Property Rights in Space
December 22, 2012
The 21st century will herald scientific and technological advancements we can’t even begin to imagine. With the advent of private companies embarking on space exploration it is only a matter of time before legal issues of one sort or another will come before the courts.
What kind of issues? Here’s a look over the horizon.
There are minerals on asteroids and even on the moon- including very rare and valuable minerals. One US company has announced plans to mine both minerals and water on asteroids.
With this kind of money involved there are bound to be lawyers looking for a niche and governments looking to tax, regulate and otherwise control as much as they can. This is not necessarily a bad thing but there will inevitably be headbutting between private industry and the government as this brave new world emerges.
Oh, and we haven’t yet even decided on how mineral claims on extra terrestrial bodies will be determined and administered…
Ever since space travel began in the 1950s, space enthusiasts have dreamed that the exploration of space would lead to the colonization of space by human beings. From Arthur C. Clarke’s visions of colonies on the Moon to the plans of the Mars Society today, the goal of human settlements on celestial bodies has inspired scientists and science fiction writers, and to a lesser extent politicians and entrepreneurs. But progress toward a permanent human presence in space has stalled. Scientific research conducted by people in orbiting labs like the International Space Station has contributed modestly to our knowledge of living in space. Unmanned satellites for telecommunications, defense, weather monitoring, scientific research, and other applications have proliferated over the last half-century. However, practical, economic development of space — treating it not as a mere borderland of Earth, but a new frontier in its own right — has not materialized. Still, the promise is as great as it ever was, and, contrary to popular opinion, is eminently achievable — but only if the current legal framework and attitude toward space can be shifted toward seeing it as a realm not just of human exploration, but also of human enterprise.
Space contains valuable resources. These provide a compelling reason for entrepreneurs, investors, and governments to pursue space exploration and settlement. Asteroids are known to be rich in valuable elements like neodymium, scandium, yttrium, iridium, platinum, and palladium, most of which are rare on Earth. Because of the high price that these minerals command, harvesting them from space could possibly justify even very costly mining expeditions. This is the hope of Planetary Resources, a company recently formed and funded by Google executives Larry Page and Eric Schmidt with the intent of mining asteroids. Similarly, Microsoft billionaire Naveen Jain has founded the company Moon Express, with plans to use robots to start mining the Moon — as early as next year, it claims. Meanwhile, Texas-based Shackleton Energy Company plans to mine ice in Shackleton Crater at the lunar south pole to provide propellant for planetary missions, and is raising funds for the venture now.
The basic technology for space travel necessary for off-planet development has of course existed for several decades; the United States did, after all, put a man on the Moon in 1969. And recent advances in spacefaring technology, like the SpaceX Falcon Heavy launcher, promise to reduce the cost of transporting people and goods to and from outer space. This new rocket will deliver about fifty metric tons of payload to low-Earth orbit at a price of $120 million, allowing material to be shipped to space for about a thousand dollars per pound — far less than the tens of thousands of dollars per pound that technologies like NASA’s retired space shuttle cost to ferry cargo. And if SpaceX or some other company can achieve the goal of partial or full reusability, the price of launching goods into orbit will likely drop much further, especially if market forces bring more competitors into the field.
Despite the progress in technology, and the appeal of valuable resources, space settlement has been hampered by the lack of a clearly defined legal regime for recognizing property rights in space under current U.S. and international law. There is in fact some slight internationally recognized legal precedent for retaining ownership of resources mined in space, as lunar samples returned to Earth on both U.S. and Soviet missions (the latter robotically) have been exchanged for other tokens of value. But actually owning the portion of the celestial body from which the resources are harvested — as in a traditional mining claim — is more problematic. Without legally recognized rights to buy, own, and sell titled property, it is difficult if not impossible to raise capital to develop land or extract the resources it holds. Property rights have long been considered one of the pillars of prosperity in the modern world, and their absence in space — due to the contingencies of the history of international law during the early space age — partly explains why we have not yet developed that final frontier.
A Brief History of International Space Law
International space law, such as it is, began to take shape during the space race, when outer space was viewed not as a potential frontier for development and settlement by private actors but rather as a competitive battlefield between the two superpowers in the Cold War, as well as a new realm for scientific discovery, led by government space agencies. The United States and the Soviet Union each sought to curtail the other’s political and military use of space; they found common ground, or at least claimed to, in the project of exploring space for the advancement of science.
An important precedent for the development of international space law was the 1959 Antarctic Treaty, which was meant to prevent the militarization of the Antarctic and to ensure that peaceful activities, particularly scientific exploration, be allowed to continue there. These were just the sort of aims that world leaders at the time were concerned with achieving through an international agreement governing space activities, and on September 22, 1960, President Eisenhower recommended that the principles of the Antarctic Treaty be used as a model for an international agreement governing space. But tellingly, because the Antarctic Treaty prevented any nations from establishing sovereignty and contained no provisions for granting property rights or regulating economic activity, resources in the Antarctic have gone undeveloped to this day. This stands in contrast to the emerging resource boom in the equally inhospitable regions of the Arctic, where much clearer property rights exist under the jurisdiction of Arctic nations.
Negotiations in the late 1950s and early 1960s between the United States and the Soviet Union on governing space activities culminated in the signing in 1967 of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies (better known as the Outer Space Treaty, or OST), an international agreement that remains the most important piece of international space law today. Just as the Antarctic Treaty was meant to preserve Antarctica as a place for international scientific cooperation, space-law historian Vladimír Kopal writes that agreement on the OST was guided by the principles that “outer space and celestial bodies are free for exploration,” and that they remain free from “national appropriation.”
Some parties to the treaty, particularly the Soviet Union, wanted space activities to be the sole preserve of governments. But negotiators from the United States managed to achieve a compromise in Article VI of the treaty that, as Kopal writes, “paved the way for the private sector to conduct space activities side by side with States and international intergovernmental organizations.” Under Article VI, signatory governments
bear international responsibility for national activities in outer space … whether such activities are carried on by governmental agencies or by non-governmental entities, and for assuring that national activities are carried out in conformity with the provisions set forth in the present Treaty.
By permitting non-governmental activities in space, albeit under government supervision, this section of the treaty allowed for the creation of the commercial telecommunications, remote-sensing, and spacecraft launching industries, which were then in their infancy and today are thriving. However, as Kopal notes, the treaty “does not contain any principles that would regulate economic activities for the purpose of exploring and exploiting the natural resources of outer space, the Moon and other celestial bodies.” At the time the treaty was negotiated, the issues of economic development in space seemed remote, and so diplomats set them aside as potential obstacles to finding agreement on what they saw as more pressing issues.
A dozen years after the signing of the Outer Space Treaty, a handful of countries proposed a new treaty aimed at governing economic activities in space: the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies. (Its informal name, the Moon Treaty, is somewhat misleading, since the treaty applies to all celestial bodies in the solar system, not just the Moon.) The principle behind this treaty is that resources falling outside the territories of nation-states — in this case, off-Earth resources — are “the common heritage of mankind.” This principle is modeled on the 1982 Law of the Sea Treaty, one of the aims of which is to regulate seabed mining. But as a 2009Economist article argued, the Law of the Sea Treaty would deny most of the rewards of prospecting to those who actually undertake it, making it a barrier to seabed mining happening at all: “Commercial miners want both a clear title to their holding and exclusive rights to exploit it. They also have to answer to shareholders.” This is one of the principal reasons that the U.S. Senate has never approved the Law of the Sea Treaty despite repeated efforts to muster the necessary two-thirds vote, most recently in summer 2012.
Fortunately, the Moon Treaty is essentially a failed piece of international law. Only fourteen states are signatories to the agreement, and none of these is a spacefaring nation. Nonetheless, the provisions of the Moon Treaty remain a potential disincentive to the economic development of space, and underscore the case for the United States to repudiate it by providing an alternative, more market-friendly legal approach to space settlement.
Unlike the Moon Treaty, all spacefaring nations are signatories of the Outer Space Treaty. But there remains a question of how property rights stand under the OST — whether they are permitted, outlawed, or neither. This issue has not been put to the test in any significant legal proceedings, but some analysts have argued that recognizing property claims would be explicitly prohibited under Article II of the treaty, which reads in part, “Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.” It is certainly clear that this part of the treaty prohibits nations from making claims of sovereignty off-planet; but whether private property claims are national appropriations depends on whether the recognition of these claims can be considered one of the “any other means” of national appropriation.
A later section of the OST can be interpreted to suggest that private property might count as national appropriation. As noted earlier, under Article VI, signatory states bear “responsibility for national activities in outer space” no matter whether those activities are conducted by government personnel or private citizens. But it is still not clear that the “national activities” referred to here would include private activities and property claims not made on behalf of a national government. As early as 1969, the distinguished space-law scholar Stephen Gorove argued in the Fordham Law Review that
the Treaty in its present form appears to contain no prohibition regarding individual appropriation or acquisition by a private association or an international organization, even if other than the United Nations. Thus, at present, an individual acting on his own behalf or on behalf of another individual or a private association or an international organization could lawfully appropriate any part of outer space, including the moon and other celestial bodies.
In a way, the very existence of the Moon Treaty (notwithstanding its paucity of ratifying states) undermines the notion that the Outer Space Treaty outlaws private property in space — for if it did, there would then have been no need for the Moon Treaty to outlaw it explicitly. At best, as Gorove argued, this is one among several issues that the OST leaves unclear.
Despite these ambiguities, an alternative property-rights regime would be most successful if it aimed to conform with the OST. After all, the OST is the basis of most current international space law, including subsequent treaties, such as the Rescue Agreement (1968), relating to astronaut rescue and return, and the Liability Convention (1972), which establishes how to adjudicate claims for incidents that result in harm to third parties. Hence the first step in any space settlement strategy is to find a means of establishing property rights in space that adheres to at least the letter of the Outer Space Treaty, and perhaps can be considered an attempt to clarify and expand upon it — rather than to engage in the much more difficult process of amending the treaty or negotiating a replacement…