilitate any approximation of national further question with respect to the creation laws at international level. The space treaties of a European space law framework is related do not deal with aspects of private law and to harmonisation itself. It seems that the efforts for the creation of private law models existence of national laws would be a prerequisite for harmonisation, but given the are still in the draft stage.65 Formalisation fact that only five MS have adopted national into a more detailed international regime at laws, it might be questionable whether the UN level seems unlikely, and harmonisation could take place in the space development through the current field in Europe. international private law schemes does not 66 seem suitable. On the contrary, it must be recalled that the current EC is founded on the removal of In this context, much emphasis has been market barriers and free competition. placed on the capacity of the EU to create a However, where national laws are aimed at coherent common legislative framework, protecting interests recognized by the through secondary law. The powers for community, such as public health or national harmonisation of the EU seem best suited for security, such barriers may still persist. creating such a common legal framework that Harmonisation is then the instrument is able to encompass not only the entire whereby the EU creates common standards in range of regulatory fields, but also to provide order to reduce the risk of operators moving the legal basis for the implementation of their bases to other countries in search of less constraining national legal frameworks. 68 64 EC/ESA joint Task Force Secretariat, Green Paper on Regarding space activities, harmonisation European Space policy, Report on the Consultation becomes even more important given its Process, BR-208, Oct 2003. capacity to contribute to the aims of the 65 The Unidroit Protocol on Space Assets is the major effort in the creation of a model law concerned with private space operations. Nevertheless, the protocol is rather limited in 67 Gerhard, Michael Kai-Uwe Schrogl, “Report of the scope as it only deals with the jurisdictional aspect of „Project 2001 Working Group on National Space liability matters. Legislation” “Project 2001”-Legal Framework for the 66 Hobe, Stephan. “Harmonisation of National Laws an Commercial use of Outer Space. Böckstiegel, Karl-Heinz. Answer to the Phenomenon of Globalisation.” “Project 2002 Köln,/Berlin/Munchen: Karl Heymanns Verlag, 2002. 2001”-Legal Framework for the Commercial use of Outer 549-552. Space. Böckstiegel, Karl-Heinz. 2002 Köln,/Berlin/Munchen: 68 Steiner, Josephine and Lorna Woods. EC Law. Oxford/ Karl Heymanns Verlag, 2002. 551,552. New York: Oxford University Press:2003. 258-276.

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Union. This is due to the fact that a European Commission adopted a competitive space sector does not only serve Communication73 reporting on the joint European strategic purposes such as reflection conducted by the European independent access to space but also has the Commission and ESA. The document potential to contribute to an innovation based reflected the strategic and economic economy as pursued by the “Growth and Jobs importance of space-technology–enabled Strategy.” A coherent legal framework that services and applications while it raised eases financial burdens to commercial awareness of the need for a coherent operators favours the shift of funds towards approach to space and the importance of the improvement of space technologies and creating a consultative structure with ESA. the optimisation of production. The document took account of the global switch towards a market based approach, the All in all, the European Union has recently relevance of developing a competent industry been provided with a European Space Policy capable of sustaining independent access to that forms part of the space competence space and the need to create the conditions previewed by the Lisbon Treaty, a for an industry capable of competing competence that already sets the basis for an worldwide. The lack of consensus in Europe EU wide action in space. that would allow the creation of such conditions raised the challenge of having to 4.1.1. The European Space Policy take an institutional and organizational approach at European level. Legislation was At the end of the 1970’s it became evident conferred a key role as more effective that if European space industry was to be implementation of existing legislation was competitive in the global markets, the considered essential. The European Union European Union would need to take active was seen as the facilitator of the coordinated action in space in coordination with ESA while introduction of global systems regarding providing for a strategy that would facilitate frequency management and authorisation the spill-over of space technology conditions and procedures. The EU could developments into other areas of the conceive one-stop-shop organism for economy and provide society with the licensing and also use its power to obtain the benefits of space technology based services. adherence of MS to non-binding rules such as The increasing commercialization of space CEPT where Community policies where at activities and the development of space law stake. The strategy did not sketch out any pushed the European institutions towards the concrete institutional structure nor a space first steps in the space field. Already in 1979 policy. In early 2000, the ESA International the European Parliament (EP) adopted a Relations Committee made efforts in “Proposition for a Resolution on the discussing national approaches and plans Community's participation in space through holding a number of informal research”69 and later, in 1981 the EP adopted meetings. These efforts, however, did not a resolution on a “European Space Policy”70 lead to concrete accommodations but at least raised understanding of the respective for the first time. The first reference to positions and approaches. national space legislation appeared in 1987

when the EP urged the European Commission That would happen at a later stage when the to contribute to the process of development 74 and codification of space law in order to avoid White Paper was adopted in 2003. Although a time consuming codification later on.71 during the consultation process regulatory concerns were raised relating to standards

and licensing issues, the White Paper Nevertheless real action towards a European elaborates on the contribution of space space framework did not start until 1999 technologies and space based services to the when two major events took place in the several goals of the EU and contains only a European Space environment. On the one mention of legislative matters when referring hand, the European Commission officially to the role of the EU in the elaboration “of announced the launch of the Galileo proposals and representation of the EU programme72 while, on the other hand, the

69 Proposition for the Resolution of 25 April 1979 on the 54 final of 10 Feb. 1999 and European Commission . Community's participation in space research, OJ C 127 of Communication on Galileo. COM (2000) 750 final of 22 21.5.1979, p. 42. Nov. 2000. Brussels. 70 Resolution of 17 September 1981 on Europe's space 73 European Commission. Towards a coherent approach for policy, OJ C 260 of 12.10.1981, p. 102. Space. SEC (1999) 789 of 7 June 1999. Brussels. 71 Resolution of 17 June 1987 on Europe's space policy, OJ 74 European Commission. White Paper on Space: A new C 190 of 20.07.1987, p. 78. European frontier for an expanding Union- An action plan 72 European Commission. Galileo- involving Europe in a for implementing the European Space Policy. COM (2003) new generation of satellite navigation services COM (1999) 673 final. 11 Nov 2003. Brussels.

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interests when addressing space law issues in again put in the context of the EU general international forums.” strategy for growth and jobs. Accordingly, space is a horizontal policy with the capacity The White Paper paved the way for the to enhance other strands of the EU policy, adoption of the European Space Policy (ESP) particularly innovation. Due to its intensive in 2007 and the ESP Communication technology content, space fosters the dedicates a section to regulatory issues which creation of a high skilled workforce and has affect mainly the market of space based the capacity to spill over into other sectors. services. Although the ESP Communication The nature of space activities makes them seems to have abandoned the concept of a specially suited to the innovation aims of the coherent legislative context with the creation Lisbon Strategy and embeds a combination of of common authorisation standards and a different technologies allowing innovative and one-stop-shop authorisation procedure, the competitive services. In addition, this sector White Paper does mention that space is faced is faced with strong international competition. with high technological and financial risks but The increase of commercial activities in space does not elaborate further on the provision of also indicates a high potential for growth and mechanisms to deal with materialized risks. makes space extraordinarily well suited to be The ESP provides the context in which considered one of the lead markets within the activities are set and elaborates its Lead Market Initiative.75 interaction with other policies and its contribution to the Lisbon Strategy goals and The strategic potential of space as a motor the CFSP/ESDP. It does not elaborate much for innovations is gaining strength. In further on the institutional setting or on September 2008 the Competitiveness collaboration with ESA, but this might be Council, while dealing with other aspects of explained by the fact that ESA-EC relation are space such as GMES and Galileo, endorsed already dealt with in the ESA-EC framework the possibility of bringing space within the agreement. Also, the institutional Lead Market Initiative. Most recently, the arrangements at EU level will be better December 2008 European Council has shaped after a clear space competence is mentioned space among the economic awarded to the EU. Therefore it seems logical sectors that deserve special attention for that the ESP must be seen as a piece of the their capacity to contribute to economic jigsaw of European wide Space Policy. growth.

4.1.2. Space and Innovation. A new strategic role for space in 4.2. The Ongoing Discussion on Europe? Harmonization in the Light Since the time of the Cold War, space has of the Lisbon Treaty been viewed as a highly strategic sector for its content of critical technologies and its security component. With time, space-based As mentioned before, the ESP does not infrastructures have become increasingly mention any legislative activity or important as space technology based institutional organization, an absence that applications are integrated into every aspect might be explained by the fact that already at of our lives. As already mentioned by the its preparation, so the White Paper seems to space strategy, what is at stake is the suggest, the ESP was designed to be part of number of applications to be guaranteed by a an EU shared competence when the Lisbon competent European industry. The drafters of Treaty (LT) would enter into force. As has the White Paper saw this and drafted the been seen in the previous chapter, there is a document along the lines of the Lisbon strong need for cohesion of rules and Strategy striving for a knowledge based most authorisation procedures relating to space competitive economy with strong emphasis that, due to the trans-boundary nature of on research and innovation. Space starts space activities, may be better achieved gaining strategic relevance as a potential through measures at European level than catalyser of innovation and so the ESP selects through national actions.76 The inclusion of space as the enabler of the partnership for growth and jobs as it offers a great scope for high technological innovation and opens the 75 European Commission. A lead market initiative for possibility for the development of lead Europe. COM (2007) 860. 21 dec 2007. Brussels. markets. 3 Aug 2009. http://ec.europa.eu/enterprise/policies /innovation/policy/lead-market-initiative/ index_en.htm#h2- a-lead-market-initiative-for-europe The idea was further elaborated during the 76 Marchisio, Sergio. “Potential European Space Policy and Informal European Council that took place in its Impact on National Space Legislation”. Eds. Stephan Kourou in June 2008 where space was once Hobe, Berhard Schmidt-Tedd, Kai-Uwe Schrogl,. Towards a

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Space as a self-standing competence in the TEC, the EC may create a competence where Treaty of Lisbon, therefore, was much EC action is proven necessary. awaited as it should be able to provide for the legal basis to that end. All in all, currently, although the EC lacks an attributed competence, there is a range of 4.2.1. European space competence possibilities to be able to regulate over space. as it currently stands These range from the current horizontal approach, which is in line with the horizontal The current EU/EC Treaties77do not contain nature of space stated in the ESP, through any explicit reference to space. However the approximation of rules in specific actions space has been regulated with somewhat far in order to attain the internal market goals, reaching competences in the current to the adoption of a new competence. framework within the reach of other competences, e.g. GALILEO has been The current landscape and particularly the regulated in the context of the Trans- horizontal approach may have proven a European Networks while GMES has been practical means to tackle regulatory needs ad accommodated by DG Enterprise and hoc, however, seen in the light of the Industry and space related projects are strategic value of space regarding both its managed through the Industrial Research contribution to economic growth and its Funding Programme FP7. Equally, other critical relevance for security, the current provisions such as environment have horizontal approach may not be able to provided the basis for the adoption of properly support the holistic vision legislation on data collection, e.g. INSPIRE encompassed by the ESP. In addition, while Directive.78 In this context, it has been regulatory aspects such as frequency allocation and standardization may be suggested that the EC is competent to set a adequately dealt with through their legal framework for commercial space attachment to any other policy, issues exploration and can support the European regulated by space laws, such as third party space industry. liability or the set up of authorisation

procedures, may find a difficult fit within It must also be recalled that, as long as it is other policies as they are intrinsic to space. not explicitly excluded, the general principles At an institutional level, the horizontal of the EU apply also to space therefore approach may involve undesirable making space subject to the principles of bureaucracies, duplication of work and time- attribution of competences, subsidiarity and consuming inter-service negotiations that proportionality according to which “ insofar may hinder due progress on space activities. as the objectives of the proposed action Finally, in international forums, the EU risks cannot be sufficiently achieved by the MS and to be represented by different services can therefore, by reason of the scale of the according to the legislative issue at stake. effects of the proposed action, be better

achieved by the Community” the EC may In this context, the adoption of a self- take necessary measures to regulate a policy standing space competence would seem to be as long as Community action does not go able to provide the institutional basis to beyond necessary to achieve the objectives 79 reunite all legal and legislative aspects of of the Treaty. Connected to this is the space while permitting a holistic approach in principle of pre-emption whereby the EC can decision making and a visibly unique image regulate in fields that have not yet been before the international community. regulated by the MS. When an action in the context of the internal market has not been 4.2.2. Space in the new Lisbon Treaty expressly attributed, the EC may make use of Art. 94 and Art. 95 TEC in order to The Lisbon Treaty (LT) introduces several “approximate” laws. Art 308 TEC provides changes that are relevant to the space sector another means for harmonization whereby in in the context of the EU80. The LT regulates order to achieve the means listed in Art 2 also EU relations with International Organisations by establishing that the “Union shall establish all appropriate forms of Harmonised Approach for National Space Legislation in cooperation with the organs of the United Europe. Köln: 2004. 145, 146 77 The Treaty establishing the European Union and the Treaty Establishing the European Community. Nice. 80 For a general overview see Schmidt –Tedd, Bernhard 78 European Community. Directive Establishing an “Authorisation of space activities after the entry into force of Infrastructure for Spatial Information in the European the EU Reform Treaty”. ECLS Practitioners Forum 2008. Community (INSPIRE). 2007/2/EC. 14 Mar 2007. Brussels: National space legislation in Europe-Issues of authorisation EU in the light of developments in European space cooperation. 79 Art. 5 TEC ESA Headquarters, Paris, 15 Dec 2008.

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Nations and its specialised agencies”. The considered a shared competence81 and, relevance of this attribute is evident as it therefore, it has been coined as a “parallel creates an active role for the EU before competence”82. International Organisations permitting it

more coherent accommodation of EU law to The peculiarity of the space competence is international obligations to which MS are reinforced in Art. 189 TFEU which provides bound. for the legal basis of the space competence.

In Art. 189 the TFEU recognizes the value of The traditional measures space to boost technology and innovation and

provides for the adoption of the ESP. The While divided in the Treaty of the European article reads as follows: Union (TEU) and the Treaty on the

Functioning of the European Union (TFEU), 1. To promote scientific and technical the LT brings all general principles, the basic progress, industrial competitiveness and objectives and institutional provisions the implementation of its policies, the together with the CFSP and the ESDP into the Union shall draw up a European space TEU and encompassesall TEC and 3rd pillar policy. To this end, it may promote joint within the TFEU. In this scheme the general initiatives, support research and principles and main objectives of the EU are technological development and coordinate preserved as they stand currently, and Art. the efforts needed for the exploration and 94 and Art. 95 on the approximation of laws exploitation of space. find their equivalent in Art. 114 and Art. 115 2. To contribute to attaining the respectively, while Art. 308 finds its objectives referred to in paragraph 1, the equivalent in Art. 352. Therefore, the current European Parliament and the Council, mechanism for the approximation of the laws acting in accordance with the ordinary in cases of no specific attribution of legislative procedure, shall establish the competences is maintained. necessary measures, which may take the

form of a European space programme, The space competence excluding any harmonisation of the laws

and regulations of the Member States. Most importantly, the LT creates a new EU 3. The Union shall establish any competence for space while shaping it as a appropriate relations with the European sui generis competence. The TFEU Space Agency. categorises the competences in exclusive 4. This Article shall be without prejudice (Art. 3 TFEU), shared (Art. 4 TFEU) and to the other provisions of this Title. support competences (Art. 6 TFEU). While

the first two categories allow for the adoption By expressly providing for the exclusion of of legally binding measures (regulations, “any” harmonisation of laws and regulations directives, decisions), the third category of the Member States, this article seems to attributes to the EU the capacity to adopt exclude even the widest interpretation of the actions to support, coordinate and concept of harmonisation which would also supplement the action of the MS without categorise as harmonisation the creation of superseding its competence. Although a list new laws aimed at filling the gaps between of competences is given per category, space national legislations. But the wording of the is not included in any of the lists. On the article still leaves some space for the contrary, Art 4(3) TFEU groups space with adoption of legally binding rules, i.e. the areas of research and technological decisions. Keeping space as a shared development. competence which allows for the adoption of

legally binding instruments may reflect the By not including space into the shared will for and the relevance of a European competences the TFEU also excludes the Space Policy. However, the elimination of all applicability of the pre-emption principle to harmonisation only adds to the peculiar space whereby MS would only exercise their character of this competence approximating competence to the extent that the EU had it to supportive competences. decided not to exercise it (Art. 2 (2) TFEU). On the contrary, Art 4. (3) TFEU establishes that MS shall not be prevented from 81 According to Art. 4(1) TFEU “The Union shall share exercising their competence when the EU has competence with the Member States where the Treaties decided to do so. This places space in a confer on it a competence which does not relate to the areas referred to in Articles 3 and 6. peculiar situation, while not being listed 82 neither among the exclusive competences nor Hobe, Stephan; Kunzmann, Katharina; Reuter, Thomas and Julia Neumann. Forschungsbericht ESA-EU: among support competences, it is still to be Rechtliche Rahmenbedingungen einer zukünftigen kohärenten Struktur der europäaischen Raumfahrt. Berlin: LitVerlag, 2006. 560

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The discussions held in the context of scenario up to the one that has just been projects such as Project 2001 have stressed described. However, the lack of any the relevance of harmonisation in order to possibility of harmonisation presents the overcome the deficiencies of the European scenario above described as a highly unlikely space sector. In fact, harmonisation aims at one. The question however remains on the overcoming deficiencies that the principles of one hand whether such scenario is desirable the internal market and fair competition are given the already existing institutional not able to solve.83 capacities, and on the other, whether harmonisation is absolutely necessary to In this vein, the peculiarities of space overcome the deficiencies created by the activities, such as their strategic importance, current map of space legislation and space their links to security or their trans-boundary activities in Europe. nature, may make the rules of the internal market not the best fitted to overcome the Enhanced cooperation very particular barriers to space activities e.g. high insurance costs and burdensome The emphasis put in harmonisation may be and unclear authorisation procedures. A full explained by the little awareness of the competence or even a listed shared institutional implications of harmonisation at competence subject to the pre-emption European level but mainly because principle would have allowed a wider scope of harmonisation is the main pillar of action at action such as the creation of institutional EU level after the general principles and legal structures capable of pooling regulating the internal market. As mentioned expertise and generating the legal and before, space presents very specific market administrative means to deal with challenges characteristics. Space activities are of the space sector at a European level. characterised by their global scope and the space market is an eminently international In particular, regarding space activities, such one with only a handful of operators (often competence would probably have allowed the not more than one satellite operator per adoption of a common authorisation scheme country and rarely a launch services with common standards and a one-stop-shop operator) per region. The strategic character licensing system which would have been able of space also implies a strong public control to avoid the establishment of foreign on space activities and therefore, the operators on the sole basis of convenience classical market approach of the EU, i.e. within the EU and provide legal certainty and through harmonisation, may not be the best predictability to operators with seats in suited to space activities. Europe. The power to harmonise would have had further consequences in the judicial area. As it is well illustrated by the process leading EU law would be equally applicable in all to the adoption of the European Space Policy, national jurisdictions and would, therefore, common action in the space field in Europe is avoid any forum shopping with regards to the essential, in particular, a common legal MS. The power of harmonisation would have framework for space activities which cannot permitted a more coherent implementation of be achieved solely at national level. international obligations and a more coherent Nevertheless, the strategic implications of participation at international forums.84 space with its link to security and international obligations may have triggered

the exclusion of harmonisation from the LT. Another feature of such competence would This paradoxical situation where common have comprised the creation of an agency action is desired but the ordinary methods for with the expertise to take on assist in the common action are limited may require the adoption of regulations such as regulations 85 shaping of space competence in different on standards. It could probably have been terms through enhanced cooperation. capable of acting as a one-stop-shop agency for European and foreign operators applying Enhanced cooperation was already introduced for authorisation as well as for the conduct of in the context of Schengen86 and the supervisory activities. 87 Monetary Union and most recently The possibility of harmonisation in space incorporated by the Treaty of Nice in the field would have allowed any intermediary of CFSP/ESDP but was never applied in this

83 Supra 65 86 Convention implementing the Schengen Agreement of 14 84 Specially in view of Art. 34 TEU which provides that June 1985 between the Governments of the States of the Member States shall coordinate their action in international Benelux Economic Union, the Federal Republic of Germany organisations and conferences and shall uphold the Union’s and the French Republic on the gradual abolition of checks positions in such forums. at their common borders. OJ EU L 239 of 22 Sep 2000. 85 Modelled possibly after EASA or Eurocontrol . 87 Title VII TEC.

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field (although it has never been applied). the Luxembourg Process88 the EU gained an Through separate title in the TEU (Art. 20 additional “approximation” mechanism: the TEU) and further specification in part six of Open Method of Coordination (OMC). The EES the TFEU (Arts. 326-334) dedicated to would later on form a key element of the “Institutional and Financial Provisions” the LT Lisbon Strategy and with it the OMC would be detaches enhanced cooperation from any introduced as an instrument of the Lisbon specific policy and makes it available to any Strategy. other policy field, thus making it also possible in the in the context of Space Policy. Although we have seen that for the strategic nature of space and the possibility of Enhanced cooperation was introduced with adopting legally binding rules (decisions) the aim to facilitate the furthering of the space cannot be held as a mere supportive objectives of the EU and reinforce the competence given the sui generis status of integration process allowing a hard core of the Space Policy in the LT, it has been countries to advance integration in any policy suggested that the only power left to the EU areas covered by the Treaties that are not of institutions is the adoption of guidelines in exclusive competence (Art. 20 (1) TEU). this field. In this regard the OMC would fit the According to the LT, the MS which establish bill bringing the competence of the EU further enhanced cooperation between themselves than mere recommendatory actions. may make use of the EU institutions and exercise those competences by applying the The OMC provides for a framework of relevant provisions of the EU Treaties. cooperation between MS whereby the MS set common goals for a determined policy and Enhanced cooperation is initiated at the evaluate one another in what has been initiative of a minimum of nine MS and must described as “peer pressure”. The MS identify be ultimately authorised by the Council (Art and define the objectives to be achieved, 329 (1) TFEU). Y letting the initiative and the which are then adopted by the Council and ultimate decision in the hands of the MS followed by guidelines by the European wanting to further cooperation, this scheme Commission that are then transformed into would allow shaping a space competence national policy programmes. MS jointly according to the acceptable parameters for establish measuring instruments such as MS. Therefore it could allow the adoption of statistic indicators and guidelines and secondary legislation or even ad hoc legal benchmarking mechanisms whereby MS instruments as well as the creation of compare performance and exchange best institutional infrastructures adapted to the practices. The role of the Institutions is rather current evolution of space policy in Europe limited with the European Commission i.e. having into account the collaboration creating guidelines and monitoring the between EC and ESA. It would also be able to benchmarking progress; but neither the provide for harmonisation in the desired European Parliament (EP) nor the European regulatory fields while leaving aside or Court of Justice (ECJ) plays a part in the OMC designing special mechanisms in those other process. areas where national public interest is compromised. The OMC is an intergovernmental mode of policy coordination instead of a legislative Open method of coordination process and does not impose legally binding measures. As its name indicates, the OMC is Yet enhanced cooperation would require a an open method for the approximating of first discussion among the interested member policies, not a legal harmonisation tool. The states and a later negotiation in Council as mechanisms of peer review and other well as approval from the European indicators can be flexibly chosen according to Commission and the European Parliament the policy in question and even “soft law” which would definitely legitimate the legal basis for further action in space but would questionably be needed if the regulatory 88 The Amsterdam Treaty introduced a Title VII on needs may still be covered by action at MS employment policy putting in place a comprehensive level. strategy which would be elaborated later on in the Extraordinary European council Meeting on Employment of Luxembourg, 20/21 November 1997. The Treaty did not In this vein, it is worth noting that the LT provide for a European competence for harmonisation in incorporates the Open Method of the field of employment but established a coordinated Coordination (OMC). Since the creation of the strategy for employment which would be nourished by the European Employment Strategy (EES) and coordinated contribution of the MS an which lead to the Presidency conclusions 20/21 November 1997 and the Commission Guidelines for Member States Employment Guidelines for 1998 et seq. 03 Aug 2009 http:// ec.europa.eu/employment_social/elm/summit/en/home.htm

European Space Policy Institute 41 Report 21, September 2009

measures can be applied, especially in the are adapted to different types of space context of the Lisbon Strategy89. activities while containing conditions also adapted to the different kinds of operators One of the main strands of action of the (launchers or satellite operators). The Lisbon Strategy is innovation. As we have framework must facilitate a common or mentioned, the White Paper sketches the ESP coordinated authorisation procedure for all along the lines of the Lisbon Goals that are MS incorporating common safety and also collected in the ESP and the 6th Space environmental standards and based on a Council90. Thus it seems that the OMC would one–stop-shop authorisation system. On the financial side, the framework should provide be well suited not only to the formal for limited insurance according to risk and constraints created by the LT but also to the market based parameters as well as limited aims of the Space Policy in the framework of liability based on pre-established criteria and the Lisbon Strategy. not open to a case-by-case approach.

Equally, a state warranty mechanism should Given the strong security component of space be also foreseen which, in the case of the EU, and the reluctance of MS to give in could be supported by the contribution of a competence in this area, the OMC would be 91 able to create a coherent regulatory European Fund for catastrophes . framework throughout the EU by means of guidelines and common practices in terms of Given that the European Union is able to authorisation procedures, control supervision provide the institutional and legal tools to mechanisms and technical requirements. attain such ends, and given that the Needless to say that the drawback of the possibilities offered by the EU are rather OMC lies in its non-binding nature and its flexible, European MS should strive to agree incapability to create European-wide on a model that will allow them independent institutional infrastructures. implementation of their international obligations through mechanisms that are common to all MS. 4.3. Conclusions on the Way The traditional approach has been based on a to a European Legal harmonised model designed in the context of Framework for the an EU space competence whereby directives would be adopted under the umbrella of the Commercial Space Sector EU institutions and implementation left to national authorities. Such scheme would also allow for the creation of an agency to pull the Whether it happens at a supranational level necessary expertise for the creation of further or at intergovernmental level, there is need regulations and the carrying out of for a referential legal framework that brings supervision of space activities. Given the together space laws in Europe in a way that restrictions posed by LT this scenario seems supports a three-fold aim: it must be able to highly unlikely on the basis of the LT space support the contribution of commercial space competence as it seems to exceed the activities to the “Growth and Jobs” strategy, possibilities allowed for by the LT. it must be able to provide a strong position of Nevertheless, it is of some importance to European Space Operators in the global depict this scenario as the uncertainties context by facilitating competitiveness of the surrounding the adoption of the LT may lead European space sector and it must be able to to reconsideration of the treaty and with it provide a level playing field with regards to the space competence. international operators. More realistically, MS might still not wish to The framework to be designed for such give in such competence for strategic purposes must pursue the attainment of a questions but also because harmonisation in coherent range of licenses and permits which space would mean a capacity to harmonise all other aspects of space such as space 89 programmes which might not be desirable In this context a comparison can be established between the EES and the Research Policy. Whereas the first is given the already existing cooperation based on multiyear Commission guidelines that are later implemented by the National Action Plans and reviewed in a yearly basis, the Research OMC is based on guidelines 91 An example of a similar regime has already been and reports prepared by five working groups at Director propose in the context of European GNSS Third Party General level which are monitored and adapted per cycle of Liability. Anna Masutti. “GNSS: the Basic Principles for a about 2 years. http://ec.europa.eu/invest-in- European Legal Framework on TPL”.Policy Aspects of research/coordination/coordination01_en.htm Third Party Liability in Satellite Navigation. Preparing a 90 Council f the European Union. Competitiveness Council Roadmap for Europe. Eds. Alfredo Roma, Kai-Uwe Schrogl (6th Space Council). Brussels. 29 May 2009. and Matxalen Sánchez. Vienna: ESPI, 2009. 30-40

Report 21, September 2009 42 Economic and Policy Aspects of Space Regulations

between ESA-EC. Nevertheless, MS are not In fine, although the creation of soft law halted by the Treaties (neither Nice nor mechanisms may be able to create a Lisbon) to conduct further cooperation coordinated legal framework for commercial outside the reach of the EU towards the space activities in Europe, this might not approximation of laws. Furthermore through suffice to ensure competitiveness. A common enhanced cooperation MS could be able to or coordinated legal framework must also be further harmonisation in space legislation supported by executive infrastructure which while shaping the space competence must be able to pool the expertise and according to a common compromise. ensure the implementation of the framework while serving as a reference to other national It is also questionable whether harmonisation and European authorities. This being said is absolutely needed for the creation of a national and European authorities must not European legal framework to support be shy in taking advantage of the different competitive commercial space activities in possibilities offered by the EU when it comes Europe. Soft law through the establishment to designing a coherent legal and regulatory of an OMC involving countries with framework for the EU. The approach taken commercial space activities can suffice to until now has focused on an all-embracing bring together national practices and to harmonisation. While approximation of overcome the deficiencies created by the legislation can happen through soft in the gaps between the laws. In a technology context of a sui generis competence, the intensive sector such as space mere creation of the institutional instruments guidelines could be insufficient for the related to such implementation of space law creation of a competitive and coherent and support to further supervision may need commercial space sector as the less to be based in a stronger competence. This experienced countries would still lack competence may be found in other policies expertise in drafting and implementing space such as the TransEuropean Networks or may laws, it would also not warrantee common be shaped ad hoc through enhanced conditions for all European commercial space cooperation. actors towards international activities.

European Space Policy Institute 43 Report 21, September 2009

List of Acronyms

B BNSC British National Space Centre C CEPT European Conference of Postal and Telecommunications Administration CFSP Common Foreign and Security Policy CNES Centre National des Études Spatiales COPUOS Committee on the Peaceful Uses of Outer Space CSLA Commercial Space Launch Act E EC European Community ECJ European Court of Justice EES European Employment Strategy EP European Parliament ESA European Space Agency ESDP European Security and Defence Policy ESP European Space Policy ESPI European Space Policy Institute EU European Union F FAA Federal Aviation Administration G GMES Global Monitoring Environment and Security L LIAB Liability Convention (Convention on International Liability for Damage Caused by Space Objects) LT Lisbon Treaty M MS Member State N NSAU National Space Authority of Ukraine O OMC Open Method of Coordination OST Outer Space Treaty (Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies) R REG Registration Convention (Convention on Registration of Objects Launched into Outer Space) S SOA Space Operations Act T TEC Treaty of the European Community TFEU Treaty on the Functioning of the European Union U UK United Kingdom UN United Nations US United States W WTO World Trade Organisation

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A c k nowled gement s

The author wishes to express her gratitude to the many experts who have provided input throughout the completion of this study. The author would like to thank especially the participants to the brainstorming meeting of 27 March 2009 at ESPI for sharing their invaluable knowledge to support the basis of the study. The author deeply thanks all experts from the private sector for accurately sharing their hands-on experience and for their readiness to communicate their views.

The author highly appreciates the guidance and encouragement provided by the Director of ESPI, Brainstorming meeting of 27 March 2009 at ESPI. Kai-Uwe Schrogl, during the conduct of the study. Clockwise from left: Kai-Uwe Schrogl, Armel Kerrest, The author is also most grateful to Julia Bernhard Schmidt-Tedd, Ulrike Bohlmann, Kenneth Neumann, Florian Hafner and Isabelle Arnold for Hodgkins, Irmgard Marboe, Sergio Marchisio, Rafael Moro sharing their views and to Mathieu Girerd for his Aguilar, Niklas Hedman, Matxalen Sanchez Aranzamendi. support as research assistant.

European Space Policy Institute 45 Report 21, September 2009

Mission Statement of ESPI

The mission of the European Space Policy Institute (ESPI) is to provide decision-makers with an independent view and analysis on mid- to long-term issues relevant to the use of space.

Through its activities, ESPI contributes to facilitate the decision-making process, increases awareness of space technologies and applications with the user communities, opinion leaders and the public at large, and supports students and researchers in their space-related work.

To fulfil these objectives, the Institute supports a network of experts and centres of excellence working with ESPI in-house analysts.

Report 15, September 2008 120 Space Policies, Issues and Trends 2007/2008

www.espi.or.at