On 29 July 2020, the UK Government opened a consultation, Unlocking Commercial Spaceflight for the UK, on three draft sets of regulations to implement the Space Industry Act 2018 and on accompanying guidance documents for licence applicants. The publication of this consultation and the draft regulatory instruments marks an exciting development in the UK’s commercial spaceflight ambitions. Our Satellite & Space Activities team considers some of the key topics covered under this consultation and the draft regulations, and what they mean for the space sector in the UK.
The recognition of space as an important contributor to the UK’s economy, society, national security and its role in shaping technological innovation is not new. The most recent statistics from the UK Space Agency show that the £15 billion UK space industry has continued to grow and more than £300 billion of wider UK GDP is supported by satellite services (telecommunications, meteorology, Earth observation and navigation).
However, in recent years, the importance of space as a strategic priority has become demonstrably more significant for the UK. In 2019, the UK Ministry of Defence announced its intention to scale up its military space activities and look to develop a Defence Space Strategy, and the Space Innovation and Growth Strategy 2014 – 2030 sets a target of the UK capturing 10% of the global market for space by 2030. In addition to increased national programmes and recent investments (notably the UK’s investment in OneWeb earlier this year), the UK increased its contribution to the European Space Agency (ESA) to £374 million per year (for the next five years from 2019), making the UK the fourth largest contributing ESA Member State after Germany, France and Italy.
The development of a UK spaceflight programme is an important part of the UK’s target to grow its share of the global sector in the next decade. The programme will involve commercial spaceflight technologies such as vertical and horizontal (air-launched) launches of small satellites from UK spaceports as well as the launch of sub-orbital spaceplanes and balloons. Underpinning the development of such an ambitious spaceflight programme is a robust regulatory framework. The establishment of this framework began with the Space Industry Act 2018, which became UK law on 15 March 2018.
The three sets of implementing regulations – the subject of the current consultation – are now the next step in establishing this spaceflight regulatory framework.
The lack of supporting regulations to date has not prevented the interest from the private sector - and support from the UK Government - in establishing spaceports in the UK. Following a series of studies, the UK Government announced in July 2018 that it will provide funding towards one of the sites under development in the UK, a vertical launch facility in Sutherland in north Scotland. Other spaceport sites in the UK include Spaceport Cornwall (to be used for horizontal launch) and the Shetland Space Centre.
In addition to these spaceport developments, which remain for the most part at an early stage, the UK has made efforts to create international partnerships for future launch activities from UK soil, such as the signing of the US-UK Technology Safeguards Agreement in June 2019 which aims to facilitate the participation by US companies in launch activities from the UK.
Much interest has been generated in the potential for UK spaceports, the possibility of satellite launch activities as well as human spaceflight. The scale of what the UK is seeking to achieve with this spaceflight programme might therefore explain the length and scope of the three draft sets of regulations (the main set itself containing over 250 regulations) which seek to address topics ranging from liability and licensing to environmental provisions for spaceport operations and informed consent of human spaceflight participants. The level of detail in the consultation and the questions asked of stakeholders underscore the importance of industry providing input to ensure that these regulations are workable to achieve the UK’s bold ambitions.
Outer Space Act 1986
The UK already has a well-developed framework for the regulation of space activities, which derives from the Outer Space Act 1986 (the “1986 Act”). The 1986 Act regulates activities carried out in outer space by UK nationals in the UK or elsewhere. The licensing process is managed, in practice, by the UK Space Agency which grants licences to cover launch, in-orbit operation for the lifetime of a satellite or both the launch and in-orbit operation of a satellite. The UK Space Agency makes available useful guidance on the licensing process under the 1986 Act, available here.
The current legal and regulatory framework under the 1986 Act has been subject to amendment since its entry into force and has, for the most part, proved to be a flexible framework capable of keeping up with technological developments and new space activities. For instance, following consultation with industry, the 1986 Act was amended (by the Deregulation Act 2015) to set a cap on an operator’s (formerly unlimited) liability to indemnify the UK Government for loss or damage caused by the licensed space object. The UK Space Agency has also made amendments to its assessment of third-party liability insurance requirements on licensees to make the process more streamlined and to more accurately assess the risk posed by different missions (including the possibility of waiving the third party liability insurance requirement for missions deemed low-risk).
Space Industry Act 2018
The Space Industry Act 2018 (“2018 Act”) is not intended to replace the 1986 Act but will work alongside it. In summary, once the 2018 Act fully enters into force:
This consultation asks stakeholders 84 questions which centre around the three draft sets of regulations and the various guidance documents accompanying them.
The draft sets of regulations are:
In addition to the draft regulations, stakeholders are invited to provide comments on the various accompanying guidance documents which include:
This consultation is broad in scope and the priorities of industry stakeholders in reviewing and responding to this consultation will likely differ – indeed, the regulations on the launch and in-orbit operations may be of greater interest to satellite operators and launch service providers than some of the proposed regulations on spaceport operations and range control services.
We have highlighted below some of the key points to take away from the consultation, the draft regulations and the guidance documents:
i. The relevant regulator for space activities
Regulation 3 of the 2020 Regulations appoints the UK Civil Aviation Authority (“CAA”) as the relevant regulator for commercial spaceflight and the associated activities to be regulated under the 2018 Act. The UK Government has indicated that it intends to produce further regulations to delegate certain functions currently accorded under the 1986 Act to the Secretary of State for the Department for Business, Energy and Industrial Strategy (the relevant UK Government department responsible for space activities), to the CAA.
This means that once the 2018 Act fully enters into force, the CAA will have regulatory function over all 2018 Act activities while the UK Space Agency will retain a regulatory function in relation to the licensing of overseas space activities under the 1986 Act.
ii. Different available licences under the 2018 Act
The 2020 Regulations contain detailed rules applicable to all licences under the 2018 Act, including the conditions for the granting of a licence, the eligibility criteria and prescribed roles for licensees, i.e. the roles that must be undertaken by individuals on behalf of a licensee, such as a security manager for a spaceport licensee and a launch director for an operator licensee.
The 2020 Regulations also set out rules specific to the various types of licences available under the 2018 Act:
iii. The proposed approach to licensing
Similar to the current approach taken by the UK Space Agency, the UK Government is considering adopting a traffic light system to assess the risk involved in the proposed activity, as part of an applicant pre-application engagement with the regulator. This traffic light system is proposed to only be used in relation to orbital operator licences because there is a wider diversity of missions and technologies in orbit and a greater range of risk profiles for orbital activities, compared to the types of activities covered by the other licence types under the 2018 Act. The use of the traffic light system is intended to be optional for prospective applicants and would not be a formal part of the application process. The ratings provided by the regulator (red, amber and green) will provide an early, non-binding indication of the potential level of risk of the proposed activity.
The consultation does not contain detailed guidance on the proposed traffic light system for the licensing under the 2018 Act which, like the current traffic light system used by the UK Space Agency for licences under the 1986 Act, would be a practice used by the regulator as opposed to being written into law. This area of the consultation will be of particular interest to space industry stakeholders, in particular future orbital operator licence applicants who may use this licensing system. The UK Government has indicated it will continue to engage with industry on the proposed regulatory approach and related matters such as charging schemes under the 2018 Act.
iv. Licence exemptions
Regulation 18 of the 2020 Regulations sets out the circumstances in which a person may be exempt from the requirement to obtain an operator licence. The exemption applies to the operator of a carrier aircraft where (i) the carrier aircraft is being used to transport a space object, launch vehicle or component part and not being used to launch the space object from the carrier aircraft (unlike a repurposed aircraft to be used to horizontally launch a space object) and (ii) the operator of the carrier aircraft has an air operator certificate acceptable to the CAA.
The UK Government indicates in the consultation that it is considering further exemptions from the requirement to obtain an operator licence, for instance, where only the procurement of the launch activity is being carried out within the scope of either the 2018 Act and/or the 1986 Act.
A significant point of interest for future applicants and licensees under the 2018 Act will be their potential liability for loss or damage arising out of the licensed activity - and so it is likely that Part 12 of the consultation (Liabilities and indemnities) will trigger a strong level of response from stakeholders.
Sections 34 to 38 of the 2018 Act contain the provisions relating to the liability of operators for injury and damage caused by their licensed activity; the obligation to indemnify the UK Government; and insurance requirements. The rationale for the inclusion of these liability provisions, as for the liability provisions under the 1986 Act, is to flow down to operators the UK’s liability obligations as a “Launching State” under international law (namely Article VII Outer Space Treaty 1967 and the Liability Convention 1972).
The liability provisions under the 2018 Act, and the 2020 Regulations, are broader in some instances than the liability terms of the 1986 Act. For instance, section 34 of the 2018 Act places strict liability on operators if their licensed spaceflight activities cause damage or injury in the UK (including the UK’s territorial waters). By contrast, the 1986 Act and subsequent UK Space Agency’s licensing guidance does not contain an explicit reference to strict liability for damage caused in the UK; the 1986 Act requires operators to indemnify the UK Government for damage or loss arising out of the licensed space object under their control and the UK Space Agency requires operators of most space missions (unless waived) to take out third-party liability insurance. The Government’s rationale for expressly including the strict liability provision under section 34 is “to ensure that the general public suffering injury or damage in the UK are entitled to the same compensation (without having to prove fault) as foreign nationals are entitled to under the [Liability Convention 1972]”.
As we mention above, the 1986 Act was amended to set a cap on an operator’s indemnity to the UK Government for loss or damage arising out of a licensed space activity; the current cap is set at €60 million for standard missions. The UK Government has indicated in the consultation that it intends to take a similar approach under the 2018 Act and limit an operator’s liability to indemnify the UK Government for activities carried out from the UK. It is worth noting that Regulation 207 of the 2020 Regulations sets out circumstances where this liability cap will not apply: the gross negligence or wilful misconduct of the operator in performing its obligations under the 2018 Act, or where the damage or loss is caused by the operator’s failure to comply with licence conditions, the 2018 Act or the implementing regulations. As gross negligence is not a recognised term under English Law it will be interesting to see if the term will be defined (we suggest it is!).
In relation to the liability of launch activities carried out from the UK, the UK Government has previously consulted on the merits of limiting the liability to indemnify the UK Government. In the current consultation, the UK Government has indicated that it is still in the process of assessing whether to cap the liability to indemnify for UK launch activities and will re-engage with industry once it has finalised a policy position.
Similar to the amendments introduced under the 1986 Act to cap an operator’s liability to indemnify the UK Government, the consultation indicates that the UK Government will maintain the policy on limiting the liability for activities licensed carried out from the UK.
vi. Spaceport safety
Part 9 of the 2020 Regulations sets out the provisions relating to spaceport safety and, in particular, the controls and requirements for carrying out spaceport operations. The regulations apply to any aspect of spaceport operations, during all phases of pre- and post-spaceflight operations, and are intended to work alongside existing UK law, namely health and safety legislation and legislation relating to the storage and handling of propellants and hazardous materials. With a number of UK spaceports now in active stages of development, the operators of these spaceports will be particularly interested in the requirements with which they will need to comply under the 2020 Regulations.
In addition to the conditions on operation, safety and the handling of hazardous materials with which a spaceport operator will need to comply, Regulation 153 of the 2020 Regulations requires spaceport licensees to have and maintain an emergency response plan. The UK Government recognises the inherently risky (and new) activity in the UK that is the operation of a spaceport. However it has looked to analogous examples to determine the type of emergency plan for spaceports and requires a licensee to have a plan similar to the type required for aerodromes under existing UK law.
The 2020 Regulations broadly cover three categories of security: physical, personnel and cyber. Regulations 157 to 172 cover the physical and personnel security requirements, including security in relation to individuals, security controls for payloads and launch vehicles and the surveillance of space sites. It is worth noting that further security provisions are applicable where US technology, data and equipment is being used and a US launch activity is taking place on a UK spaceport site. These security provisions are addressed in the consultation and are based on both existing export control regulation and the terms of the recently signed UK-US Technology Safeguards Agreement (mentioned above).
The cyber security aspect of space technology has become increasingly significant in recent years. It is therefore interesting to note that Regulations 173 and 174 set out specific rules on cyber security in relation to spaceflight operations. These rules are based primarily on existing principles which are supported by the guidelines of the UK’s National Cyber Security Centre and require a licensee to draw up and maintain a “proportionate and appropriate” cyber security strategy for the systems used for the spaceflight operations. Industry stakeholders should be aware that this security requirement applies to all licence types.
viii. Commercial sub-orbital human spaceflight – informed consent
The UK Government recognises that “it is crucial that a licensee informs the human occupants who are to travel on board of the risks involved”. Part 11 (Regulations 191 to 205) of the 2020 Regulations contain the rules relating to informed consent which, as the UK Government notes, have been inspired by US provisions about informing crew and commercial human spaceflight participants of the risks involved. These regulations prescribe rules for the consent form, the types of information to be given to spaceflight participants (including the current risk assessment in an easily understandable form) and the procedural and evidential requirements of consent.
It is worth noting that while commercial sub-orbital human spaceflight is one aspect of the UK spaceflight programme, it is clear that it is not the priority for the UK Government at this stage. This reflects the current reality that ‘space tourism’ remains at a relatively early stage, notwithstanding the continued interest in and development and testing of initiatives by various companies (mostly in the US). Having said this, the consultation contains five questions relating specifically to the rules around informed consent, and so this area of the draft regulations will be of interest to companies that are or may in the future be involved in commercial manned spaceflight activities from the UK.
The consultation is open until 21 October 2020 following which there is likely to be further engagement with industry. The UK Government intends to publish a further consultation in relation to certain aspects not fully covered by the current consultation, notably the insurance requirements under section 38 of the 2018 Act. The UK Government has indicated that it may respond to both this current consultation and the responses to the subsequent consultation on insurance requirements at the same time.