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Unlocking Commercial Spaceflight for the UK: Consultation on Draft

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Unlocking Commercial Spaceflight for the UK: Consultation on Draft EN UNLOCKING COMMERCIAL SPACEFLIGHT FOR THE UK Consultation on draft insurance and liabilities requirements to implement the Space Industry Act 2018 Closing date: 10 November 2020 1 © Crown copyright 2020 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to us at: [email protected] 2 Contents Contents Contents __________________________________________________________ 3 Executive Summary __________________________________________________ 6 Introduction ______________________________________________________ 6 Why we are consulting ______________________________________________ 7 Overview of the liabilities and insurance requirements _____________________ 8 How to respond __________________________________________________ 10 Confidentiality and data protection ____________________________________ 11 Quality assurance ________________________________________________ 12 Context and Background Information ___________________________________ 13 The future of spaceflight in the UK ____________________________________ 13 The Outer Space Act 1986 __________________________________________ 14 The Space Industry Act 2018 ________________________________________ 14 Structure of the instruments and guidance _____________________________ 15 The regulator ____________________________________________________ 15 Legislative process ________________________________________________ 16 Background on liabilities and insurance provisions in the Space Industry Act 2018 16 What are the liabilities provisions under the Space Industry Act 2018? _______ 16 Are there powers in the Space Industry Act 2018 to limit liability? ____________ 18 What are the insurance provisions in the Space Industry Act 2018? __________ 19 Proposals for insurance requirements under the Space Industry Act 2018 _______ 19 Launch - Modelled Insurance Requirement _____________________________________ 20 Insurance requirements for procuring a launch / in-orbit operations ________________ 21 Detail on the Modelled Insurance Requirement for launch ___________________ 21 Previous views expressed on the MIR in the call for evidence ______________ 23 Detail of types of losses covered by the scope of the MIR _________________ 23 Rationale for including business interruption and environmental damage costs ______ 24 Financial values considered for use in the MIR __________________________ 25 Detail of the risk approach and financial values to be used to set the MIR _____ 27 Assessment of the analysis ___________________________________________________ 28 Rationale for applying single figures for death and injury __________________________ 29 Questions ______________________________________________________ 30 3 Additional calculations / requirements for sub-orbital, air-launch, balloon-launch and re- entry activities _______________________________________________________________ 30 Questions ______________________________________________________ 31 Detail of the approach on insurance requirements _________________________ 31 Guidance on insurance requirements under the Space Industry Act 2018 _______ 34 Cross waivers of liability ______________________________________________________ 35 Waiver of insurance requirements (Space Industry Act 2018 and Outer Space Act 1986) ___________________________________________________________________________ 35 The Traffic Light System ___________________________________________ 35 Proposals for limiting third-party liabilities under the Space Industry Act 2018 ____ 37 Policy intention and rationale ________________________________________ 37 Approach to limiting operator liabilities for launch activities _________________ 38 Limits of liability applied in other Launching States _______________________ 39 Detail of the regulations on limiting liabilities ______________________________ 41 Reviewing the regulations ____________________________________________________ 41 Guidance on liabilities _______________________________________________ 42 Insurance requirements and limits of liability where licences are also issued by another state ______________________________________________________ 42 Insurance requirements for end-of-life and re-entry operations of UK licensed Space Objects___________________________________________________________ 42 Issues for which we do not intend to introduce regulations ___________________ 45 Use of securities and other alternatives to insurance _____________________________ 45 Government insurance and re-insurance scheme ________________________________ 45 Impact assessment _________________________________________________ 45 Accident and investigation ____________________________________________ 48 Registration _______________________________________________________ 48 Charging _________________________________________________________ 48 Background _______________________________________________________ 48 What are the charging provisions in the Space Industry Act 2018 and Outer Space Act 1986? _________________________________________________________ 49 Charging Proposals under the Space Industry Act 2018 and Outer Space Act 1986_____________________________________________________________ 49 New Space Industry Act 2018 spaceport, launch and range licensing ________ 49 Space Industry Act 2018 and Outer Space Act 1986 satellite licensing _______ 49 Charging Powers _________________________________________________ 50 Catalogue of consultation questions ____________________________________ 50 Annex A – Summary of the call for evidence ______________________________ 56 4 Annex B - Glossary ________________________________________________ 60 ANNEX C – Detail of Regulations setting out those persons who do not have a strict liability right of claim previously consulted upon __________________ 61 Annex D: Details of Regulations disapplying the limit on an operator’s liability to indemnify UK Government previously consulted upon ________________ 63 5 Executive Summary Introduction Safety is at the heart of our proposed regulatory regime under the Space Industry Act 2018. Launch from the UK is a new activity that presents new and different risks from those posed by traditional aviation and our experience of licensing procurement of launch activities from other states under the Outer Space Act 1986. Under the Act the regulator has an overriding duty to exercise its functions with regard to spaceflight activities (including whether or not to grant a licence) with a view to securing public safety. This duty has primacy over the other matters that the regulator has to take into account in exercising its functions. The draft regulations to support the Space Industry Act 2018 will enable a range of commercial spaceflight and associated activities to operate from the UK, creating the conditions for horizontal and vertical launch to take place from UK spaceports. A consultation on draft Space Industry Regulations to implement the Space Industry Act 2018 was issued on 29 July 2020 and closes on 21 October. This contained two provisions on liabilities (regulations 206 and 207). This consultation should be read in conjunction with that consultation. The draft Space Industry (Liabilities) Regulations will be merged with the Space Industry Regulations post consultation. The Space Industry Act 2018 created the high-level legal framework to enable commercial spaceflight and associated activities to be carried out from the UK. The Act, which received Royal Assent on 15 March 2018, contains delegated powers to make secondary legislation. Together with draft instruments covering Accident Investigation and Appeals, these sets of Regulations will implement the Act. Currently the space activities of UK entities are governed by the Outer Space Act 1986. This requires any UK entities who wish to procure the launch of a satellite and/or operate a satellite in orbit to hold a licence. The UK has a well-established and globally respected licensing regime for these activities. Whilst the Space Industry Act 2018 is now law, the draft secondary legislation contained both in this consultation on liability requirements and in the main consultation on the Space Industry Regulations is required, along with our proposed arrangements for setting insurance requirements in licence conditions, to create the regulatory framework necessary for commercial launch operations to be licensed in the UK. Once in force, the Space Industry Act 2018 will work alongside the Outer Space Act 1986 to regulate the spaceflight and associated activities of UK entities and others wishing to engage in spaceflight activities from the UK. The Outer Space Act 1986 will continue to regulate the following activities carried out overseas by UK entities: • The procurement of the overseas launch of a space object; • The operation of a satellite in orbit from an overseas facility by a UK entity. 6 The Space Industry Act 2018 will regulate the following activities carried out from the UK: • Launch (space or sub-orbital) and return; • The procurement of a UK launch (space or sub-orbital); • The operation of a satellite in
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