Memorandum in Opposition to Proposal to Weaken the Moon Treaty

by Dennis O’Brien (published in The Space Review March 3, 2018)

In two recent articles in The Space Review1, author Vidvuds Beldavs argues that the Agreement Governing The Activities Of States On The Moon And
Other Celestial Bodies, commonly called the Moon Treaty, must be revised so that investors in a future space economy can achieve a sustainable return
on their investments.  Although the creation of a sustainable economic model in outer space is essential for humanity’s future there, his proposed revisions
throw out the baby with the bathwater.

The Perceived Problem and Proposed Remedy

Mr. Beldavs’ main concern, shared with many others, is that the declaration in the Moon Treaty that outer space is the “common heritage of mankind”
(CHM) precludes the establishment of property rights sufficient to establish and sustain a space economy.  As stated in the first article, co-written with
economist Jeffrey Sommers:

How could the huge investments required for development of infrastructure and enabling technologies needed to develop a self-sustaining space economy
be justified unless investors on Earth can realize returns that are competitive with other investments?

If an investment cannot lead to rights to realize economic returns from the investment, it would be irrational. Rights to economic returns from investments,
or property rights, or use rights, are a necessary pre-condition of rational investment decisions. If the Outer Space Treaty (OST) excludes economic rights
to resources in outer space, how can a space economy even emerge?

To address this concern, Mr. Beldavs makes specific proposals in the second article:

I propose the following modifications to the Moon Treaty to clarify that the treaty is consistent with US national interests and the goal of advancing space
development. No doubt other suggestions would emerge, if this course were to be followed.

“Article 11, paragraph 1: [current language]
The moon and its natural resources are the common heritage of mankind, which finds its expression in the provisions of this Agreement, in particular in
paragraph 5 of this article.”

The definition of CHM in the Moon Treaty implies a concern with economic benefits to humanity as a whole. It creates an obligation that if it becomes
feasible to exploit lunar resources to increase economic benefits to mankind this should be encouraged. Revised text:

“The moon and other cosmic bodies and their natural resources are the common heritage of mankind to explore and to use. While the moon is a subject of
interest for mankind as whole this does imply that the moon and its resources are the property of mankind or that rents should be collected by an
international authority for their use, which finds its expression in the provisions of this Agreement, in particular in paragraph 5 of this article.”

(Note: It appears that Mr. Beldavs intended to say, “this does not imply that the moon and its resources are the property of mankind or that rents should be
collected . . .”  Otherwise the paragraph and his entire argument do not make sense.)

The short answer to these concerns is that the international regime of laws mandated by the Moon Treaty will provide private enterprise the necessary
legal rights and protections while ensuring that the benefits of commercialization are realized by all of humanity.  But that legal structure and the agency
that implements it must have the underlying legal and moral authority that the CHM and the Moon Treaty provide.

Analysis: The Treaty Provides Certainty for Commerce While Protecting the CHM

As an example, let us look at the most specific proposed revision of the Treaty, that the CHM “does [not] imply that the moon and its resources are the
property of mankind or that rents should be collected by an international authority for their use.”  We should first note that the “collection of rents” (aka
leases, use fees, etc.) is common on Earth whenever public resources are developed by private enterprise.  Although some public land is kept wild and
pristine, much of it is leased by governments to allow the extraction of minerals, growing of crops, and grazing of animals.  Payments to the government
allow the people of that nation realize the benefit of the use of their land.  So, too, would such payments allow all of humanity to realize the benefits from the
use of its common heritage.

The real issue at this time is how such payments would be collected and distributed.  A new agency, perhaps an Agency for International Development of
Outer Space, could be created to receive such revenues and determine their best use, including distributing them to less-developed countries.  The
structure, policies, and procedures of any such agency would need to be determined as part of the “international legal regime” created by the parties to the
Treaty.  But if the CHM was weakened and the authority to collect revenues was specifically removed from the Treaty, then there would be no legal basis
for such an agency and no incentive for the space-faring nations and companies to create a mechanism to share the economic benefits of space
commerce with the rest of humanity.  For all practical purposes, the Treaty would be dead.

Although some oppose such a regime of laws and regulations on a philosophical basis, most businesses want a legal regime that they can rely on to
reduce the uncertainty that investors deplore.  Even Beldavs and Sommers acknowledge this:

If rights to economic benefits cannot be guaranteed, there will be little if any investment. Property rights are one example of rights to economic benefits of
an investment. Mining rights and land use rights are other examples. Internationally accepted rules have not been developed for assigning mining or use
rights to resources on the Moon or elsewhere in outer space.1

“The most important point is that companies are asking for this regulation. It’s not really so much what the regulation is but that there is regulatory clarity.
Right now, because there are no clear regulations on these activities, companies are afraid.” - Mark Sundahl, director of Cleveland-Marshall College of Law’
s Global Space Law Center 2

“There is a need for an international regime, whether through adoption of a binding treaty or soft-law mechanisms, because it will ensure compliance with
the principles of international space law, increase legitimacy of space-mining activities, provide legal certainty to stakeholders, and develop an approach to
benefit sharing. An adaptive governance approach of addressing issues step-by-step and involving all actors in the discussion would be most effective.” -
Tanja Masson-Zwan, deputy director of the International Institute of Air and Space Law at Leiden University.3,4

The proposed solution is to allow the private ownership of property in outer space.  But the right to economic benefits does not require private ownership.  
Such rights can be guaranteed by the leases, use permits, etc. provided by the international agency that is established by treaty.  That is the kind of
certainty that allows for rational economic decision-making.

The alternative is uncertainty and conflict, resulting in costly litigation or worse.  According to Melissa K. Force, an attorney/consultant for the aerospace
industry, “Any action designed to resolve the issue [of use of outer space resources] without international agreement will ultimately be subjected to the risk
of litigation.”5

There seems to be a consensus that private enterprise needs legal certainty to assess the risk of any endeavor.  The only question is whether we establish
a legal structure through international cooperation or face inevitable conflict as nations try to enforce their own notions of “property” and “ownership”.

Leases are only one possibility for sharing the benefits of the use of outer space.  Another is a value-added tax, to be applied when anything of value is
brought into an economic system.  For example, the first time that hydrogen mined from water in space is sold for fuel, the VAT would be applied, with those
funds going to the CHM program.  Thereafter the resource would be treated like any other commodity.  Indeed, the VAT might be the primary method for
satisfying the CHM mandate for physical resources.  The fee-for-use model might be more appropriate for enterprises that generate income through a
service rather than a product, e.g., a hotel or other tourist attraction on the Moon.  This could even be applied to a private robotic Moon lander that
streamed a continuous image of the Earth for a fee.  It is precisely because such enterprises are imminent that a legal structure is imperative.

Another area of concern is intellectual property.  The space treaties seem to require that any technology that is used in the exploration and development of
outer space must also be shared with less-developed countries.  Mr. Beldavs and others fear that this would strip entrepreneurs of the protections provided
by intellectual property laws, particularly patent laws.  But the international regime of laws could satisfy the CHM by simply requiring that such
patents/technology be made available to others, not that it be free.  Enterprises would be required to share their advances, but they would still be able to
charge a licensing fee.  Exorbitant fees would be avoided by regulations capping them, just as is done with monopolies and regulated industries in
developed countries.  Reduced fees might be available for developing countries, perhaps subsidized from other revenues collected.  Again, the solution is
not to deprive the Moon Treaty of its equitable sharing mechanism, but to use it wisely and explore a full range of options.

Using the revenues created to assist developing countries is not just theoretical.  It is already possible to fund a space mission that directly engages such
countries.  The United Nations recently announced an agreement with Sierra Nevada Corporation to use SNC’s Dream Chaser reusable space plane to
carry the experiments of dozens of countries to orbit and safely return them when their science is complete.6  The technical plans are very detailed, and
outreach has already begun.  Only the funding is needed, funding that could come from benefits of space commerce that other countries/companies are
beginning to realize.

These examples demonstrate the variety of mechanisms that are available when adapting any legal regime to the many and varied subdisciplines of space
economics, another concern of the authors. The Moon Treaty itself acknowledges that any such equitable sharing of benefits must consider all interests:

An equitable sharing by all States Parties in the benefits derived from those resources, whereby the interests and needs of the developing countries, as
well as the efforts of those countries which have contributed either directly or indirectly to the exploration of the moon, shall be given special consideration.  
– Moon Treaty, Article 11, Paragraph 7(d).

Private enterprises are included in “those countries which have contributed . . .”, as defined in Article 14, Paragraph 1 of the Treaty.

The Reluctance of National Governments

With all due respect for those arguing against the Treaty and its protection of the Common Heritage of Mankind, it does not destroy private economic
rights.  Rather, it calls for the creation of an international regime of laws that protects those rights.  Those who perceive an economic advantage in
projecting their own country’s laws into space will fight that, but those who wish to benefit all of humanity will support it.

The current U.S. administration appears ready to fight it.  When it’s new Space Directive on returning to the Moon was announced in December, Vice-
President Mike Pence stated, “We will also ensure, lastly that the rules and values of space exploration are written with American leadership and American
values.”7  The charter of the Users’ Advisory Group of the revived National Space Council states that, “The UAG will provide advice and recommendations
on matters including, but not limited to . . . Strategies to ensure U.S. leadership in the economic development of outer space.”8

Scott Pace, the newly-appointed Executive Director of the Space Council, was even more direct:

“In a rapidly changing environment of nanosats, ‘mega constellations,’ and commercially available on-orbit servicing or rendezvous and proximity
operations, creating new legally binding agreements is unlikely to be timely or successful.  On the other hand, non-legally binding guidelines, based on
international consensus, can be reflected in national law and regulation. In this way, we can address rapid technical changes without subordinating U.S.
activities to new trans-national authorities.”9

The title of the Council’s latest conference is further evidence of the Administration’s intent: “Moon, Mars, and Worlds Beyond: Winning the Next Frontier”.
10  Although a couple of attendees, most notably National Security Advisor H.R. McMaster, spoke of the need to cooperate with other countries, no one
even mentioned international agreements.  The theme of the conference was to streamline United States laws and regulations to support the extension of
its commerce, corporations, and legal system into outer space,

Given this constant drumbeat against an international legal regime, Mr. Beldavs and others are to be forgiven for proposing to weaken parts of the Moon
Treaty to save the rest of it.  But it is important to keep the stronger language in the Moon Treaty, even if it is not officially ratified by the space-faring
nations.  As Mr. Pace acknowledged above, “non-legally binding guidelines, based on international consensus, can be reflected in national law and
regulation.”

The influence of an unratified but strong Moon Treaty is detailed in an article by Michael Listner, an attorney and Senior Contributor at DefensePolicy.Org:
11

Even with only six nations [now seven] ratifying the Moon Treaty, the fact that eleven other nations [now fifteen], including Australia, France, and India,
have acceded to or become signatories to the Moon Treaty creates a shadow of customary law that could grow such that non-parties could find themselves
overshadowed by the penumbra of the Moon Treaty, especially if those non-parties take no action to refute its legitimacy. . . .

A potential game-changer that could give strength to the shadow of the Moon Treaty is the possibility that either Russia or China could decide to throw its
diplomatic weight behind the Moon Treaty. The status of both countries as non-parties to the Moon Treaty contributes to its repute as a failed treaty;
however, the opposite would true if either or both nations at the very least signed or acceded to the Moon Treaty. Such an action would not only revive the
Moon Treaty’s reputation, but it would also expand the shadows of customary law engulfing parties and non-parties alike. . . .

Assuming that the Moon Treaty has no legal effect because of the non-participation of the Big Three is folly. The shadow of customary law and its ability to
creep into the vacuum left vacant by treaty law should not be underestimated. . . . The true test of the Moon Treaty both as treaty and customary law will
not come until the exploitation of extraterritorial resources becomes technically and economically feasible. The question is when that time comes, will the
shadow of the Moon Treaty have grown sufficiently to blanket parties and non-parties alike under the penumbra of customary international law?

The weakening of the CHM in the Moon Treaty thus would destroy not only its legal authority for an international regime of laws, but also its moral authority
to affect customary international law.  Humanity would cede control of its own destiny to the unseen hand of economic forces and political power.  This
would be a far greater “loss of sovereignty” than any loss feared by individual nations.

Secondary Concerns

Mr. Beldavs proposes a second revision to address the functions of the international legal regime called for by the Moon Treaty:

“Article 11. paragraph 5: [current language]
States Parties to this Agreement hereby undertake to establish an international regime, including appropriate procedures, to govern the exploitation of the
natural resources of the moon as such exploitation is about to become feasible. This provision shall be implemented in accordance with article 18 of this
Agreement.”

The revised text of Article 11, Paragraph 5 includes the idea that the international regime needs to be efficient, absorbing as few resources in its
administration as practicable. Its formulation should encourage commercial development of outer space to lead to greater benefits to humanity and
increased prospects for promoting higher standards of living and conditions of economic and social progress as called for in Article 4, paragraph 1.

“States Parties to this Agreement hereby undertake to establish an international regime, including appropriate procedures, to govern the exploitation of the
natural resources of the moon as such exploitation is about to become feasible. The international regime needs to be efficient and encourage commercial
development where this would be feasible. Multiple regimes need to be considered due to the very different conditions present on the Moon in contrast to
other cosmic bodies. This provision shall be implemented in accordance with article 18 of this Agreement.”

Although Mr. Beldavs’ intentions are laudable (and understandable, considering the drumbeat against “inefficient” and “inflexible” government), the
language he proposes would be better placed in the mission statement of any future agency, not the founding document that authorizes the creation of a
legal regime.  Founding documents create authority and set parameters for its use.  Efficiency and flexibility in implementation are assumed.  Although I
have no problem with the language, amending the Treaty just for that purpose opens the door to amending it for other purposes, which would be
disastrous.  It would be much cleaner – indeed, more efficient – to make such declarations part of the “international regime of laws” that are required to
implement the policies set forth in the Treaty.

Conclusion

Legitimate concerns have been raised about the viability of private enterprise in outer space under the “Common Heritage of Mankind” and the
“international legal regime” mandated by the Moon Treaty.  The proposed solution is to allow private property rights in outer space and to remove from the
Moon Treaty the authority to create economic mechanisms that would assure that all humanity would benefit from space commerce.

That solution is not only harmful to humanity, but also to free enterprise.  Businesses need the certainty that a legal regime provides to make rational
economic decisions.  Humanity needs the protections that a legal regime provides so that everyone will share the benefits realized from the exploration and
use of outer space.

We are currently living in an age when war, violence, and neglect are weighing heavy on the human spirit.  People are increasingly feeling out of control of
their own lives and are losing hope for the future.  Our mission, the mission of the Moon Treaty, is to restore that hope, to create that shining city on the hill
that will light the way for all.  

This is not the time to shy away from our responsibilities.  There will be only one time when humanity leaves its home planet, one chance to establish a
pattern that will ripple far into the future.  Full implementation of the Moon Treaty will protect businesses and release the creativity and innovation that have
long been the hallmark of free enterprise.  At the same time, it will ensure that all of humanity benefits from space exploration and commerce, that no one is
left behind.

As Klaatu reminded us, the choice is ours.


Dennis O’Brien is a retired attorney and former member of the NASA-Hastings Law Project.  He recently founded The Space Treaty Project (www.
spacetreaty.org) whose mission is to educate people about the benefits of the Moon Treaty.  His latest book, Major Tom (www.amazon.com), explores
space law and space commerce in the context of a race to establish the first permanent human settlement on the Moon.

FOOTNOTES

1. “The Emerging Field of Space Economics: Theoretical and Practical Considerations”, Vidvuds Beldavs and Jeffrey Sommers, The Space Review, Dec.
18, 2017. http://www.thespacereview.com/article/3393/1
“Simply Fix the Moon Treaty”, Vidvuds Beldavs, The Space Review, Jan. 15, 2018. http://www.thespacereview.com/article/3408/1
“Vidvuds Beldavs is strategist and grant writer for the national science centre FOTONIKA-LV of the University of Latvia, Riga, Latvia (vidvuds.beldavs@lu.
lv).  Jeffrey Sommers is Professor of Political Economy & Public Policy, Senior Fellow, Institute of World Affairs at the University of Wisconsin-Milwaukee &
Visiting Professor at Stockholm School of Economics in Riga (sommerjw@uwm.edu)”

2. “Companies Entering Law's Final Frontier Find Nebulous Rules Around Commerce in Space”, Caroline Spiezio, Corporate Counsel, Jan. 22, 2018. https:
//www.law.com/corpcounsel/sites/corpcounsel/2018/01/22/companies-entering-laws-final-frontier-find-nebulous-rules-around-commerce-in-space/

3. “Outer Space Laws and Legislation: Regulating the Province of All Mankind”, Catherine Doldirina, Engineering and Technology, Jan. 22, 2018. https:
//eandt.theiet.org/content/articles/2018/01/outer-space-laws-and-legislation-regulating-the-province-of-all-mankind/?
utm_content=buffer278e2&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

4. See also “Work from the Final Frontier Takes Off for Japan’s Space Lawyers”, John Kang, Asian Legal Business, Jan. 10, 2018; http://www.
legalbusinessonline.com/news/alb-insights-work-final-frontier-takes-japan%E2%80%99s-space-lawyers/75252
and “Blastoff: What Do New Zealand’s New Space Laws Mean for Other Emergent Technologies?”, Steven Moe, The Spinoff, Jan. 12, 2018. https:
//thespinoff.co.nz/business/12-01-2018/blastoff-what-do-new-zealands-new-space-laws-mean-for-other-emergent-technologies/

5. “Space Law Principles That Encourage Extraterrestrial Resource Extraction and Investment”, Melissa K. Force, Esq., Corporate Counsel, MK Force
Consultants.
http://images.spaceref.com/docs/2013/CSCA2013/Mellisa-K-Force-presentation.pdf  This presentation also argues that, once resources are removed from
the Moon, they are no longer “resources in place” and thus are not subject to any of the space treaties.  This ignores the fact that any such resources
were “in place” prior to extraction, and thus within the jurisdiction of an international legal regime adopted under the Moon Treaty.  Ms. Force also taught
space law at Webster University in International Law and Politics of Outer Space. https://www.youtube.com/watch?v=9EnJG5Frgts

6. “Orbital Space Mission; Technical Briefing”, United Nations Office for Outer Space Affairs (UNOOSA) press release and video, Jan. 10, 2018. http://www.
unoosa.org/oosa/en/ourwork/psa/hsti/FreeFlyer_Orbital_Mission.html

7. “Presidential Space Policy Directs NASA to Return Humans to Moon”, NASA press release and video, Dec. 2017. https://images.nasa.gov/details-
NHQ_2017_1211_Presidential%20Space%20Policy%20Directs%20NASA%20to%20Return%20Humans%20to%20Moon.html (5:40)

8. Charter of the National Space Council Users’ Advisory Group, NASA, Dec. 6, 2017. https://oiir.hq.nasa.gov/docs/UAG_Charter-Signed.pdf

9. “Trump Administration Continues Support of Outer Space Norms of Behavior”, Jeff Foust, Space News, Feb. 2, 2018. http://spacenews.com/trump-
administration-continues-support-of-outer-space-norms-of-behavior/?utm_content=bufferd9008&utm_medium=social&utm_source=twitter.
com&utm_campaign=buffer

10. White House Statement, Feb. 21, 2018. https://www.whitehouse.gov/briefings-statements/moon-mars-worlds-beyond-winning-next-frontier/  See also
NASA Press Release, Feb. 21, 2018. https://www.nasa.gov/feature/vice-president-pence-hosts-national-space-council-at-nasas-kennedy-space-center  
Video of full conference at https://www.youtube.com/watch?v=H0K4bLFVQ1w.

11. “The Moon Treaty: Failed International Law or Waiting in The Shadows?” Michael Listner, The Space Review, Oct. 24, 2011. http://www.thespacereview.
com/article/1954/1