LEGAL CHALLENGES OF SPACE EXPLORATION AND COMMERCIALIZATION

ABSTRACT
A thorough review of current frameworks is required due to the substantial legal issues posed
by the quick development of space exploration and commercialization. The intricacies of
property rights, liability, and regulatory supervision are examined in this article in relation to
the private sector’s participation in space operations. The Outer Space Treaty, which forbids
national possession of celestial bodies but raises concerns over who owns resources taken
from them, is one of the main issues ¹ . To provide fair access and avoid disputes, the growing
involvement of commercial organizations in activities like space tourism and asteroid mining
creates new business models that need for precise legal regulations. Furthermore, there are
environmental issues raised by the growth of space debris that call for strong governance
frameworks and international cooperation. To ensure that space exploration activities benefit
all people while protecting the environment, this research seeks to emphasize the urgent need
for updated legal frameworks that can change to reflect the rapidly changing space
exploration scenario.
Keywords: Space Law, Commercialization, Property Rights, Liability, Outer Space Treaty

INTRODUCTION
The relationship between legal and business interests has grown more noticeable as humanity
approaches the dawn of a new age in space exploration. The emergence of private enterprises
exploring space, from satellite deployment to bold proposals for space tourism and asteroid
mining, has changed the face of space operations ² . Although these advancements hold the
potential to open previously unheard-of avenues for economic expansion and creativity, they also bring up important legal issues that need to be resolved to guarantee the fair and sustainable use of space.

The Outer Space Treaty of 1967, which lays down basic guidelines for the exploration and
use of space, is one of the major international treaties that form the basis of space law. ³
However, current legal frameworks are being put to the test in ways that their original
designers could hardly have predicted as private companies become more prominent in this
field. Legal scholars, legislators, and industry players have turned their attention to issues
including space traffic management, property rights over celestial resources, and
accountability for harm brought on by space activities.

Furthermore, there are serious environmental issues that need immediate action, such as the
growing traffic in low Earth orbit and the spread of space trash. Commercial endeavors,
scientific missions, and international collaboration in space exploration are all at danger due
to the absence of adequate governance systems to handle these problems.
The purpose of this study is to examine these complex legal issues related to space
commerce. We hope to add to the continuing discussion on how to best traverse this
unexplored area by examining existing legal frameworks and pointing out any gaps that
require attention. Our ultimate objective is to promote a strong legal framework that
encourages creativity while defending humanity’s common interests in the wide reaches of
space.
LEGAL FRAMEWORK DISJOINTED
The Outer Space Treaty (OST) of 1967 and several other international accords serve as the
main pillars of the legal system controlling space operations. The main goals of the OST,
which was droughted during the Cold War, were to stop space from becoming militarised and
to lay the groundwork for peaceful exploration. The treaty’s main clauses forbid putting
nuclear weapons in space, state that national appropriations do not apply to outer space and
require that celestial bodies be used only for peaceful purposes ⁴ . However, the OST does not
have comprehensive laws that handle modern commercial activities that have acquired
popularity recently, such private spaceflights and asteroid mining. There are now serious
legal uncertainties because of the lack of clear guidelines for these novel initiatives.

Many nations have passed domestic laws to control private space endeavors in reaction to
the constraints of international accords. As a result, the legal system is disjointed, with
different countries enforcing different laws on comparable actions. For example, some
nations may have rules that are favorable to private investment in space, while others may
have rigorous regulations or no clear guidelines at all ⁵ . This discrepancy can complicate
compliance and possibly stifle innovation in the rapidly growing space industry by causing
jurisdictional conflicts and ambiguity for businesses operating internationally. A unified
international legal framework that can successfully handle the complexities of contemporary
space activities while guaranteeing their safe and responsible conduct is becoming more and
more necessary as commercial interests in space continue to grow. ⁶

PROPERTY RIGHTS AND THE USE OF RESOURCES
Property rights and resource use in space are becoming more and more controversial issues,
especially in the wake of the 1967 Outer Space Treaty (OST). While one might declare
themselves the sovereign of outer space, including the moon and other celestial bodies, OST
stands in direct opposition to any attempt to exert such claims of sovereignty over celestial
bodies ⁷ . The treaty does not, however, specify precise rules for the ownership and
exploitation of resources discovered on these bodies. Different interpretations and national
regulations that permit the commercial exploitation of space resources are the result of this
ambiguity.
The U.S. Commercial Space Launch Competitiveness Act of 2015, which allows private
businesses to own and sell resources taken from celestial bodies, is one important
advancement in this field 8 . Supporters contend that by promoting investment and innovation
in space exploration, such legislation establishes the United States as a pioneer in the
developing space industry. Critics, however, argue that this strategy violates the OST’s tenets,
especially those pertaining to fair resource distribution and the possibility of monopolisation
by a small number of countries or businesses. They contend that permitting private ownership
might increase international inequality and spark disputes over resources.

The laws governing property rights in space are still complicated. Although ownership of
objects sent into space is permitted by Article VIII of the OST, it must be established on
Earth 1 9 . Theoretically, elements taken from celestial bodies—known as res communes, or
common heritage—could be owned if they are used to make new things, yet their original
state would still be unowned. This leads to a dilemma. Like fishing in international waters,
where people can claim ownership of their catch without claiming sovereignty over the
waters themselves, some scholars argue that as customary international law develops,
interpretations of the OST may change to permit resource extraction under specific
circumstances.
The Moon and its resources should be regarded as part of humanity’s common heritage,
according to the 1979 Moon Agreement, which further complicates things ¹⁰ . This treaty’s
efficacy as a regulatory framework is constrained by its limited adoption. International
cooperation is desperately needed to create a unified legal framework that strikes a balance
between national interests, global equity, and sustainability in space operations as countries
continue to create their own laws governing the use of space resources.

RISK AND LIBILITY MANAGEMENT
A framework for liability regarding damages caused by space objects is established by the
Liability Convention of 1972, which states that the launching state bears full responsibility
for any harm done to aircraft or the Earth’s surface because of its space objects. ¹¹ Given the
growing complexity of space operations, this convention was created to guarantee
responsibility and offer a compensation mechanism. However, there is now a great deal of
uncertainty around the allocation of liability between public and private organizations
because of the emergence of commercial operators in the space industry. The growing
number of commercial satellites and spacecraft raises concerns about liability for mishaps
involving these private endeavors.
Regardless of whether the launching state was directly responsible for the disaster, it is
nevertheless liable under the current system if a commercial spacecraft causes harm. Even if
a state was not directly involved in the launch or operation of the spacecraft, it could
nonetheless be held liable for damages caused by private corporations operating inside its borders under the strict responsibility concept 12 . As a result, this complicates international
relations and raises the possibility of conflicts by putting innocent states in a precarious
financial position due to events they did not initiate.
Furthermore, states and private businesses are at danger due to the unclear culpability
distribution. Governments’ risk management plans and insurance needs are made more
difficult by this uncertainty since they must account for possible liabilities resulting from
private sector operations. 13 Navigating this environment can be tough for private businesses;
they can have trouble finding insurance or figuring out how to divide risk among
stakeholders. As more organizations participate in space exploration and commercialization,
it is imperative that clear norms on liability distribution be established.

ISSUES WITH THE ENVIRONMENT AND SPACE DEBRIS
The increasing amount of space debris has become a serious environmental issue that is
endangering not only spacecraft that are now in operation but also the long-term viability of
space exploration and use. According to contemporary estimates, there are roughly 34,000
bigger objects in orbit, 128 million particles of debris smaller than 1 cm, and 900,000
fragments between 1 and 10 cm. Past satellite launches, accidents, and deliberate destructive
events—like anti-satellite tests—are the main causes of this debris, which has greatly
increased in number. For example, more than 3,500 additional debris bits were produced by
the Chinese anti-satellite test in 2007 alone. The growing number of satellite launches—2023
saw a record number of launches—increases the risk presented by this debris by creating
crowded orbits that increase the chance of collisions.
The problem of space debris cannot be adequately addressed by the legal structures that now
regulate space activities. Although there are regulations, like as the United Nations’ 25-year
norm for deorbiting retired satellites, there are no enforcement measures in place. It is
challenging to hold nations and private organizations responsible for their contributions to
space debris because of this regulatory gap. The possibility of “Kessler syndrome,” a
condition in which the density of objects in low Earth orbit rises to such a level that collisions
cause a cascade effect, resulting in an exponential increase in trash and making some orbits
useless, further complicates matters.

Environmental issues extend beyond Earth’s orbit to possible mining operations on asteroids
and the Moon, among other celestial entities. These initiatives bring up moral dilemmas
about humanity’s obligation to protect alien habitats. The possibility of mining could upset
fragile heavenly ecosystems and put current legal institutions to the test, which do not
sufficiently address the management of resources in space. In addition to the immediate
problems of dealing with space debris, humanity must consider the wider effects of its actions
on other celestial bodies as it ventures farther into space. Therefore, resolving these problems
calls for an all-encompassing strategy that incorporates stronger laws governing the reduction
and removal of debris as well as moral concerns for any future extraterrestrial exploitation.

CONCLUSION
Space commercialization offers previously unheard-of chances for scientific advancement,
economic expansion, and innovation. These developments must be counterbalanced,
nevertheless, by the creation of a strong legal framework that tackles new issues, guarantees
fair access, and encourages the peaceful and sustainable use of space.
Harmonizing laws and developing a complete governance framework that satisfies the
demands of the contemporary space age require international cooperation and
communication. Only then will humanity be able to protect the interests of future generations
while fully using the promise of space exploration and commercialization.

RERENCES & CITATIONS

1 Outer Space Treaty (1967), United Nations Office for Outer Space Affairs
2 National Aeronautics and Space Administration (NASA), “Commercial Space Activities: Opportunities and
Challenges.

3 Outer Space Treaty (1967), United Nations Office for Outer Space Affairs
4 United Nations Office for Outer Space Affairs. (1967). The Outer Space Treaty. Retrieved from UNOOSA

5 European Space Agency. (2020). National Space Legislation: A Comparative Study. Retrieved from ESA.
6 United Nations Committee on the Peaceful Uses of Outer Space. (2021). Report on the Legal Subcommittee.
Retrieved from UNOOSA
7 Outer Space Treaty (1967), Article II
8 U.S. Commercial Space Launch Competitiveness Act (2015).

9 Outer Space Treaty (1967), Article VIII.
10 Moon Agreement (1979), Article 11.
11 United Nations Office for Outer Space Affairs (UNOOSA), “Convention on International Liability for
Damage Caused by Space Objects,” 1972.

12 Ibid
13 National Aeronautics and Space Administration (NASA), “Risk Management in Commercial Space
Operations,” 2022.