To Boldly Go Where No Man Has Gone Before: Commercial Activities under the Indonesian Outer Space Law

Shuttle Launch - Courtesy of NASA

By Stephen Igor Warokka and Bambang Dhanisworo

Space … the final frontier. Mankind entered the Space Age when Sputnik was launched into orbit in 1957. During the Cold War, the United States and the Soviet Union engaged in a full-fledged competition for supremacy in outer space through the Space Race. It was a race that Indonesia sat out. Now Indonesia is embracing the idea that space is the final frontier, providing opportunities in a wide array of areas, including technological advancement, new energy sources, and tourism.

Indonesia recently enacted Law No. 21 of 2013 regarding Outer Space (Outer Space Law). This follows Indonesia’s ratification of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (Space Treaty, 1967) and its three implementing regulations: Convention on International Liability for Damages Caused by Space Objects (Liability Convention, 1972); Convention on the Registration of Objects Launched into Outer Space (Registration Convention, 1975); and Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (Astronaut Agreement, 1968).

The Outer Space Law regulates outer space activities and their related aspects, e.g., security and safety, responsibility and indemnification, insurance, countermeasures against falling space objects (or debris), and the rescue of astronauts. The purpose of the law is, among others, to regulate and optimize the exploration and utilization of outer space and to protect the state and its citizens from any negative impacts resulting from this exploration and utilization.

Under the Outer Space Law, the government is mandated to act as implementer, supervisor, regulator and controller of outer space activities through the Ministry of Research and Technology (MRT). By virtue of the Outer Space Law, the government is represented by the MRT, which in turn coordinates a government institution, the National Institute of Aeronautics and Space (Lembaga Penerbangan dan Antariksa Nasional or LAPAN), to oversee space activities. The MRT and LAPAN are authorized to cooperate with other entities, e.g., Indonesian or foreign legal entities, foreign governments, and international organizations.

According to the Outer Space Law, LAPAN may involve national companies in the development of outer space technology, with an option to subcontract to foreign entities. It is interesting to note that the Outer Space Law provides that LAPAN can engage a national entity for spaceport construction but does not give it the option to engage foreign entities. This could be a controversial topic in the future since it contradicts the current construction rules where foreign construction entities may conduct their activities in Indonesia without establishing a legal entity in the country.

As a nod to international conventions, the Outer Space Law establishes restrictions on entities engaging in commercial activities in outer space. These restrictions are on: (i) locating, orbiting, or operating nuclear weapons and other weapons of mass destruction in outer space; (ii) testing nuclear weapons and other weapons of mass destruction in outer space; (iii) using the moon and other natural outer space objects for military purposes or other purposes that may put mankind in danger; (iv) conducting activities that may threaten the safety and security of outer space utilization; and (v) conducting activities that may cause environmental contamination and/or damage the earth and outer space environment.

The activities governed by the Outer Space Law cover outer space science, remote sensing, technology mastery, launches, and outer space commercial activities. These activities shall be performed with consideration of national interests, safety and security, and the development of science and technology and outer space professional human resources.

With regard to commercial activities, the Outer Space Law provides that such activities can be performed by legal entities established by both Indonesian and foreign law. This raises the question of how a foreign legal entity can operate in Indonesia’s space sector. The Outer Space Law does not yet offer comprehensive regulation of outer space commercial activities and it is still a question whether a foreign legal entity must invest in Indonesia to conduct outer space-related activities in Indonesia or if its presence as a permanent establishment is sufficient to conduct such activities. This issue needs to be resolved sooner than later, as the implementation of outer space activities may become crucial for Indonesia, especially as it relates to national security, natural resources (we are of the view that a satellite placed in orbit around Earth may be considered a natural resource as stipulated in the 1945 Constitution), and commercial issues.

While the Outer Space Law at the moment does not provide a comprehensive description of outer space commercial activities, an upcoming implementing regulation is expected to govern the requirements and procedures for such commercial activities and provide details on other activities governed by the Outer Space Law.

Some commercial aspects, however, are already covered in the data collection provisions in the Outer Space Law, particularly in the matter of satellite imaging. The Outer Space Law provides that LAPAN can obtain satellite images from data providers for both commercial and non-commercial remote sensing data collection. According to the law, high-resolution satellite images are subject to a commercial tariff. It is also stipulated that high-resolution remote sensing data for government institutions and regional governments shall be procured solely by LAPAN. Both provisions imply that there will be procurements for remote sensing data but, as stated above, it is still unclear how such procurements will be regulated.

Overseas entrepreneurs have begun to invest in businesses involved in the launching of outer space objects. Some companies have started to build commercial spaceports offering people the ultimate trip as space tourists. The Jakarta Post newspaper recently reported that investors were exploring the possibility of constructing a suborbital space tourism facility in Central Sulawesi.

With the enactment of the Outer Space Law, outer space commercial activities become more feasible in Indonesia. Though there remains a lack of regulatory detail, the Outer Space Law has set down provisions that offer guidance for companies involved in outer space commercial activities. For example, there are administrative obligations that must be undertaken by entities that will engage in such commercial activities. Entities that intend to engage in space launches are required to register every intended outer space object that will be launched with LAPAN.

Eventually, the Outer Space Law is also likely to require the entities to obtain an Outer Space Activity License and Launch Permit, which is expected to be covered in implementing regulations.

While outer space activities in Indonesia are still in the infancy stage, with the enactment of the Outer Space Law, Indonesia has taken a step toward realizing both the national security and the commercial opportunities of the sector. May the Force be with us all, because the sky is no longer the limit.

This article is intended for informational purposes only and does not constitute legal advice. This article should not be acted upon in any specific situation without appropriate legal advice.

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