Multinationals May Not Be Subject to the Outer Space Treaty
“The Outer Space Treaty (OST), which entered into force on 10th October 1967, has served as a foundation of international space law since the second decade of the Space Age.” The treaty on outer space was developed in an era of international relations when the state was the main actor or to a large extent the only actor. However, in modern international relations, this is not the case. According to the business news website, Investopedia, private multinational rocket production and operation company (MNC) SpaceX, has the potential to become a giant in the aerospace industry with a value of $120 billion. SpaceX is simply one of many corporations operating in the space exploration industry. This short essay will outline three main reasons why it may be difficult to hold MNCs such as SpaceX accountable for their actions in relation to outer space exploration.
First, Berk (2009) says that the International law of space was formulated at a time when space flight was done by states. This is reflected explicitly in the Treaty which opens with the following words: “The States Parties to this Treaty”. In 2017, Alphabet Inc. had revenue of $111 billion, If it was a nation-state, it would be number 59 based on Gross Domestic Product (GDP). SpaceX with a potential value of $120 billion would be slightly above that based on GDP. Despite being larger than some states, MNCs like SpaceX do not qualify as states and cannot be subjected to the OST. According to the Montevideo Convention of 1933 cited in A Murphy and V Stancescu (2017), there are four requirements for statehood: a defined territory, a permanent population, a government, and recognition from other states. MNCs have a government in the name of the board of directors or management which is similar to a head of state and cabinet in a state. MNCs also have a permanent population in the name of their employees. MNCs however by virtue of operating in multiple countries do not have a defined territory, and they do not have recognition from other states. Without fulfilling these conditions, MNCs cannot be subjected to a law that is meant to regulate the activities of states.
Secondly, this essay has established that MNCs by failing to fulfill the conditions of statehood cannot be subjected to the OST. However, Nation-States are the relevant entity in the OST and are responsible for the supervision of space activities of MNCs and are internationally liable for damages caused by the MNCs that are registered in or operating from its jurisdiction. Based on this, MNCs should be held accountable for their actions with regard to outer space exploration. However, investment and economic activity coming from MNCs often outweigh the consequences of violating international treaties, giving states more reasons to turn a blind eye to MNCs operating in violation of international laws within their jurisdiction. An example is Russia’s use of unsymmetrical dimethyl hydrazine (UDMH), a rocket fuel that is hazardous to the environment, which was in violation of the 1982 United Nations Convention of the Law of the Sea which requires states to adopt laws and regulations that prevent pollution of marine environments through the atmosphere. Russia was well aware of this but still opted to allow MNCs to use the fuel when launching from Russian because it was cheap, which made Russia a competitive player in the commercial space launch Market. It is therefore evident that states are unlikely to enforce the OST domestically on MNCs because the economic benefits of violating it outweigh the benefits of enforcing it.
Finally, with states unwilling to regulate MNCs or prosecute them for violations of the OST, an argument could be made that MNCs should be taken to the two international courts, the International Criminal Court (ICC) or the International Court of Justice (ICJ). With the ICJ, there is nothing much it can do about MNCs’ activities in relation to the OST because its mandate is “to settle inter-state legal disputes with the consent of both parties.” Having established that the MNCs do not qualify as states, it means they are not covered under the mandate of the ICJ. The ICC, on the other hand, is obligated to take action on crimes committed on the territory of a state party, or a by a citizen of a state party if the domestic courts are unwilling to take action. While MNCs are legal persons, they are not citizens and for that reason, they are also not covered under the jurisdiction of the ICC, which makes it difficult to regulate their activities under the current space law regime.
To conclude this essay has outlined why is difficult to hold MNCs accountable for their action regarding outer space exploration, first because they are not states and thus not directly subject to the OST which is designed for application states. Secondly, the essay looked at how states willingly avoid regulating MNCs’ space activities for economic gain and finally how the failure of states to regulate MNCs’ activities and violations of the OST cannot be rectified by either the ICC or the ICJ due to their nature of not being states and natural persons or citizens.
