Abstract
Space law is regulated largely by international treaties which have little to say regarding the use and regulation of commercial space. As the costs of access to outer space decrease and the benefits exponentially increase, more countries are seeking to support and encourage ‘NewSpace’ entrepreneurs in order to establish commercial space industries. Australia has been a minor player in the space domain, primarily through involvement with Europe and the US since the late 1960s, but its domestic legislation bears little relevance to the shape of space industry today. Australia’s neighbour, New Zealand, now wants to become a NewSpace incubator and has recently enacted legislation designed to make it a competitive host nation for launch providers. This article will compare the regulatory space regimes of these two countries to provide an assessment of the importance of domestic regulation in fostering competitive commercial space services, for countries seeking to become competitive in the commercial space race.
Introduction
Outer space is the final frontier for humankind, an endless domain with just as many possibilities. The commercial sector has rapidly embraced space, working to increase the frequency and viability of private sector projects. Government launches are no longer the ‘on-trend’ option for reaching orbit, with American companies such as SpaceX and United Launch Alliance, and the France-based Arianespace leading the global launch industry, providing unprecedented access to space. 1 With outer space being regulated at the international level, countries are left to implement their own laws to ensure that nationals and companies act appropriately in orbit while also paying regard to international obligations. Australia implemented their Space Activities Act 1998 (Cth) (‘SAA’) before the invention of the CubeSat, 2 when Space Shuttle launches were commonplace and the ‘big satellite’ was king. No company has launched a payload into space from Australian territory since the SAA’s inception despite numerous viable proposals and test launches over the last two decades. Comparatively, New Zealand introduced their Outer Space and High-altitude Activities Act 2017 (NZ) (‘OSHAA’) while a small-scale launcher was already establishing themselves in the country. 3 These regimes follow similar patterns by focusing almost exclusively on launch, but their interpretation and application can prove complicated and may act as a disincentive to new industry, despite commercial efficacy being central to the long-term viability of space industries and the ‘NewSpace’ movement. 4
This article outlines the context and relevant regulatory environment in both Australia and New Zealand, followed by an analysis of the likely impact of the applicable regulation on fostering and encouraging a domestic commercial space industry in each of those jurisdictions. The article will conclude that despite public pronouncements of the enhanced flexibility and commercial applicability of the New Zealand legislation, there is little evidence to suggest that the regulatory regime to be developed in New Zealand represents a major improvement on the Australian model, upon which it was based. The authors recommend that for a commercial space industry to flourish in either country, a broad and permissive approach to the interpretation of the applicable legislative regime will be required.
Background
International Law
International space law is composed of treaties, multilateral agreements, custom, State practice and other instruments of varying applicability. Modern-day space is regulated by five treaties administered by the United Nations. In order of introduction, these treaties are the Outer Space Treaty, 5 Rescue Agreement, 6 Liability Convention, 7 Registration Convention 8 and Moon Agreement (collectively, ‘Space Treaties’). 9 The most significant of these, the Outer Space Treaty, 10 establishes the basic principles determining use of the domain and, in many circles, has been taken to codify the basic customary international law applicable to the space domain. 11 The treaties have varying statuses. The Outer Space Treaty is the most widely adopted, with over 105 parties. 12 As time progressed and the treaties became more comprehensive in the obligations they impose on states, the adoption rate declined. 13 These treaties only bind their State parties. Commercial entities are bound by domestic laws that implement the operative provisions of the Space Treaties, epitomising the importance of international law as the foundation of modern domestic space instruments.
The patterns of adoption by Australia and New Zealand are indicative of their historical approach to space activities. Australia approached space with vigour and enthusiasm, evidenced by its relatively early adoption of all five Space Treaties and role as a founding member of UNCOPUOS. 14 New Zealand is party to four of the five treaties, with accession of the Registration Convention taking place in January 2018 as part of reforms in the space law field. 15 Adoption of the treaties by New Zealand was much slower than Australia, indicative of a later and less ambitious drive into the realm of space activities, perhaps one assisted by the benefit of hindsight with respect to the highly criticised Moon Agreement. 16
Australia
1. Context
Australia initially took an active role in the exploitation of space. As a founding member of the UNCOPUOS and a major party to the development of the Space Treaties, Australia was well positioned, politically, geographically and technologically, to take advantage of the burgeoning of space activities and science in the 1950s and 1960s. The initial burst of activity in Australia can be attributed to cooperative testing and development of rocket technology at a remote weapons testing range near Woomera, South Australia, which included 10 launches of the ELDO-operated Europa-1 Rocket. 17 Forming part of the Anglo-Australian Joint Project, this jointly operated United Kingdom–Australia testing range was one of the most significant launch sites of the late 20th century. 18 The Woomera rocket range, now RAAF Woomera Range Complex, still plays an essential role in the development and testing of rocket technology, primarily in the military context. The 2016 Department of Defence White Paper refers to the Woomera Range Complex as an essential requirement for the ‘development of sensitive new technologies and capabilities’ domestically and with international partners. 19
Between the late 1970s and early 1990s, the Australian space industry stalled, with no launch activity and direct space involvement limited to the provision of ground services for international orbital infrastructure. The mid-1990s saw a refocus on commercial space with the Australian government approached with a number of proposals for the establishment of commercial launching operations. Kistler Aerospace, one of the more ambitious launch operators of the time, entered into an operating agreement with the Commonwealth of Australia in 1997. 20 This provided authorisation for operation of a commercial launch facility, while also satisfying international obligations under art VI of the Outer Space Treaty. 21 Despite the significance of the proposal, Kistler Aerospace never eventuated as an operator in Australia. Similar commercial spaceport proposals were developed by United Launch Systems for northern Queensland and Asia Pacific Space Centre for Christmas Island. 22 It is against this backdrop that the Australian government implemented the SAA, to manage its liability for space activities, to comply with its international obligations, and regulate what was envisioned to be a booming space industry. 23
The SAA has since been amended to include a regulatory demarcation of space as well as to rectify significant typographical errors in one of the appended treaties. 24
Despite the failure to develop a commercial launch operation or spaceport, Australia has long been a major player in the space services industry, with a rich history of involvement in projects as a ground services provider. Famously, Australia was essential for communications during the Apollo program, with the Parkes Observatory and Honeysuckle Creek Tracking Station acting as receiving stations. 25 Australia is also host to a number of ground stations for satellite systems and science installations, including the Square Kilometre Array Pathfinder in remote Western Australia. 26 Despite the prevalence and importance of ground-based space services in Australia, the SAA does not address non-launch activities.
The Australian government completed a review of the SAA in March 2017. 27 The Department of Industry, Innovation and Science (‘DIIS’) responded with a Legislative Proposals Paper in March 2017 and officially recommended that the Australian government reformulate the SAA in its entirety. 28 However, the legislation passed by the Federal Parliament in August 2018 is an amendment to the current SAA rather than a complete reformulation. The Space Activities Amendment (Launches and Returns) Act 2018 amends several aspects of the SAA which will be noted below. It is anticipated that the amendment will come into force on 31 August 2019 (12 months after Royal Assent) giving the nascent Australian Space Agency time to assist with development of the anticipated Rules, which will provide significant detail regarding the operation of the revised regulatory scheme. 29
The Australian government also commissioned a review of the nation’s space industry capabilities, with an Issues Paper released in August 2017, 30 and a final report in March 2018. 31 The Australian government also announced the establishment of an Australian Space Agency during the 2017 International Astronautical Congress in Adelaide, Australia. 32 These announcements have sparked great excitement amongst commercial space industry providers that Australia will once again provide a friendly regulatory environment for a range of space-related industries, including launch.
2. Legislation
Entering into force on 21 December 1998, the SAA placed Australia as the sixth nation to implement a national space regime. 33 The SAA adopted a novel approach by dividing the licensing by activity rather than utilising a generalist space access permit. 34
The SAA is applicable to launches where a space object is intended to go beyond an altitude of 100 km above mean sea level. It only applies to activities within the Australian territorial jurisdiction and those activities conducted by Australian nationals (or legal entities) overseas. 35
The SAA introduced five permits; a space licence, 36 a launch permit, 37 overseas launch permit, 38 return authorisation 39 and an exemption certificate. 40 To ensure compliance, the SAA creates a series of federal criminal offences punishable with up to 10 years’ imprisonment. 41 The Space Activities Regulations, which supplement the primary legislation, were introduced in 2001. 42
The space licence is the primary operating authorisation for Australian-based commercial activities. This licence is required for the operation of a launch facility, use of launch vehicles and use of certain flight paths. 43
The launch permit authorises a launch or series of launches taking place in Australia. A launch requires the simultaneous subsistence of both the launch licence and space licence in respect of the launch facility, vehicle and flight path. 44
The most patronised licence, the overseas launch licence, grants Australian nationals (including natural people and Australian-registered corporations) permission to launch from other territories. 45 This is generally used by Australian companies to allow them to launch satellites overseas, especially significant due to the lack of an Australian launch industry.
The final two authorisations, the return authorisation 46 and exemption certificate, 47 consider niche circumstances. The return authorisation allows for space objects launched from outside of Australia to be returned into Australia and has only been invoked on one occasion, with the re-entry of the Japanese scientific probe, Hayabusa. 48 The exemption certificate’s primary purpose is for permitting emergency launches. 49
New Zealand
1. Context
New Zealand has not traditionally been a major player in the space industry, with commercial launch operations only considered recently. The recent push into commercial space has been attributed to the efforts of a small firm, Rocket Lab, a United States-based company with a New Zealand subsidiary. Rocket Lab is focused on delivering low-cost launch services for smaller primary payloads, contrasted against typical launch operators that contract small satellites as secondary payloads. 50
Founded in the mid-2000s, Rocket Lab attempted its first launch from New Zealand in 2009, launching their Atea-1 rocket. Debate surrounds the success of this launch as the payload contained no transmission capability, nor was it tracked after launch. 51 Rocket Lab completed their launch facility, Launch Complex 1, on the Mahia Peninsula on 27 September 2016, with the first test launch occurring on 25 May 2017 and a number of commercial launches occurring in 2018. 52 This site is purported to allow for launches into sun-synchronous orbit through orbits with a 39° inclination. 53 Rocket Lab was previously operating under a contractual agreement with the Government of New Zealand and transitioned to the OSHAA upon commencement. 54
The US origins of the Rocket Lab technology have created unique issues in terms of export to and use of that technology in New Zealand, even by its own subsidiary. To accommodate these issues, the OSHAA includes specific terms that can be related to the bilateral Technology Safeguards Agreement between New Zealand and the United States executed in 2016. 55 This agreement provides an ability to export rocket technology which would otherwise be prevented by the American Missile Technology Control Regime. 56 These political and national security-related issues remain a significant impediment to global technology sharing and the development of multinational space corporations. They also provide a point of difference in terms of global competition for space industries.
2. Legislation
The first iteration of the OSHAA was presented to the New Zealand Parliament on 19 September 2016 and subsequently referred to the Joint Standing Committee on Foreign Affairs, Defence and Trade. The Committee delivered its report on 21 April 2017. The Outer Space and High-altitude Activities Bill 2016 passed the New Zealand Parliament on 4 July 2017, receiving Royal Assent on 10 July 2017 and entered into force on 21 December 2017. 57
The OSHAA purportedly adopts a permissive approach to licensing by delegating certain factors to ministerial consideration, allowing the regime to change over time and ensure its future relevance. 58 Adopting the approach in the SAA, the OSHAA uses a regime based around specific activities and where they take place. It introduces a launch permit, payload permit, overseas launch permit, overseas payload permit and a facility permit. 59 These licences contemplate a wide range of activities relevant to a commercial operation. Further, the OSHAA also contains a section dedicated to high-altitude activities. 60
The OSHAA maintains uniform provisions across all licences, with the majority of the requirements for the grant of a licence/permit being either identical or highly proximate.
The launch licence is the primary licence for New Zealand-based operations. The OSHAA also presents a requirement for a payload owner to hold a permit in respect of the objects they intend to operate, not just launch. 61 In the practical sense, for a New Zealand launch to occur, there needs to be a facility licence, launch licence and payload permit granted.
Overseas launch and payload licences/permits utilise similar requirements to that of their domestic counterparts. The primary point of distinction in overseas licence/permit terms is the lower number of legislative obligations an operator needs to comply with, likely due to presence of licensing obligations in the other jurisdiction.
Of major significance to the OSHAA is the scope of the legislation in respect of a requirement to hold a payload permit or overseas payload permit. A payload permit is required when procuring the launch and ‘operation of a payload in outer space’. 62 Despite this, the offence provisions of the OSHAA are limited to just the launch of a payload, not its continuing operation, and there is no further mention of in-orbit regulation. 63
The New Zealand Governor-General proclaimed the Outer Space and High-altitude Activities (Licences and Permits) Regulation 2017 on 21 August 2017. 64 The regulations fill in practical matters affecting the issue of licences and permits, including detailing the specific content required for applications.
Critical Analysis
The Australian and New Zealand governments have approached legislating domestic space law in a similar manner, adopting a common approach and style, a likely consequence of their shared legal heritage. Australia had little to model its domestic space law on in 1998, 65 but New Zealand has had at least 26 other examples to look to when implementing theirs, allowing for adoption of internationally successful components and avoidance of the less effective measures. 66 What is discernible from each regime is the different target audience. The SAA was introduced for big launching operations, whereas the OSHAA was introduced for a significantly more miniaturised market.
On the surface, the Australian and New Zealand acts are incredibly similar, using almost indistinguishable language, almost identical permit classification methods, and a heavy reliance on delegated legislation and ministerial discretion. These similarities raise a number of questions; principle among these is the validity of the New Zealand claim of taking a new and permissive approach. 67
Each regime is grounded in the same purpose: to domestically legislate international obligations in respect of outer space. 68 The majority of each regime’s overarching structure is therefore likely to be substantially similar, with limited scope to deviate from the requirements of State responsibility under the Space Treaties. 69 It is the method, statutory construction and detailed regulatory aspects that permit a State to act creatively when legislating. Compliance with local political, social and statutory styles is where the unique aspects of domestic space legislation arise. It is these choices, the style and regulatory content, that determine the success of a national space regime and whether it fosters a space industry, or terminates it in its infancy.
Contextual Comparison
Both the SAA and the OSHAA are products of their context, reflecting developments in the commercial world, the pressures faced by commercial operators, global space governance, and the state of technology.
Introduced in 1998, the SAA is clearly a product of its time. The Australian government was presented with three serious and significant proposals for launch facilities within the nation’s territorial jurisdiction. 70 With a deficit of regulation, the government entered into an operating agreement with Kistler Aerospace for a launch facility in Woomera, South Australia. 71 Kistler never launched nor completed construction of their facility, entering into bankruptcy in the United States despite appearing to be an industry leader in the NASA-supported Commercial Orbital Transport Service program at the time. 72 The possibility of multiple launch operators spurred the Australian government to develop the SAA, introducing a ‘clear legislative and regulatory framework’ to ‘promote investor confidence and to enable the safe and efficient operation of commercial space launch activities in Australia’. 73
Although there is a gap of 19 years between the introduction of each regime, a clear commercial driver is common to both Australia and New Zealand. Since the late 1990s, industry focus has transitioned rapidly from an emphasis on ‘big rockets and satellites’ to small satellites. 74 Even more recently, the focus has been on the use of CubeSats in large constellations for high volume data collection and service provision. 75 Since the first CubeSat launched in 2003, an estimated 1030 have been launched into orbit as at January 2019. 76 This is a scale of space activity not contemplated in 1998. Although Rocket Lab approached the New Zealand government in a similar manner to Kistler in Australia, the scale of the industry has rapidly shifted, impacting the overall legislative design choices. 77
The New Zealand government has embraced this new industry and responded in kind, rapidly implementing a legislative document to regulate these activities. Due to the smaller scale and Rocket Lab’s primary role as a commercial launch partner, the OSHAA has been structured to facilitate different business models in a similar manner to the Australian ‘activity-based’ approach. This ensures the long-term viability of the regime as a whole and its applicability to commercial ventures that may take on different forms.
Australia can be considered one of the leading nations in the effort to codify and confirm the law applicable to outer space, evidenced not only through its active participation in UNCOPUOS’s foundation but also early adoption of all five Space Treaties. By the time New Zealand implemented its own legislation, it had the benefit of observing the operation of a vast number of other domestic regimes targeted at controlling, authorising and licensing activities in outer space. 78 This placed New Zealand in a position to take advantage of other nations’ experiences, to recognise past failings and make new legislative choices. 79
The introduction of the SAA and the OSHAA both demonstrate that foreign investment and commercial activity can drive rapid legislative action, with each only introduced after international parties communicated interest in operating in Australia and New Zealand. The scale of the industry is the primary point of difference between the development of each legislative instrument. New Zealand is marketing itself as an ideal home of small operators while Australia originally contended with larger rocket and satellite manufacturers.
Definitional Concepts
Each regime uses a discrete approach to key definitional provisions. Two that can be drawn out due to their impact on applicability and functionality are the demarcation of space, a heavily debated concept at law, and the definition of a ‘space object’. Each of these definitions impact the applicability of the regime.
1. Demarcation of Space
The Australian SAA introduced, through an amendment in 2002, a regulatory demarcation of space, a practice foreign to other legal regimes of the time. 80 The Australian delegation to the Legal Subcommittee of the UNCOPUOS indicated that despite introducing a definition of outer space for the purposes of the SAA, ‘[i]t is important to note that amendments to the [SAA] do not constitute a definition of outer space’, 81 in a more general sense. This is a significant statement in the broader context of space law and ensures that ambiguity as to where space starts remains. The 100 km above mean sea level definition of outer space is utilised in the definitions of ‘launch’, ‘launch vehicle’, ‘return’ and ‘space object’, all central to the granting of domestic and overseas launch licences. 82 Both Kazakhstan and Denmark have followed Australia’s example, implementing a 100 km demarcation of space in their respective space acts. 83 Other nations have retained an intentionally ambiguous definition of ‘outer space’ devoid of a specific altitude to align with international law on the matter. 84
The OSHAA implies a minimum level for space through the inclusion of the high-altitude activity permit. 85 The OSHAA utilises the measure of the higher of the ‘upper limit of controlled airspace’ as defined under the Civil Aviation Act 1990 (NZ) or Flight Level 600 to determine applicability of the regime. 86 At present, these two measures are identical and well below the 100 km specified in the SAA. 87 This measure does not define space, it merely implies that space must begin above where high-altitude activities take place. The omission of a clear definition of where space starts was intentional, with the Ministry of Business, Innovation and Employment (MBIE) clearly stating that they do not ‘seek to lead the development of space law in an area that is so contentious’, a choice that brings them into alignment with the majority of the international community. 88
Although it would appear to be a routine question, ‘where does space start?’, this is one of the most contentious and unyielding debates in international space law. Despite the use of a 100 km regulatory demarcation, the Australian and New Zealand acts are similar in that they utilise an ‘intention’-based test to determine applicability of the respective regimes, with the respective enforcement provisions only applying where a party intends an object to go into ‘space’, wherever it is so defined.
2. Space Object
‘Space object’ is central to the offence provisions of the SAA. 89 Launching a ‘space object’ is a criminal offence without the requisite permissions, both within Australia and by Australian nationals abroad. The SAA defines a launch vehicle and payload, or ‘any part of such thing’ that goes above 100 km mean sea level as a ‘space object’. This reinforces the regulatory role of the demarcation of space for the purpose of the SAA.
New Zealand has presented a definition of ‘space objects’ as those that are ‘launched, or intended to be launched, into outer space’. The definition is broadened by the inclusion of a launch vehicle, its payload and any component part of each even if they are not intended to reach space. 90 This can be read in a similar light to the Australian definition, with intention to reach ‘outer space’ in the place of a specific altitude demarcation. Although it appears that the SAA employs a raw objective altitude-based threshold on space objects, a close reading of the provision sees terminology that implies a prerequisite intention to reach the regulatory demarcation of space before an object becomes a ‘space object’. This reaffirms the ideals of common practice between Australia and New Zealand, in what likely represents international best practice. 91
Neither regime considers the evolution of the space industry beyond its current position and the potential for the production of objects in space, those that will not be launched or form a part of the launch vehicle, its payload or its component parts. This is not only a deficiency in the national legal regimes, but at international law where liability for such objects lags, well and truly, behind the development of new technologies. This also lends itself to the limit on the regimes, their exclusive applicability to launch activities rather than continued supervision of all space activities.
Format
Both regimes share a similar structure, adopting an activity-dependent permit regime. This approach stands in contrast to the alternate legislative design choice, the singular ‘space licence’, an approach the United Kingdom still adheres to, even in its most recent Space Industry Act 2018 (UK). 92 The division of the licensing structure by activity carries numerous benefits: it allows for an intuitive link between the objectives of an operator and the relevant legislative framework while remaining simple in nature and easy to understand. In adopting an ‘activity-based’ approach, New Zealand made a conscious decision to choose this method over alternatives found internationally.
The Australian approach was informed by the commercial interests that were pursuing operating authorisation at the time of drafting the SAA. Two licences are required for launch activities within Australia, the launch licence and space licence. 93 Each licence has a specific function, with the space licence governing the use of flight paths, launch vehicles and launch facilities, 94 while launch licences relate to an actual launch or series of launches. 95 The overseas launch licence is clear in its application, purely regulating Australian commercial operators taking advantage of international launch opportunities. 96 This structure clearly informs the commercial entity, ensuring the accessibility of the SAA as a whole. The final licences in the SAA allow for the return of space objects and exemptions to the licence requirements in cases of emergency. 97 These later provisions still fit with the structure, format and overarching theme of the legislation. Despite this clarity, the largest complication is the position of a payload operator. The SAA does not contemplate a distinct licence for payloads, imposing a strict requirement for all payload providers to acquire a launch licence. This ‘all in one’ approach to licensing, assuming a large, single purpose payload on each launch, although simplistic, is counter to current commercial realities, where payloads are diverse and multipurpose.
The OSHAA approaches licensing from a similar position, with activities providing the structure and content of the regime. The most significant difference, and a factor that has likely developed as a consequence of the modern launching industry, is a stronger separation of launch and payload activities. Unlike the SAA, there is no exemption regime, nor return authorisation, with the latter likely due to the small geographical size of New Zealand when compared to Australia, limiting the ability for object returns. 98
The use of clear ‘activity-based’ permits and geographical applicability statements make both regimes relatively simple on their face. With sourcing of overseas launch partners now commonplace, both regimes recognise the commercial reality of the space industry; location is essential to achieving optimal orbital parameters and outsourcing of launch operations overseas will be inevitable. The OSHAA does this marginally better by clearly differentiating between overseas launching activities, where a New Zealand national is the responsible entity for an overseas launch or a payload with an international launch partner. 99 The division by ‘overseas’ and ‘domestic’ activities within each regime is also clearly grounded in the principles of international jurisdiction, utilising both territorial and national jurisdictions to ensure compliance with the international space law regime that controversially applies in both senses. 100
The structure of the SAA was heavily criticised during the 2016–17 Space Activities Act review. 101 Many regarded the SAA as ‘unnecessarily complex’ and ‘difficult to actually achieve low cost, agile access to space’. 102 Despite questioning the validity of some complaints raised during the review due to the low percentage of submissions that indicated previous experience under the SAA, 103 the author of the Analysis Report still noted the significance of the ‘widespread perception…that the application and approval process under the [SAA] are burdensome and acts as a disincentive for some’ operators to engage in the industry. 104 This should raise concerns for the New Zealand approach due to the similarity in structure and content.
Clarity is the key in both regimes. They adopt a similar approach, indicative of the developing international best practices that have been codified in the Recommendations on National Legislation Relevant to the Peaceful Exploration and Use of Outer Space as adopted without vote by the United Nations General Assembly in 2013. 105
Applicant Character Tests
A wide variety of entities can apply under the New Zealand and Australian regimes to launch a rocket or payload, but each has a unique approach to evaluating the applicant prior to granting a licence. New Zealand adopts a ‘fit and proper person’ requirement, a test that allows the examination of an applicant’s credentials in the field, criminal history and even their history of ‘serious behavioural problems’ and mental health. 106 This is significantly more thorough than the Australian approach, with the SAA merely thresholding the granting of a space licence, launch permit and return authorisation with a need to be ‘competent’. 107
The ‘fit and proper person’ test is expansive in its scope and varies depending on the type of applicant. The test provided for in the OSHAA gives the Minister responsible six grounds under which they can review an applicant for any of the launch (domestic and overseas) and facility licences. 108 It is not uncommon to see this test in New Zealand licensing regimes, with Ministers regularly given powers to scour the applicant’s credentials and regulatory history. 109 These considerations, although broad and far-reaching, can be logically justified within the overall approach of the OSHAA, with national interest and security remaining paramount throughout. 110 In this instance, consideration of regulatory compliance, experience in aviation and aerospace, regulatory knowledge, criminal history, behavioural history and mental health history all lend themselves to painting a clear and comprehensive picture of the applicant, their ability to operate a launch and the potential complications that may arise under such activities.
The approach changes depending on the type of applicant. 111 Natural persons will see their personal history examined, whereas corporate applicants will be assessed on both their previous corporate activities as well as the history of their ‘officers’. 112 With many NewSpace entities, there will be little scope for previous launch activities, inhibiting any analysis of previous regulatory compliance. As a consequence, examining the history of officers is a significantly more complex matter. The exact scope of ‘officer’ is not provided in the OSHAA itself, nor the Companies Act 1993 (NZ). 113 ‘Officer’ existed as a defined term in the predecessor to the Companies Act and has now been abolished across all legislative regimes, the most recent of which was the Securities Markets Act 1988 (NZ) which defined officer as those who are ‘concerned or take part in the management of the public issuer’s business’, a direct reference to management in public companies. 114 Furthermore, the New Zealand common law has not recognised ‘officers’ since the introduction of the Companies Act. 115 This ambiguity and the implementation of a phrase that has clearly been phased out by previous New Zealand parliaments, adds a layer of complexity to the licensing regime. The Australian Corporations Act 2001 (Cth) and common law recognise ‘officers’ as holding a distinct position in a company, a step down from directors but above the general employee, those who can significantly impact the operations of the company. 116 Although this ambiguity exists, it is likely that the Australian definition and scope could be employed to allow the regulatory bodies in New Zealand to look to those a company has employed with experience in the space industry, history of launching rockets and operating payloads, as well as those who have direct access to sensitive launching technologies. The regulations also provide guidance, requiring information on ‘the applicant, or any other person who is to have or likely to have control over the exercise of the rights under the licence’ and the requirement to notify of parties holding more that 10 per cent of the company supporting the assertions above. 117
The fit and proper person test has remained a steadfast component of the OSHAA regime since its inception but shifted from a requirement that the Minister need be ‘satisfied that — the applicant…[is] a fit and proper person’, to the Minister may decline if ‘not satisfied that — the applicant is a fit and proper person’, a measure that the MBIE believe will ‘reduce the regulatory burden and associated compliance costs of this aspect of the proposed regime’. 118 This is a controversial statement, especially in light of the regulations that still require an applicant to address the fit and proper person criterion in their applications. 119
The Australian approach, as foreshadowed above, is considerably lighter. Applicants to space licences, launch permits and return authorisations must be ‘competent’. 120 This is a subjective precondition required before the relevant Minister or their delegate issues a licence. 121 This requirement is only in place for domestic licences, ensuring that Australian safety and security is paramount, while preventing excessive interference with companies simultaneously engaged in other international regimes. Neither the SAA nor the Space Activities Regulations provide further content for this test, allowing for a case-by-case analysis and flexible approach. The only other codified requirement for space licences and launch permits is that the entity be a corporation. Rather than an explicit requirement to protect safety and ensure capability, it is likely a consequence of the Australian Constitution that requires Commonwealth legislation be under a head of power. 122 Uniquely, the space licence also requires evidence that the applicant has ‘sufficient funding to construct and operate’ a launch facility. 123
These two regimes are quite different in their approach to applicants. New Zealand has implemented a test that can be seen frequently throughout its various licensing regimes, 124 a test that explores the background, skills, capabilities and past of applicants. 125 The Australian approach is much less comprehensive, with ‘competent’ a completely subjective and flexible term. From a critical perspective, the New Zealand approach may see the hiring of experts purely for the purpose of fulfilling the ‘fit and proper person’ test. At worst, the relevant regulatory bodies may direct local operators to hire experts to meet the fit and proper threshold without actively ensuring that these experts play an active part in the operation of the launch, a concern that may be mitigated in practice.
Sustainability
Sustainability is a developing area of international concern, in both the terrestrial and orbital domains. Although there is no explicit reference to environmental protections in the Outer Space Treaty, it is implied through art IX that while conducting exploration ‘with due regard to the corresponding interests of all other State Parties’, nations will respect the environment in a way that will not deleteriously impact on the rights and capabilities of other States to explore and use the space domain in the future. 126 Along with increasing awareness of the terrestrial environment, mistreatment and lack of care in orbit is becoming a greater concern for space-faring nations. Debris can be fatal to space operations with approximately 166 million pieces of debris in orbit, of which only 29 000 pieces of debris are currently capable of being tracked. 127 This presents significant dangers to operators, especially those contemplating human space travel. Furthermore, without mitigation, the Kessler Syndrome hypothesises that debris could reach a level that would prevent further activities in any orbit. 128
Orbital environmental protections and debris mitigation were completely foreign concepts at the time the SAA was enacted. The only explicit mention of environmental protections is that related to domestic approvals for the construction of launch facilities. 129 The review into the SAA raised concerns about the deficiency in environmental considerations. 130 The Space Activities Amendment (Launches and Returns) Act 2018 (Cth) includes a requirement that applicants for launch and overseas payload permits have a debris mitigation strategy. 131 Submissions to the Senate Economics Legislation Committee during the Review of the Bill expressed some disquiet as to the scope and breadth of this requirement. 132 Protecting the space environment at a global regulatory level requires consideration in a number of contexts. Many small operators raised concerns that any regulation will hamper their opportunities in the market by increasing compliance costs, while larger operators point to the issues that may arise when small companies reach their goals of placing large constellations of small, uncontrolled, satellites into orbit. 133
Implementing a new legislative regime in the 21st century carries an obligation to consider the environment. New Zealand included references to debris mitigation and ensuring reduced environmental contamination in every iteration of the Outer Space and High-altitude Activities Bill 2016 (NZ). 134 After a submission by New Zealand entity ‘Venture Southland’, the requirement for a recognised debris mitigation plan moved from a discretionary term to a threshold requirement for every licence, both domestic and overseas. 135 This approach designates the shift towards sustainable operations and ensuring continued access to space continues.
Applicability
The applicability of each regime, as mentioned above, is grounded in the international principles of jurisdiction, primarily, that every State is sovereign in its own right and can legislate in respect of its territoriality (subject to internal limitations and international obligations). 136 Further, most regimes extend beyond the territorial jurisdiction of a State, looking to personal or national jurisdiction: the right a state has to exercise jurisdiction over its nationals. 137 This ground is invoked in respect of the ‘overseas’ launching and payload permits under both Australian and New Zealand regimes and is a valid measure in the light of the United Nations General Assembly recommendations on national legislation. 138 Stretching the domestic law to cover nationals abroad is not a new concept. 139 The primary limitation of extraterritorial laws is enforcement, with a need for international recognition of jurisdiction, the alleged offence and cooperation for prosecution.
The SAA applies to all Australian nationals and legal entities, with the exception of the Commonwealth which is exempt from prosecution. 140 This creates a significant and broad exemption to the SAA. It presents a clear divergence of legislative intention; the Australian government, and its departments, can engage directly in launching activities while failing to observe compliance with the SAA, standing in stark contrast to NewSpace companies that face significant burdens under the legislation. The New Zealand regime is more comprehensive in its application, reaching across all government departments except Defence. 141 As the New Zealand government does not operate any unclassified orbital infrastructure, this is not particularly surprising but does indicate that there may not be a domestic drive for government space activities (or that all such activities will be contracted through civil providers). 142
Commercial Efficacy
There is no argument that regulatory regimes can deleteriously impact on the commercial efficacy of an industry. For the space industry, companies look to regimes that impose low costs and foster development. As such, any consideration of a legal regime can be focused on four distinct areas: application burdens, licence and permit obligations, costs, and insurance. Each regime has differing characteristics, a function of both legislative intent and context, especially considering the dates of implementation and the most recent substantive amendment to the SAA occurring in 2002. 143
The basic critique is that high levels of obligations, costs and regulatory burdens will see companies avoid a jurisdiction. The sheer international variability in domestic space regimes invokes parallels with lessons learnt during the development of the law applicable to the high seas. A prevalent and dominating issue for nations and operators alike is the problem of ‘flags of convenience’: that a commercial entity will intentionally seek out the jurisdiction with the lowest costs and obligations for conducting operations. 144 On the high seas, this is manifested in naval incidents and operators being both unqualified and unequipped to operate ships. 145 The United Nations and States attempted to rectify this with the imposition of international regulatory restrictions in updated multilateral treaties applicable to the maritime environment. 146 This translates to the space domain in a limited manner. Although the specific licence obligations vary between States, the strict and broad liability articles contained in the Outer Space Treaty and Liability Convention, as well as recommendations by the General Assembly to utilise both territorial and national jurisdiction when implementing laws, 147 overcome a majority of the incentives of international regime ‘shopping’. 148 In a further practical sense, with the majority of launch capabilities currently nested within a small number of countries and geographical impediments relevant to launch trajectories and orbits, commercial payload operators will have little choice but to comply with the regulatory regimes as implemented by major space-faring states in order to remain in a position to exploit space. This does not prevent a NewSpace operator being heavily disincentivised by a regulatory regime, making the balance between national interests, costs and legislative design significant.
Application Burden
Each regime requires applications to take a specific form, contain prescribed information and be complemented by various plans and approvals. One of the most significant threshold requirements has already been discussed above: applicants must meet a character or fitness test before the relevant Minister or authority can grant a licence or permit. This is merely one element of what is a substantial application process irrespective of the jurisdiction. Both acts share a significant number of common application requirements, generally those focused on the national interest, security and international law compliance. 149 This is both a function of common legal heritage and necessity when dealing with easily weaponised technology. While the majority of the burden on assessing an application will rest with the relevant government agency, it is the sheer volume of information that needs to be provided in the first instance that imposes the highest burden. 150
Both regimes require significant disclosures of information in addition to domestic environmental approvals, proving of funding and risk mitigation plans. The OSHAA, and yet to commence amendments to the SAA, also requires the presentation of a debris mitigation plan, 151 imposing significant burdens on the applicant including independent assessment and contingency plans. 152
In both cases, although it appears that the application process is relatively procedural, the subsequent information collection and presentation represents a significant cost implication for operators. It was noted in the Australian Analysis Report that one applicant to an overseas launch licence spent: 45 full days…seeking to understand the scope of the requirements; interpret their application for [their] purposes; co-ordinate with the Department on the Minister’s expectations; query provisions with legal counsel…as well as calculate [Maximum Probable Loss] and seeking insurance advice from brokers and drafting applications as required under the statute.
153
Licence and Permit Obligations
The obligations contained in the various permits may give rise to future complications as seen with flags of convenience on the high seas. In drafting the OSHAA, the New Zealand government has been promoting its permissive approach to licences, flexibility in the regime, a case-by-case approach to licences and an intention to work with operators to secure the establishment of a local space industry. 157 A New Zealand Cabinet position paper even goes so far as to look to the SAA as an example of how a ‘prescriptive’ approach will neither promote industry development nor be suitable in the New Zealand context. 158 The New Zealand government has sought to codify a significant number of licence/permit conditions and terms, though with much of the primary legislation utilising the ‘must’ phrasing, restricting ministerial discretions. 159 Although there will be difficulties in comparing an Australian launch permit with a New Zealand launch licence due to the Australian requirement to simultaneously hold a space licence, 160 the Australian primary legislation only provides for four compulsory terms with the remainder left for regulation. This is compared to more than a dozen compulsory terms in the New Zealand equivalent. 161 The Space Activities Regulations 2001 (Cth) do contain a significant number of obligations and terms that must be contained within a licence, but this stands separately to the primary legislation as a secondary instrument that can be amended with significantly more ease. 162 The high level of primary codification of licence terms brings into question a permissive and flexible approach, and raises the potential for the OSHAA to be more restrictive than its heavily criticised Australian counterpart. The OSHAA also grants the Minister the discretionary power, within the primary legislation, to impose terms they consider ‘necessary or desirable in order to’ meet a number of objects related to public safety, international obligations, security, and continuing protection of the space environment and those in it. 163
Despite what appears to be a significantly lighter approach in the SAA, it has still faced constant criticism for being ‘draconian and restrictive’ with many interested parties critiquing the perceived high regulatory burden. 164 What must be considered is the likelihood that any regulation will be seen as excessively burdensome for operators. The lack of any launch industry in Australia may be linked, in part, to the regime as it stands.
Costs
Financial burdens will arise as a consequence of compliance with the regulatory regimes and cost will always remain a high-level sensitivity for commercial operations. The Australian regulation outlines application fees for licences and permits under the SAA allowing for an assessment of the cost implications on parties. Comparatively, the New Zealand regime does not provide any guidance as to the costs associated with licensing or applications.
High start-up costs can be seen as reducing the viability of any new operator entering the market. As noted in the Analysis Report and the Explanatory Memorandum to the Space Activities Bill 1998 (Cth), Australian licence fees have been set on a ‘cost recovery’ basis so as to mitigate the expenses of the relevant regulatory body. 165 With only overseas launch licences being issued since inception of the SAA, the fees set out in pt 9 of the Space Activities Regulations 2001 (Cth) cannot be definitively assessed to determine whether they are genuinely proportionate to the cost associated with granting and maintaining a licence from the Australian government’s perspective. 166 Despite significant submissions indicating that the fee structure in Australia is ‘excessive’, the report concludes that this is merely the case for small commercial operators. 167 With a significant emphasis on innovation and the ‘entrepreneurial economy’, the dismissal of complaints regarding the fee structure in the Analysis Report stands in opposition to government policy and the interests of the small satellite and start-up industry. 168
The position in New Zealand is more difficult to ascertain. There are no fixed licence and permit costs included in the OSHAA or relevant regulations. The only guidance on costs is found within Cabinet papers which indicate the setting of fees on a ‘cost recovery’ basis. 169
Looking practically, a launch operator in Australia will need a space licence and launch permit which entails a minimum cost of AUD340 000 for the first launch. 170 Of course, the AUD300 000 space licence fee is a ‘one-off’ fee, but it needs annual renewals. 171 For companies such as Rocket Lab that are aiming to launch entire rockets for less than USD5 000 000 and host single CubeSats for approximately USD30 000, a AUD40 000 launch permit is a significant imposition. 172 The traditional operators, such as SpaceX, purport to sell an entire Falcon 9 Rocket for USD62 000 000. With costs reducing on reuse, a AUD40 000 launch fee is less likely to be a significant imposition when compared to this cost but are likely to be heavily damaging to a start-up operator. 173
Insurance
One of the most significant components of any domestic space law regime is how it contemplates insurance and liability. The Outer Space Treaty and Liability Convention each codify the financial responsibility of a State for activities of their nationals. 174 As the State is liable for the actions of operators, the most common approach is to legislatively or contractually shift liability from the State to the operator directly. 175 This has been implemented in a number of different ways internationally. Australia, being an early legislator, took the approach of requiring an operator to have insurance for the lower of the fixed amount of AUD750 000 000 or the Maximum Probable Loss (‘MPL’). 176 Beyond this value, the Commonwealth of Australia would remain liable for all further damages. 177 This has been critiqued as one of the highest insurance requirements internationally and ‘out of proportion to the size and potential risk’ of many space activities. 178 Furthermore, the MPL, a statistical measure adopted from the United States, has been heavily criticised due to its ability to fluctuate widely based on minor statistical assumptions. 179 The primary rationale for the implementation of such insurance thresholds was to ensure that the Australian government was protected against significant international claims and the sovereign risks associated with permitting space activities. Further, the use of the MPL was adopted in what can only be identified as an attempt at uniformity when looking to the United States’ commercial launch laws which preceded the Australian equivalent. In most instances, these insurance requirements have been considered a barrier to activities, especially in the light of overseas launch permits, where exemptions must be applied for in the case that the launch partner has already procured independent indemnities. It is important to note that the recent amendment does address industry complaints and reduces the insurance requirements to AUD100 000 000 or other sum as determined by the regulations. 180
Looking to New Zealand, they have refrained from outlining a minimum or maximum insurance requirement, rather purporting to adopt a more flexible approach. The OSHAA allows the Minister to require, at their discretion, a full, or part, indemnity of the Crown. This appears as an adoption of the permissive approach. 181 When adopting a more critical perspective, a variable indemnity requirement provides no certainty or cap on potential insurance costs. With this indemnification requirement substantially similar across all licences and permits under the OSHAA, there may be the potential for companies to intentionally avoid incurring liability through insolvency and subsequent liquidation rather than paying damages if they arise. This legislative choice was also criticised by Rocket Lab as ‘pos[ing] a risk to the creation of a local space industry’. 182 These concerns are further fostered by the Explanatory Memorandum to the SAA that clearly recognised that the ‘[i]mposition on launch operators of unlimited liability is neither commercially tenable nor desirable from a competitive standpoint’, 183 a fair assessment of the current OSHAA.
Internationally, nations have adopted a broad variety of approaches to mitigating liability incurred by private actors. Many have implemented caps on insurance; the United States uses a limit of USD500 000 000 184 and the United Kingdom, although having no legislative insurance cap, utilises a measure of €60 000 000. 185 The most striking regime, and one that is frequently referred to by NewSpace operators, is that of Belgium where insurance is based on the turnover of the applicant, reducing the requirement for NewSpace operators and those trying to enter the market. 186
Comparing the two regimes, the SAA provides commercial certainty at the cost of rigidity. The OSHAA could see the imposition of an unlimited liability, and for a small company this may be unrealistic and adverse to long-term business success. The Australian cap is high, frequently being called the most expensive in the world, but it provides an operator with a baseline and a figure to work from, allowing for budgeting and commercial certainty for their investors.
Space Agencies
One of the classical hallmarks of a space-faring nation is a space agency. The United States, Russia, China and Europe have highly active space agencies with names and projects that are easily identifiable. Australia and New Zealand do not possess this name recognition for a space agency. Alongside the OSHAA, New Zealand announced the introduction of a national space agency, the New Zealand Space Agency. As a division under the MBIE, this agency holds a dual role as both the primary regulatory agency administering the OSHAA and as an industry promotion agency. 187 It is an entirely regulatory and policy-based body, with no official scientific scope.
Australia has long been criticised for its lack of a national space agency. However, following an announcement at the 2017 International Astronautical Congress, 188 the Australian Space Agency came into operation on 1 July 2018 under the leadership of Dr Meagan Clark. The Agency is located within DIIS. 189 The Agency is currently tasked with setting national space policy and coordinating regulation under the SAA, as well as proving the lead in international space engagement and raising domestic awareness of the space industry.
With respect to the Australian and New Zealand models as they stand, there is little to be encouraged by. Dominant international examples fulfil a purely scientific function, with little to no regulatory ambit. 190 Concerns remain regarding space agencies with a largely regulatory function, small budget and, in the case of Australia, a lack of statutory authority. In both cases, the agencies will remain accountable to a larger government department with multiple responsibilities.
Conclusions
Many would not expect Australia or New Zealand to be significant players in the international space industry. Australia took a leading role in law and early space activities, cooperating broadly while attempting to promote a launch industry in the late 1990s. This never eventuated, but a product was the SAA, a regime that has not aged well or kept up with evolving technology. It is a regime that imposes high costs on operators, does not recognise new business models and appears dated in its approach to the space environment. New Zealand is faced with an operator that has actively pursued permission to launch from within New Zealand territory and conducted launches before the OHSAA even came into force. This new regime has been designed by looking internationally, drawing heavily from the Australian approach, but attempting to mitigate the elements that have failed it since its implementation. The OSHAA has publicly been linked to a permissive licensing approach, a claim that can be challenged in many regards. Between the two regimes, the significant body of criticism against the SAA and the high costs it imposes drag it into mediocrity and apparent failure, with the OSHAA designed for modern enterprise and business, especially for the small satellite community. With an Australian space industry developing and the need to drive innovation through regulatory changes, it is to be hoped that the recent revisions to the SAA will achieve this goal, although it is noted that most key details remain to be implemented in the Rules, which are currently still being drafted.
It remains to be seen if the advantages flagged for the New Zealand legislation and the related regulatory domain will in fact manifest in a vibrant space industry. As at writing it is clear to see that Rocket Lab have taken New Zealand-based launches seriously, having conducted a number of initial payload launches. It is vital that the requests and interests of NewSpace start-ups are listened to in any reform and revitalisation of space industry regulation, whether in Australia or New Zealand. Too much time and energy has already been invested in designing regulation for industry models that have long passed us by. It is to be hoped that the New Zealand model, with its heavy reliance on the Australian approach, may be flexible enough to carry New Zealand into the NewSpace age.