• SMM Law

Space Industry v. The Outer Space Treaty


Apollo 11 was one of the most prolific achievements in United States history. When Neil Armstrong planted the American flag onto the lunar surface, the United States not only won the space race against the Soviet Union, but also advanced the sophistication and capabilities of the human race as a whole. 50 years later, the United States is planning to go back to the Moon again, however, instead of NASA leading the charge into the cosmos, companies like SpaceX and Blue Origin are taking the initiative. A mission to become the first company to expand business practices to the Moon and beyond has begun. For example, Blue Origin is planning to establish bases on the lunar surface within a decade. Further, SpaceX is scheduled to orbit paying customers around Moon in 2023. Additionally, several companies have planned to mine helium on the Moon with robots. A boom in the commercial space sector is coming, it is only a matter of time. However, while American companies have moved the ball forward, Congress has failed to do the same regarding the laws that govern the commercial space sector. The Outer Space Treaty (“OST”), a treaty older than the Apollo 11 mission itself, maintains as the leading body of law governing the commercial space industry in the United States. As a result of the government’s failure to withdraw from the Outer Space Treaty, much of what the American commercial space industry plans to accomplish may be deemed illegal until new legislation is passed.

The laws contained within the OST that pertain to commercial activity in space are incredibly vague. This is because the OST was initiated during 1967, a period where commercial activity in space was not a realistic possibility. Of the three articles contained within the OST that concern commercial activity in outer space, Article II (the “Appropriation Clause”) serves as the largest roadblock for companies looking to conduct business in outer space. The Appropriation Clause states that outer space, including the Moon and other celestial bodies, is not subject to national appropriation. Essentially, many have interpreted this clause to prohibit American businesses from utilizing outer space and extraterrestrial land for commercial purposes. This interpretation of the Appropriation Clause is damaging to the aspirations of the American commercial space industry. Without a withdrawal from the OST by the United States, all the progress made by American commercial space companies—and the billions of dollars invested into these ventures—are in jeopardy of becoming a waste of time, energy, and money.

Despite the OST being the leading body of law in the United States governing commercial space practices, new laws have slowly emerged from the shadows of United States Capitol. For example, with the passage of the SPACE Act in 2015, commercial businesses gained the power to enforce property rights over objects and materials they harness in space and from celestial bodies. However, some interpret the SPACE Act as an explicit breach of the OST’s Appropriation Doctrine. Nevertheless, Congress has started to recognize the emergence of the commercial space industry as a major player in the economy. Given that the global space economy eclipsed $414.75 billion in 2018, it is in the best interest of the American commercial space industry that new legislation keeps getting passed and the OST gradually fades away in America’s rearview mirror.

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