The Impact of a Space Real Estate Market on the Africa Space Industry

The New Dawn satellite is one of Africa's multilateral satellites, jointly launched for communication. Image source: biztech

Understanding Space Real Estate

Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made. The buying, leasing, or acquiring of landed properties and improvements upon it (such as houses, offices, or other structures) by means other than the building of such property could be a better and more economical alternative, compared to developing it by yourself. This real estate style applied on earth has been seen as a possibly viable alternative to property acquisition in space.

Space real estate market is, in simplest terms, is proposed to be a mirror of earth-based real estate. In this market, states and private persons can lease or sell space objects which, under the Liability and Registration Convention, are owned and/or under the jurisdiction and control of such aforementioned persons — in this case, country. 

While this seems like a promising market, the challenges facing the transfer of ownership between a launching state and a non-launching state are quite numerous.

A space object, according to Article 1 of the Liability Convention, “includes component parts of a space object as well as its launch vehicle and parts thereof.” While avoiding the technicalities involved in defining a space object, this much is certain; space objects include the following; satellites (and components of the satellite orbiting the earth, or any other celestial body), rockets launched into space as well as component parts of the rockets, objects constructed in space, like the International Space Station. 

Merits of Space real estate 

Having a real estate market for space can lead to cost-sharing among nations, similar to a lease and sublease on earth, for the usage of space properties. The heft of the prices of rockets and its components, as well as costs of launching, play a huge part in the expensive nature of space travel. Thus, it is safe to assume that cutting out the process of launching, where possible, would present a more affordable shared-cost option in space operations. Furthermore, the option of renting or buying in instalment can prove beneficial to countries in the global south.  

A natural consequence of this alternative route is that spacefaring and space operations will become convenient to begin, as perfectly orbiting space objects could be bought or leased as soon as the necessity arises, among parties who are not launching states. The resulting ease of undergoing space activities, a benefit in its own right, will further spur interests in the space scene. 

Implications for the Africa Space Industry

By application, the realisation of the market would ensure that if, for instance, Kenya requires the operation of a weather satellite in a particular orbit, Kenya could apply for the lease or outright purchase of any satellite already in space which fits Kenya’s specification, and simply transport it to a preferred orbital location, even if Kenya is not a launching party with regard to the satellite. This simple alternative would save Kenya the cost of building and or launching the satellite which includes the cost of the rocket, while also creating a healthy habitat for international partnerships between African states like Kenya and interested foreign states. This would accelerate Africa’s access to the already emerging market. 

In terms of benefits to the African Space Industry, the reduced cost of engaging in space operations will ensure increased participation in space operations, as the opportunities once considered exclusive to the “big players” of space, will become accessible and available for use. Access to geospatial data will also spur economic advancements.

The increased trade relationships between purchaser and seller or lessor and lessee, among African nations, will also, in no small measure further intra-continental and multilateral relationships, to the benefit of the African Space Industry. It would contribute to Africa’s growth and development through collaboration, cooperation and sharing of costs between African states, as well as between African states and non-African states, potentially fostering the realization of Africa’s Agenda 2063. We could have a situation where Uganda and Rwanda will share the cost of leasing an Earth Observation satellite to gather data. 

According to the Second Ordinary Session For The Specialized Technical Committee Meeting On Education, Science And Technology (Stc-est), regarding the question of how Space can address and resolve Africa’s challenges, some of the weaknesses identified via the SWOT situational analysis includes; disjointed continental efforts because there are no data management or data sharing policies, limited funding on a continental scale that is allocated for space science and technology. One of the ways the session proposed to address the weaknesses includes the establishment of “a continental space programme that is able to promote programmes and projects that foster intra-continental partnerships by strengthening the existing nodes of space and in-situ capabilities”. The potential intracontinental cooperation and collaboration between African states in the course of buying, selling, leasing, mortgaging, etc. of space objects, including circumstances where states involved are launching parties, as well as where not all states are launching states, will in no small measure attend to this approach.  

The above represent a few of the beneficial importance of space real estate habitat. However, the realization of space real estate market faces legal challenges which threaten any purported transfer involving a non-launching state.

However, there are inhibitions…

Article II (1) of the Convention on Registration of Objects Launched into Outer Space provides that “When a space object is launched into Earth orbit, or beyond, the launching State shall register the space object by means of an entry in an appropriate registry which it shall maintain.” A launching state, according to the same Convention, can either be “A State which launches or procures the launching of a space object” or “A State from whose territory or facility a space object is launched.”

Additionally, article VIII of the Outer Space Treaty provides as follows; “A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body. Ownership of objects launched into outer space, including objects landed or constructed on a celestial body, and of their component parts, is not affected by their presence in outer space or on a celestial body or by their return to the Earth”.  

The implication of the above legislation is that when a state launches a space object into earth’s orbit or beyond, such state will be required to register such a space object. Further, by provisions of Art VIII of the Outer Space Treaty, the state that registers such a space object shall have jurisdiction and control over the space object and its personnel. 

This provision has its benefits; however, it is the major obstacle to the realization of space real estate market. This is because the article seemingly precludes the transfer of jurisdiction and control between states, where one state to such intended transfer is not a launching state, with regard to the space object being launched. This transfer is the main ingredient for the legal and treaty-backed realization of the market. 

It is important to note that in practice, the purported transfer of ownership from state A to state B has been done repeatedly, as earlier said. The mechanism for this is that State A, which had registered the space object in question, deregisters itself with the United Nations subsequently allowing State B to register with the United Nations, thus gaining jurisdiction and control. Despite the ingenuity of this approach, it is limited to circumstances where both parties to the transfer are launching states, as only launching states, by virtue of Art II of the Registration Convention, are capable of registering a space object. This leaves the persisting need for a change in legislation as the requirement of being a launching state defeats the whole purpose of reduced cost, as well as increased convenience. 

The operations of a lease, hire purchase, or sale agreement, which necessarily and ultimately includes the transfer of jurisdiction and control, temporarily or permanently, will be seemingly impossible or extremely unlikely. In the example given earlier, Kenya, upon possession of said satellite will not have acquired jurisdiction and control of it, especially if Kenya is not a launching party. Thus, Kenya’s use of the satellite will be presumably subject to the control of it by the party from which Kenya acquired the satellite. 

Understandably, such an obstacle exists in the Outer Space Treaty because, being enacted over 50 years ago, the draftsmen could not have envisaged present-day realities.

Future needs for enabling the Space real estate ecosystem 

Dynamism and adaptability are two of the essential features of any good law; this is because laws are made for a society to aid the progress and development of such a community and not stifle it. Consequently, it is proposed that the Space treaties be modified to include a properly regulated framework which can ensure the legal transfer of jurisdiction, control, as well as liability between states and or private entities. This would alleviate the cumbersome process of deregistration and registration amongst parties that are both launching states to the Space Object in question, the seeming illegality pervading the transfer between a launching state and a non-launching state, and finally, cater to the present issue of liability, which Frans Von Der Dunk summarizes as follows: “a transfer of ownership in orbit may raise questions of applicability of the license handling such liabilities, or more fundamentally in case of an international transfer, of jurisdiction of the still-liable State over the operations of a foreign entity which may result in damage that the State would have to cover under the Liability Convention”.

This would allow access to the billion-dollar opportunity that is the space real estate market, by providing an effectively regulated medium for the treaty-backed temporary or permanent transfer of jurisdiction and control from a state party to another state party or parties, and perhaps, private citizens.

 

© Space in Africa 2020

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New Report: The 2020 Edition of African Space Industry Annual Report is now available. It presents data and analyses on projects, deals, partnership and investments across the continent. It also provides analyses on the growing demand for space technologies and data on the continent, the business opportunities it offers and the necessary regulatory environment in the various countries.

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