Japan: Legal issues in space business in Japan - Volume 2

In brief

The Japanese Diet enacted the Space Resources Mining Act1 on June 15, 2021. The Act will come into force by early 2022. Japan became the fourth country in the world to enact a law regarding space resources exploitation, following the United States, Luxembourg and the United Arab Emirates. Japan already has a Space Activities Act2 that regulates rocket launches and satellite operations; however, it was not clear under this Act whether the Japanese government would allow commercial exploitation of space resources. The Space Resources Mining Act explicitly permits a person to undertake commercial mining of space resources and expressly provides that a person that conducts mining activity will acquire ownership of the space resources so exploited.


Contents

Background

Japan is a party to the Outer Space Treaty3. Article 2 of the Outer Space Treaty stipulates that "outer space, including the Moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means". However, this provision does not address or determine the issue of whether or not space mining business is permitted.

In some jurisdictions4, the law explicitly permits space mining. An example of this is the United States, which explicitly allows space mining by a private entity under the Commercial Space Launch Competitiveness Act of 2015. Prior to the enactment of the Space Resources Mining Act, Japan's space laws did not explicitly allow space mining business. However, the Japanese government has invested in ispace, inc.5, a Japanese space venture company whose purpose is space mining, through the Development Bank of Japan. It was evident from this that the Japanese government, at the very least, had no intention to ban space mining.

Overview of the Space Resources Mining Act

1. Space Resources

The Act defines "Space Resources" as "water, minerals and other natural resources that exist in outer space, including the Moon and other celestial bodies". However, the Act does not define the term "natural resources". Given that the term is widely understood to include fauna and flora that is useful to humans, Japanese law seems to allow potentially a broader exploitation and ownership of space resources compared to US law since, at least in theory, a person could exploit and acquire ownership of animate matter as well as inanimate matter in outer space.

2. Permit

Under the Space Activities Act, a person needs to obtain a permit in order to pursue space resources mining activity. In addition to the requirements under the Space Activities Act6, the Space Resources Mining Act also requires the applicant to attach an activity plan to an application for a permit to pursue mining activity. The activity plan must include:

- the purpose of the proposed space resources exploration and exploitation activity;
- the term of the activity;
- the location of the activity;
- the method of the activity;
- other details of the activity; and
- other matters as required under the relevant regulations7.

The government will review the activity plan and consider whether it can grant a permit.  In particular, the government must assess whether:

- the activity plan complies with the basic principles set out in the Space Basic Act of Japan8 and will not breach space related treaties nor harm national security; and
- the person that proposes to undertake the activity has sufficient capacity to do so.      

3. Public Announcement

When the government grants a permit to a person to undertake space resources mining activity pursuant to the Space Activity Act and the Space Resources Mining Act, it will publicly announce:

- the name of the person who is to be granted the permit
- the person's activity plan
- other matters as required under the relevant regulations

4. Ownership of Space Resources

The Space Resources Mining Act provides that the space resources that the permitted person exploits in accordance with an approved activity plan will belong to the person when "the person possess the resource with an intention to own it."

The Space Resources Mining Act does not provide for the transfer of ownership or creation of lease rights, etc. or security over space resources. Accordingly, until the Japanese government enacts another law or regulation governing such transactions, the applicable rules under the Civil Code of Japan will govern. For example, under the Civil Code, a transferor and a transferee of space resources may agree to the terms of a transfer orally or in writing. Perfection of such a transfer may be by way of transfer of possession, including constructive transfer of possession, of the space resources.

5. Effective Date

The Space Resources Mining Act will come into force by early 2022.

Click here for Volume 1.


1 Act for Promotion of Business Activities regarding Exploration and Exploitation of Space Resources (uchu shigen no tansa oyobi kaihatsu ni kansuru jigyou katudou no sokushin ni kansuru houritu)

2 Act on Launching of Spacecraft, etc. and Control of Spacecraft (Act No. 76 of 2016)

3 "Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies". Japan is not a party to the Moon Agreement.

4 The United States, Luxembourg and the United Arab Emirates

5 https://ispace-inc.com/

6 We will elaborate on the requirements under the Space Activity Act and the Act itself in subsequent client alerts.

7 The regulations have yet to be published.

8 Peace, improvement of the lives of Japanese citizens, promotion of industry, development of human society, international cooperation and the environment

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