Introduction

1.1        On 21 June 2018, the Senate referred the provisions of the Space Activities Amendment (Launches and Returns) Bill 2018 (the bill) to the Economics Legislation Committee (the committee) for inquiry and report by 13 August 2018.[1]

1.2        The bill seeks to amend the Space Activities Act 1998 (Space Activities Act) to:

• broaden the regulatory framework to include arrangements for launches from aircraft in flight and launches of high power rockets; and
• reduce barriers to participation in the space industry, by amending approval processes and insurance requirements for launches and returns.[2]

1.3        In his second reading speech, the Hon. Dan Tehan MP, Minister for Social Services, explained:

The bill will support innovation and investment and provide additional flexibility to adjust to the changing operational environment of the space industry, while balancing safety and risk of potential damage with the national interest.

The global space sector is worth over US$345 billion, and growing at 10 per cent annually.

Australian businesses represent just 0.8 per cent of this industry internationally: a disproportionately small share considering our immense capability in space-related sectors, including our immense advanced manufacturing capability, and our world-leading work in fields such as automated mining and precision agriculture.

Combined with our expertise, the extraordinary growth of this global industry makes it vital for Australian businesses to be able to participate with minimal regulatory burden, while maintaining Australia's international obligations.[3]

Conduct of the inquiry

1.4        The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting submissions. The committee received 22 submissions, which are listed at Appendix 1.

1.5        The committee thanks all those who have assisted with the inquiry.

Background

Review of the Space Activities Act 1998

1.6        On 24 October 2015, the then Minister for Industry, Innovation and Science, the Hon. Christopher Pyne MP announced a Review of the Space Activities Act (review). The government would review legislation governing civil space activities in Australia to 'ensure it appropriately balances Australia's international obligations with encouraging industry innovation and entrepreneurship'.[4]

1.7        The terms of reference for the review included whether the Space Activities Act:

1. Supports innovation and the advancement of space technologies.
2. Promotes entrepreneurship and private investment in Australia, as well as opportunities for Australian firms to compete globally into the future.
3. Appropriately protects the Commonwealth against potential liability claims in relation to current and future civil space activities conducted in Australia or by Australians.
4. Adequately addresses emerging issues such as management of the space environment and technology advancement or convergence.
5. Appropriately aligns with other related Australian legislation and/or Australia's international obligations, and removes unnecessary regulatory burden.
6. Provides the necessary authority to support Commonwealth led civil space activities (government only).[5]

1.8        Consultations undertaken as part of the review included a stakeholder forum held on 24 February 2016 at Parliament House. Public consultations were held between February and April 2016 and are published on the government's website (www.space.gov.au).

1.9        The Department of Industry, Innovation and Science, (the Department) engaged Professor Steven Freeland[6] to undertake an analysis of the public submissions (the Analysis Report), which was released in August 2016. On
24 March 2017, the Department released a Legislative Proposals Paper, outlining a number of key proposals for change to the regulatory framework in response to issues identified during the review process.[7] Public submissions for feedback on the Legislative Proposals Paper were open from 28 March to 17 April 2017.[8]

1.10      The bill was introduced in the House of Representative on 30 May 2018.[9]

Review of Australia's Space Industry Capability

1.11      On 13 July 2017, Senator the Hon. Arthur Sinodinos, then Minister for Industry, Innovation and Science, announced a review of Australia's space industry capability, to be led by an Expert Review Group, chaired by former CSIRO chief executive Dr Megan Clark AC. The purpose of the review was to build on the existing Australia's Satellite Utilisation Policy (2013), and the findings from the review of the Space Activities Act by 'developing a strategic framework for the Australian space sector that supports leadership, innovation, opportunity and entrepreneurship across the sector along with our broader national interests'.[10] The government received the report from the Expert Reference Group on 29 March 2018, and the Australian Government response to the report was announced on 14 May 2018.[11]

Australian Space Agency

1.12      On 25 September 2017, the Hon. Michaelia Cash, then Acting Minister for Industry, Innovation and Science, announced the government's commitment to establish a national space agency in order 'to ensure Australia has a long-term plan to grow its domestic space industry'. The Expert Reference Group was tasked with providing advice on a charter for the new space agency, which is included at Appendix 6 of its final report.[12]

1.13      The establishment of the Australian Space Agency was announced in the 2018–19 Budget, with the government committing to provide $41.0 million over four years to grow and establish a national space industry.[13]

1.14      The Australian Government response to the Expert Reference Group's report on the Review provides further information on the establishment of a new Australian Space Agency:

On 1 July 2018, the Australian Government will establish the Australian Space Agency on an ongoing basis. It will perform its functions as set out in the Agency's Charter, which will be finalised within three months of commencing operations.

The Australian Space Agency will be located within the Department of Industry, Innovation and Science. In addition, the Australian Space Agency will develop close linkages with federal departments and agencies as well as state and territory governments and international agencies to ensure a whole of government approach is taken in respect of civil space activities.

The establishment of a statutory basis for the Australian Space Agency will be considered after a review of its operations that will commence within four years of the establishment of the Australian Space Agency.[14]

1.15      The Australian Space Agency's responsibilities will include authorising Australian space activities under the Space Activities Act and the associated legislative framework, and engaging in international discussions affecting space regulation, such as treaty negotiations.[15]

1.16      Dr Megan Clark AC, Head of the Australian Space Agency, observed:

Every day space provides essential data for banking, TV, internet access, and GPS to simply know where you are. Space underpins almost every part of the broader economy helping farmers seed a crop between the rows of last year's crop, marine vessels navigate, and emergency crews get up to date information. Growing how we use space will change how we live and work including providing new opportunities for communication in regional and remote areas. Space will be a defining domain for human endeavour and will change what we do on Earth. 

[The] Agency's purpose is to transform and grow a globally respected Australian space industry that lifts the broader economy and inspires and improves the lives of Australians. This will be underpinned by strong international and national engagement.[16]

Overview of the bill

1.17      According to the Explanatory Memorandum (EM), the bill seeks to amend the Space Activities Act to address the changing landscape of the space industry. This changing landscape includes the new space industry participants, such as smaller emerging businesses and additional involvement by universities. In addition, the types of activities being undertaken are changing.[17] In his second reading speech, the Minister noted:

The global space sector is a major source of technological advancement that provides broader applications and benefits across industry and society—not just in space exploration, but in sectors spanning communications, defence, mining, transportation and agriculture, to name but a few.[18]

1.18      The bill seeks to:

• include licensing arrangements for launches from aircraft in flight;
• streamline the approvals process for launches and returns;
• balance safety and risk of potential damage with the national interest in a changing environment;
• adjust insurance requirements to appropriate risk levels and international norms;
• reduce barriers to participation for small Australian space industry companies;
• increase non-compliance penalties to reflect the seriousness of damage to people and property; and
• introduce safeguards for high power rocket activities.[19]

Name of the Act

1.19      The bill seeks to amend the short title of the Space Activities Act to better reflect its scope. The Legislative Proposals Paper noted the current title does not reflect the limited function of the legislation, which is to regulate the launch and return of space objects.[20] The proposed new short title is Space (Launches and Returns) Act 2018. [21] The bill also seeks to amend the long title of the Space Activities Act to include high power rockets as follows: An Act about space activities and high power rockets, and for related purposes.[22]

Commencement

1.20      The proposed commencement date of the bill is either the day of proclamation, or 12 months from the date of Royal Assent. The EM explains that the delayed commencement date is intended to provide sufficient time for the subordinate legislation to be drafted, so the full regulatory package can commence at the same time.[23]

Rules instead of regulations

1.21      Proposed section 110 to the bill seeks to amend the legislation to refer to the making of rules instead of regulations. According to the EM, this change will provide increased flexibility, subject to the limitations set out in the section, as the rules can be updated when necessary to maintain currency with changing government policy. The EM states:

• New subsection 110(1) makes it clear that the Minister may, by legislative instrument, make rules for matters required or permitted by the Act and necessary or convenient for carrying out or giving effect to the provisions of the Act.
• New subsection 110(2) provides that the rules must not: create an offence or civil penalty; provide powers of arrest or detention, or entry, search or seizure; impose a tax; set an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in the Act; or directly amend the text of the Act.
• New subsection 110(3) makes it clear that despite subsection 14(2) of the Legislation Act 2003 the rules can apply, adopt or incorporate, with or without modification, any matter contained in any other instrument or writing as in force or existing at the time when the provisions of a legislative instrument commence.[24]

Insurance requirements

1.22      The EM notes the measures in the bill seek to balance the risk of damage to persons and property, with the benefits of increased participation in the Australian space industry. Consistent with international practice and standards, the bill seeks to reduce the level of financial responsibility, and therefore insurance, required by participants, and adjust the proportion of risk carried by the Commonwealth.

1.23      As such, the bill seeks to significantly reduce the current insurance requirement of the Space Activities Act of an amount not less than $750 million (or maximum probable loss). The proposed measure provides that the insurance required for each authorised launch or return will be specified in subordinate legislation ('rules'), noting that the amount will not exceed $100 million. The EM notes that the reduced insurance requirement is consistent with comparable requirements in other nations. The details of the insurance requirements will be moved from the Act to the rules to allow for greater flexibility to update requirements as the space industry evolves.[25]

Regulation of space activities and high power rockets

1.24      Part 3 of the bill relates to regulation of space activities and high power rockets. The bill provides a simplified outline of this Part:

• The operation of a launch facility in Australia requires a launch facility licence.
• A launch of a space object from a launch facility in Australia, from an Australian aircraft that is in flight or from a foreign aircraft that is in the airspace over Australian territory requires an Australian launch permit or an authorisation certificate.
• A launch of a high power rocket from a facility or place in Australia requires an Australian high power rocket permit or an authorisation certificate.
• A launch of a space object from a facility or place outside Australia by an Australian national requires an overseas payload permit or an authorisation certificate.
• A return of a space object to a place or area in Australia requires an Australian launch permit, a return authorisation or an authorisation certificate.
• A return of a space object to a place or area outside Australia by an Australian national requires a return authorisation or an authorisation certificate.
• The Minister may take into account the security, defence or international relations of Australia in deciding whether to grant a licence, permit or authorisation under this Part.[26]

1.25      The bill seeks to repeal Divisions 2 to 6 in Part 3 of the Space Activities Act which deal with licences, permits and authorisations and replace them with new Divisions 2 to 6A that provide the terms and conditions for launch facility licences, Australian launch permits, Australian high power rocket permits, overseas payload permits, and return authorisations.[27]

1.26      The EM notes that the inclusion of Australian high power rocket permits 'recognises the evolving nature of space technologies and provides a regulatory framework for the safe launching and return of these rockets.'[28]

1.27      The new Divisions also apply penalty provisions in respect of any breaches, and are intended to ensure safe industry participation, as well as encourage investment and innovation through legislative simplification.[29]

Legislative scrutiny

1.28      The EM states that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.[30]

1.29      The Parliamentary Joint Committee on Human Rights considered the bill in its Report 5 of 2018 and made no comment.[31]

1.30      In its Scrutiny Digest 6 of 2018, the Senate Standing Committee for the Scrutiny of Bills raised concerns in relation to proposed subsection 110(3) in schedule 1, item 187 to the bill. Proposed subsection 110 provides a general rule making power. The Scrutiny of Bills committee was concerned that proposed subsection 110(3) provides that those rules may incorporate external material into the law. In particular, it noted:

The explanatory memorandum provides no explanation as to what type of instruments or documents may need to be applied, adopted or incorporated, nor does it explain why it would be necessary or appropriate to incorporate matters in instruments or writings as in force from time to time. It merely restates the operation and effect of the relevant provisions. Nor does it explain whether such incorporated instruments or documents will be made freely available.[32]

1.31      The Scrutiny of Bills committee sought advice from the minister with regards to its concerns.[33]

Financial Impact

1.32      The EM states that the bill will provide for a person making an application for a licence, permit or authorisation under the Act to pay the Commonwealth the relevant fee prescribed by the rules. The prescribed fees will operate on a cost recovery model. Setting out the prescribed fees in the rules is intended to provide greater flexibility, allowing the cost recovery model to be updated as required, subject to periodic review.[34]

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