Imagine. In 50 years, there is a population of 1 million living on Mars. A prosperous mining industry exists there, preparing their next shipment of platinum from the asteroids to earth. This really could happen, but the law needs to be in place quickly.
In 1967, when the Outer Space treaty was created, they were living in a different world. The space industry was government dominated, with the US leading and spending $156 billion in today’s money on the Apollo mission to send 24 astronauts to the moon. Government expenditure on space exploration has decreased greatly since then. The US is still in the lead, but this time only at $41 billion i.e.only 0.48% of the federal annual budget being spent on NASA. Nonetheless, the advent of the private space industry signals great prospects for the future, with Elon Musk’s SpaceX estimated to be worth c. $74 billion, a little under twice as much as NASA’s federal annual budget. With SpaceX, Blue Origin, Rockelab, Virgin Galactic and many more private space companies on the rise, the industry has become increasingly privatised and thus commercialised. Many of these companies are focusing on a mission to Mars, with SpaceX aiming to have arrived by 2026 and have 1 million people living there by 2050. Other economic incentive to invest include lucrative opportunities available when at Mars which is exciting investors, such as mining materials (such as rare earths) there and transporting them back to earth, as well as using Mars as a base to mining asteroids (which contain materials such as platinum and gold) due to the cheaper cost than doing so from earth (the asteroid belt lies in between Mars and Jupiter). So the purpose of going to space has changed quite a bit from just stepping on the moon to directly becoming a new sector of the world’s economy. However, in order for all of this to be possible there must be a strong body of Law.
However, in this rapid technology development, the law was left behind in 1967, and what is important is that all major spacefaring nations can agree on some basic principles in a Treaty. Can you claim ownership to an asteroid? What if another country then mines from your asteroid? Will borders be created on Mars? How do you even regulate this if the crime has taken place off earth? The questions are endless, but must be answered.
In 1967, the concept of commercial space was a preposterous idea to them. Therefore establishing property rights in the Treaty was not in favour of commercialisation. It says ‘outer space is not subject to national appropriation by claim of sovereignty, by means or use of occupation, or by any other means’. This would suggest that any exploitation of the rich resources in space is not lawful. Therefore, firstly the Outer Space Treaty will have to be revised and added to in light of this new era of space industry in order to establish some basic principles.
After an international Treaty is made, each signatory then makes more detailed domestic laws. These laws must be in line with the initial international treaty, of course. Nonetheless, in this process, the signing countries can come up with quite different laws and policies. They might have different policies on subsidising space exploration. What will they say about making space companies exempt from tax? What about who these countries will allow their laws to apply to? Will the hosting countries provide aid in easing the entry of these space materials into the market? As such, the domestic laws and policies might end up appearing quite different to each other. This becomes interesting when the economic benefits of utilising Mars’ and asteroids’ resources extend to those countries who have the most favourable domestic laws for the private space companies who technically do not have binding loyalty to their country. While SpaceX and Blue Origin were made in America and likely feel a certain degree of loyalty to their home country, they are private companies and therefore will be looking out for a country which provides them the most profitable deal through legal and regulatory framework, having invested billions of their private wealth. This characterisation makes the differences in domestic law become pivotal in deciding which countries will be at the centre of this industry.
If the UK creates a binding law that policies the government will subsidise space companies, then they will attract the attention of the upcoming companies. Thus, they might set up in the UK over other countries. However, if this policy only applies to British citizens, then they might miss out on capitalising from the gains foreign startups.
In fact, Luxembourg just became the first European country to confer ownership to any resources their country extracts from space, such as those from asteroids or Mars itself. However, this law extends to any companies who set up in the country, as opposed to only their citizens, thus inviting foreign startups to categorise themselves under the space industry of Luxembourg such that these beneficial laws apply to them. Thus, they could become the new silicon valley of the space industry by getting these laws in place so early. In the same way London is famous for its financial services, contributing huge GDP to the nation, Luxembourg (as small and as insignificant as it initially seems) could become a real hub of this new lucrative sector. As such, recognising the huge impact the creation of these laws could have on a nation’s economy, a legal arms race is underway.
However, a problem arises when two countries collaborate on a space project. This question stands today as countries work together on launching satellites. Imagine India builds a satellite, but has to launch it in the US due to lower costs of launch there, but something goes wrong and having launched it falls on land in Mexico, damaging infrastructure there. Due to the billions at stake when it comes to space technology, this will include greatly detailed contracts between the two countries involved, outlining who is liable in certain circumstances (e.g. if the rocket satellite is damaged in transit from India to America, or in the air). This only gets more expensive when it comes to going to Mars. Therefore, there will be increased demand for contractors and insurers. However, the real issue at hand is whose domestic law the countries operate under. As highlighted earlier, there is much room for domestic laws on liability, sentencing etc. to become quite different. Given the high chances of rocket launches failing initially, or getting to Mars and having a technology failure and not being able to get this hugely expensive machinery back to earth, there will likely be quite a few legal disputes between countries and it seems difficult to decide whose domestic law to operate under when collaboration occurs.
The UAE is tackling this dilemma at the moment, having just announced the creation of their Space court. This will be in the DIPC, a zone in the UAE that uses English law, and will facilitate any legal disputes between multiple space companies/ country governments. The English law has statutes on these matters and is internationally renowned for being the most mature, detailed and most historically legitimate law. This feature will attract investors and companies to trust in the court. They will also facilitate the setting up of deals here between insurers, contractors, investors and the private space companies/ government agencies. In this simple creation of a space court that is internationally accessible, they will soon have a kind of highstreet where all space companies can come to set up deals. This is a very different kind of strategy to Luxembourg mentioned earlier, but again a genius way of establishing their nation as receiving a significant slice of the ‘Mars’ economics benefits’ cake.
This is a fascinating new opportunity for the legal sector and for governments worldwide and is due to be an exciting next few decades as lawyers worldwide will have to build Space law from the ground up in the age of the commercialisation of space. Yet another illustration of how Law can be at the core of economics, and no matter how developed a country’s technology may be in space, they may never reap these benefits fully due to the fact they do not have a good team of law makers on their side to help attract private space companies…
Stamp’s Post 