Kate Creighton-Selvay, Annabel Griffin, Anna MacFarlane and Vanessa Sporne take a quick look at the law as it applies to the rapidly evolving space sector. As the industry grows worldwide, regulation at a national level tries to keep pace. But what law is relevant to space – and what trends do you need to know about?
For the purposes of this piece, we will talk about “space law” – not just in the sense of international law, but also to capture anything that is legal and in the space industry. Whether it’s financing a space asset, funding an M&A deal in the industry or securing launch licences, there are lots of legal and regulatory issues to navigate.
We have pulled together a (non-exhaustive!) list of seven things you need to know about space and the law. You can listen to partners Kate Creighton-Selvay, Annabel Griffin and Urszula McCormack discuss them on the KWM Podcast episode, ‘Why is space law so critical?’. Their discussion is specific to the Australian jurisdiction, but some elements apply universally (such as the global framework and international register of radio frequencies).
Here they are – starting with the global framework.
“Investments in space are going to benefit Earth for a very long time and lead to real human improvements. Whether that’s in food, protein, innovations in technology, understanding and identifying solutions for climate change.” KWM partner Annabel Griffin
Thing One: The International Legal Framework – a setting of peace, where governments are ultimately responsible
| Countries have committed to using space only for peaceful purposes. The international law principles of freedom of use and non-appropriation apply in space, which determines which activities lead to which rights in space. Governments are ultimately responsible for the activities of private entities in space. |
A product of Cold War tensions, the Outer Space Treaty was ratified in 1967. It set a lasting commitment to use space only for peaceful purposes.
This commitment led to the application of two important international law principles in space: freedom of use and non-appropriation. These concepts mean that space is free for all to explore, and no one nation may claim ownership of outer space.
Under the international framework, Governments are ultimately responsible for damage to another government caused by its space objects – or those of private parties launched from its country – no matter where the damage occurs. Governments in turn generally flow some of that responsibility and liability down to its private operators.
Each Government maintains a register of its objects launched into outer space, and each government has jurisdiction and control over the satellites listed on its national registry.
“A 1950s US plan to explode a nuclear bomb on the moon… instead [led to] a lasting commitment in the form of international treaties. That cold war context is really important to understanding the commitment to use space only for peaceful purposes.” KWM partner Kate Creighton-Selvay
Thing Two: Radio frequencies are managed by the International Telecommunication Union (ITU)
| A UN agency known as the ITU maintains the Master International Frequency Register. This allows operators to claim radio frequency. Private satellite operators must apply to their local government authority (for example, the Australian Media and Communications Authority (ACMA) in Australia) for registration which provides their claim with international recognition and protection from interference. |
Radio frequency spectrum is essential for communicating with satellites, and although it is an inexhaustible resource, it is finite at any point in time. All users of radio waves compete for spectrum and must coexist in their use of it.
The ITU manages the international coordination of radio-frequency spectrum and associated satellite orbits to minimise interference. It deals with governments rather than private operators – private operators must contact the ITU through government agencies. In Australia, this process is undertaken through the ACMA.
Thing Three: Radiocommunications licences are necessary
| Users of radiocommunications equipment must generally hold an apparatus licence, a class licence, and/or a spectrum licence. Users must assess the type of licence they require and then follow the relevant process to obtain it. |
If you are an operator in Australia, you need to make sure your use of radiocommunications equipment is licensed. There are three categories of radiocommunications licence – what you need will depend on the activity you are undertaking:
- Apparatus licence: For particular transmitters and receivers. Application and fee required.
- Class licence: For common radio equipment on shared frequencies. No application or fee required.
- Spectrum licence: For spectrum use in a specific geographic area and frequency band. Typically auctioned by the ACMA.
Thing Four: Launch licences are required no matter the location
| An Australian Space Agency licence or authorisation is required for any launch in Australia or by an Australian legal person (eg company) or resident, anywhere in the world. |
Space licences and authorisations are required to:
- operate a facility in Australia from which you can launch objects into space
- launch an object into space, and
- return a space object to Australia.
The Space Agency determines whether to issue a permit based on a range of criteria, including the applicant’s competence, its insurances, and the probability of the launch causing substantial harm.
Thing Five: Financing structure is key
| Entities must consider each element of their project to make an informed decision about financing.
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When considering which financial protections are needed, entities must think about the financial viability of the project and where the project operators are based to avoid incurring unnecessary costs.
The UN Space Protocol is not yet in force, but it will likely make giving and getting a secured interest in satellites clear, which could make asset-backed financing for satellites more straightforward.
Thing Six: Statutory liability provides for compensation
| Australia has a specific legislative regime that applies to compensation claims for damage in space. Subject to some exceptions, the damaged party does not need to show that the responsible party was at fault. |
Domestic governments are liable for damage to another country caused by its space objects, and there is variation to how they deal with this liability.
The Space (Launches and Returns) Act 2018 creates a new ground for compensation for damage in space where the launch is from Australia or the ‘responsible party’ is an Australian national, and damage is caused to a third party on Earth or in the air. The damaged party generally does not need to show that the responsible party was at fault or negligent to be entitled to compensation – they must only show that the damage occurred.
There are some exceptions and limitations to this type of claim, including time limits to bring a claim, and this liability regime does not apply between parties who are involved in a launch.
Thing Seven: The need to mitigate risks
| Emerging trends mean that entities need to make informed and strategic decisions about each element of their project. |
Considerations when managing risks should include:
- How defects will be managed and fixed in space
- The appropriate insurance type
- Who owns the related intellectual property
- Whether proportionate liability will apply
“Take the time to make informed and strategic decisions about what risks you really do need to protect against. There’s a lot to think about.” KWM partner Kate Creighton-Selvay
These are 7 of the things you should think about in the context of legal issues in the space sector, but each project will have its own unique challenges. And of course, there are many more ‘things’ participants in the sector need to think about (space debris being a topical one!). Get in touch with one of our experts if you need help navigating the law as it applies to space – we’d love to chat.