Leiden Law Blog

Will YOU own the next space project?

Posted on by Neta Palkovitz in Public Law , 7
Will YOU own the next space project? Photo: NASA

The space industry is undergoing an interesting process, opening the market to private entrepreneurs and investors.

SpaceX provides a good example for a private commercial company with launch capabilities and the ability to operate transportation to and from the International Space Station. Further, private entities hope to lead the exploration of Mars and asteroid mining, recently, a mission to explore deep space was funded by private investors as well. And of course, there are several private companies that will operate sub-orbital flights for private space tourists.

While the above projects require massive investment in order to become operational, there are small-scale space projects that enjoy the financial support of the “average Joe”. A visit to “Kickstarter” reveals small space projects that were successfully funded by the website users, such as a sub-orbital spacecraft, a nano-satellite mission, an experimental mission of new miniature space hardware or other new projects that are still collecting funds.

While Kickstarter is an American web platform, there is a similar Dutch platform that focuses on equity-based crowd funding.

There is no doubt that these developments bring space closer to us all. Recalling the provisions of the Outer Space Treaty of 1967, which is the magna carta of international space law, the following question arises:

Should it be that simple to acquire a piece of the (space) action?

The 1967 Treaty does not restrict or forbid private space activity, however, according to its Article VI, the state will always be responsible (and consequently liable in most cases) for “national” space activities carried by non-governmental actors. The wording of this provision reflects a compromise between two opposite policies, on the one hand, the view of the former USSR according to which outer space should be accessible to states exclusively, and on the other hand, the American view which promoted non-governmental activities in outer space.

Getting back to the new developments in the private space sector, we can ask specifically:

  • Can a micro investment by a private entity in a space project trigger state responsibility by becoming a “national activity” of the state?
  • If so, should changes be made to the criterion of nationality as attributing private space activities to the state? (e.g. by amending the 1967 Treaty)
  • Should states restrict the possibility of crowd funding for space projects in order to avoid massive exposure to international responsibility (and possibly liability)?
  • If so, on the basis of which criteria?

Such questions are at the core of the development of private space activities, and they relate to law, policy and finance. Until regulatory progress will be made, space entrepreneurs will enjoy the relative freedom granted by default, as they lead humanity to new frontiers in outer space, and as their actions lead us, space lawyers, to new territories of legal thought.

7 Comments

Tanja Masson-Zwaan
Posted on April 18, 2013 at 00:09 by Tanja Masson-Zwaan

Interesting article on crowdfunding in The Space Review: http://www.thespacereview.com/article/2279/1, which also discusses the very limited success of Golden Spike;  the campaign is almost over, and they raised only about 5% of their goal. It seems like it’s not that easy to fund a space project with “free” money…

Tanja Masson-Zwaan
Posted on March 3, 2013 at 11:50 by Tanja Masson-Zwaan

After Golden Spike a couple of weeks ago, here is another asteroid mining project, unsing Indiegogo to raise funding, Stott Space, see http://stottspace.com

Tanja Masson-Zwaan
Posted on February 14, 2013 at 13:32 by Tanja Masson-Zwaan

Another private space company goes for crowd funding, see “Lunar Exploration Company Offers the Public a Chance to Participate”, see http://www.universetoday.com/99926/lunar-exploration-company-offers-the-public-a-chance-to-participate

Charlotte Thijssen
Posted on September 15, 2012 at 23:43 by Charlotte Thijssen

Interesting contribution!

Neta Palkovitz
Posted on August 26, 2012 at 21:36 by Neta Palkovitz

Thank you for the comments.

You are correct in the sense that the treaty does restrict activities in outer space, both governmental and private, assuming we consider claiming ownership as an “activity”. I wanted to emphasize that the treaty does not include additional restrictions on private activities (no entity, private or governmental, can own the Moon for example).

When it comes to mining the situation is a bit different as the treaty does not forbid extracting natural resources. The Moon Agreement even refers to the option of future extraction, stating the activity will be regulated in the future. The entities which are working to develop the possibility of mining asteroids commercially are in the opinion that they do not have to own the asteroid in order to perform the mining activities. A different approach, like the one you expressed, sees the non appropriation principle as forbidding commercial mining as they are connected to ownership rights and the activity will probably not be to the benefit of all mankind.

I believe that amending the treaty is not a must. Firstly, the treaty can be interpreted in ways which allow innovative private space ventures. Secondly, since we are in the sphere of public international law, state practice and opinio juris can help us create customary law which may promote private activities. Finally, amending such a treaty will not be an easy task, there are no “new space treaties” since the 70’s. This reflects the political challenges relating to regulation of activities in outer space. That is the reason why codes of conduct and guidelines are common in this context.

Matthew Maniscalco
Posted on August 25, 2012 at 23:12 by Matthew Maniscalco

I am not sure of the accuracy of the statement “The 1967 Treaty does not restrict or forbid private space activity”. 

As you explain later, the text of the treaty states that the acts of individuals will be interpreted as the acts of the state (for liability and other purposes).  Elsewhere in the treaties, it is clear that state actors (thus including individuals) cannot claim property rights in space.  As a result, the treaty effectively forbids private space activity, such as mining in space, because the material there is “preserved for all mankind” (and thus cannot be claimed by any of mankind). 

In my humble opinion, if we really want to encourage private investment in the development of space, we MUST amend the treaty not only to remove state liability for small-scale private actors, but to allow clear and reasonable ownership incentives to properly encourage private investment in space development.

Cesar Bernal
Posted on August 23, 2012 at 12:23 by Cesar Bernal

Even it is not 100% technical/engineering, which is my area, I have always been interested in this law side of the space.
I find the article very interesting. The space legal field is definitely full of gaps and opportunities. There are still some no man’s lands in this topic.

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