Proceedings of the Workshop - United Nations Office for Outer ...

136 THE ROLE OF INTERNATIONAL ORGANIZATIONS IN PRIVATIZATIONAND COMMERCIAL USE OF OUTER SPACEAfter this short description of the restructuringprocess of the intergovernmental satellite organizations,it can be said that the new companies stemming from theinternational organizations will not be in a position toaccept the rights and obligations of the SpaceConventions, and it is doubtful whether the remainingintergovernmental organizations with no furtheroperational activity in space would accept any liabilityderiving from acceptance thereof. In the case ofInmarsat Ltd., established under English law, the UnitedKingdom is a Party to the Space Conventions mentionedabove and this is also the case of France and EutelsatS.A. which will be established under French law.Concluding remarksThe intergovernmental satellite organizations have beencreated on the same model and have worked for anumber of years according to the same principles;because of their purposes and of the markets on whichthey operate, they have been faced with the challenge ofadapting their mission and structure to a newenvironment. It is likely that this unprecedented changein intergovernmental organizations will result, even ifthere are many similarities in the restructuring modelswhich have been adopted, in entities with very differentdestinies in the future.Commentary PaperRestructuring of InmarsatMr. David SagarLegal ConsultantInmarsatReasons For Restructuring1 Inmarsat’s restructuring was completed on 15 April1999, when the Inmarsat system was transferred toprivate sector UK-based holding and operatingcompanies (“the Companies”). However, theintergovernmental organization (“IGO”) continuesunder an amended Convention in order to oversee andenforce the continued performance of the GlobalMaritime Distress and Safety System (GMDSS)services and certain other obligations by the Companiesunder a Public Services Agreement.2 Inmarsat was the first of the international satelliteorganizations (ISOs) to privatize but Intelsat andEutelsat are also engaged in similar processes. Thisreport explains why Inmarsat’s Member States felt itnecessary to embark on this privatization and sets outthe main features of the new structure as well asmentioning some of the special corporate, commercialand legal problems which had to be overcome.3 On the initiative of the International MaritimeOrganization (IMO), Governments set up Inmarsat in1979 to utilize space technology for worldwidemaritime communications, especially for safety of lifeat sea. The 1980’s were years of steady growth forInmarsat, with few commercial pressures. Its serviceswere extended to aeronautical and land mobilecommunications, and today there are over 150,000users of the system worldwide.4 From around 1990, however, a combination offactors urged change upon Inmarsat's co-operative andinter-governmental structure, namely:increasing privatization of the telecommunicationsindustry in many countries;the advent of competing satellite systems such asIridium and Globalstar, affecting the risks associatedwith further investment in Inmarsat;a demand by regulators including the EuropeanCommission for wider access to space segment capacityand a demand for removal of privileges and immunities,to create a level playing-field with the competitors;an urgent need for a more normal corporate structure,with limited liability of investors and a small, fiduciaryBoard able take decisions quickly, and raise capitalfrom the financial markets for new systems;