SURVEY OF THE TOP TEN SPACE POLICY PROBLEMS AT 1995

AND A PROPOSED SOLUTION:

THE LUNAR ECONOMIC DEVELOPMENT AUTHORITY, (L.E.D.A.)
By Declan J. O'Donnell, President
World Bar Association
and
President, United Societies in Space, Inc.
and
DECLAN JOSEPH O'DONNELL, P.C.

(Paper delivered on November 15, 1995 to National Space Society's Second

Annual International Lunar Exploration Conference, hosted by International
Space Enterprises, Inc., San Diego, California November 12-15, 1995).

ABSTRACT

The Top Ten Space Policy Problems at 1995 are lack of money, lack of focus,
conflicts of interest, SOFT LAW proliferation, strict liability coming, launch
insurance costs, space debris clean up, treaty enforcement problems, the
ownership of space resources, and the number one problem called The
Common Heritage of Mankind Treaty burdens. All of these are material to
our mission to return to the moon and have a substantial negative impact on
it.

A substantial and material solution is suggested in the form of the Lunar

Economic Development Authority, (L.E.D.A.). This will become a legislative
proposal in Congress first and world-wide later. The L.E.D.A. will introduce
the "entity approach" to space governance and a possible basis for solving
many of the top ten space policy problems of 1995. It is a larger version of
the Lunar Port Authority as proposed in 1994 by me and Dr. Philip R. Harris.

INTRODUCTION

The Outer Space Treaty of 1967 represents the world's Constitution for Space
Law. All subsequent space treaties refer to it. In 1979 the U.N. adopted the
Moon Agreement and in 1982 it adopted the Agreement on the Law of the
Sea. These two treaties are part of the body of International Law that can
and will be applied to space. They also compound the legal problems for our
mission of returning to the moon. The mosaic for space law has become so
negative as to commercial space development that none can be expected
until the policy problems are cured. L.E.D.A. would help do so.
TOP TEN POLICY PROBLEMS

The following problems are created by human design or neglect and have
nothing to do with technology. They are political, economic, and societal
constraints which can be amended by us. In reverse order of mission
importance these are:

No. 10: Chronic Lack of Money. The 1995-1996 N.A.S.A. Budget reductions
will dwarf the Agency's size at the year 2001 to where it was in 1961. This is
scandalous for America. This Projection was made by Mr. Alan Ladwig,
Deputy Director of N.A.S.A. for Policy and Planning. It may represent a world
policy trend for outer space budgets. Almost no money is budgeted for our
return to the moon.

No. 9: Chronic Lack of Focus. We have a shared dream but we do not have a
common plan. Nor do we have any way to achieve a common plan for
space. There is no space planning office for the world; no zoning department
for the moon, Mars, or the orbits around them; no building code, no license
department and no place to post a performance bond. National Legislatures
have very different priorities and lesser governance units have no
jurisdiction. The U.N. is preoccupied and not aggressive as a space
governance force. The United Nation's Committee on Peaceful Uses of Outer
Space, the U.N.C.O.P.U.O.S., sponsored its' first conference on space in 1968
in Vienna and a second conference in 1982. A Motion made to sponsor a
third conference at the June, 1995, U.N.C.O.P.U.O.S. meeting in Vienna was
tabled indefinitely because:

1.No consensus could be reached on an agenda,

2.No agreement could be reached on where to have a conference,

3.No money could be located to pay for it.

No. 8: Conflicts. The 1995 A.I.A.A. Space (Industry) Convention in Oslo,

Norway, featured the subject of CONFLICTS OF INTEREST for its' Space Policy
Committee. The ethical fabric of space law was made a subject of industry
debate under the harsh label of "Conflicts of Interest." Here are a few of the
policy issues.

1.What special conflicts occur in multi-national astronaut crews? (This was

the simple genesis of the whole conflict question).

2.Should a nation pay out tax revenues to build an extra-territorial estate,

one out of its' control?
3.Can a nation justify spending money in outer space instead of on its' own
citizenry and in spite of domestic priorities?

4.Does international cooperation compromise a nationalist objective?

5.Can a government or military employee share a fiduciary duty? Is it

acceptable to die for the United Nations? For no nation - - for space? For
U.N.C.O.P.U.O.S.?

No. 7: Soft Law Proliferation. In the void left by weak and ambiguous
treaties, there has been a proliferation of "SOFT LAW," contracts and ad hoc
constitutions. N.A.S.A. started this with its' requirement for legal waivers
"FLOW DOWN" and E.S.A. is now exploiting this to new dimensions. The
Alpha Space Station is next in line for making an ad hoc constitution that
may conflict with other ad hoc legal regimes as well as conflict with member
state domestic laws. For example, closed meetings are conducted without
any concern for sunshine laws applicable in almost all of the participating
nations.

These are the product of the GOLDEN RULE: "He who has the gold makes
the rule." A problem can be expected to occur when the gold turns to mud.
What are the residual legal implications to these contracts as to fiduciary
duties, disclosures, anti-competition, intellectual property, and damages for
breach. Are these regional constitutions "simple contracts" or "regional
treaties" in effect? Will the Courts enforce them or set them aside?

No. 6: Strict Liability. See article: "LIABILITY OF AEROSPACE

MANUFACTURERS: MacPhearson v. Buick Sputters into the Space Age", by
Phillip D. Bostwick, Journal of Space Law V. 22, 1994, page 75. (Compare
Appalachian Insur. Co. v. McDonnell Douglas to Consumer damage cases).
Ordinary negligence is tried but strict liability was NOT because of the purely
commercial setting. Dicta clarifies that any consumer problem or personal
injury would have been subject to the product liability standard of strict
liability (i.e. no defense). (See Martin Marietta vs. Intelsat where waivers did
not cut-off GROSS NEGLIGENCE). Part of the problem here is that our
domestic Court system does not appreciate the assumption of risk of the
higher perils in flight and space.

No. 5: Insurance. Commercial space launches are exclusively controlled by

N.A.S.A. and the Department of Transportation as to all launch requirements,
including insurance. The Statutory maximum is set at $500,000,000.00 and
the typical premium is 18% for liability coverage. (Cargo insurance is much
higher and can be closer to 80%, but it is not required).

The high cost of insurance is a space policy problem because it relates to the
1967 Outer Space Treaty. Each nation is exclusively responsible to the rest of
the world for space launches by its' nations, rather than nationals
themselves. Insurance reserves are growing largely because of financial
burdens of their treaty perils and because space debris is growing larger and
more dangerous. Not all premiums are $90,000,000.00 but they are
uniformly higher than we should tolerate. Government has created a
condition and it should be called upon to help solve it.

No. 4: Lack of Enforceability of Treaty Damages. Another scandal in space

policy is the refusal of many nations to pay damages incurred under treaties.
France is trying to collect a $800,000.00 D.F.L. (franc) Judgement against
Germany and Russia has been resisting a variety of ruble judgements
resulting from its' space activity. The credibility of the treaty system is at
stake. The U.N. is now protesting the failure of the United States to pay
several million U.S.D. in past due treaty assessments, also. The sovereign
nature of states party to these agreements is typically asserted as a defense.
This negates the entire treaty system's value. Director Boutros Boutros
Gahli, refused to meet with a representative of our group (United Societies in
Space, Inc.) until the U.S.A. paid-up its' treaty dues to the U.N. This kind of
retaliation can be expected among Russia, Germany, France, etc., etc., as
damage accounts increase. The net result is that our going to the moon idea
is being held hostage by irrelevant international defaults and political
processes.

No. 3: Debris. There is no space treaty regarding space debris so space law
presumes that maritime law regarding salvage on the high seas will apply.
See, N. JASENTULIANA, "Regulation of Space Salvage Operations," Journal of
Space Law V. 22, page 5. This is awkward and dangerous. There is no legal
duty for a launcher to clean-up debris, but some movement is seen for a new
treaty on that subject. It is predictable that the U.N. will recommend
extending MARITIME LAW to outer space for this purpose.

Tracking is done on 10,000 + - space objects, but 100 trillion small swarms of
objects have been measured. This is a growing problem within 1,000 miles
of earth. NO SOLUTION exists for space debris but, in 1994, it was put on the
U.N.C.O.P.U.O.S. Agenda, for the first time.
No. 2: Ownership of space Resources is a classic treaty problem in space
policy. This came-up again during the U.N.C.O.P.U.O.S. meeting in 1994. The
Committee ratified the intention of Article IX of the 1967 Treaty: ". . .The
Commercial utilization of Natural Resources found in outer space must be for
the benefit of all, and not far the self-interest of some and to the detriment of
the interest of others." (Paul G. Dembling, Senior Counsel to the
U.N.C.O.P.U.O.S. and former General Counsel of N.A.S.A.). In lay language
this means there can be no ownership of space resources.

If a mixture occurs, then a formula for sharing is possible, if not necessary.

The U.N. has firmly committed to the idea that space resources cannot be
owned, and that position affects lesser estates, such as possession. Only
objects brought into space can be owned.

No. 1: C.H.O.M. Not only is ownership denied by law in space, as to space

resources, but the concept of Common Heritage of Mankind, (also called
C.H.O.M.), actually imposes an affirmative burden on possession of space
resources. By legal force of the Moon Agreement of 1979, (which is part of
space law), five Sanctions apply whenever C.H.O.M. is applicable to a venue.
The three relevant ones:

1.The premises must be preserved for future generations.

2.The administration of its' use must be actively shared by all nations.

3.Any benefits derived must be actually distributed to all nations.

These definitive realities are enumerated in detail in the U.N. Agreement on

the Law of the Sea, 1982. This Agreement was signed as a Treaty by
President Clinton in early 1995. It is Maritime Law which will be applied in
space for the protection of space resources, objects, and assets because it is
exactly compatible with Article IX of the 1967 Outer Space Treaty, (although
this extended result was NOT FORESEEN): ". . . States Party to the Treaty
shall be guided by the principle of cooperation and mutual assistance and
shall conduct all their activities in outer space with due regard for the
corresponding interests of all other States Parties to the Treaty." Due regard
now means sharing profits.

So C.H.O.M. has become the TOP problem in 1995. It closes down

commercial space by eliminating not only ownership but, also, effective use
of space resources by commercial entities.

A POLICY SOLUTION:
LUNAR AUTHORITY LEGISLATION
The treaty system needs to be supplemented by an entity approach to
management. Even the unpopular Moon Agreement of 1979 contemplates a
regime with a committee to regulate mining on the moon. The naked and
lifeless existence of a treaty is no substitute for governance by qualified
managers. It is proposed that a Lunar "authority" should be established as a
remedy for most of the policy problems stated above and as a way to
administer the treaties previously adopted, (rather than as a way to avoid
them). As will be seen, there are extra benefits to be derived from this
legislation.

1.Structure. We propose L.E.T.A. as a creature of legislation for participating

nations. No sovereignty is asserted, and each nation would be deemed to
give-up some of its' freedom to explore and utilize space at the venue of the
moon. There is adequate precedence for this in law. We will follow-up with
treaties. At the outset, however, we recommend exposure to Congress and
the Parliaments of the world because a comprehensive and progressive plan
is going to be put in place around L.E.T.A., one that involves a one-hundred
year commitment.

The structure of L.E.T.A. will be like the Tennessee Valley Authority in that it
will have a small and effective executive board of directors. It will be like
INMARSAT with a Congress of Nations which we may call the Council of
Regents. Its' authority at the moon will be exclusive and a degree of police
power is anticipated so its' user regulations can be enforced.

We anticipate a staffing pattern that will accommodate a long-range planning

commission, a zoning board, a building permit department, (with clear
standards for construction, mining, and transportation), and a legal provision
for bonding performances. Areas of the moon will be made available for
leasing for up to ninety-nine years and the rent would be geared to how
much space resources are being consumed or used.

2.Legal Basis. L.E.T.A. would serve as a Trustee for all mankind by

administrating the venue on behalf of all nations and collecting fair rental
income for itself on behalf of all nations. It would protect the basic rights of
free passage in space as well as the regulated and common uses of space
resources, prevent waste, collect debris, sponsor common amenities,
maintain a rescue squad, run a hospital, provide oxygen, and take charge of
regularly scheduled transportation to and from earth.

There is precedence for this kind of legislation in the N.A.S.A. Statute at 42

U.S.C. 2451: In 1958 we created N.A.S.A. "for the benefit of all mankind." So
too can we create L.E.T.A. for the benefit of mankind at the venue of the
moon. Acceptance by other nations would elevate L.E.T.A. to a regime for
management as contemplated in the 1979 Moon Treaty.
3.Host Government. In order to serve as an effective quasi-municipal
authority, L.E.T.A. needs to have a HOST NATION. Since each legislative
participant will covenant to not compete with L.E.T.A. at the moon and,
instead, to waive its' treaty rights to share under the C.H.O.M. formula, (or to
appoint L.E.T.A. to serve as Trustee for gathering and distributing those
rights), each nation becomes a partial host. The legal precedent for this is
clear: See The English Channel Authority where England and France host
sponsorship of a facility in the ocean under the English Channel.

The L.E.T.A. would be empowered to issue bonds to investors in each

participating nation. These would be revenue bonds repayable ten to fifty
years later at a fair interest rate. Each host nation will have the option to
enhance the sale of L.E.T.A. Revenue Bonds in its jurisdiction by adding its
guarantee to ultimate payment. This would convert them to general
obligation bonds, lower the interest rate, and guarantee funding. Guarantors
may receive a preference on rent and priority on site selection on the moon.

The T.V.A. issued $50,000,000.00 of bonds at 3% interest in 1948 and used

that money for "conservation purposes" and created this nation's largest
electric energy system. The economic model is not yet completed, but we
foresee large amounts of money being raised to establish our off-world
priority estate on the moon.

4.Business Plan. The Space Hab, Inc. policy of acquiring specialized capital
assets and leasing them to N.A.S.A. and E.S.A., etc. would be anticipated
here. The world's space agencies will become L.E.T.A.'s anchor tenants on
the moon. Commercial enterprises would rent space according to their
needs. The L.E.T.A. Bonds would have a reliable revenue base and the
guarantees of participating nations. The leasing technique would be
approved in the L.E.T.A. Statute.

The L.E.T.A. Model can be duplicated for a Mars direct expedition and for a
series of orbital (O'Neill Style) settlements. The maturing of this model
includes the advent of a new nation in space to serve as the common HOST
NATION and take out guarantor for the original participating nations. This is
"Meta-Nation", one far above and beyond and yet all about us. We do not
view it as a stand-up and SALUTE nation, but, instead, we see it as a super
space agency with enough authority to guarantee L.E.T.A. long-term debt,
police the policy of freedom of travel in space, and sponsor a court system in
space with justice and common sense for all who venture off-world. That
phase will be anticipated at the outset.

CONCLUSION

The Top Ten Space Policy programs are many years old: They are simply
rearranged in their order of importance. The L.E.T.A. solution, however, is a
1995 new proposal. It can help solve many of the chronic problems and
provide a catalyst for international cooperation around a common and
parallel pathway to space. The "port authority" concept works on earth and
there is absolutely no reason to avoid it in space. It provides money, focus,
parallelism, hard law at the venue, a court system in space, insurance
regulation on its vehicles, space debris management, a relevant police
power, and a legal solution to "C.H.O.M." In this particular L.E.T.A. Legislation
will provide that it preserve the premises for future generations, manage the
resources on behalf of all nations and all mankind, and distribute benefits to
itself as our common fiduciary at the lunar venue. It also serves as a
building block for a comprehensive new approach to space development, one
that accommodates a meta-nation as the Trustee for mankind in space and a
take-out financial partner for participating partners. L.E.T.A. may represent a
basis for solution of the Top Ten Space Policy Problems at 1995.