Who Makes the Rules for the New Space Economy?

Q: What is space law right now and what developments can we anticipate?

Space law is a very underdeveloped field of international law. That’s understandable because until recently, activities in space were quite limited and primarily state led. The boom in commercial space companies and the plans by a number of nations to establish bases on the moon will necessarily lead to filling in the gaps, because the main legal instruments are very outdated.

The 1967 United Nations (UN) Outer Space Treaty came out of the Cold War. Aside from some security provisions, it provides only rudimentary and vague norms.

The UN’s subsequent Moon Treaty from 1979 was aimed at building on the 1967 Outer Space Treaty, but it was not widely ascribed to. It’s difficult to talk about that as effective law governing relations in space when the actual participants— the major space-capable states—are not parties.

If we think about how international rules developed in the past—the law of the sea, for example, emerged as people went out and tried things and inevitably there were disputes. Over time, the relevant actors in resolving their disputes—that process of claims and counterclaims—led to a body of norms, treaties, and international agreements.

With space law, we can, again, expect that parties going to space will run into situations that create conflicts that need to be resolved. They will devise arrangements that allow them to conduct their operations. As activities, technologies, and conditions develop and evolve, the rules will evolve with them. It’s not a coincidence that satellites are the most developed part of the space economy and that’s where the legal framework is most developed.

Q: What’s the forum for this rulemaking process?

We could say that in an ideal world every member of the international community should be involved in international lawmaking for space through a formal, “Let’s negotiate a treaty and set rules” approach, but a piecemeal approach is more likely.

For instance, the arrangements that are going to shape the activity on the moon are likely to happen between the parties because they have no incentive to involve or make any concessions to anyone else. Those arrangements might be simply coordination around a specific issue; they might be a broader bilateral agreement. But we have also seen coalition-building approaches.

The United States developed the Artemis Accords in connection with a long-term plan to establish a base on the moon. Since the accords were introduced in 2020, 43 countries have signed on. It is not a binding treaty, but in a sense, it represents a path of lawmaking through establishing nonbinding norms, shaping expectations by actors, developing practice and so on.

It’s my view that all international law is composed of instruments intended to shape decisions of participants. The Artemis Accords shape decisions because parties that join accept specific interpretations of the Outer Space Treaty relating to, for example, resources and safety zones.

Notably, China announced a competing plan connected to their own International Lunar Research Station (ILRS). More than a dozen countries have joined on. It’s unclear whether the ILRS principles will differ significantly from those outlined in the Artemis Accords since they have not been made public in the same way. This represents a lawmaking process through competing systems of public order, which could lead to a divergence in the norms but also to arrangements resolving disputes and conflicts.

Q: Would you walk us through what we might expect as lunar bases are established?

The moon is large, and theoretically, the whole thing is interesting. But there is a limited set of places to focus on in exploring and utilizing. The area where the different actors want to land and establish operations isn’t dispersed; it’s focused on the southern polar region, which has ice, and potentially other resources, to be used for fuel for machines and air for people. As such, it’s crucial to sustaining long-term human activity in space. And given that it’s a resource everyone will need, there will be disputes and conflicts.

When someone establishes a lunar station, they’re necessarily making use of a certain area and making it unusable for others. Some have said that amounts to a claim of sovereignty, which isn’t allowed under the 1967 Outer Space Treaty on the principles.

Further, once the base is there, if another country or company lands a rocket nearby, it would disturb the dust and loose material on the lunar surface which effectively sandblasts everything it hits. It would make solar panels inoperable; it would damage buildings and equipment. Because of that, the Artemis Accords recognize the need for safety zones around installations. People are also criticizing safety zones as a violation of the 1967 Treaty. It’s possible to make that argument. It’s also possible to argue the opposite. There are ocean-based installations which have safety zones; they aren’t recognized as claims of sovereignty.

It's my view that while we are figuring this all out, applying the rules from 1967 in a textual way would be useless. We’re better off recognizing that this is an underdeveloped area of law that needs to develop—if the circumstances change, it’s okay that the law changes as well. The changes in technology since 1967 represent a change in circumstances. Commercialization is also a major change in the circumstances. The law needs to evolve.

With the ocean, as technological capabilities developed, the rights and jurisdiction of states evolved with it. With increased security threats state sovereignty extended into the waters adjacent to the coast reaching up to 12 miles from shore in 1982; it’s their territorial sea. But as our capacity to extract resources from the ocean, seabed, and subsoil developed, we extended exclusive economic control of natural resources out to 200 miles and beyond.

I’m pointing to the law of the sea as an example of rules evolving. I don’t believe we can simply copy and paste the law of the sea into the books to get space law. There may be some comparable circumstances that can guide us, but there isn’t a one-to-one correspondence.

With space law, for now, we can set some general concepts about how we conduct activity in space, then conflicts among participants are going to shape the law and that law is going to shape new interactions, and those new interactions are going to shape new law.

Q: How is jurisdiction over disputes established in space law?

If you think about activities in space, it’s many different state and non-state actors carrying out activities in an area that don’t necessarily fall under any existing jurisdiction.

If there were a dispute between two U.S. companies, sure, they could go to a U.S. court. But if it’s a Chinese company and a U.S. company, you don’t necessarily have a forum to resolve the issue. And for disputes between states, there is no jurisdiction under the 1967 Treaty. If both countries agreed to grant the International Court of Justice jurisdiction, that could be a forum. But I don’t think anyone is likely to give such jurisdiction.

Many commercial disputes and investor-state disputes will be handled through international arbitration fora. But tribunals still need to have jurisdiction over disputes. One of those, the Permanent Court of Arbitration, has developed rules specifically around outer space activities and has arbitrators with expertise in the area. Dubai’s International Financial Centre Courts is also developing courts of space. Some tribunals may have jurisdiction under other treaties or contract but for many disputes consent would be required.

Q: Could international arbitration tribunals become the default jurisdiction for space activity?

They will likely play a very large role because in the next few years the issues that arise will emerge from the actors that are going into space. So commercial and investor-state disputes will likely be, effectively, developing law in outer space.

If that proves to be the case, there is a risk that law in outer space will be shaped in a way that optimizes norms for private interests and for the space-capable states without giving voice to those that are not involved.

In principle, the decision of an international arbitration tribunal is not binding on parties that are not part of the dispute. This is true for the International Court of Justice as well. International law doesn’t create precedent as we know it in domestic law. But that is just the theory, the myth so to speak; the operational reality, or code, is that when tribunals issue a decision, it creates at least an expectation for how subsequent disputes will be decided. Tribunals cite each other and the International Court consistently refers to its prior decisions.

We need to be aware that the disputes creating the norms in space are going to be among a limited number of repeating actors. In the near term, we’re not going to have 10,000 companies launching rockets and driving the space economy. Perhaps we will have 10 or 20 major private actors. And while many countries may have satellites or other space-based capabilities, a limited number of countries will be the leading participants. Additionally, there will be a limited number of venues and arbitrators, so the decision makers will also be repeat actors.

With a limited number of litigants and a limited number of decision makers, whether decisions are binding or not, whether decisions are confidential or not, everyone will know everything. That will shape expectations. Expectations shape decisions. That is lawmaking. There’s no way to avoid that.

So, we need to figure out how to bring societal considerations into space law. Currently tribunals are required to decide disputes solely on the arguments brought by the parties. The tribunals should not consider broader ramification or systemic considerations. Perhaps space-focused tribunals might be changed so that they can consider societal issues like equity or environmental concerns. Perhaps the interests of those outside the main commercial and national players are brought into space law some other way. Such as amicus briefs or defining certain fundamental issues as “non-arbitrable.” But finding some option is important.

Q: Where does domestic law fit?

Companies that want to operate in space must get a license from a country. Each country’s domestic laws form an important part of the rules shaping decisions of private actors in space.

In the early 2010s companies started thinking more seriously about extraction of space resources—mining the moon or even asteroids. But Article II of the 1967 Treaty has what was called a “non-appropriation principle”. And companies won’t pursue the extraction of resources if they’re not fairly sure they’ll get to keep what they mine.

So the U.S. passed the Commercial Space Launch Competitiveness Act of 2015, which recognized property rights in space under U.S. law. The Artemis Accords also recognize property rights as distinct from sovereignty or exclusive ownership. This is lawmaking. Call it interpretation or amendment the result is the same. Textuality has limited impact on the lawfulness of conduct and the law’s development when major changes in circumstances occur. As they have.

Now, countries have begun competing to attract space companies. Luxembourg adopted a legal framework that made it attractive enough that many space companies have made it their legal home.

A company providing launch services may have significant investment in infrastructure, so they are tied to a specific location. But many space companies, especially those in the space-to-earth and space-to-space economies, will be able to do their work from anywhere.

If a country offers less taxation or fewer regulatory obligation, there’s little reason not to go there for the license to operate. But where does that end? It risks a regulatory race to the bottom. We’ve seen this with tax and environmental law on Earth. If we had international rules which created a minimum standard for everyone, it would not be such a problem.

Q: An area we haven’t touched on is defense. How do anti-satellite weapons play into the development of space and space law?

Anti-satellite weapons are a serious issue that needs to be addressed thoughtfully. With a conventional war, the effects on third parties are limited. Whereas if two warring countries start shooting down each other’s satellites, that creates enormous amounts of debris, which could hit satellites belonging to other countries or private companies. Those satellites become debris that hits other satellites. The destruction could create a cascade effect. The debris could make crucial satellite orbits unusable for years. It would have tremendous impact on the security of other countries. It would have a huge impact on economies all over the world. It would have a tremendous impact on business. This is an area where business has an incentive to push for norms that stop anti-satellite weapons testing and proliferation.

The U.S. has a self-ban on testing of destructive anti-satellite weapons. That is a good example. Some other countries followed suit. The UN General Assembly passed a non-legally binding resolution banning destructive anti-satellite weapon testing, but the countries that objected or abstained were Russia, China, and India. All of them tested anti-satellite weapons. Again, to be effective, norms and rules need to include the relevant actors.

If both the Artemis Accords and the Chinese ILRS explicitly built into their programs a commitment not to develop or proliferate anti-satellite weapons, it would have had enormous impact. Every country that signs on to either one agrees. It becomes the expectation. That hasn’t happened yet, which is unfortunate.