Sustaining the Race to the Top in the Commercial Space and Satellite Sector

At the G7 Leaders’ Summit in Cornwall, delegates pledged to take action to tackle the growing hazard of space debris as our planet’s orbit becomes increasingly crowded. But how can this pledge be enforced? And, who will enforce it?"

ESG — environmental, social, and corporate governance — is the buzzword across diverse channels of investor and business commentary. The widely hailed concept of ESG is now seen as being integral (at least in the West) to sound corporate and investment strategy, risk management, and the promotion of ethical, responsible, and environmentally sustainable investment.

The “UN’s Guidelines for the Long-term Sustainability of Outer Space Activities” (LTS Guidelines) were adopted in June 2019 with the intention to provide guidance on the policy and regulatory framework for space activities, safety of space operations, international cooperation, capacity-building and awareness, and scientific and technical research and development.

The LTS Guidelines are important for setting an international policy agenda but, as voluntary guidelines, their effectiveness risks being limited by the uptake and success of their implementation at national level.

The U.K. government has sought to embrace the LTS Guidelines and made them an important part of its strategy to promote the development of the U.K.’s commercial space and satellite sector. The U.K.’s UNCOPUOS report of April 2021 “Update on our reporting approach for the voluntary implementation of the Guidelines for the Long-term Sustainability of Outer Space Activities,” identifies the LTS Guidelines as being integral to the U.K. government’s plans for implementation this summer of the country’s new space regulatory framework under the Space Industry Act 2018.

The ESG imperatives, increasingly driving investment decisions in the wider business environment, offer an opportunity for the commercial satellite sector to work closely with national regulators to make implementation of the LTS guidelines a reality. ESG, and the link to investment and even insurance decisions, could be the mechanism that forces the change in the approach of the space industry.

The LTS guidelines state: that “In supervising space activities of non-governmental entities, states should ensure that entities under their jurisdiction and/or control that conduct outer space activities have the appropriate structures and procedures for planning and conducting space activities in a manner that supports the objective of enhancing the long-term sustainability of outer space activities, and that they have the means to comply with relevant national and international regulatory frameworks, requirements, policies and processes in this regard”

The LTS guidelines recognize the need for regulators to balance government risk, safety, security and sustainable use and access to space, against the aim of encouraging commercialization, innovation and growth in the sector. Questions derived from the LTS guidelines that regulators, in relation to launch and in-orbit licensing, should be considering include:

• Can the applicant safely conduct the launch into orbit of the proposed vehicle and associated payload/platform? For example, does the applicant understand the hazards involved and evidence how launch and in-orbit operations will be performed safely and sustainably?

• Operational considerations for liability risk. For example, what is the possibility of encountering another object, the probability of a collision occurring and the likelihood of a resulting damage claim?

• Operational considerations for in orbit phase assessment. For example, the following should be assessed:

• The ejection phase – ejection of platforms from a launch vehicle;

• Orbit-raising phase – criteria to initiate the orbit-raising phase; who commands and monitors the orbit-raising; how is it performed;

• Constellation maintenance and the commanding and monitoring of satellites; and

• Planned and unplanned disposal – process/mechanism for disposal and conjunction management.

For satellite and space companies wishing to make themselves more attractive for investment, the LTS guidelines offer a tangible and ready reference point for at least part of their ESG strategy. The U.K. government’s promotion of investment in the U.K.’s space economy and the U.K.’s responsible approach to space evidenced by its support of the LTS guidelines are well aligned and the investment needs of companies can therefore be a mutually supportive mechanism for driving the success of the LTS guidelines in the U.K. by reason of their fit with companies’ investor ESG interest.

The synergy between the UN’s international direction to regulators through the LTS guidelines and ESG motivation for commercial companies and investors appears to be well-aligned. This offers welcome momentum for a “race to the top” for regulators, commercial operators, and investors alike.

Richard Hilton, CEO of GlobalTrust Ltd., said, “ESG is a rapidly growing initiative that crosses industries and aims to force meaningful change. Whilst we largely think about ESG activities being focused on the Earth’s surface, it’s just as important to take care of the area surrounding our planet. It is, after all, where we place satellites that enable so many things to operate in our everyday lives. It is a critical area that must be protected.”

National regulators competing at international level to attract high-tech satellite and space investment should deploy good forward-looking and enabling regulation for companies seeking favorable bases from which to license their operations. Regulators successfully implementing the LTS guidelines can engender a stamp of approval that effectively supports the commercial sector and aligns with its commercial aims by serving and supporting companies' and their investors’ ESG reporting needs. VS

Joanne Wheeler MBE, is the managing director of Alden Legal.

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