The industry players of the Indian space sector are slowly but certainly gravitating from being mere sub-contractors of ISRO towards being full-fledged participants in its upstream activities. Apparently encouraged by the global space innovation scene with SpaceX Falcon 9’s ‘vertical’ landing attempt and Virgin Galactic LauncherOne’s ambition of mass production, these private actors are in turn collaborating with newspace startups to garner enough innovation momentum. With the increasing number of stakeholders both government and private, and the complex MoU’s between them, a well designed legal framework is needed for streamlined functioning of the complete ecosystem.
To address this, the National Law School of India University (NLSIU) has taken the initiative and organised a Round Table Conference on “Commercialization and Privatization of Outer Space: Issues for National Space Legislation” on 18th July 2015 at their campus in Bangalore in partnership with the TMT Law Practice, New Delhi.
The Academy-Agency-Industry triad was well represented by eminent scientists of ISRO, professors of prominent law universities of the country, popular private space players and established attorneys advocating space law. This article is my interpretation of the 8-hour long discussion between them on the need for a robust national space law and the issues surrounding it.
The former ISRO Chairman, Dr. G Madhavan Nair’s talk began with a light-hearted remark that framing India’s existing Space and Remote Sensing Laws into a full-fledged legislation would definitely and prima facie invite more work and hence more income for the lawyers!
In the current scenario, the national space policies of several countries are at loggerheads with one another. The first major issue at hand is the geostationary slots being limited. Reservation of slots is very much commonplace now but is resulting in slots being kept idle beyond the intimated date of occupancy. The second issue to be addressed is regulation of earth imaging. Even though access to satellite imagery is of utmost importance for disaster management, natural or otherwise, the norms for its authentication and sharing are yet to be in place. Another issue frequently voiced out but seldom taken seriously is the mitigation of space debris. The statistics on the number of space debris objects floating around in the usable orbit space is already too high. The currently available solutions to clear up orbital space are too expensive for the satellite owners to attempt them at all. The firing up of old communication satellites to 150 Km beyond their orbits will consume about 6 months of their mission life in terms of fuel. And decaying the orbits of LEO satellites is not economically viable. One practice can be to reduce the use of explosive elements such as batteries and propulsion systems on board. But again this is more of a technological challenge than a policy issue. Given the global nature of mankind’s current space exploration, international cooperation is mandatory.
There is a stark difference in ideology compared to the western nations and India in terms of space applications. India provides services such as Tele-Education and Tele-Medicine for free, given its policy of using space segment primarily for social benefit. However, this is not a sustainable model in the long run. The current space industry of the country comprises mere sub-contractors and this lack of competition is not healthy. The industry could thrive in the west given its well established military program and India, given its economy cannot and wouldn’t afford such an initiative. However, it has a major advantage of having the potential for a large market. But these high volumes of business will only get generated with the participation of private industry. And more importantly, the private players should be willing to take complete responsibility and not expect hand-holding at every juncture. On the other hand, the major concern for the government would be national security and hence their unwillingness to place sensitive and powerful technology in the hands of private parties.
The suggestion to the Indian Space Program is to take an initiative and garner more competence in the global space scenario by encouraging private participation with adequate space laws and policies in place.
Prof. (Dr.) Stephan Hobe of the University of Cologne joined over Skype and after showing a copy of the book “Cologne Commentary on Space Law” released by the University began his speech on the need for a robust space law given the emerging market for space activities.
The three phases of space law making can be the 1950 – 1979 period of international agreements, the 1979 – 1995 period of UN assembly resolutions and the latest one with its Cape Town Convention (2011) focused on Space Debris mitigation. Upon close inspection, there is clear evidence of a tendency of the participating agencies and organizations gravitating towards less binding commitments. However, as clearly stated in the Article 6, Sentence 2 of the Outer Space Treaty (1967), any country allowing private launches must have a national space legislation in place.
India’s space laws should majorly address the aspects of Licensing – eligibility and requirements for issue, conditions for transfer of license, Insurance – with provisions for incentives for the private players such as being partly covered by the government, which has already been implemented by the Czech Republic, a National Registry – and resolution methods in case of double registration, Supervision – with the supervising authority being the same as the licensing authority and most importantly Environmental Impact Assessment – to avoid space debris. There can be a Space Law Tribunal whose decisions will be final and binding under all circumstances.
Voice of Academia & Attorney
NALSAR Law University’s Center for Air and Space Law Head, Prof. (Dr.) V Balakista Reddy, reminisced the days of 1995 when the first voices for space policies in India were raised, but only by a handful of space enthusiasts. He is glad that now many attorneys and even the government is asking for a well-established national space legislature.
The former MD of ISRO’s commercial arm ANTRIX, Prof. K R Sridhara Murthi stressed the need for space law so as to equip the country for future with space infrastructure.
Currently, 76% of the space sector activities are from private players. And their behavior is only governed by government policies. In India, the private space sector’s role is mainly concerned with downstream activities while the R&D, missions, operations and some applications are solely by the publicly funded ISRO. There has been no full-fledged participation of the industry in the upstream activities of development, integration and testing of satellites or launch systems. With its rising economic power, high demographic dividend and large market, India can be both a user and provider of space applications and all it needs to do further for encouraging private participation is to create a conducive environment for them.
There are already several space policies in place, such as the SatCom Policy which can be extended to cover the aspects of financing, transfer of assets, continuous supervision, licensing, etc. The legal facet of the telecom arena will have to address the issues of allocation of orbital slots, risk coverage and also provide incentives for infrastructure building. A national space legislation is to be drafted at the earliest, otherwise the country will be facing big liabilities.
Several reforms are to be made in the national GI policy such as opening it up to global competition, providing free access to satellite imagery and providing incentives to exploit this from across the world. The risk coverage issue can be addressed by entering into long term contracts with the private players similar to what the USA and EU had done. The domestic as well as global markets need to be aimed at. The existing policies will have to be revitalized to attract the private sector into building communication satellite infrastructure alike the IRIDIUM constellation. Another important area is satellite based positioning. Even though getting frequencies allotted is not easy for late entrants, India should get its own satellite based positioning system. The private sector’s role here will be in developing appropriate and cost-efficient receiver systems and ground support equipment and policies in ground segment should be framed accordingly.
There are great new space opportunities in India given its rich talent pool. It is sad that even after Ms Ranjana Kaul’s paper on National Space Legislature in 2005, we are still debating today. There is a dire need to open up to private sector and enable them to perform.
Prof. G S Sachdeva of the Indian Air Force (rtd.) and now professor of Space Law, spoke of the need for a national space law that doesn’t contradict international obligations and additionally advised the private stakeholders to concur on a code of ethics for their own preservation in the long run. Given the global interconnectedness of the present times, a national space law will have to simultaneously consider the state’s responsibility under international law, national law, space law and also other international instruments. Given this complex set-up, there is a need for a deep analysis of permissibility of private actors into the space arena.
International liability is a touchy subject with the party, private actor and state involved, very much possibly from different jurisdictions and hence probably contradicting laws. Given mankind’s inglorious history of slavery and colonialism and also given the fact that space is a very vulnerable area for loophole mongers who twist the laws to their advantage, there is a need to frame new ethics for space commerce. Outer space shouldn’t be entirely commercialized but also be seen as a means of service to mankind. Ethics are to be created, in the form of soft laws which are mostly self-binding by the organizations and corporations involved. The private players should have a CSR outlook towards the new space ethos. Fair play and equity should be the norm. Also importantly, the private actors need to have an institutional system such as a union or a chamber of commerce to voice out their opinions and issues.
Dr. Ranjana Kaul, an ardent space law advocator for the last decade, spoke of the existing national space policies and pointed out that the Remote Sensing Data Policy is currently under challenge in the Delhi High Court.
Law professor, Dr. Sandeepa Bhatt elaborated on the issues under licensing, liability and IPR aspects. One major issue under the licensing laws will be transferability of licenses and terms of transfer, given the obvious fact that selling and buying of space assets will be an integral aspect of space business. Another equally important issue to be addressed will be transfer of registration. The license and registration transfers are to be addressed specially when done between states or parties belonging to different states. These transfer clauses are not provided for by any of the international treaties.
The international space policies so far direct the entire responsibility and liability to the launching state alone, probably because there weren’t any major private players in the space arena then. However, now that private actors are reaping significant benefits, it is logical that they share also be liable. Since a direct liability shift to the private player, which is not in lieu with the implications of the liability convention that place complete liability on the launching state, will deter their participation prima facie, there is a need to adopt the policies of limited liability regimes such as those of Australia.
Given that the Indian economy is still developing, an ideal policy model to address liability issues will be similar to that of the nuclear liability wherein all the industry players contribute to a common liability pool. This will prevent the faulting player from going bankrupt and also avoid burdening the state exchequer. The policy should also address the details of transfer and distribution of liability amongst the participating parties when there is a transfer of ownership.
The Rescue agreement provides for the safety of astronauts and personnel in case of emergency landing, by conferring them with a diplomat status. However, given the rising scope and demand for space tourism, the aspect of rescue of tourists is also to be addressed. Another issue to be addressed will be IPR protection for technologies invented in space and their patenting terms. The section 105 of the US Patents Act already addressed this issue.
Voice of Private Space Players
D S Govindarajan of Aniara Space observed the impact young innovators will have on the overall competitiveness of the industry and country at large.
The origins of the multibillion dollar Virgin Galactic, world’s first commercial spaceline, can be traced back to the Ansari X Prize whose winners founded the Mojave Aerospace firm which had developed the suborbital spacecraft for Virgin. This is just one live example underscoring the fact that competition builds excellence. The “Make in India” initiative has the potential to create the needed competitive environment with the participation of the government-industry-academia triad. Innovation will be the most important ingredient for such a contest to bear fruit and therefore funding young entrepreneurs is most essential.
Amitava Chakraborty of the TMT Law Practice remarked that the number of patents filed by India under Remote Sensing, satellite technology and earth observation areas is very low and that its global R&D sharing is rapidly declining.
The serial space entrepreneur Dr. Susmita Mohanty of Earth2Orbit called for a support structure for budding entrepreneurs and a flexibility in governance, citing examples from the USA and the EU.
Small businesses, usually the hubs of innovation, require support for conducting their R&D. The SBIR (Small Business Innovation Research) program of the US government does exactly that. However, there is no such assistance framework in India. Even the European EU spends about 40 billion euros annually across several themes to help small businesses. With its $200M annual revenue, Antrix barely scratches the surface of the $300B global space market.
The reason behind the US private space industry’s lion’s share of the global revenue is the American deregulation policies beginning in 1984 that encouraged entrepreneurship and emphasised on IP ownership by private players. SpaceX is the most popular example of the success of this endeavour. In addition to promoting industry participation, the government also needs to quickly adapt to changing market scenarios. One example will be the French government’s quick move of selling its shares in ArianeSpace to Airbus Safran Launchers so as to withstand competition from SpaceX, only 5 months after ASL’s creation by the merger of Airbus and Safran.
Certainly ISRO has grown exponentially from its sounding rocket days of 1950 to reaching the planet Mars in 2014, but with the advent of private giants and international collaborations, reforms are definitely needed to survive the modern space race. ISRO needs to think in 50-100 years cycles now instead of making 5-10 year plans. The first move should be replacing the existing Space Commission with a new entity headed by industry representatives from Remote Sensing, Telecom and launch areas. A commercial space launch act is to be enacted. There is a need for people’s representatives such as ministers and lawyers, who understand space.
A phased approach would be to first create a joint venture between the government and industry players in the lines of ArianeSpace while ensuring transparency and facilitating ease in doing business. The next step would be to adopt a COTS approach in building newer and more efficient launch systems. Most importantly, there is an urgent need for a dedicated commercial space port.
Advocate Ashok G V stressed on the need for an unbiased regulating body without any stakes in the play and also spoke on the issues under liability, insurance, IPRs and taxation.
In the Indian scenario, policies for the participation of private players do exist, but there are no established definite timelines in place. Absence of a certainty in approach is the biggest deterrent to the industry players. Besides, the regulating body is the Department of Space of which ISRO, the biggest competitor to private players, is a part. Such a setup will result in an unfair arena for the private players to compete and prove their worth. Since having the government department as a regulating body will ensure national security, an approach similar to the one followed by the US, wherein the Department of Transport acts as the regulating body, can be adopted. The Delhi Geographical Spatial Data Infrastructure act is commendable but the access to the data itself is to be elaborated on.
Technology transfer is facilitated through Antrix, but an open source approach will give a greater thrust to innovation. Moreover, if ISRO is into both R&D as well as operations, it will be less likely to share its technology. Only if it primarily focuses on R&D while off-loading the operations and applications to the industry will the concept of technology transfer be meaningful. To address the issue of liability and insurance, either the existing Public Liability Insurance Act be expanded and elaborated or a common national liability pool be created involving all major stakeholders. Classification of assets and IP protection are also to be addressed.
Speaking of Tax Rationalization, the terms for the applicability of sales tax for sale of assets in space are to be formed. Under the Section 5(2) of the Central Sales Tax Act, sales tax is not applicable for an item sold outside India. However, clarity is needed in case of sale of only the license and not the asset. To address the issues of national security, one option can be Returns filing wherein every location that is imaged will have to be filed with the regulating body. This suggestion was met with a rebuttal from Susmita that it will be impossible to run a company doing so.
Prashant Butani of Northern Sky Research, presented a comparative case study on the space policies of Brasil, a developing country like India and the USA, a developed country.
Dhruva Space’s Director Narayan Prasad highlighted the difference between India and the EU in terms of ease of doing business by citing the example of his own new space startups. The first one, Dhruva Space, in the Indian arena for the last 3 years, with him practically drawing no salary while the second one, potentially securing a funding of 50K euros in 3 months of its conception. There is a need to set up an “Office of Space Commerce” without any conflict of interest, similar to what the US has done by housing its OSC under the Department of Commerce and not under NASA.
Open House Discussion
Former Director of SHAR, ISRO Dr. M Y S Prasad talked about the need for space law at all, for a country that journeyed from transporting sounding rockets on bicycles to building indigenous cryo engines in under six decades.
With an annual budget of $1B and 16,000 employees, ISRO currently has 17 operational satellites in the GEO orbit and 11 more in the LEO, 3 launch vehicle designs with 28 consecutive successes of one, its own satellite bus design and world class launch vehicle integration and launch facilities, all without any Space Law in place. So the first question should be “Why should we have law?”
ISRO’s legacy of the last 52 years can be attributed to its visionary leadership, non-interference of politics, checks and balances at every stage, flexibility in an otherwise inelastic bureaucracy, innovation and the spirit of bouncing back from failures and the attitude of taking criticism constructively. However, with growing activity in the space sector and the resultant increase in money flow, a law will be required to keep up the ethics. It should be noted that the UN had taken the initiative to formulate space treaties only because of the existence of the USSR. The second reason for a national space law is for the protection of space assets.
The third and major reason is to genuinely fulfill international obligations and to have a long term vision. Compensation and liability aspects are only a part of it. For instance, the Space Debris Mitigation Guidelines were the outcome of a 6 year long fight so that the developed countries, having cluttered the space given their early and frequent access, will not be dictating terms to the developing countries that reach outer space much later.
The fourth reason will be to encourage private participation, given the need for the nation to technologically empower itself as a whole, against the rising global competition. After the International Space Station retires, China will be the only country having an operational space station and the rest of the countries will be fighting to have one of their own. However, the space industry alone can achieve nothing without support in capacity building and to an extent some handholding from the government. Therefore keeping in mind the evolving market scenario, the rising global competition and the need for private players and the government to work together, a space law is needed.
Sunil Kumar from the British High Commission, remarked India can have its own ClydeSpace or SSTL (Surrey Satellite TEchnology Ltd.) only when there emerges a strong connect between the industry, the academia and the agency.
NSR Analyst Prateep Basu posed the question of whether there is a market for the private industry to make profits from satellite or launch vehicle making. For the upstream market to thrive, there is a need to first create a demand for the downstream activities. For instance, the UK Space Industry, which is much behind ISRO in its indigenous capabilities, organizes annual competitions in downstream activities through its Harwell Oxford Space Cluster.
Devi Prasad urged the the private sector to take up a role in the space environment protection in public interest. The terms of the current Liability convention are not sufficient. India already has well evolved environment protection laws with its Polluter Pays Principle (PPP) that can incorporated in the space sector as well. There is a need for regulation in the area of Space Tourism as well, to ensure the safety of tourists.
To Kodandaram’s question of why India can’t manufacture and export space technology instead of only importing them, Susmita Mohanty replied that the Indian products are not competitive enough in the open market given a lack of proper support mechanism in India for technology innovation. M Y S Prasad rebuted the answer by declaring that the idea of open market is a myth and that even though the engines ISRO developed from the French are very much cost effective and competitive, the market is not open.
To Prateep Basu’s query on the process of data transfer being routed through NRSC and Antrix in spite of an online transfer, M Y S Prasad responded saying that the policies on data security and access need to be remade since remote sensing data security has now lost its meaning with open sale and access by everyone. Sridhara Murthi remarked that since satellite markets are not completely open and having a satellite in slot implies a semi-permanent occupation, existing policies have to be redone and new ones are to be drafted, by both the government as well as the industry, so as to be in tune with the global scenario.
Ranjana Kaul commented that the current mapping policy is too restrictive and it needs to be fixed. To which Sridhara Murthy suggested having differentiated policies with respect to maps, given the fact that 90% of the users don’t need high resolution and high precision maps. Ranjana Kaul remarked if that can imply a differentiation in price as well.
M Y S Prasad recounted that In 2014, a space legislation was drafted and over a 2-day workshop involving about 30 space law experts of India, 31 further recommendations were included and the revised draft was circulated among all the members. This initiative had begun in 2002 under the then Chairman, Madhavan Nair. This Round Table Conference can be considered as a second such meeting for drafting the national space legislation, and presence of the Industry this time is commendable.
It is evident from all the speeches and opinions offered that everyone wishes to contribute to drafting the Indian Space Law. Our primary aims should be to benefit all sections of the country using space technology and to increase industry participation in the space sector to promote innovation and competitiveness. Following international obligations should only be a part of our efforts and not the primary purpose.
In his valedictory address, the High Court Judge of Karnataka Justice Raghavendra Chauhan commended the concerns voiced, the profound analyses and the solutions proffered by experts from the agency-academia-industry trinity. Observing that all the participants present wish to contribute in building the space technology potential of the country, he encouraged the private players to draft a space legislation by themselves as a response to the one mentioned by M Y S Prasad. Since the motivation behind the two drafts will apparently be the benefit of the country at large in the long run, he commented they might be complimentary to one another and therefore result in the formulation of a well drafted national space legislation.
The way forward is definitely to draft a national legislation immediately. However, the space policies can be enforced effectively only if all the major stakeholders are made to participate in their formulation. Given the multiple vantage points of the different stakeholders involved and the fact that law in general can be interpreted in several ways, drafting a space law that meets the approval of every player will be an intricate if not tedious task. With the additional requirement of adhering to obligations of the international space treaties India has signed, legal framework of space is certain to be elaborate and probably more complex than that of the terrestrial facets of the country.
In spite of the government’s recent encouragement for entrepreneurs through its “Make in India” initiative and FDI policies, the representatives from industry find the country lacking in providing them with a support structure. This communication gap can possibly be bridged through a dialogue between the government and the industry that will enable them to arrive at a mutually acceptable plan of action.
It will be commendable if the policy makers of the nation orchestrate a confluence involving the scientific fraternity, the industry representatives, space policy experts, attorneys in space law and academicians to arrive at a blueprint of a national space policy.
Rachana Reddy is a Scientist with the Department of Space, Government of India with her primary research focused on satellite data processing. She is a graduate of the Indian Institute of Space Science and Technology, Trivandrum and is currently pursuing a Masters Degree in Space and Telecom Laws from NALSAR University of Law, Hyderabad.