15 January 2015

Legal Issues Surrounding the Use of Commercial Drones in Hong Kong and Singapore

From Military to Civilian Use

Traditionally, it was militaries that developed, then deployed unmanned aerial vehicles (drones) for combat roles or intelligence-gathering missions. The use of drone technology in the recreational space, and a projected spike in the commercial exploitation of drones, have caught the attention of Hong Kong and Singapore’s regulators. The ongoing privacy debate about how best to regulate presently under-regulated commercial drone use is expected to intensify. Actual or prospective commercial drone operators are advised to monitor what is expected to be an evolving aviation and privacy regulatory environment in two of the Asia Pacific’s key commercial centers.

The Commercial Drone Market

The commercial drone market, whilst still in its infancy, possesses significant growth capacity. Though sales of drones will be dominated by traditional military usage for the foreseeable future, research by the Teal Group has forecast that annual spending on drones, including civilian and military applications, will reach US$11.6 billion in 2023. This represents an increase from around US$5 billion in annual spending in 2014. The Teal Group posits that there will be about US$89 billion in cumulative spending on drones globally over the next 10 years, of which US$8.2 billion of that amount will be spent on commercial and civilian drone use. Retail and e-commerce—along with the related logistics and shipping industries—may have the most to gain from the proliferation of commercial drone usage. Other commercial uses of drones that will propel the rise of commercial drones include, but will not be limited to: private and public security monitoring; assisting agribusiness to better monitor crop production; aerial film production (including by studios, the media and news networks); the inspection of tall buildings; and land surveying.

Hong Kong and Singapore are jurisdictions ripe to witness enhanced commercial drone use. Both jurisdictions are: (i) densely urbanized tech-savvy populaces comfortable with e-commerce, whereby commercial drone technology would help alleviate traffic congestion and optimize package delivery time; (ii) close to drone technology producers in Asia; and (iii) through a lack of regulation around commercial drone use, have (at present) permissive regulatory environments for commercial drone operations. In Hong Kong alone, it is estimated that there are around 5,000 recreational and commercial owners of drones (and this figure is escalating).1 With multinational companies looking to scale up their use of commercial drones in delivery chains globally, there has been significant public discourse about the need for enhanced regulations surrounding commercial drone use in Hong Kong and Singapore, commensurate with the increase in utilization of commercial drone technology.

The Hong Kong and Singapore Commercial Drone Regulatory Regimes

There has been an emerging trend of drone manufacturers and distributors relocating to Hong Kong because of the region’s light touch airspace regulation to meet the growing regional demand for drones. Presently the use of smaller drones (weighing under seven kilograms without fuel) for recreational purposes is unregulated. Hobby users of drones weighing over seven kilograms, however, are required to apply for a permit from Hong Kong’s Civil Aviation Department (CAD) 28 days prior to flight.

Parties using drones for commercial purposes (irrespective of the size of the drone), are legally obligated to apply to CAD for approval to use the drone, regardless of the drone’s size and weight. A written response from CAD outlined its approach to assessing commercial drone use applications: “[…] in the absence of international standards, CAD considers applications for commercial unmanned aircraft systems operations on a case-by-case basis taking into account the necessary safety requirements for the protection of persons, properties and other airspace users in the vicinity.” Applicants are also asked information about the manufacturers and the amount of insurance held against third party liability risks. However, under Hong Kong law, there are no specific rules regarding aerial photography or videotaping from an airborne drone.

In Singapore, as in Hong Kong, there is growing public interest in drones for recreation and commercial purposes such as aerial filming. The Singapore Air Navigation Order (ANO) currently applies to the operation of drones that weigh not more than seven kilograms without fuel. The ANO prohibits the flying of drones within five kilometers of an aerodrome, or at an altitude higher than 200 feet above the mean sea level when outside five kilometers of an aerodrome. An exception applies where a permit has been obtained from the Civil Aviation Authority of Singapore (CAAS) at least seven working days prior to the date of activity (which is processed on a case-by-case basis).2 Unlike Hong Kong, there are no separate thresholds between recreational and commercial drone use for the purposes of regulatory assessment. Parties who breach the rules can be fined up to US$15,000. Repeat offenders can be fined up to US$30,000 and/or be jailed for up to 15 months.

The International Civil Aviation Organization (ICAO) has embarked on the development of international standards to regulate drones, particularly in airspace used by manned aircraft. The work covers areas such as certification of drones, competency requirements of the drone operator/pilot, and guidance on the drones operations. Singapore, represented by the CAAS, is a member of the ICAO Panel tasked with developing such standards. In July 2014, Lui Tuck Yew, Singapore’s Minister for Transport conceded that: “The current regulations do not adequately address unmanned aircraft heavier than seven kilograms, to which regulations for manned aircraft would apply.” Minister Yew did, however, map out the future direction of drone regulation in Singapore:

“In parallel with the development of international standards by ICAO, CAAS is reviewing the regulatory framework for the various types of unmanned aircraft and their operations in Singapore. This review, which is being done in collaboration with other stakeholders, takes into account the safety and security risks posed by unmanned aircraft activities, particularly near aerodromes, built up areas and critical/sensitive installations. The review will provide the necessary regulatory oversight of UAS activities while allowing for the growth of the industry. Operating guidelines to advise operators on the safe conduct of UAS activities are also being developed. The proposed regulatory framework will be rolled out for public consultation in the coming months.”

The Privacy Conundrum

The likely rise of commercial drone use in Hong Kong and Singapore presents compelling (and unanswered) privacy concerns that, if not effectively addressed, could chill commercial drone flights. Commercial drones’ capabilities to collect data with precise resolution and granularity at distant vantage points—often for long periods, and on a continuous basis, enables them to conduct effective aerial surveillance in a sustained fashion. Put simply, the capacity of commercial drones to invade people’s personal spaces in high density urbanized regions triggers a slew of privacy concerns that to-date, have not been addressed by Hong Kong and Singapore regulators.

In Hong Kong, aviation safety is the primary concern of CAD. However, whether or not the department is concerned with privacy and data protection with respect to drones is unclear. There is an absence of regulation around drone photography and/or videotaping. Hong Kong’s Privacy Commissioner Allan Chiang has urged the government to reform its privacy laws to address privacy issues caused by drones.3 Privacy protection under the current Personal Data (Privacy) Ordinance is limited. Enforcement action may be taken by invoking the Data Protection Principle (DPP) on collection of personal data which requires, among other things, that personal data shall be collected by fair means and that practical steps shall be taken to notify the person before collecting their data. The Hong Kong Privacy Commissioner is empowered to remedy a contravention of a DPP by issuing an enforcement notice to the organization or person at fault. However, while contravention of the enforcement notice is an offence, contravention of the DPP per se is not. There is also the practical difficulty of identifying or tracing the offender responsible for the data collection in question.

In Singapore, similar to Hong Kong’s nascent drone regulatory regime, there are no laws specifically targeting the use of drones that invade people’s personal spaces. Under Singapore’s Personal Data Protection Act, permission is needed before taking photos or videos for commercial use. However, this applies only to private places, not public spaces. The Personal Data Protection Act also does not apply when photos or videos are taken in private areas for personal use, such as during a visit to a friend’s home. Instead, aggrieved parties can rely on other legal avenues. If a drone takes pictures of a woman in a state of undress, it could be an insult to her modesty, which is punishable as a crime under Singaporean law. Flying a drone above a person’s home may be construed as trespass because the person owns a certain amount of airspace above it, although the height of the airspace is not clearly defined. Moreover, anyone using a drone to take photos or videos of people could be found guilty of harassment. As yet, these scenarios have yet to be tested in the courts (and may need to be further developed), though the range of potential legal pitfalls around the use of commercial drones conflicting with privacy concerns is extensive.

Conclusion

Technology often outpaces regulatory reaction. The business potential brought by commercial drones can be game-changing. Whether the advent of commercial drone use in Hong Kong and Singapore means that drone operators will exist in a state of regulatory uncertainty, or face regulatory clampdowns or restrictions, is unclear. However, this will be an evolving regulatory regime in Hong Kong and Singapore that warrants close monitoring.

If you have any questions regarding this update, please contact the Sidley lawyer with whom you usually work or

Yuet Ming Tham
Hong Kong/Singapore
yuetming.tham@sidley.com
+852.2509.7645/+65.6230.3969


1Editorial, “Drone Invasion Needs Regulation,” July 13, 2014, South China Morning Post; and Danny Lee, “Our Skies Are Within Reach…Of Everyone,” July 7, 2014, South China Morning Post.

2For example, in the United States, concerns are growing over safety issues related to drones, with more than 80 cases recorded of close calls of drones flying near airplanes and crowds in September and October 2014. The Federal Aviation Administration (FAA) received 41 reports of safety incidents involving drones, after receiving fewer than 10 cases a month in March and April. There were a total of 193 such cases in the period from February 22 through to November 11, according to FAA data.

3Allan Chiang, “The Privacy Challenges of Google Glass and Drones,” April 29, 2014, Office of the Privacy Commissioner for Personal Data, Hong Kong, December 18, 2014.

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