Unidroit Approves Space Assets Protocol Despite Satellite Industry Protests
By Jeffrey Hill | March 9, 2012
[Satellite News 03-09-12] The International Institute for the Unification of Private Law (Unidroit) has approved the Space Assets Protocol, which aims to facilitate the financing of space assets, at its March 9 diplomatic conference in Berlin.
The decision drew ire from several satellite organizations and close to 100 satellite companies that banded together in opposition to the new piece of legislation. The protocol comes at a time when the satellite industry has benefited from a robust and successful financing market.
The Space Assets Protocol introduces a uniform regimen to govern the creation, perfection and enforcement of international interests in space assets, notably satellites. “It is envisaged that the cost of financing will be reduced as a result of the increased level of transparency and predictability for financiers, thereby making financing more widely available to a greater number of players in the commercial space sector,” Unidroit said in a statement posted to the organization’s website. “Such an instrument will, in particular, help bring much-needed financial resources to the NewSpace community, namely those small start-up companies that have emerged as a result of the booming commercial space sector.”
One element of the protocol is that satellites, classified simply as “space objects,” should be listed on a new international registry in order to create a form of security interest. Satellite operators have claimed this would add unnecessary, confusing and cumbersome complications to the financing system if adopted.
In February, the European Satellite Operators Association (ESOA), the Satellite Industry Association (SIA), the Canadian Satellite and Space Industry Forum (CSSIF), the Space Industry Association of Australia (SIAA) and the Cable and Satellite Broadcasting Association of Asia (CASBAA) submitted a letter of protest to the Unidroit conference chairman. Satellite industry leaders said the measure would have the opposite effect in practice, and would risk creating a new layer of regulation for satellite financing with serious negative consequences.
“It is disappointing that the Berlin Conference moved ahead with a Protocol on space asset financing, over the clear and unified opposition of those involved in the actual business of constructing, launching, operating, insuring and financing communications satellites,” SIA President Patricia Cooper said in a statement.
ESOA Secretary General Aarti Holla said the satellite coalition would now work on initiatives to inform nations of the negative impact of the protocol on the market as each nation considers ratifying the legislation.
“We hope that member states will note the concerns of the global satellite industry and not ratify the protocol. If they do, it will increase the cost of financing and make it extremely difficult for developing nations to benefit from the delivery of satellite services,” said Global VSAT Forum Secretary General David Hartshorn.
Holla added the global satellite industry had repeatedly raised its concerns with Unidroit during the last few years, but those concerns still remain unaddressed. “Satellite finance is a booming business, with operators of all sizes and from diverse countries raising funds to launch new satellites the world over. The Protocol is inconsistent with financial market practices and unnecessary.”