In order for commercial space activities to grow, there must be an attractive legal environment. Unfortunately existing space law consists mostly of some inter-governmental treaties negotiated during the cold war, which are quite inappropriate for business. As an example, under existing law, governments are liable for damage caused by any launches from their territory. This is quite different from other transport industries, such as shipping and air transport which are governed mainly by commercial law, and liability for any damage caused by an accident is borne by commercial insurance companies. There's no reason why flights to and from orbit should be different. In the worst case, a passenger launch vehicle carrying 50 people which crashed on a city would cause less damage than an airliner carrying 500 people.

An attractive legal environment is needed to enable operating companies to plan passenger services and place orders for the vehicles which they require, and for manufacturers to finalize vehicle design details and raise the investment which they need in order to put the vehicles into production.

Recently it's begun to be recognised that this situation needs to be changed. US Congressman Robert Walker has stated:

"Most of our laws and regulations governing space activity were written to make it easier for government to function in space. Now we need to make it easier for the private sector to undertake space development".

Professor Reynolds of the University of Tennessee has stated:

"For decades, all space activity was undertaken by governments, leading to the creation of institutional structures, bureaucratic cultures, and ways of doing business that are poorly adapted to the commercial marketplace. In trying to promote the growth of commercial space industries, the US government must overcome these built-in biases, and encourage the formation of new structures and cultures that are well-suited to the realities of the commercial marketplace".

There are more examples of the need to revise space law. According to the 1967 UN Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space, commonly known as "The Rescue Agreement, astronauts are to be treated as "envoys of mankind". This was logical and valuable as a way of aiding cooperation between the USA and USSR during the cold war - but it's no good for tourists! Nor for business. Hashimoto has proposed that we need a "second generation" of space law.

Another example is the need for private property rights in space. Without the ability to own and protect the facilities they build in space, companies cannot make large investments in such economically desirable projects as hotels, power-generating satellites, Moon-mines and others. Lauer and colleagues have started to discuss what kind of legal regime needs to be created.

Another interesting idea is the proposal to introduce a law of "Space Salvage". At sea the long-standing law of salvage allows the person who takes control of an abandoned vessel to claim ownership. One of the growing problems in Earth orbit is the amount of "space debris" - abandoned satellites, rocket stages and other pieces abandoned by the governments which launched them. By introducing a law of salvage there would be a strong incentive for businesses to collect together useful objects. Because of the high cost of launch, any mass in orbit is valuable. Even at a launch cost as low as $100/kg, scrap metal would be worth at least $100,000/ton in low orbit! And so we can foresee that recycling is sure to become a major orbital business.

When mining companies start operating on the Moon they will be under the auspices of the 1966 "Outer Space Treaty", that is the UN Treaty on the Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (pretty sweeping!). The 1979 "Moon Agreement", that is, The Agreement Governing the Activities of States on the Moon and Other Celestial Bodie discusses this matter in more detail, but has been ratified by only a small number of countries, since most countries consider that it does not provide a good legal framework for business activity on the Moon.

We should remember that a certain amount of fundamental law is made "de facto", that is by someone doing something, and thereby establishing the fundamental principle that they may do it. A famous case of this was the flight of Sputnik 1 in 1957 which established the principle that spacecraft in orbit may overfly any nation - which is not allowed within the atmosphere without permission.

We may well see companies starting commercial operations on the lunar surface, perhaps Lunacorp and Celestis thereby proving that they may. And at a later date a company may have to defend its operations by force against "pirates", thereby establishing the right to self-defense - one of the fundamental rights of pioneers in new territory!

Much law that is required will be basically a simple extension of aviation law. Aviation is a huge, popular, profitable, global business, operating within a network of international law. It will be much simpler to add to this to cover rocket vehicles and flights to and from Earth orbit, than to start from scratch. Indeed the fact that the Office of Commercial Space Transportation was moved into the FAA in 1995, and the X-33 test-vehicle is to be licensed as an experimental aircraft are signs of this.

Today the only traffic rules in space cover the siting of satellites in geo-stationary orbit, in which orbital "slots" are agreed at the International Telecommunications Union (ITU). But eventually low Earth orbit ( LEO) is going to get busy too - perhaps sooner than most people guess - and then there will be a need for traffic rules, probably initially around orbiting hotels, and then extending to form "spacelanes" analogous to controlled airspace in aviation today. However, defining orbits is more difficult than defining an air-route!

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