Introduction: Evolution of the Cayman Islands Civil Aviation
The Cayman Islands has a rich aviation heritage spanning the PBY Catalina (the “American Flying Boat”), which was the first Commercial airplane to fly into Grand Cayman (the largest of the three islands) in the 1940s and 1950s, to the modern-day drones, which, in step with the rest of the world, have grown in popularity in the Cayman Islands.
In terms of business opportunity, Cayman has recently distinguished itself by way of legislation which permits the addition of offshore aviation services to Cayman Enterprise City’s Special Economic Zone (now becoming the Cayman Maritime & Aviation Services Park). This innovation, which has gained tremendous traction, enables international aviation service businesses to also benefit from Cayman’s tax-neutral environment. These include aircraft owners and brokers, corporate head offices of aviation industry related businesses, aircraft manufacturing and repair businesses, technology companies and start-ups focused on aviation research and development, companies providing management consultancy and any other specialised services to the aviation industry. The Park is slated to become the largest transportation services group in the region and allows aviation companies the means to set up a physical presence in the Special Economic Zone in a cost effective and time efficient manner. The business, with a fully staffed office, can be fully operational in four to six weeks, inclusive of time spent obtaining any necessary staff visas. The ability to establish physical presence in the Zone facilitates aircraft registered with Cayman’s Civil Aviation Authority to meet Air Operator’s Certificate requirements in cases of commercial air transport. Already the Zone boasts over 200 companies which benefit from Cayman’s lack of corporate, income, sales, capital gains, or payroll tax.
Added to this, the CI$55 Million dollar Owen Roberts International Airport Expansion and Renovation Project currently underway, and the recent ground-breaking for the Civil Aviation Authority’s brand new home next to this airport (named after a RAF Wing Commander, Owen Roberts, who was a pioneer of commercial aviation in Cayman), have led to a growing “buzz” in the aviation industry. This is an exciting time for aviation in Cayman.
What of Drones?
What was once a tool used exclusively by the military is now being used globally for commercial purposes and perhaps more as a toy. Drones were typically operated by pilots or military personnel who were formally trained in small unmanned aircraft (“SUA”) technology, systems and operations. Today, the average drone operator does not possess formal training in the handling of these drones and other SUA and this has created a need for increased regulation of the industry.
Regulation of Drones
As with a Boeing 737 and other conventional aircrafts, there are certain “rules of the air” which apply to drones and other SUA, including those equipped with surveillance or data acquisition capabilities. In the Cayman Islands, the first set of rules can be found in Article 73 of the Air Navigation (Overseas Territories) Order 2013 and apply to SUA with a mass up to and not exceeding 20kg. Similar to other countries, different rules and restrictions apply in the Cayman Islands, depending on whether the drone is being used for commercial gain or recreational flying.
At a minimum, a drone operator is required to take adequate steps to fully understand the rules governing the use of the drone. There is a legal obligation to conduct proper safety checks and to ensure that all parts of the drone are properly working prior to flight. The operator is also required to ensure that the drone at all times remains within his clear line of vision. The operator must, of course, take all necessary steps to avoid collisions; not operate the equipment in any way that may cause danger to people or property; and not fly the drone in congested areas.
Any commercial usage of a drone or other SUA is subject to approval and licensing requirements which are strictly observed. The owner/operator must obtain prior approval from the CAACI and obtain a business licence from the Department of Commerce and Investment.
If the drone is to be used for commercial purposes such as aerial work or surveillance, permission must first be obtained from the CAACI. Permission is obtained by submitting an application form together with a detailed Operations Manual, a complete evaluation checklist and a fee of $2,000. On average, the CAACI receives two applications per month, which suggests there is not a lot of activity in this area, compared to other countries, such as the United States and Canada.
Drones with cameras or video equipment are restricted from flying:
(i) over and above 150 meters of any congested area or organized open-air assembly of more than 1,000 persons;
(ii) within 50 meters of any vessel, vehicle or structure (not under the control of the drone operator); or
(iii) within 50 meters of any person or 30 meters during take-off or landing (not including the operator).
With the increased use of drones particular by drone hobbyists and the potential risks of accidents involving conventional aircrafts, the CAACI has issued additional restrictions which affect drone operators. This includes “no fly zones” within the Cayman Islands’ three airports and the prisons. In these cases, it is illegal to fly a drone within three nautical miles of any of the airports or one nautical mile of the prisons. While the Cayman Islands Law Reports do not yet contain any cases relating to breaches, the CAACI was no doubt influenced by the reported spike in usage of these drones, particularly in the vicinity of the Owen Roberts International Airport. The CAACI’s Direction was also likely influenced by reports from other parts of the world showing the role that drones and other SUA have played in smuggling contraband into prisons and breaching security systems. As such, the CAACI’s Direction is aimed at enhancing security in the Cayman Islands, especially in relation to its prisons.
There is currently no requirement under the regulations for drones to be registered. The Federal Aviation Authority in the United States had previously imposed a registration requirement which is now under review. Similarly, Cayman Islands regulations do not require operators to have a special flight operations certificate as required in Canada.
The CAACI is responsible for ensuring compliance of the laws relating to SUA in the Cayman Islands. An operator, who fails to comply with these laws, may be guilty of an offence and liable to a fine not exceeding $6,000 or imprisonment for a period not exceeding two years, or both. Interestingly, there have been no prosecutions to date, which could suggest that there is relative compliance in this area. Whether this is real or perceived, only time will tell, as more persons become knowledgeable about their rights and obligations in relation to drones. The CAACI attributes compliance to its ongoing partnership with the Royal Cayman Islands Police Service, in bringing about educational awareness and safety training seminars. Safety is the overriding concern for the CAACI who have confirmed that there have been no reports or incidents arising since the introduction of the laws. By way of comparison, there have been recent reports of prosecution in the use of laser-type lights which were shone at a police helicopter, with the overriding concern being for the safety of the aircraft.
As drones continue to grow in popularity, there will likely be an emerging number of disputes regarding their use. It is anticipated that legislation in relation to the use of drones and other SUA will evolve over time to keep pace with technological advancement. An interesting point to consider is how to best ensure that these drones comply with privacy laws. Operators are prohibited from flying their drone within 50 meters of a person, building or structure, or overhead groups of people at any height.
Protecting Privacy and Elements of Data Protection
Apart from safety issues the privacy issues and potential harassment actions connected with drones and other SUA are likely to create the most fertile ground for disputes, which will no doubt occupy many legal minds and cause a growth spurt to the currently bare case law in Cayman. There may also be data protection concerns especially with new regulations and legislation. The European Union’s General Data Protection Regulation (“GDPR”), came into force on May 25, 2018 and sets a single data protection standard across the EU which gives individuals more control over their personal data and considerably raises the stakes where there are breaches. Added to this is the Cayman Islands Data Protection Law, which comes in to force early next year and is intended to give the Cayman Islands a modern framework for protection against the misuse of individuals’ personal data, which would include identifiable images of people captured by drones with cameras. While the Cayman Data Protection Law, based on international best practice, only speaks to the actions of people or companies within its borders, the EU’s GDPR regulates the export of personal data outside the European Union and has extra-territorial effect. This means that, regardless of where it is located, any entity that holds or processes personal data on an EU subject must comply with the EU directive or face severe penalties which can be as crippling as EUR 20 million or 4% of the company’s annual turnover, whichever is higher. Under Cayman’s Data Protection Law, refusing to comply with an order would be an offence, with the data controller (the individual who determines what data is being processed and why) subject to a fine of CI$100,000 or five years in jail.
Both the EU GDPR and Cayman’s Data Protection Law emphasize the requirement of “consent” to varying degrees and the duty to ensure that explicit consent has been given by individuals for their personal data to be obtained and held. It is anticipated that proper “consent” (or lack thereof) to drone recordings could feature prominently in privacy disputes relating to the use of drones and other SUA and the sharing of images obtained in that flight. By their very nature, drones can unobtrusively hover overhead and capture photographs and other personal information relating to the “unwitting victim” below.
It is noted that Canada’s regulations on drone use include recommendations that drones should be flown during daylight hours and in good weather and the drone operator should respect the privacy of others.
It may well be that regulations regarding drone use in Cayman will need to be refined to ensure that all such matters are clearly stated.
Drones, perhaps, represent to the aviation industry in Cayman the huge steps taken in the general development of these Islands over the last 70+ years. We have come a long way since the Catalina first touched down on our shores. From a regulatory standpoint, the drone forms part of a rapidly moving business, which will present challenges as it evolves. While Cayman has a controlled regime, this is in large part due to the size of the Islands and the current low degree of commercial activity involving drones. As the drone industry matures and new technologies and uses are introduced, additional challenges and regulation can be expected. We also look forward to some interesting case law in this region, which we think is inevitable.
* Gina M. Berry is the Country Managing Partner of Higgs & Johnson’s Cayman Islands office, where she also heads the real estate & development team. Ms. Berry has practiced law in the Cayman Islands for approximately 19 years and can be contacted at email@example.com