Looming Rocket Lab launch spurs govt to set up space regulatory regime

Tuesday 14th June 2016

The prospect of space travel pioneer Rocket Lab launching a rocket locally before the end of this year has spurred the government to set up a regulatory regime to cope with the issues that are out of this world.

Economic Development Minister Steven Joyce today unveiled a raft of measures putting in place what officials describe as a permissive regime, which gives the deciding minister discretion on whether to issue a licence and avoids the risk of becoming obsolete too quickly. The Ministry of Business, Innovation and Employment will act as the lead policy agency and administer the regime, and a draft bill has been released with the expectation it will go through select committee in the second half of the year.

"Rocket Lab is using innovative and disruptive technology developed right here in New Zealand and employing highly skilled people in New Zealand," Joyce said in a statement. "These organisations show there is the opportunity to build New Zealand's capacity and expertise across a broad spectrum of space and high altitude activities, from rocket technology to the use of satellites to perform functions that benefit our economy, environment and society; as well as attracting offshore talent and investment into New Zealand."

A Sapere Research Group report commissioned by MBIE to analyse the economic impact of developing a local rocket industry said it was reasonably confident such an industry could generate $450 million to $1.15 billion of added value to the economy over a 20-year period through direct employment, services suppling the sector, construction, space tourism and cluster effects from developing certain types of technology.

Sapere also said some highly speculative benefits could generate a further $30 million to $110 million in spin-offs and $160 million to $340 million in having direct access to satellite technology, though because of the uncertainty it discounted those values by 50 percent. In total, the research estimated added value of between $600 million and $1.55 billion.

Rocket Lab is backed by Silicon Valley investor Khosla Ventures, Stephen Tindall's K1W1 fund, Silicon Valley venture capitalist Bessemer Venture Partners, and global defence group Lockheed Martin. In July, it signed a contract with the US's National Aeronautics and Space Administration letting it use NASA's resources.

The company was consulted on the design of the regime, and "emphasised that the regime needs to accommodate relatively low cost and frequent launches of very small satellites, and onerous liability provisions will act as significant deterrent to the development of the industry in New Zealand," MBIE's regulatory impact statement said.

"We consider that the proposed design can address these concerns through the flexibility to tailor licence requirements to specific circumstances, including an assessment of risks and consequences," MBIE said.

As part of the regime, Joyce and Foreign Minister Murray McCully said the government will sign a deal with the US government covering safeguards associated with the use of controlled US rocket technology in New Zealand. The agreement will be signed this week, and New Zealand will be allowed to prevent a launch that is contrary to local laws or policies.

A National Interest Analysis by the Ministry of Foreign and Trade said the agreement was consistent with the country's commitment to countering the spread of weapons of mass destruction, and would facilitate a local commercial space launch operation. Downsides were limited to ensuring the security of US technology which would require some extra overhead cost.

That agreement will be subject to select committee scrutiny as well.

BusinessDesk.co.nz

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