European Commission

1. European Commission GNSS institutional and economic issues Presentation GNSS 5.3 by Markus Bruns

2. Legal Aspects

3. Background • As air navigation services evolve from ground based to space based systems, these services are increasingly provided outside a single contracting state • In order to cope with the legal consequences of this development, ICAO has been working on a legal framework with regard to GNSS since 1992 • In this context, ICAO Assembly Resolution A32-20 instructed Council and the Secretariat General to establish a Secretariat Study Group (SSG) on this subject • The 33rd Assembly task the Council and the Secretariat General to continue its work on this matter

4. Main Conclusions so far (I) • Art 28 of the Chicago Convention should not be amended. It reads: • “Each contracting State undertakes, so far as it may find practicable, to: • a) Provide, in its territory, airports, radio services, meteorological services and other air navigation facilities to facilitate international air navigation , in accordance with the standards and practices recommended or established from time to time, pursuant to this Convention; … • b) …” • It should be kept in mind that Art 28 allows for the delegation of operational functions to other entities • However, States are still responsible for ensuring that the air navigation facilities comply with SARP’s, to the extent practicable

5. Main Conclusions so far (II) • National laws governing the liability of air traffic control agencies seem to be reasonably adequate to determine or apportion liability arising from accidents involving GNSS failure or malfunction • These national laws are based on negligence (or, some cases, gross negligence) • They require proof of fault of the ATC agency or its employees

6. Main Conclusions so far (III) • Rules relating to procedures and jurisdiction are not fully adequate to bring all parties before the same court with a view to prompt and equitable compensation • In particular, court action against foreign States or agencies of foreign States may be impossible because of the principle of sovereign immunity • According to the SSG, a contractual framework is a means to solve this problem

7. Contractual Framework for CNS/ATM including GNSS • Contracts must be in line with the Charter on the Rights and Obli-gations of States Relating to GNSS services (Resolution A32-19) • To maintain uniformity, some common elements are necessary, applicable to all contracts and listed in a Resolution, including: a) participants in GNSS, including contractual service providers shall comply with ICAO SARPS; • b) the issue of sovereign immunity • c) although Art 28 States remain responsible for ATC services in their territory, other participants also retain responsibility for the services they undertake to perform; this may necessitate a recourse mechanism • d) participants should have adequate risk coverage • e) liability should be based on fault

8. Parties to the Contractual Framework • ATS Provider • - an Art 28 State, or • a private entity charged by the State (e.g. Skyguide), or • an international organization (e.g. Eurocontrol) • GNSS SIS Provider • - a State, or • a private entity, or • an international organization • SBAS SIS Provider • - a State, or • a private entity, or • An international organization Others

9. Remaining issues • Should an international dispute settlement mechanism (e.g. arbitration or an international claims commission) be established? • Should a maximum cap for compensation, to be paid by one Art 28 State, be introduced? • Should the maximum cap be combined with a compensation fund? • Is the risk associated with GNSS services insurable? • How can the equal treatment of governmental and non-governmental CNS/ATM service providers be guaranteed? • How can the victim oriented approach of the 1999 Montreal Convention be translated into a GNSS based CNS/ATM system?

10. Approach for a long-term solution • Some of the open questions cannot be solved in a contractual framework only, in particular: • - Sovereign immunity: even if States ensure in domestic legislation that this is not a barrier to compensation, it remains questionable whether different approaches in different countries will not lead to legal uncertainty • - Procedural questions: reliance on the status quo (fault liability with a burden of proof on the victim) does not make for a comprehensive and fair legal framework • The contractual framework can possibly only be an interim solution!

11. An International Convention? What are the advantages? • Final and predictable allocation of liability • Legal certainty, which will increase the confidence into CNS/ATM services, including GNSS • Focus on a victim-oriented approach, avoiding the deficiencies of the existing framework which could lead to serious injustice • Equal treatment of governmental and non-governmental CNS/ATM service providers

12. The next steps • The contract provisions to be included in the contractual framework are under elaboration by the ICAO secretariat legal study group • The establishment of an international convention is being seen for a later stage • All States interested in the provision of air traffic services based on GNSS should investigate into their own legal system and provide input to the ongoing discussion

13. Conclusions • GNSS constitute a challenge for the existing legal framework for CNS/ATM services because they are increasingly provided outside of the boundaries of a single contracting State • A contractual framework is an interim solution for this challenge • However, key questions like sovereign immunity and procedural issues can only be dealt with in an international convention • Hence ICAO and all states interested in GNSS are invited to continue investigations in this direction

14. Economic Aspects

15. The challenge • Airspace users are particularly concerned about any new introduction of infrastructure • Implementation of GNSS needs to be economically viable • However what does economic viability mean? • Since aviation is not the only user of GNSS associated costs need to be fairly shared among users • Some states will be GNSS service providers and many others will only use this service.

16. Personal comms and location Cars (route guide etc) Light Commercial Vehicle (route guide etc) Truck & Bus (route guide etc) Other Worldwide GNSS Market Size Breakdown by main application 4,000 3,500 3,000 2,500 Number of users (million uusers) 2,000 1,500 1,000 500 - 2005 2010 2015 2020 Compared with other applications, the civil aviation market is rather limited! Source: PWC Final Report November 2001

17. Economic aspects of GNSS for aviation • Cost savings in terrestrial infrastructure versus new costs for GNSS technology (conservative CBA). • Careful transition planning in consultation with the airspace users will be required. • How can one evaluate the benefits from better direct routing? EU studies have identified benefits of up to 280 flight hours per aircraft when introducing ADS, which will rely on GNSS. • How can one measure potential improvements of safety in some remote areas of the world?

18. A potential approach • World-wide benefits of GNSS need to be assessed • Some regions will benefit more than others. Hence a differentiated approach should be applied • Infrastructure savings and new operational benefits have to be seen together • Distributions of costs and benefits need to be equal • Other GNSS users have to contribute their fair share

19. Conclusions • Economic benefits of GNSS world wide through reduction of terrestrial infrastructure and better services. • Operational benefits difficult to quantify and to attribute. • Some benefits mostly accrue in non - GNSS provider states. • Aviation only one GNSS users among many others. • Consultation with air space users and air traffic service providers necessary