| State Responsibility, Liability, and the Failure of Legislative Governance |
| Submitted by,Pratyush MahapatraBBA, LL.B., 5th Year |
I. Introduction
The way we govern outer space is starting to change structurally. It was previously strictly controlled by sovereign States for scientific exploration, military advantage, and prestige, but has become increasingly commercialized in recent years through private industry involvement. The advancements of launch technologies (e.g., smaller satellites), the reuse of rockets, and data-driven technology being used to develop space flight has significantly reduced barriers to entry, so private companies can now participate in all aspects of space flight and operate across the entire value chain associated with it. This transformation is being referred to as the “NewSpace” era; it has changed the fundamental way we think about, operate in and accept risks associated with launching spacecraft.
As a result of this transformation, several space-faring nations are reforming their national laws about space to accommodate for these changes. They are making new laws to both maintain their Nation’s authority over space, to help manage the liability for international activities that take place there, and to remain compliant with their treaty obligations to the rest of the world. While India has demonstrated that it has developed advanced technologies and has an evolving private ecosystem, it is lagging regarding legislative reform in this area. The Indian Space Policy (2023) and establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe) indicate that there is strong intent on the part of the Indian Government to allow the commercial sector to participate. However, India currently does not have a comprehensive space law that has been passed through its Parliament.
This lack of legislation has resulted in a regulatory void in an area where executive authority should not solely govern the actions in the area of “Space”. The international nature of the activities in “Space” include many factors that a Government must consider, such as its obligations to other countries, the possibility of transboundary effects caused by a Space activity, and the international liability regime that a Government faces when engaging in a Space activity. This article contends that India’s reliance on executive policy as a substitute for binding legislation is not just a gap at the administrative level but is in fact a complete breakdown of the legal structure of the Indian legal system that provides for compliance with international space law. This breakdown of the legal structure is damaging to India’s compliance with international space legislation, undermines the regulatory authority of Governments, and exposes Governments to the possibility of unquantifiable international liability at a time when there is rapid growth in the area of private space activities.
II. International Space Law and the Non-Delegable Nature of State Responsibility
The principal body of international Space Law is the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space 1967 (Outer Space Treaty). Article VI of the Treaty specifies that states are responsible for all national activities in outer space and are liable to the international community for those activities, whether performed by government agencies or by private individuals. The state cannot delegate its international responsibilities to anybody, including private individuals; therefore, the state must be more vigilant in efficiently regulating the private sector.
States have two interdependent obligations under Article VI to authorize and supervise all private sector activity in outer space. These obligations are not optional or aspirational; they are treaty obligations and require that the state has a domestic legal system to give effect to the obligations of the Treaty, that allows the state to grant licences and to provide for ongoing supervision to ensure compliance. All of the treaty obligations assume that states will create laws and other processes in their national legal system to allow the international obligations of the Treaty to be enforced as legally binding domestic obligations.
Presently India follows a form or type of government that raises a basic or fundamental question regarding how executive authority can meet foreign laws that provide legally enforceable requirements, as well as being continued. Under traditional theories of international agreements, any obligation relating to liability and responsibility has to be fulfilled by an instrument that is binding only on the other party. As such, since policies may not be permanent, or possess democratic authority, and they are not enforceable, the state must ensure that policies will continue to cover obligations under a treaty that require ongoing regulatory control.
The results of this lack of a binding instrument are compounded with the Convention on International Liability for Damage Caused by Space Objects (1972), which creates an absolute liability for any damage done to persons or property located anywhere within earth’s atmosphere or outside of it. In instances where there are no statutory supervisory provisions to provide for any regulatory environment for private entities in these spaces, the state remains liable internationally for any actions of private entities in these spaces without having any corresponding domestic authority over such entities. This irregularity is what creates the gap between the governmental authorities of India, creating a regulatory black hole.
III. India’s Policy Centric Space Governance
The current state of space regulation in India has a contradiction in that it seeks to promote more space activity from the private sector but does not establish a legal framework for accountability. This is a troubling situation given that the Indian Space Policy 2023 has set forth very ambitious goals for private sector participation in launch services, satellite operations, and the various downstream applications of these activities. However, while doing so, it failed to create the necessary statutory support for the establishment of a legally accountable regulatory system for private space activity.
The regulatory authority and supervisory function over the activities of the private sector with respect to space is assigned to IN-SPACe which serves as a one-stop regulator for all activities in the private space sector, but IN-SPACe receives its regulatory authority from the executive branch of the Indian government rather than from any elected body, thus creating serious constitutional and administrative law issues. Regulatory agencies or bodies that are permitted by legislative authority to exercise the coercive powers such as licensing, compliance monitoring and enforcement should be created through legislative authority in order to conform with the principle of separation of powers, legal due process and procedural fairness.
Without the required statutory foundation for its regulatory functions, the actions or decisions made by IN-SPACe are vulnerable to being challenged in the courts as lacking the necessary legal authority, arbitrary in their exercise of authority and lacking adequate safeguards for the protection of legal rights of affected parties. The absence of the statutory foundation for the regulatory role of IN-SPACe creates an unstable environment for investment in the private space sector in India, erodes the confidence in the space governance framework in India as well as creates a situation in which the regulatory authority is perceived as lacking an adequate legal basis for regulating private sector space activities.
The prolonged failure to implement the Space Activities Bill, 2017 further illustrates the abdication of responsibility by Parliament through their inaction. The need for domestic legislation on space has been repeatedly acknowledged by Parliament, yet Parliament has remained silent about enacting such legislation. The lack of action in an area of high risk, potential for irreversible damage and the potential for international liability is indefensible. Uncertainty in space law does not equal neutrality; instead it provides a mechanism to shift the burden of risk from private actors to the State while preventing the State from exercising its authority to regulate effectively.
IV. Liability without Legislation: The State as the default Risk Bearer
To this extent, the International Liability Regime (ILR) of space activities exposes India’s continuing development and regulation through its vacuum of statutes or laws regulating its liability exposure.
Under the Convention on International Liability for Damage Caused by Space Objects, 1972, India can face unlimited liability for damage caused by a space object launched from its territory, and this liability has no fault requirement, it is both automatic and international.
On a domestic legal perspective, India does not have a complete and comprehensive statute to allocate risk to private operators, insurers, and the State.
Policy-based indemnification clauses have been used to make up for the lack of statutory liability regimes; however, these indemnity clauses are inherently less efficient, enforceable, predictable, and transparent than statutory liability regimes for managing catastrophic risks.
The lack of a statutory liability cap, clearly defined insurance thresholds, and a legislative framework for structuring indemnities will leave the private sector operators exposed to excessive uncertainty and will place the State at a disproportionate level of international risk as a result.
If this imbalance continues, it will turn India into a default last-resort insurer, assuming liabilities without the corresponding level of regulatory leverage. The result will be an economically unfeasible and legally incoherent position.
A mature commercial space ecosystem can provide a clear framework for allocating liability, pricing risk, developing insurance markets, and planning for long-term investments. Without this clarity in India, both sovereign and private interests will be severely compromised.
V. Comparative Jurisdictions: Legislative Preparedness as a Precondition for Privatization
Comparative analysis indicates that India’s traditional policy-based approach is inadequate. In the United States, recognizing that private launch services would emerge, the government passed the Commercial Space Launch Act in 1984 to create an all-encompassing system of licensing, safety oversight, and liability sharing. The Act created a legal structure that allowed for private innovation while allowing the Government to maintain control and comply with treaties.
The United Kingdom established their own legal framework for both orbital and suborbital space activities through its Outer Space Act of 1986 and later the Space Industry Act of 2018. These Acts create procedures for authorization, obligations for indemnification, powers of enforcement, and dispute resolution processes, thus codifying the requirement that nations fulfil their international obligations as a matter of domestic law.
India’s failure to develop a legislative-based framework on which to regulate space activities cannot be justified as “strategic restraint.” Rather, it illustrates India’s failure to develop legislation in a time period where it was necessary to be legally certain about space activities. Other nations have developed systems for Government supervision and liability while India is still using executive policies that lack democratic legitimacy and legal permanence. Therefore, India’s divergence from the other models is untenable in an area of law subject to international responsibility.
VI. Toward a Statutorily coherent Indian Space Law
i) The passage of a comprehensive Parliamentary Space Statute
A comprehensive space law for India should be enacted by Parliament rather than by executive policy. This statute should expressly incorporate the responsibilities of India under the Outer Space Treaty and the Liability Convention to internalize the responsibilities of the State into Indian national law. Enactment by Parliament will ensure democratic legitimacy, legal permanence and judicial enforceability of the law when compared to the lack thereof with policies created by the executive branch. The activities undertaken in outer space are irreversible and are high-risk, therefore, silence in legislation is no longer constitutionally or internationally acceptable.
ii) Statutory Empowerment of IN-SPACe
As an independent regulatory authority IN-SPACe should be empowered through legislation that provides for defining its jurisdiction, powers and responsibilities to ensure independence. The statute must clearly set out IN-SPACe’s authority to issue licences, monitor compliance, conduct inspections and take enforcement actions including imposing fines and suspending licences. The discretion afforded regulators must have limits and be dictated by rules including the requirement to issue written orders with reasons and an avenue for review on appeal. Without statutory authority IN-SPACe will lack institutional strength and therefore place investor confidence and the credibility of regulatory authorities at risk.
iii) Establishing licencing and authorisation frameworks for private operators through statute
The legislation requires a licensing framework that is transparent and rules-based and which applies to launch operations, satellite operations and downstream services. The criteria for the issuance of a licence should relate to technical capability, financial solvency, conformity with safety standards and orbital sustainability. The promulgation of a timeline for decision making around these criteria and the establishment of a regulatory framework with published guidelines is critical to creating a predictable environment and reducing arbitrary decision making. A codification of the authorization framework would provide an avenue for India to fulfil its obligations under Article VI of the Outer Space Treaty and give private operators predictability, thus facilitating their ability to participate commercially over the long term in the Indian space industry.
iv) Statutory allocation of liability and requirement of insurance coverage
The legislation must clearly allocate liability between the State and private operators, and must also establish the thresholds for the third party insurance required for private operators, statutory caps on liability and structured frameworks for indemnification of private operators by the State. The establishment of liability and other insurance related requirements is critical to preventing India from becoming the default risk bearer under international law. The clear allocation of liability assists the insurance markets in establishing risk pricing, providing a mechanism for the insurance markets to participate, and aligning Indian legislation with the international absolute liability obligations of the Liability Convention.
v) Development of Space Debris Mitigation and Sustainability Regulations
The provisions of the Act should clearly incorporate the obligations of space debris mitigation and orbital sustainability based on the UNCOPUOS Guidelines. The licensing process should require a plan for post-mission disposal, along with a protocol for collision avoidance and data sharing. The potential for irreversible damage caused by orbital congestion supports the notion that operators cannot voluntarily comply with sustainability goals. The inclusion of these obligations in Indian law would demonstrate India’s commitment to responsible governance of its space activities and bolster its standing in international norm-setting processes.
vi) Developing Dispute Resolution Models
There should be a model for dispute resolution specifically addressing technical, commercial, and liability issues related to space activity. The Act should allow for the establishment of Tribunals or arbitration models specializing in resolving disputes regarding space operations. To attempt to resolve space dispute issues through traditional civil courts may be inefficient due to the lack of institutional capacity to properly try complex and specialized space dispute cases. Such a process would reduce costs, increase confidence in investment, and promote prompt and efficient resolution of disputes occurring in a sector where delays could cause substantial financial and operational impacts.
VII. Conclusion
India is now actively pursuing its aspirations in space while at the same time continuing to have a great deal of uncertainty concerning the legal basis for these pursuits. The continued reliance on the policy-based approach to the development of India’s space program creates a regulatory void with little or no neutrality or with a great deal of uncertainty. This uncertainty places great risk on the state’s ability to govern the space program; causes significant uncertainty for private sector actors; and creates a situation in which those who hold the state accountable are the international community.
As a result, there is a need for India to have an accountable framework in place to provide sufficient and satisfactory protection to the entire space sector. Until the time when the Indian Parliament passes a comprehensive legislative framework for the development of India’s space program, India will remain in a precarious state of being legally and normatively vulnerable to the international community.
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