At the end of last year, the House of Representatives Standing Committee on Industry, Innovation, Science and Resources (Committee) handed down its report into Australia’s space industry and the associated legal framework: ‘The Now Frontier: Developing Australia’s Space Industry’. The report makes 38 recommendations directed at improving policy and legislation in order to facilitate growth in this sector. This blog post considers some of the most significant recommendations.
The last round of reforms occurred when the Space Activities Act 1998 (Cth) was amended and renamed the Space (Launches and Returns) Act 2018 (Cth) (Act), following a long period of consultation and review. The amendments were focused on opening up access to small to medium enterprises, including by dramatically lowering the insurance requirements for launch licenses and other monetary barriers. This was balanced by the introduction of a stronger framework of civil penalties to deter non-compliance with the requirements of the Act.
The amended Act also sought to accommodate technological developments in the way payloads were launched and the move away from government controlled space programs towards greater involvement by private companies. However, not all stakeholders were convinced that the reforms went far enough to modernise the Act in the global context, or that the amendments created a regulatory regime that strongly encouraged innovation and investment. The current process of review and the resultant recommendations provide a welcome opportunity for further reform.
Separating the industry engagement and regulatory roles of the Australian Space Agency
The report recommends that consideration be given to separating the industry engagement and regulatory functions of the Australian Space Agency (Agency), as well as transforming the Agency into a better funded statutory body engaging more staff who possess industry experience and expertise.
Since its establishment in 2018, the regulatory role of the Agency has been to administer the licensing regime under the Act. The Agency is responsible for granting the array of licenses and permits required under the Act, which include:
Given the Agency’s regulatory function, submissions to the Committee noted the potential for conflicts of interest or direction with the Agency’s concurrent role of industry promotion and advocacy. Other submissions proposed establishing the Agency as a better funded statutory body that would improve Government coordination and promote greater efficiency in the application assessment process. Although the Committee did not go as far as recommending the division of the Agency’s roles or its transformation into a statutory body, it did recommend that these matters be given “careful consideration” as part of the Agency’s upcoming post operational review.
Reducing the duration and complexity of the applications for licenses
It is perhaps no surprise that submissions to the Committee by industry and stakeholders focussed on reducing the regulatory burden. There was some frustration with the length of time it can take to obtain a license, with one submission estimating that even simple applications can take up to 6 months to approve. The Committee recommended that the Government consider further reforms to the Act, in consultation with industry, to simplify the application process so as to ensure the growth and competitiveness of the industry, the safe and responsible management of the space environment, and consistency with regulations in other countries.
One particular suggestion made by industry participants was to remove the requirements in the Act of having a “suitably qualified expert” undertake various assessments of the proposed space activity, and to instead have these assessments undertaken either in-house or by the Agency. Currently, the Act requires that risk hazard analyses and return safety plans must be performed or confirmed by a suitably qualified expert who is not a related party of the applicant. However, there are few external organisations that are able to provide such expertise and often greater expertise is located within the applicant company.
Industry participants also noted the inconvenience of having to obtain separate licenses from multiple jurisdictions. Currently a party seeking to conduct a space activity will need to ensure that they comply with all the necessary licensing schemes separately. For example, an overseas payload permit will satisfy the Australian requirements for launching a space object overseas, but the applicant will also need to obtain the appropriate authorisation from the host country. It was suggested that a system of mutual approval of licenses could be considered.
Minimising the costs involved in seeking licenses
Another recommendation was directed at minimising the costs involved in applying for a license or permit under the Act. The focus of the Committee here was on the partial cost recovery scheme, under which the Government has proposed to charge application fees of approximately $189,894 per launch permit application. Such fees were described by industry as making Australia an uncompetitive launch location. One industry submission identified that although Australia had certain technical advantages for launch operations, it would be a less suitable location if the costs for launches were “grossly disproportionate to other like-minded commercial space-faring nations”. It was noted that, in comparison, New Zealand charges $60 and the USA $0.
The proposed fee would pose a particular detriment to small launch vehicle operators as it fails to adequately take into consideration trends in the industry towards lower launch costs for small satellites. One industry participant observed that the proposed fee could be up to three times the value of the mission and rocket development. Ultimately, in a submission from the Queensland Government, this was said to lead to a negative impact on jobs and economic growth, particularly in a start-up industry that already faces high levels of competition from overseas. The Government has so far deferred the introduction of the partial cost recovery scheme until 1 July 2022, but the Committee has recommended that the Government consider further suspending or amending these fees.
The handing down of this report shows that the Government recognises the need for ongoing reform of the policies and laws regulating the space industry. If the Australian space industry is to remain competitive it is important for the Government to avoid disincentives to private enterprise such as the imposition of disproportionate license fees. The overwhelming response of industry is that the partial cost recovery scheme should be abolished all together.
Beyond that, however, there is a real need for reforms to decrease the complexity of the license application process and to improve the efficiency of the Agency in processing applications. Legislative amendments to the Act that make it simpler, quicker and less costly to apply for and obtain licenses and permits are needed to keep up with the pace of commercial activity in the rapidly developing space sector.