Space (Launches and Returns) (Insurance) Rules 2019

The instrument uses a small set of interlocking legal concepts to implement the insurance and financial-responsibility regime in the Act. Those concepts, and where they appear, are:

• Direct financial responsibility (s 5). The instrument specifies the circumstances in which a holder of an Australian launch permit, an Australian high power rocket permit or a return authorisation is taken to have shown direct financial responsibility for the launch or return, instead of holding insurance. The concept is invoked for the purposes of paragraph 47(2)(b) of the Act (s 5(1)).

• Evidence of available assets or capacity to meet liabilities (s 5(2)). A holder demonstrates direct financial responsibility by giving the Minister evidence that it either has a sufficient amount of available assets or is otherwise able to meet the potential liabilities under the Act to pay compensation for damage to third parties caused by the launch or return (s 5(2)(a)), and by supplying any additional information the Minister asks for in writing (s 5(2)(b)).

• Sufficiency and availability of assets (s 5(3)). “Sufficient” means a value at least equal to the subsection 48(4) amount (that is, the insurance amount that would otherwise apply); “available” means usable by the holder to meet any liability under the Act, and, where assets are held by another person or body, that person or body will make them available to the holder if required (s 5(3)(a)-(b)).

• Specified minimum insurance amounts (s 6). The instrument sets fixed dollar amounts (in whole dollars) for different classes of conduct for the purposes of paragraph 48(4)(a) of the Act: principally $100,000,000 for Australian launch permits, $100,000,000 for Australian high power rocket permits, $100,000,000 for most returns, and zero dollars for launches under overseas payload permits and certain returns to places outside Australia (s 6 and its schedule).

• Methodology for determining amounts (s 7). For paragraph 48(4)(b) of the Act, the instrument delegates the method of determining amounts to a published document, the Maximum Probable Loss Methodology, “as existing from time to time,” located on the Department’s website (s 7).

• Delegation (s 8). The Minister may delegate any of the Minister’s powers or functions under the Rules to the Secretary of the Department, the Head of the Australian Space Agency, or an SES (Senior Executive Service) employee (s 8(1)); delegates must comply with any directions of the Minister when acting under a delegation (s 8(2)).

Two cross-references are built into the instrument. First, s 5 is expressly limited to the Act’s paragraph 47(2)(b) regime. Second, the note to s 6 points the reader to paragraph 119(c) of the Space (Launches and Returns) (General) Rules 2019 as a source of matters the Minister must have regard to when issuing an authorisation certificate. The external Maximum Probable Loss Methodology is treated as authoritative for calculation purposes (s 7), but is not reproduced in the instrument.

The Rules directly affect holders and applicants of the classes of permits and authorisations identified in the Act and referenced in the instrument. The primary groups are:

• Holders of Australian launch permits (s 5(1) and s 6, item 1). For the purposes of the Act’s insurance regime, they face a specified minimum amount of $100,000,000 under s 6, unless they establish direct financial responsibility under s 5.

• Holders of Australian high power rocket permits (s 5(1) and s 6, item 2). These are also subject to a $100,000,000 specified minimum (s 6).

• Holders of return authorisations (s 5(1) and s 6, items 4-5). Returns are split in the schedule. Returns that are to places outside Australia and where the returned space object is carried as a payload by another space object that does not require a return authorisation have a specified amount of $0 (s 6, item 4). Other returns authorised by a return authorisation have a specified amount of $100,000,000 (s 6, item 5).

• Applicants and holders of overseas payload permits (s 6, item 3). The specified minimum for launches authorised by an overseas payload permit is $0 (s 6, item 3). Although the instrument fixes a zero-dollar specified minimum for these items, the note to s 6 points to the matters considered when issuing authorisation certificates under the General Rules, indicating the Minister must have regard to unsatisfactory risk of liability,this remains a factor when permits and certificates are considered.

• Third parties that hold assets intended to be made available to permit/authorisation holders (s 5(3)(b)(ii)). Where assets are held wholly or partly by another person or body, the instrument makes availability of those assets contingent on the person or body making them available to the holder if required (s 5(3)(b)(ii)).

• The Minister and delegated officials. The Minister retains power to ask for additional information in writing to verify direct financial responsibility (s 5(2)(b)) and may delegate functions under the instrument to specified senior officials (s 8(1)); delegates must follow Ministerial directions (s 8(2)).

Indirectly, insurers, financiers, asset-holding corporate groups and counsel advising applicants will be affected because permit applicants will either need insurance at the specified levels (or as determined by the methodology in s 7) or will need to gather and present the evidence described in s 5. The instrument changes the administrative pathway for satisfying the Act’s insurance/financial rules: applicants can either obtain the required insurance or demonstrate direct financial responsibility in the manner prescribed.

The Rules impose a set of procedural duties on permit and authorisation holders and confer, by implication, a limited alternative right to rely on direct financial responsibility rather than insurance, subject to Ministerial satisfaction and available evidence.

Duties on holders and applicants

• Provide evidence that they have sufficient available assets or are otherwise able to meet liabilities for compensation under the Act (s 5(2)(a)(i)-(ii)). The evidence must demonstrate that asset value equals or exceeds the subsection 48(4) amount (s 5(3)(a)) and that assets are available for use by the holder (s 5(3)(b)(i)).

• Supply any additional information requested by the Minister in writing for the purpose of showing that the holder has assets of the required kind or is otherwise able to meet liabilities (s 5(2)(b)). The instrument gives the Minister open-ended power to request further written information where necessary to form a view about direct financial responsibility.

• Where assets are held wholly or partly by another person or body, secure assurance that the third party will make those assets available to the holder if required (s 5(3)(b)(ii)). The instrument requires that availability as part of the definition of “available assets”.

• Hold insurance at the specified minima in the instrument, unless the holder demonstrates direct financial responsibility as set out (s 6; s 5). The schedule in s 6 designates $100,000,000 as the specified amount for most Australian-authorised launches and returns, with defined exceptions.

Rights or alternatives created or clarified

• Alternative to insurance: a holder can show direct financial responsibility in lieu of holding insurance if the s 5 conditions are satisfied and the Minister is satisfied for the purposes of paragraph 47(2)(b) of the Act (s 5(1)-(2)). The instrument does not itself define the Minister’s standard of satisfaction but prescribes the forms of evidence that must be provided.

• Reliance on assets of third parties: the instrument permits assets held by others to be treated as “available” if those other persons will make them available to the holder when required (s 5(3)(b)(ii)). The holder must therefore secure arrangements with third parties to meet this threshold.

• Use of external methodology: for the purposes of paragraph 48(4)(b) of the Act the instrument gives effect to the Maximum Probable Loss Methodology published on the Department’s website, establishing a rights-duty interface in which the holder may need to consult that external document to determine insurance requirements (s 7).

Ministerial and administrative duties

• The Minister must consider further information provided in writing (s 5(2)(b)) and is subject to the Act and the General Rules when making decisions related to authorisation certificates (note to s 6). The instrument also permits the Minister to delegate functions under the Rules but requires delegates to follow any directions given (s 8(1)-(2)).

The instrument does not set out procedural timelines, formats for evidence, or prescribed forms. It leaves significant procedural discretion to the Minister as to what further information will be required and to delegated officials acting under directions.

The Rules themselves do not create penalties, fines, or specific enforcement mechanisms. They operate within the statutory framework of the Space (Launches and Returns) Act 2018 by prescribing how holders may satisfy insurance or financial-responsibility requirements under that Act. Accordingly, enforcement and penalties for breach of insurance or financial-responsibility obligations are matters addressed by the Act, not by this instrument. The instrument directly sets out evidentiary and calculation mechanisms that will determine whether a holder is treated as having met the Act’s requirements.

Specific enforcement-relevant mechanisms included in the Rules are administrative rather than punitive:

• Ministerial discretion to request further information in writing (s 5(2)(b)). The Minister’s power to require additional information can be used to verify a holder’s claim of direct financial responsibility before an authorisation or permit is issued or maintained.

• Specification of monetary thresholds (s 6). The schedule fixing specified amounts ($100,000,000 in several categories, $0 in others) sets objective benchmarks against which compliance is measured. A holder who does not have insurance at the specified minimum and cannot satisfy the Minister that it has direct financial responsibility would, under the Act, face the consequences that flow from non-compliance with the Act’s insurance/financial requirements (the instrument itself does not list those consequences; see s 5 and s 6 as operative links to the Act).

• Delegation with directions (s 8). Administrative enforcement action under these Rules can be taken by delegates authorised in writing; those delegates must act in accordance with any Ministerial directions (s 8(1)-(2)). This affects who will make enforcement-related determinations and the degree to which those officers must follow the Minister’s policy instructions.

The instrument contains no schedule of sanctions, penalty amounts, or prescribed prosecution pathways. Any penalties or enforcement steps,such as conditioning, refusing, suspending or revoking permits, or seeking compensation,must be sought through the Act’s powers and processes. The Rules therefore shape enforcement primarily by defining what counts as compliance for the purposes of the Act (e.g. what constitutes direct financial responsibility and what numerical thresholds apply), rather than by creating new enforcement authorities or punishments within the Rules themselves.

The instrument is expressly made under the Space (Launches and Returns) Act 2018 (s 3) and exists to operationalise particular paragraphs of that Act. It therefore functions as subordinate legislative material connected to the Act. The interaction points in the instrument are limited and explicit:

• Paragraph 47(2)(b) and paragraph 48(4) of the Act. Section 5 is framed as applying “for the purposes of paragraph 47(2)(b) of the Act” in relation to certain permit and authorisation holders (s 5(1)). Section 6 operates “for the purposes of paragraph 48(4)(a) of the Act” and sets the specified minimum amounts (s 6). Section 7 is for the purposes of paragraph 48(4)(b) and designates an external methodology (s 7). The Rules therefore plug into the Act’s statutory hooks; any substantive enforcement, sanctioning, or conditions remain governed by the Act.

• Space (Launches and Returns) (General) Rules 2019. The instrument’s note to s 6 directs attention to paragraph 119(c) of the General Rules 2019 as setting out matters the Minister must have regard to when deciding whether to issue an authorisation certificate covering specified conduct (note to s 6). This indicates that the General Rules’ criteria inform the Minister’s approach even when the minimum specified amounts in s 6 are zero for certain categories.

• External Departmental publication. Section 7 incorporates by reference the Maximum Probable Loss Methodology as published on the Department’s website, “as existing from time to time,” to determine amounts for paragraph 48(4)(b) of the Act. That creates a functional interaction between the Rules and departmental administrative material that is outside the legislative instrument.

• Delegation and internal administrative law. Section 8 permits the Minister to delegate functions under the Rules to specific office-holders (Secretary, Head of the Australian Space Agency, SES employees) and requires delegates to comply with any directions of the Minister (s 8(1)-(2)). That interaction engages standard public-administration principles: delegates act under instrument authority but subject to Ministerial directions.

What the instrument does not do in relation to other laws

• It does not amend the Act itself, nor does it alter civil liability rules, criminal provisions, or other statutes outside the Act. It is an implementing instrument that interprets and operationalises elements of the Act’s insurance/financial regime.

• It does not create a stand-alone compensation regime; compensation duties and liabilities remain those established in the Act, not in the instrument.

The instrument therefore must be read in conjunction with the Act and with the General Rules and the external Maximum Probable Loss Methodology to form a complete account of regulatory obligations. The instrument’s references to external materials and the Minister’s discretion are the principal points at which regulatory interaction with other legal and administrative sources occurs.

The instrument contains a commencement table (s 2(1)) that records its commencement “at the same time as the Space Activities Amendment (Launches and Returns) Act 2018 commences.” The instrument is made under the Act (s 3) and is dated 26 August 2019 (signature page). The table also contains a formal note that it relates only to the instrument “as originally made” and that it will not be amended in the table to reflect later amendments of the instrument (s 2(2) explanatory material).

Beyond the original commencement information, the instrument itself does not list any subsequent amendments within its text. It contains a provision (s 7) that gives effect to an external document “as existing from time to time” (the Maximum Probable Loss Methodology), which means that, practically, methodology-driven determinations can change as that external document is updated without amending the instrument. The instrument therefore embodies a static set of prescriptions (s 5, s 6, s 8) together with a dynamic reference to an external methodology (s 7).

The instrument’s schedule of specified amounts (s 6) is expressed as fixed dollar amounts and items. Any formal amendment to those dollar figures would require an amending instrument made under the Act (the instrument itself does not provide a power to alter those figures by administrative act). However, determinations under paragraph 48(4)(b) of the Act that rely on the Maximum Probable Loss Methodology (s 7) are subject to change as that methodology is updated on the Department’s website.

The instrument includes a delegation provision (s 8) that permits the Minister to delegate powers under this instrument; that delegation power remains available to the Minister and is a continuing operational feature. The instrument contains no retrospective amendments, savings provisions, transitional provisions, or expiry clauses. Any later legislative or administrative history beyond the original instrument is not recorded within the text provided.

The instrument does not record, reference, or mention any litigation. It contains no citations to case law and does not identify adjudications or judicial interpretations of its provisions. Because the instrument is an implementing rule under the Space (Launches and Returns) Act 2018, judicial consideration, if any, would appear in decisions addressing the Act and related instruments; however, this instrument’s text contains no litigation history, no references to court decisions, and no mention of disputes about the content, application, or validity of its provisions.

For users and advisers, the absence of litigation references in the instrument means the text itself provides the entire authoritative content of the Rules. Any questions about the construction of s 5 (for example what form of evidence suffices to show that assets “will be made available”), the application of s 6’s specified amounts, or the legal status of the external Maximum Probable Loss Methodology (s 7) would therefore be matters of statutory construction and administrative practice to be tested in the courts only if and when disputes arise. The instrument includes the Minister’s power to ask for additional written information (s 5(2)(b)), and delegates must comply with Ministerial directions (s 8(2)); these administrative features are also likely focal points in any future litigation about whether the Minister or a delegate properly exercised discretion under the instrument.

Because the instrument does not record litigation, any assessment of how courts might construe the Rules must be undertaken from first principles and the text itself; no judicial gloss is supplied by the instrument.

The instrument is short and appears straightforward, but it contains several practical and legal features that warrant careful attention.

1. Zero-dollar specified amounts. Items 3 and 4 in the schedule under s 6 specify $0 as the minimum amount for launches authorised by an overseas payload permit and for certain returns outside Australia carried as payload by another space object that does not require a return authorisation (s 6, items 3-4). A $0 specified amount does not mean that no assessment of risk is relevant. The note to s 6 points to paragraph 119(c) of the General Rules 2019, which requires the Minister to have regard to whether conduct would represent an “unsatisfactory risk of liability to the Commonwealth if insurance is not held to cover the applicant or the Commonwealth, or both.” The practical effect is that even where the schedule lists $0, the Minister retains an evaluative duty when issuing authorisation certificates.

2. “Available assets” can be held by third parties, but must be made available. Section 5(3)(b)(ii) allows the value of assets held wholly or partly by another person or body to count, provided that the person or body “will make them available to the holder if required.” The instrument does not set out the form of proof needed to show that a third party will make assets available, nor does it set timelines or contingencies for when “required” would be triggered. In practice, permit applicants will need robust, documented legal arrangements or guarantees from those third parties.

3. Ministerial discretion and open-ended information requests. Section 5(2)(b) allows the Minister to ask for “any additional information” in writing for the purpose of showing sufficiency or availability of assets. There is no statutory limit on the scope or number of such requests in the instrument. That open-endedness places a compliance burden on applicants and shifts a measure of administrative power to the Minister or delegates.

4. Reliance on an external, changeable methodology. Section 7 delegates the method of determining amounts to a departmental Maximum Probable Loss Methodology published on the Department’s website “as existing from time to time.” The methodology is external to the instrument and is not reproduced in it. That means the technical basis for calculations can change administratively without amending the Rules, introducing a transparency and predictability issue if users do not monitor updates to the Department’s publication.

5. No procedural detail on evidence. The Rules require “evidence” that assets are sufficient and available (s 5(2)(a)), but do not prescribe formats, valuation standards, independent verification, or timing (for example, whether evidence must be audited, insured, or placed into escrow). Absent such procedural detail, the Minister’s written information requests and any administrative practice will determine evidentiary expectations.

6. Delegation subject to Ministerial directions. Delegates must comply with Ministerial directions when acting under delegations (s 8(2)). That ties administrative decision-making to potentially broad Ministerial policy directions and may affect the consistency of decisions and the independence of delegated officials.

7. Instrument does not create enforcement mechanisms. The Rules define compliance mechanics but do not themselves create penalties or enforcement powers; enforcement relies on the Act. Advisers must therefore consult the Act and the General Rules to understand the full range of consequences and processes.

8. Commencement tied to another Act. The Rules commenced “at the same time as the Space Activities Amendment (Launches and Returns) Act 2018” (s 2(1)). Users should match the operational timing of this instrument against the relevant commencement of the amending Act to determine when obligations took effect.

Each of these points is grounded directly in the instrument text (see s 5, s 6, s 7, s 8 and the note to s 6). Practically, these features create compliance risk if applicants assume that a $0 specified amount or an asserted third-party asset automatically discharges the Act’s insurance requirement without satisfying the Minister’s evaluative and evidentiary expectations.

The instrument prescribes two routes to satisfying the Act’s insurance/financial requirements: hold the required insurance as specified in s 6 (or as determined under the methodology referenced in s 7), or demonstrate direct financial responsibility pursuant to s 5. Compliance therefore requires both understanding which category the launch or return falls into and satisfying the evidentiary and calculation mechanics the instrument prescribes.

Step-by-step compliance checklist (text-based, rooted in the Rules)

1. Categorise the activity. Determine whether the planned conduct is an Australian launch (s 6, item 1), an Australian high power rocket launch (s 6, item 2), a launch under an overseas payload permit (s 6, item 3), or a return authorisation and, if a return, whether it falls within item 4 (return to a place outside Australia carried as payload by another space object not requiring a return authorisation) or item 5 (other returns) (s 6).

2. Identify the specified minimum amount. Consult s 6: for most Australian launches and most returns, the specified amount is $100,000,000. For overseas payload launches and certain returns to places outside Australia, the specified amount is $0 (s 6). For cases where paragraph 48(4)(b) of the Act applies, consult the Maximum Probable Loss Methodology as published on the Department’s website (s 7).

3. Decide between insurance and direct financial responsibility. If you will hold insurance equal to the specified minimum (or as required under the methodology), procure that insurance. If you intend to rely on direct financial responsibility, prepare to provide the evidence described in s 5.

4. Assemble evidence of sufficiency and availability of assets. Under s 5(2)-(3):

   • Demonstrate asset sufficiency: show assets have a value at least equal to the subsection 48(4) amount (s 5(3)(a)). Ensure valuations are current and, preferably, independently verifiable.

   • Demonstrate availability: show assets can be used by the holder to meet liabilities under the Act (s 5(3)(b)(i)). If assets are held by a third party, obtain a clear, legally enforceable commitment from the third party that it will make those assets available to the holder if required (s 5(3)(b)(ii)).

   • Be ready to supply any additional written information the Minister requests (s 5(2)(b)); maintain organised documentary records and anticipate lines of questioning about liquidity, encumbrances, and enforceability.

5. Review the Maximum Probable Loss Methodology. For cases where paragraph 48(4)(b) is engaged, consult the Department’s Maximum Probable Loss Methodology “as existing from time to time” (s 7). Record the version used and any parameters applied in calculations, because the instrument ties calculations to that external document.

6. Engage with the Minister or the delegate. Submit evidence and any accompanying materials to the Minister; remember that the Minister may delegate functions under the instrument to the Secretary, Head of the Australian Space Agency, or an SES employee (s 8(1)), and any delegate must comply with Ministerial directions (s 8(2)). Ensure communications are formal, written, and trackable.

7. For third-party asset arrangements, obtain enforceability. Where assets are held by another person, secure documentation (eg, escrow agreements, guarantees, indemnities, charges or similar enforceable instruments) demonstrating the third party’s obligation to make assets available when required (s 5(3)(b)(ii)). The instrument does not prescribe the form of such proof; practical compliance will require legally binding documents.

8. Maintain contemporaneous records. Keep valuation reports, legal opinions, insurance policies, third-party commitments, and correspondence with the Minister or delegates. The instrument gives the Minister power to request additional information in writing (s 5(2)(b)), so prompt and complete responses will reduce administrative risk.

9. Monitor the Department’s methodology and General Rules. Because s 7 relies on an external, updatable methodology and the note to s 6 points to criteria in the General Rules 2019, monitor both sources to stay abreast of changes that could affect insurance requirements or the Minister’s evaluative criteria.

10. Seek legal and financial advice. The instrument leaves procedural and evidentiary detail to Ministerial request and administrative practice. Legal advisers and financial auditors will be needed to frame evidence that meets the Minister’s expectations and to structure third-party asset arrangements.

The Rules do not prescribe timeframes for submissions, nor do they state what will satisfy the Minister beyond the general evidentiary categories; compliance therefore requires proactive engagement, robust documentation, and careful use of the Department’s external methodology.