Private participation in the space sector in India-need for a robust space law

Contributed by: Samvad Partners






Introduction:


The space sector in India has predominantly been under the realm of the Indian Space Research Organisation (ISRO). While ISRO’s vision is to harness space technology for national development and pursuing space science research, it is also engaged in several commercial activities such as providing space products, launch services and data services to customers worldwide. However, despite being in the forefront of space activities since decades, India currently occupies a minuscule portion of the booming world space economy.


Private sector participation in the space sector:


The space industry in India has hitherto seen a limited involvement from the private sector, where its role has been limited to supply of components, sub-systems and fabrication. In contrast, in other space faring nations like the USA, private companies have been playing a significant role in the space economy. Space X, which is a privately owned company, is the best example of private participation in the space sector in the USA. The significant achievements of SpaceX in the areas of aerospace manufacture and transportation, underscore the immense potential for development in space science and technology through private participation.


In June 2020, the Union Cabinet approved numerous reforms in the space sector with a view to enable and boost private sector participation in the entire range of space activities. The primary objective behind this move is to enable ISRO to focus more on research and development activities, new technologies, exploration missions and human space flight programme, Gaganyaan.


Formation of INSPACe and New Space India Limited


The Government of India, on 17 September 2020, approved the creation of Indian National Space, Promotion & Authorization Centre (IN-SPACe). IN-SPACe is a body intended to facilitate greater private sector participation in India’s space sector by acting as the single point interface between ISRO and anyone who wants to participate in space related activities or use India’s space resources. It is proposed that ISRO’s infrastructure and facilities would be made available to private parties approved by ISRO, the idea being to sufficiently equip the private sector to play a more engaging role.


New Space India Limited (NSIL) was incorporated in early 2019 and is under the administrative control of Department of Space (DOS). NSIL is the commercial arm of ISRO established with the primary responsibility of enabling Indian industries to take up high technology space related activities and is also responsible for promotion and commercial exploitation of the products and services emanating from the Indian space programme. NSIL’s first dedicated commercial mission was on 28 February 2021 wherein it successfully launched Brazil’s satellite Amazonia-1 along with 18 co-passenger satellites.


Space law regime in India


While the increased role of the private entities in the space sector is a welcome move, it leads us to a pertinent question on whether the current space law regime in India is robust enough to support the changes in the space sector.


The current space law regime in India primarily consists of the SATCOM Policy and the Remote Sensing Data Policy. In the end of 2020 the Department of Space, Government of India released the Space Based Communication Policy of India-2020 (Spacecom Policy) and draft Norms, Guidelines and Procedures for implementation of Spacecom Policy-2020 (Spacecom NGP-2020). The Government has also released a draft Space Remote Sensing Policy, 2020.


The Space Activities Bill:


The Department of Space had released the draft Space Activities Bill in 2017 (“Space Activities Bill’). In an article published in July 2020 the ISRO Chairman stated that the Space Activities Bill is in its final stages.


The Explanatory Note to the Space Activities Bill states “there is a need for national space legislation for supporting overall growth of the space activities in India. This would encourage enhanced participation of non-governmental/private sector agencies in space activities in India, in compliance with international treaty obligations, which is becoming very relevant today”.


Though well intentioned, the Space Activities Bill raises a few important concerns particularly considering the proposed private sector participation. Certain provisions may also have the effect of dissuading instead of encouraging the private players from participating in the space sector. A few key aspects/concerns are set out hereinbelow.


Liability-the critical aspect of space law


Liability for damage caused by commercial space activity is of vital importance in space law. It is also a key aspect of the two principal international instruments on space law being the Treaty Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (Outer Space Treaty) and the Convention on the International Liability for Damage Caused by Space Objects (Liability Convention).


Article VI of the Outer Space Treaty inter alia states that parties to the Treaty shall bear international responsibility for national activities in outer space whether such activities are carried out by governmental agencies or by non-governmental agencies.


The Liability Convention defines a “launching state” to include a state which launches or procures the launching of a space object and a state from whose territory or facility a space object is launched. Article II of the Liability Convention states that a launching state shall be absolutely liable to pay compensation for damage caused by its space object on the surface of the Earth or to aircraft in flight. Article III places a fault-based liability on the launching state in the event of damage caused elsewhere than on the surface of the Earth. It is clear from the above provisions that a state would be liable for damage caused by space objects launched by private players from the state’s territory or facility. The provision in relation to liability of the state for damages caused by private space activities thus assumes significant importance considering the foray of private players in India’s space sector.


Section 12 of the Space Activities Bill addresses the liability issue and inter alia states that a licensee shall indemnify the Central Government against any claims brought against the Government in respect of any damage or loss arising out of a commercial space activity. The section further states that the Central Government shall decide the quantum of liability to be imposed upon the licensee. It is noteworthy that claims for damages in the space sector could run into phenomenal amounts considering the quantum of investment into the space infrastructure. Having a blanket indemnity provision without any transparency and leaving the government to decide the quantum of liability is a major concern for private players from a risk perspective and may not be sustainable for the budding space private sector in India.


To promote the private sector, the government may instead consider a cap on indemnity approach taken by other prominent space faring nations where the state (as the launching state) assumes the liability for damages above a certain pre-defined limit. Further, it needs to be borne in mind that liability for space activities also differs significantly depending on the nature of the activity undertaken. Thus, having a blanket liability provision without taking into consideration the nature of the activity is also another area which needs to be relooked into.


Insurance


One of the terms for grant of a license for commercial space activity under Section 8 of the Space Activities Bill is the requirement for the licensee to procure an insurance against any liability incurred in respect of damage or loss suffered by third parties. This is another blanket provision without considering the nature of the activity undertaken. The viability of payment of large insurance premiums by entrepreneurs also needs to be factored in whilst deciding the quantum of insurance.


Intellectual property


Section 25 of the Space Activities Bill states that any form of intellectual property right developed on board a space object in outer space shall be deemed to be the property of the Central Government. To incentivise the private parties and to boost innovation the government should consider taking an approach like other space faring nations or at the least consider compensating the private parties for the intellectual property developed.


Space Debris-the looming issue in space activities


One of the terms of grant of license to a licensee is requiring the licensee to conduct its operations in a such a manner to prevent contamination of outer space or damage or pollution to the environment. Section 16 of the Space Activities Bill deals with punishment for causing damage or pollution to the environment. Considering that space debris is a critical issue in space activities it is crucial to address the same effectively and set out principles for mitigation of space debris in accordance with international guidelines. Having a blanket provision for punishment for causing damage or pollution to the environment may not be sufficient.


Further, the definition of “space activity” under Section 2 of the Space Activities Bill is very wide. The definition may be re-evaluated, and space activities should be segregated depending upon the nature of the activity and the level of governance and monitoring required for such activity.


Conclusion:


The participation of private sector in space activities is a welcome change and one which is long overdue. However, it is important that the Government takes adequate steps to formulate a robust law which not only protects its interests from an international law perspective but also strikes a balance with the interests of the private players while boosting the budding private space sector.


Contributed by Samvad Partners


The above article has been authored by Ms. Pinaz Mehta (Counsel).


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