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RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
CIVIL AVIATION SAFETY AUTHORITY
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RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
CIVIL AVIATION SAFETY AUTHORITY
ACTING CHAIR (Senator Ferris)
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RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
(SENATE-Wednesday, 24 May 2000)
- Start of Business
- TRANSPORT AND REGIONAL SERVICES PORTFOLIO
- CIVIL AVIATION SAFETY AUTHORITY
- Airservices Australia
Content WindowRURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE - 24/05/2000 - CIVIL AVIATION SAFETY AUTHORITY
CHAIR —I declare open this public hearing of the Senate Rural and Regional Affairs and Transport Legislation Committee. The committee will continue its consideration of the budget estimates and will continue to hear from the Department of Transport and Regional Services. As I stated yesterday, answers to questions on notice and additional information should be received by the committee no later than Friday, 7 July 2000. For the benefit of all present the following breaks will occur: morning tea from 10.30 a.m. to 10.45 a.m., lunch from 1 p.m. to 2 p.m., afternoon tea from 4 p.m. to 4.15 p.m., dinner break from 6.30 p.m. and 7.30 p.m. and a tea break from 9 p.m. to 9.15 p.m. Mr Harris, do you wish to make an opening statement?
Mr Harris —I apologise to the committee for the miscommunication that occurred this morning. I received a message last night saying that transport was on this morning. I did not understand that to mean that we were starting with CASA. The responsibility is mine and I apologise for the mistake. I hope the committee can understand that in the circumstances it was just a simple miscommunication.
CHAIR —Thank you for that. There were a lot of changes made but that is what we decided last night. These things happen. I am sure there was no conspiracy.
Senator O'BRIEN —I was going to suggest that we can make up time by varying the breaks: break for lunch at 1.10 p.m., break for dinner at 6.40 p.m. and conclude at 11.10 p.m.
CHAIR —Okay. That is not a problem.
Senator O'BRIEN —Welcome, gentlemen. The first issue I wanted to deal with is the letter or message or note or however you would describe it to Mr Rod Eddington relating to the class G airspace trial. Firstly, I want to get the chronology of this issue clear because it is a very serious matter and it deserves and will receive detailed consideration. The class G trial was to commence on 8 October 1998 but was deferred for two weeks, as I recall it. That delay was due, in part, to some internal dissension over the safety of the trial. In fact, in the risk assessment process, sections of a key report were downgraded from an A rating—that is, unacceptable risk—to a softer B rating. That is as reported by AAP on 1 November. Mr Toller, am I correct in saying that the airlines assumed that there would be effective radar coverage in the area covered by the trial?
Mr Toller —No. It was always understood that there would be a radar information service available in the area of the trial.
Senator O'BRIEN —Radar communication, did you say?
Mr Toller —Radar information was a use of the radar to give the airlines and any other IFR traffic any radar information that was pertinent to their flight. It was never guaranteed on a 100 per cent basis, though the commitment that we got from Airservices was that it would be consistently available. They would not absolutely guarantee it but said that it would be consistently available.
—The position was that radar or radar communication information would be consistently available.
Mr Toller —Within the class G area, the area of the trial, Canberra to Ballina, where there had previously not been access to radar information, that information would now be made available and, as I say, the wording that was given to us was that it would be made available consistently but not guaranteed. In other words, if there were workload issues such that controllers had to give precedence to aircraft in a higher class of airspace, then they would do that.
Senator O'BRIEN —It is suggested that in respect of this the safety report was changed some time after the report was signed off by the safety panel: is that correct?
Mr Toller —I do not recall. I will take that on notice.
Senator O'BRIEN —I remind you that there is an electronic memo from Airservices to Mr Parfield. Shelley is the person who has signed it. It says:
You have altered the hazard log and resulting safety requirements by including new paragraph 6.2.9 and 6.2.10 in the second amendment to the safety case (somewhat interestingly dated 28/9/98 for a document produced and distributed on 6/10/98), without consultation or approval of any other members of the panel.
Does that remind you of what took place?
Mr Toller —No, Senator. I have no recollection of that. In fact, I do not even recognise those names. The issue of a safety case is that it is a living document and, certainly, work was going on right up until the day before the trial started, in terms of analysing various hazard risks with the airlines and with various other people. Hazard analysis was going on right through this whole process.
Senator O'BRIEN —I believe that we are talking about, from Airservices' point of view, the sort of services that you suggest were going to be supplied—that is, the additional radar communication information. The document goes on:
There has been no discussion about the provision of extra staff on an on-going basis. The only comment I made was that I would be present as an additional observer on the first morning after Mr Evans decreed that the originally identified Safety Requirements and subsequent OPB suggestion of a blackout NOTAM were not to be implemented.
And there was a question about covering the cost of overtime for staff each day to meet the new mitigator.
Mr Toller —These sound to be very much Airservices issues about how they were to provide the service, rather than what service was to be provided. I had an assurance from the chief executive of Airservices that radar information would be consistently provided within the area during the period of the trial.
Senator O'BRIEN —I want to check in detail the consultative process that was followed with all affected parties in the development of the trial and the actual operation of the trial. Initially there was general support for the trial to proceed, as I understand it. But there was some confusion over the basis of the support. For example, there was an expectation on the part of some groups that the radar information service would be available on demand; but that was not the case, was it?
—I believe it was, Senator. As I say, it was never going to be guaranteed, in that the times when it was not going to be available were the times when the controllers were busy looking after an aircraft in a higher class of airspace. However, that was not considered to be an issue that would arise particularly frequently. It was recognised that there are always peak periods and there would be times when there would be a number of aircraft that needed controlling and you had to give priority to them, and the priority was going to the lowest for the aircraft in the class G airspace. Other than that, I think it is safe to say that the radar information service was consistently available throughout the trial. It did work as a radar information service.
Senator O'BRIEN —But not available on demand, as some people expected.
Mr Toller —It depends what you call `on demand'. RIS on demand meant in our view that, if you asked for it, there was a higher probability that you would get it, and I think that is exactly the service that was provided.
Senator O'BRIEN —`On demand', as I understand it, means that if you asked for it you would get it, and not that there was a high probability that you would get it.
Mr Toller —No. The rider was always there that it was subject to workload of the air traffic controller, because everybody accepted that aircraft in class C airspace—in other words, let us say, the 737s flying in and out of Sydney who are entitled to full and total air traffic control—would be guaranteed that. You would not give that away in favour of the class G airspace where there is very little traffic. We were not asking Airservices to provide a 100 per cent guaranteed radar service within the area. We were asking them to provide a very, very high level of consistency, and we talked around—and never agreed—being able to provide somewhere around 98 per cent of radar information service. This is not radar control, remember: this is effectively an air traffic controller giving a snapshot of anything that he may see on his radar screen at the time and that is relevant to a particular aircraft.
Senator O'BRIEN —When was that issued?
Mr Toller —That was H 48 1998, which was the original NOTAM issued on 13 August 1998.
Senator O'BRIEN —Once the trial got under way, there were review teams meeting on a weekly basis: is that right?
Mr Toller —Initially, yes.
Senator O'BRIEN —So when the trial started there was a weekly review team. How long did that weekly review process continue?
Mr Toller —I would have to take that on notice. I do not know exactly how many meetings were weekly and just how frequently they met thereafter.
Senator O'BRIEN —Can you tell me how and by whom these groups were selected? There is a lot of publicly available material, but I do not have it in any consolidated form. It would be useful to be put it in the record now.
Mr Toller —I cannot remember exactly how they were put together.
Senator O'BRIEN —Who selected them?
Mr Toller —They were selected, I imagine, by the authority but I will take that on notice as to what the exact process was.
Senator O'BRIEN —I assume that all industry, CASA and Airservices meetings about this trial were properly minuted and that those minutes would be available?
Mr Toller —I am not sure how many of those meetings were formally minuted and how many of them were informal consultations. Obviously some of them were minuted, yes.
—So you think that some were minuted and that for some there are no records?
Mr Toller —Some were discussions. Obviously a lot of discussions went on between members of the authority and members of Airservices during the period that we were developing the trial and during the trial. There were also formal meetings which were minuted.
Senator O'BRIEN —What about meetings that involved the industry, as distinct from Airservices or as well as Airservices? Were they minuted?
Mr Toller —I do not know, Senator.
Senator O'BRIEN —Surely it would be fairly fundamental to know which people were being told and to have a record of what people were being told about the trial.
Mr Toller —I will take that on notice. I would expect them to have been minuted.
Senator O'BRIEN —Would all that material be consolidated within CASA, with proper files in a proper system of records about the trial, so that they would all be readily accessible?
Mr Toller —Yes, Senator.
Senator O'BRIEN —Would those records also set out the views of all parties who had an interest in the trial and who were consulted?
Mr Toller —On file we will have all the comments that were made to us in writing, certainly. There were plenty of those for obvious reasons, including comments from those who were involved in the working groups.
Senator O'BRIEN —So a full record is available on file of all written communications?
Mr Toller —Yes.
Senator O'BRIEN —I guess that, if people had views and concerns throughout the trial and had communicated them orally with your officers, those views would have been minuted and recorded? I say `minuted' but `noted' might be a better way of putting it. Was a file note kept of any communication from the industry or Airservices about the trial?
Mr Toller —We were running a hotline which was taking comments. I am not sure how much of it was actually diary noted, but obviously I would think that the majority was. I will take that on notice.
Senator O'BRIEN —I suppose you could say that there may have been some comments that may not have been recorded, depending on the importance of the comments. But would you think that comments from the regular public transport operators involved in the airspace covered by the trial, if they had been communicated to CASA, would have been recorded?
Mr Toller —Yes, bearing in mind that we were keeping—
Senator O'BRIEN —When you say that you would think that, can you assure the committee that that is the case?
Mr Toller —Yes. A lot of that was done in writing. We were keeping in very close contact at the time with, particularly, the Regional Airlines Association of Australia. There was a lot of written communication going between the two; there were a lot of meetings between us. I think it is safe to say that we were working very closely together.
—So the committee could, for example, by looking at those records, establish where there was opposition to the trial and what the basis of that opposition was—for example, whether it was based on a conservative but legitimate view of safety?
Mr Toller —Yes.
Senator O'BRIEN —Or, alternatively, whether the opposition was just the industry and the unions refusing to support the reforms, as some suggest, because of some inherent resistance to change, whether or not the reforms might actually bring a safer aviation environment. So we would be able to discern that from the records as well, would we?
Mr Toller —Yes. We know that it was a controversial issue and remained so throughout. We know that we did get a number of avenues of concern. They came from virtually everywhere including, obviously, within my own organisation. There were strong complaints from operators in Western Australia who were not even affected by it, and concerns from the pilots association. Yes, I think it is safe to say that the concerns were widespread. I think we also have to recognise that it was a trial, a demonstration, if you like, that at the time we all learned from.
Senator O'BRIEN —So we have a full record there. I also want to get a clear picture of the relationship between the authority and the minister, Mr Anderson, and his office in the period leading up to the trial and during the trial. I have a particular interest in the relationship between CASA and the minister and his office in the period immediately before the trial was terminated. I also want to get a clear picture of the role of the then chair of CASA, Mr Dick Smith, the rest of the CASA board and CASA management over this period. Just as there may have been an industry position that was resistant to change, there could also have been a view held by some CASA board members that things must change but that perhaps that drive for change did not give sufficient regard to the risks involved. The CASA class G demonstration actually commenced, did it not, on 22 October 1998 in airspace between Canberra and Ballina below 8,000 feet?
Mr Toller —It did.
Senator O'BRIEN —Just over a week after the start of the trial, Qantas withdrew all aircraft from the area because of the trial and safety concerns.
Mr Toller —Yes.
Senator O'BRIEN —I think Mr Gillies said that Qantas was prepared to participate in the class G trial on the basis of assurances from CASA about radar and radio services but that those services did not eventuate. In fact, Qantas's participation in the trial only resumed after radar at Williamtown was extended from 6.00 a.m. to 10.30 p.m.
Mr Toller —That is our general recollection of the events, without actually looking at the details. We discovered what was described at the time as `a radar hole' at Williamtown—that is, at the times that the RAAF were not manning the area of Williamtown, it was not adequately covered by the radar sites elsewhere; it was in a shadow. The solution to that one was to extend the hours of the Williamtown radar—in other words, to bring more radar into play, which was the solution.
Senator O'BRIEN —I understood that they were operating their radar basically `office hours'. I am not sure exactly what hours that means, but do you know?
Mr Toller —Exactly; no. But I think, roughly from memory, it was about 8 till 6.
—Does that mean that there was not a precise start or end? I would have thought that the RAAF would have been a bit precise about that. You made need to take that on notice.
Mr Toller —I will take that on notice. As I have said, my recollection is that approximately their hours were 8.00 a.m. to 6.00 p.m., but I will take that on notice. That covered the majority but not all of the traffic in and out of Williamtown.
Senator O'BRIEN —Am I correct in saying that the decision by Qantas to withdraw from the trial led to a meeting between Qantas representatives and the minister on 2 November, Mr Harris? Perhaps you know, Mr Toller.
Mr Harris —I would need to check that there was a meeting with the minister. I am aware that there was a meeting on 2 November which involved industry parties, but I do not have any recollection that I could provide to the committee now of a meeting with the minister. I could check that and advise the committee.
Mr Toller —I believe that I met with the minister on 2 November. I do not believe that anybody else met with the minister on 2 November. We held an all-day meeting.
Senator O'BRIEN —Perhaps that is my error. There was a meeting between CASA, Mr Bernie Smith of Airservices and the minister.
Mr Toller —Yes, that is correct.
Senator O'BRIEN —Sorry, I did not intend to take you down the wrong path. The minister's media statement expressed confidence in you, Mr Toller, as head of air safety, and said that the trial would continue. But on that very day there were reports in the media that the RAAF had decided to carry an extra pilot aboard flights over its Williamtown base near Newcastle because of safety worries about radar black spots. Was that report correct?
Mr Toller —I am aware that the RAAF at some stage put some operational restrictions on their crews, yes.
Senator O'BRIEN —That is what was reported. Presumably, given the sensitivity of the trial and the fact that the minister just accepted your assurances about the safety of the trial and had gone public in making those statements, the media reports on that day which reflected on the safety of the trial would have attracted your very close attention, wouldn't they?
Mr Toller —I was not necessarily aware of that particular media report at the time, but present at the meetings that we held on that day were the top operational people of Ansett, Qantas and all the regional airlines, and the RAAF were also present, as were BASI and, obviously, Airservices. We spent a whole day at that meeting discussing the issues prior to my meeting with the minister to say that there were no immediate safety issues that required that the trial be terminated at that stage. But there were issues that needed to be resolved, such as the Williamtown radar hole.
Senator O'BRIEN —I understand that on that day, 2 November, the Sydney Morning Herald carried an article which said, as I said, that `the RAAF was using an extra pilot aboard flights over its Williamtown base near Newcastle because of safety worries about radar black spots'. The story went on to say that it followed `a decision on Friday by Qantas to cease flying into four regional centres' et cetera. The point that I am getting to is: given the state that the trial was in and the fact that that day you were involved in a meeting with the minister about the safety of the trial, wouldn't a report like that have attracted very close attention from CASA? Would there be other officers who would have drawn that to your attention or have been dealing with that issue?
—All the parties at the meeting on that day—
Senator O'BRIEN —Including Qantas?
Mr Toller —Including Qantas—most definitely including Qantas.
Senator O'BRIEN —This is 2 November?
Mr Toller —This is 2 November. The meeting as much as anything was to decide whether the problems that Qantas had seen, that they felt were sufficiently important to—temporarily at least—stop serving certain ports, could be resolved or whether the trial therefore should be terminated. It was not all the places that Qantas operated to within the area: one of the issues was that in Ballina, Lismore and Casino, from memory, you have got three airfields which are very close together and we were having communication problems within that area; the other was the Williamtown radar hole. I think we had a very constructive meeting that day, and the resolution of that meeting on 2 November was that the Air Force would increase their radar coverage at Williamtown and that we would make certain changes to the frequencies in use around the Ballina, Lismore, Casino area that would take away the concerns that Qantas had about that. And, as a result of those decisions taken at that meeting that day, Qantas agreed that they would resume flying.
Senator O'BRIEN —I understand that. I guess the point is that there was another player, effectively, expressing concern, in the form of the RAAF, on that very day. I am not sure whether they were at the meeting. It did not sound like they were.
Mr Toller —The RAAF were at that meeting and they were part of it, yes.
Senator O'BRIEN —They were at that meeting?
Mr Toller —Yes, very much so. They had an air commodore at that meeting who expressed their concerns, along with Qantas and Ansett. In fact, Ansett not so much because Ansett were actually not operating in that area. But Qantas were representing their subsidiaries, predominantly Eastern Airlines. The Ansett carriers in the area are members of the Regional Airlines Association and were represented by the Regional Airlines Association, although Ansett were also present at that meeting.
Senator O'BRIEN —Nevertheless, whatever was the view as to the resolution of the RAAF concerns, they decided on or around 26 November to suspend all but essential military flights in class G airspace, based on evidence the RAAF had compiled that confirmed earlier safety concerns over the airspace design. In fact, subsequently, Air Vice Marshal Espeland told an estimates hearing on 10 February 1999 that he had communicated RAAF concerns about the trial—to, I think, you, Mr Toller—by way of a letter and through the consultative process with CASA, and he in fact wrote to you twice expressing concerns on behalf of the RAAF. Can you confirm that?
Mr Toller —Air Vice Marshal Espeland was, in fact, on the program control group and was the main point of contact between myself and the Air Force over this matter. We were communicating on these issues reasonably frequently and it was quite proper that he was the avenue to pass on the concerns of the Air Force to me, which he did. You have to remember the Air Force was not a particularly big player in the class G airspace trial.
Senator O'BRIEN —They would not be if they withdrew all but essential flights, clearly.
Mr Toller —But it is also an issue of who was using the class G airspace and to what extent they were using it.
—Nevertheless, if they were using it at all they were entitled to have a concern about safety if they felt such concerns were valid.
Mr Toller —Indeed.
Senator O'BRIEN —Yes, and Air Vice Marshal Espeland wrote to you twice expressing concerns, setting them out. That is correct, isn't it?
Mr Toller —That is correct.
Mr Harris —Perhaps, Senator, I should make very clear there I am not sure the record you are quoting actually says Air Vice Marshal Espeland wrote. Certainly there were Defence representations. Air Vice Marshal Espeland was at the Senate hearing on 10 February noting Defence correspondence to Mr Toller on those dates.
Senator O'BRIEN —Let me check the record.
Mr Harris —A copy of the record I actually have in front of me does not have him stating it was his letter. I think that is probably a trivial point but, in case it is not, I note it from what is actually written in the record here. I am on FAD&T page 93. It may be a minor point, but he is actually talking about the view of the Chief of the Air Force in terms of correspondence.
Senator O'BRIEN —The question from Senator Schacht on page 90 to the air vice marshal reads:
And you say that in the discussions to the lead-up of the introduction of the trial, you—
That is, the air vice marshal—or maybe that is an interpretation.
Mr Harris —I suspect it might be, because on page 93 he definitely says the correspondence relates to the Chief of the Air Force. I believe that is the case. It may be a trivial point.
Senator O'BRIEN —Let us for the sake of the argument assume that someone wrote the letter. He is certainly aware of the letter.
Mr Harris —Someone senior in Defence wrote the correspondence.
Senator O'BRIEN —And the air vice marshal is certainly aware of them and the responses to them?
Mr Harris —Correct.
Senator O'BRIEN —It is also the case that the Minister for Defence, Mr Moore, told the parliament that the RAAF concerns were based on its `professional judgment'.
Mr Harris —I think that is correct.
Senator O'BRIEN —Yes, that is from the Hansard of 15 February. Mr Harris, I have just received the answer to CASA 20. Of course, I will not have a chance to read it for a moment, so we may need to come back to that. We will see.
Mr Harris —We would be happy to go through it live or whenever you are able.
—If we need to, I will come back to that later. Air Vice Marshal Espeland told the estimates committee that the RAAF concerns were in fact fivefold. There were: concerns about the provision of traffic information, concerns about cockpit workload, concerns about frequency management, concerns about how the process was being rushed and the impact that was having on pilot education, and concerns about the general haste with which CASA was pursuing the G class trial. Mr Smith said that the RAAF was pressured into taking that position and expressing those concerns by the airlines. Was it your view—they were not the RAAF's views—that they were being pressured to put that view by the airlines, which I do not believe he named? Alternatively, did you have the view that the RAAF had legitimately held concerns about the trial?
Mr Toller —I believe that the concerns that were held by the RAAF about the trial were legitimate. I think they reflected the concerns that were voiced by the airlines. Throughout the process, the RAAF had been constructive and helpful. At the time that I took over the job on 1 July, I do not think that I recognised immediately exactly how all the pieces fitted together, particularly in terms of the program control group and therefore—and I have said this to Air Vice Marshal Espeland—I believe there were occasions when I should have kept him in the loop and told him of things that were happening, which I did not at the time. I certainly learnt from that experience, but I think overall in terms of the approach that the RAAF took they had legitimate concerns, they expressed those concerns and they worked with us as one of the parties involved—as did Ansett, as did Qantas—to resolve the issues.
Senator O'BRIEN —In addition, the New South Wales Air Ambulance Service was also concerned about the safety of the trial and sought a meeting with CASA, as I understand it. Is that so?
Mr Toller —They did. My recollection is that that was right at the end just before the trial was terminated.
Senator O'BRIEN —Around the beginning of December, then?
Mr Toller —Yes.
Senator O'BRIEN —Did they communicate their concerns to CASA by way of letter?
Mr Toller —They did, yes, and I think verbally as well.
Senator O'BRIEN —Did their requested meeting with CASA take place? Were the concerns of the ambulance service resolved, or did the closure of the trial pre-empt that?
Mr Toller —The meeting was pre-empted by the closure of the trial.
Senator O'BRIEN —Which occurred on 13 December?
Mr Toller —Yes.
Senator O'BRIEN —According to evidence from Mr Dick Smith given to this committee on 8 February 1999, page 20 of the Hansard, he says you telephoned him in New Zealand and said:
I'm basically going to state that Airspace has to be stopped because BASI have come out with a recommendation. BASI hasn't said that Airspace is less safe than the old Airspace system, but that in effect the demonstration should be cancelled.
Mr Toller; you did not correct that statement at the time, so I assume it was accurate.
Mr Harris —Could you perhaps give us the page number?
Senator O'BRIEN —Page 20. That is the last Mr D. Smith on the page.
Mr Toller —Mr D. Smith went on for many pages, by the look of it.
Senator O'BRIEN —Yes, Mr D. Smith goes on for many pages quite often.
Mr Harris —This is the latter part of page 21?
Senator O'BRIEN —No, page 20. The quote I am referring to is on page 20.
Mr Harris —Does it say:
I was in New Zealand. Mick rang me and said he was going to pull the plug on it because BASI had come out with a recommendation that the airspace trial was to stop.
Senator O'BRIEN —No. In the bottom quarter of page 20, it says:
I think I should explain that when Airspace was actually stopped I was over in New Zealand and Mick Toller phoned me and said, `I'm basically going to state that Airspace has to be stopped because BASI have come out with a recommendation. BASI hasn't said that Airspace is less safe than the old Airspace system, but that in effect the demonstration should be cancelled.' I found that just extraordinary and I could not fathom out how this could possibly happen.
Do you have that?
Mr Harris —We have that. Thank you.
Senator O'BRIEN —Mr Toller, you did not correct that at the time, so I assumed it was accurate.
Mr Toller —I am not sure that I had the ability to correct it at the time in terms of the fact that Mr Smith was in full flow.
Senator O'BRIEN —But you had the ability to countermand that statement. You were there. You are on the same page.
Mr Toller —I was there. I do not think it is specifically inaccurate. I certainly rang Dick in New Zealand and said that BASI were going to come out with a recommendation that the trial should be stopped and that I would follow it.
Senator O'BRIEN —That is a bit of a gloss on it, but the point was that he said you said:
... Airspace has to be stopped because BASI have come out with a recommendation.
Again, you said to him:
BASI hasn't said that Airspace is less safe than the old Airspace system, but that in effect the demonstration should be cancelled.
Mr Toller —From my recollection of the BASI report, they were never able to make a comparison of the class G demonstration and the current system. They were never able to say whether one was more or less safe. They just believed that there were sufficient concerns as a result of the trial to cease the trial.
Mr Harris —Perhaps I could add to that as well. That was the matter of discussion, particularly between Dr Lee and members of this committee, on 8 February, where some members of this committee sought an assurance of which was the safer system. As I recall that discussion—and I am pretty clear in my own mind and I think the record will confirm it—Dr Lee was saying, `It's not a question of saying what is more or less safe here. It is a question of BASI's view based on the evidence they gathered on the conduct of the trial and the concerns held by the industry.' Subsequently, he elaborated at substantial length in the final ATSB report on this matter.
Senator O'BRIEN —That is, I am sure, an accurate description of what Mr Lee said. But I think it is important that, if that statement was made in your presence, Mr Toller, you were happy with that statement at that time.
Mr Harris —It is literally true. It says:
BASI hasn't said that Airspace is less safe than the old Airspace system ...
I am saying that I certainly recall Dr Lee commenting that it was not a question of BASI saying that one way or another. It goes on:
... but that in effect the demonstration should be cancelled.
Again, literally that was certainly BASI's view.
Mr Toller —I cannot exactly recall what I said to Mr Smith that day on the telephone. If that is his recollection of what I am purported to have said, I do not feel uncomfortable with the quote.
Senator O'BRIEN —Mr Smith referred to an incident involving a Qantas aircraft and a commercial Navaho between Taree and Williamstown in mid-1998 that led to the decision to run the trial. He said:
which I assume means BASI—
had said to CASA and Airservices that radar should be used wherever possible. Certainly at the beginning of the class G trial there were gaps in the radar cover but radio contact had been withdrawn.
So there was a problem in some areas that should have been known to CASA before the trial commenced?
Mr Toller —No, I am not sure that that is a valid statement. We had the radar maps at different altitudes. You know that as you get lower, you get less and less radar coverage—you do not have 100 per cent radar coverage in any area at ground level. In terms of saying that we knew there were gaps, yes, we had looked at the various radar maps at various altitudes and discussed them, and the airlines had copies of them. I do not think it is true to say that this was an issue. The practicality of where the radar coverage was, as opposed to where it had been anticipated, did show up a few problems we had not anticipated.
Senator O'BRIEN —But was the withdrawal of radio cover the additional factor?
Mr Toller —Not really. The radio coverage was replaced with the national advisory frequency. It was another thing that we were monitoring and it was another thing that we believed, had the trial continued, we would have amended. We would probably have added a second frequency because of certain areas of congestion and times of congestion. I do not think it matters exactly how the aircraft knew where they each were as long as they had a means of doing that. I think the added bonus of the trial was that radar was available, when it had not been before. The problem is that were a number of ATSB reports of incidents before in class G airspace, and there have been reports since, as a result of breakdowns of directed traffic information. This was an alternative system and it was aiming to use radar wherever possible. I think there were flaws in the way that the demonstration was put together. The way that we are going about this now is far superior both in terms of the speed at which the changes are being made and in terms of the changes which are being made, but the end result will not actually be dissimilar in the long term, I suspect.
Senator O'BRIEN —Mr Smith went on to say that once the BASI report came out it virtually destroyed CASA's credibility. I presume that you do not agree with that statement.
Mr Toller —I think if I agreed with that statement I would not be here today.
Senator O'BRIEN —My presumption was correct then. Can you confirm that the report referred to by Mr Smith was air safety interim recommendation IR980253, dated 8 December 1998, which is the interim recommendation on the class G demonstration? The box on the front page states, `Written advice of your subsequent action is requested within 60 days of this date.' It then states, `8 December 1998.' Finally, it has an occurrence date of 16 November. That was the report he was referring to, wasn't it?
—That was the interim recommendation—that is, in the light of safety concerns identified by this investigation, BASI recommended that CASA should terminate the demonstration.
Senator O'BRIEN —That is the one that Mr Smith was referring to in stating that when the report came out it virtually destroyed CASA's credibility? That is the one that he is talking about?
Mr Toller —Yes, it is.
Senator O'BRIEN —Mr Smith went on to state:
When I said to Mick, "what are the critical safety issues?", he said there were none that he knew of and that the two incidents were not caused or there were none identified in the demonstration that were not all covered in the safety case.
Firstly, is that an accurate account of what you said?
Mr Toller —I cannot recall that conversation. I certainly held the opinion at the time, and probably still hold the opinion, that the incidents under investigation were probably not as serious as they appeared in the light of the demonstration. In other words, they had been blown up as part of the demonstration. I certainly made that point on occasions to Dick Smith. But whether I actually said that at that time, I do not know.
Senator O'BRIEN —So you had the conversation with Mr Smith in December—or was it in January? I would have thought it was in December 1998, when the trial was pulled.
Mr Toller —It was on the day that we pulled the trial. He was on holiday in New Zealand at the time.
Senator O'BRIEN —That was 13 December, and he made this statement on 8 February of the following year?
Mr Toller —Yes.
Senator O'BRIEN —So presumably, because you were sitting there, it did not ring alarm bells with you, with you saying, `That is not what I said'?
Mr Toller —No, it probably did not.
Senator O'BRIEN —You thought that probably was what you said—or something like it?
Mr Toller —I think it is very difficult to say at this stage. You are correct that Mr Smith was recalling the issue from much closer to the time. It is also true that he tells things in a flowery way, shall we say, at times. I think the general gist of it was probably fairly accurate.
Senator O'BRIEN —So you were not unhappy with him saying that you thought there were no critical safety issues involved and that there were no incidents identified in the demonstration that were not all covered in the safety case?
Mr Toller —The incidents that led to the BASI report were not classified by BASI as critical incidents.
Senator O'BRIEN —Perhaps we will go to the BASI report then, because I understand what you are saying—that is, if he used the word `critical', you might have used it. Is that what you are saying?
Mr Toller —My recollection is that they were category 4 incidents, which is a pretty low category.
—So you agree that the two incidents were not caused or there were none identified in the demonstration that were not all covered in the safety case?
Mr Toller —I think that is true.
Senator O'BRIEN —If we go to the BASI findings, can you explain why in your view the report was flawed?
Mr Harris —Is this the statements that BASI made in the interim report of 8 December, or is this the findings that they made in the final report at the end of—
Senator O'BRIEN —Well, let us break it up into pieces, if that will assist.
Mr Toller —As a result of the interim report CASA put in a fairly lengthy submission to the ATSB on its views on certain elements in the interim report, which were taken into account when the final report was written. I do not have a problem with the final investigation report.
Senator O'BRIEN —Firstly, under the heading `Background', the report states:
... (BASI) is conducting a systematic (sic) investigation of the demonstration.
I would assume that there would have been considerable and ongoing contact between BASI and CASA as part of that systematic investigation. I think you have just confirmed that. That is right, is it not?
Mr Toller —Indeed, and they were involved throughout.
Senator O'BRIEN —So CASA—including you, Mr Toller—had input into the process that led to the interim report recommending the termination of the trial?
Mr Toller —Yes.
Senator O'BRIEN —In fact, you were interviewed by the BASI investigating team on 24 November 1998, and later that month you were provided with the draft recommendations as part of the interested party review process. Is that correct?
Mr Toller —Certainly I was interviewed by them. What was the second part?
Senator O'BRIEN —That later in the month of November 1998 you were provided with the draft recommendations of BASI.
Mr Toller —No, I do not believe I was.
Mr Harris —I believe that the position was that BASI issued an interested party copy of an interim set of findings, and Mr Toller would have provided comment on that. Then BASI issued a final interim on 8 December. I think that is where Mr Toller is perhaps not in agreement with the absolute nature of the statement. Certainly Mr Toller contributed—
Senator O'BRIEN —I did not say `the draft'; I said `draft recommendations'.
Mr Harris —Well, that would be correct. In fact, on 8 February last year I confirmed that there was an ongoing exchange between the parties in the development of BASI's views as expressed in the interim recommendation.
Senator O'BRIEN —Under the heading `Project monitoring', there is the reference to CASA staff being interviewed and data collected from CASA, Airservices and the industry. If we go to Mr Stray's evidence in that 8 February Hansard on page 60, he says that there were discussions between the time that the draft recommendation was written and when the final recommendation was made on 8 December and that BASI sought additional information from CASA. I think you have already confirmed that, but just to be clear, is that what happened?
—I believe so, yes.
Senator O'BRIEN —There was a key sentence in the draft report of 8 December:
The overall program management of the Class G Airspace demonstration has been deficient because critical safety issues have not been addressed.
That is under the heading `Safety deficiency', which was pretty hard to miss. Presumably, that was in the early drafts of the report that CASA would have seen.
Mr Harris —I do not think we can confirm that. In other words, the documentation we have is the final interim. I do not know what the initial drafts that CASA would have seen had in them. I think when we discussed this previously we were quite uncertain as to the nature of the first rough cut of the BASI report that CASA would have seen. I do not have any documentation here which would enable us to confirm that. We may be able to find a rough draft, but I suspect in the nature of these things that they would potentially not have been preserved. We can check that if you wish.
Senator O'BRIEN —Are you suggesting that that finding that the trial had been deficient because of critical safety issues was new to you when the draft report came out on 8 December?
Mr Harris —No, I am not; I am simply saying I do not know. I do not know, because I do not have the very first rough draft that BASI would have sent out as the interested party draft. It may have been preserved—I simply do not know the procedures—but we can check that. When you come to a specific quote from a formal document—
Senator O'BRIEN —I am quoting from the draft that has been published. I would have to say it seems to me that with a passage like that—that the trial has been deficient because critical safety issues have not been addressed—there must have been flagging of some sort, an indication of that sort of finding. Or did the report get worse between the interested party draft and the published draft?
Mr Harris —Indeed it can.
Senator O'BRIEN —No: did it?
Mr Harris —I can only say I do not know, because we do not have that initial interested party version with us. Mr Toller may have some recollection, but it is—
Senator O'BRIEN —Perhaps you can check that. If indeed there was that or a similar draft recommendation in the interested party draft, I would like to know, firstly, when you, Mr Toller, and CASA became aware of it, and what actions you or other officers of CASA took to have it amended, given that apparently you did not agree with it. It may be that it is a matter that you have to take on notice, Mr Toller, because I would not want you to answer a question that is based on a premise that you have not established in your mind. But I think is a reasonable assumption that this recommendation did not spring out of thin air, it was not a surprise to you when it was made. Or are you saying that it was?
—It was a surprise to me when it came out, because I well remember when I was told of the recommendation. It was on the morning of 8 December, when the secretary, Allan Hawke, rang me up and suggested that he would like to come over and have morning tea with me, and secretaries do not come over and have morning tea with you very often, as you can understand. He came over and he said, `The BASI interim report is going to be released today, and this is what it is going to recommend.' I think that was the first time that it had reached the stage where anybody had said, `We recommend that this trial be terminated.' In terms of the phrase about BASI's safety concerns, that does not spring out at me as something that had hit me hard in the face at the time as something that I had to react to. That might be in the context of the whole issue of where we were in the trial at that stage, because we knew that people had safety concerns, or it might be the fact that those comments were not made to me in that way.
Senator O'BRIEN —As I said, I do not want you to answer based on a premise that is wrong, if your recollection is not firm in your mind as to what was in the interested party draft, if I can call it that, which predated the 8 December draft, but it—
Mr Harris —We are going to try to get hold of this document. If we have it, Mr Toller can have a look at it.
Senator O'BRIEN —I think we asked for this document some time ago, and we were told that we would have it. Can we have it now?
Mr Harris —I think the problem, as Mr Toller has just mentioned to me, is that we are not certain that there was one. I can confirm for the committee—and I have done this previously—that there was an exchange and a series of exchanges from the time BASI said they wanted to do a systemic investigation into this. There was an exchange brokered between BASI and CASA in which I was involved to ensure that everybody operated on the same information and, to the extent that there were differences of opinion held about particular, inter alia, safety deficiencies, that information was able to be responded to so we came out with what we considered to be a thorough outcome.
It is possible that there was, if you like, a rough cut circulated, whether or not it was an interested party, and it may or may not have had this particular reference in it. We have always believed in, and have concentrated in our minds, the substantive factors that BASI was looking at. Those factors in themselves, regardless of whether or not they are summarised as critical safety deficiencies, were without doubt significant. If that is the real area that you are going, I do not think the department from our perspective has any problem with that being the conclusion: that those factors were seen to be significant even in the period in the run-up to the final interim report being released by BASI. CASA can obviously speak for themselves, but I think there was a serious exchange, which would suggest that people did believe that these matters were significant, whether or not they were critical.
Senator O'BRIEN —I am just trying to cast my mind back to an answer to an earlier question where I thought I asked whether you were provided with draft recommendations as part of the interested party review?
Mr Toller —I do not have any recollection of an interested party version of that report. My belief is there was not one; I think it just came out as was. I certainly recall the meeting that Mr Harris spoke about where I discussed with Dr Lee the nature of the incidents that had led to the report and those in comparison to some of the incidents that happened in normal class G airspace and whether they were any more serious. My view was they were not; they were similar. I do not believe that, other than that meeting, we were ever passed an interested parties report prior to that interim report being released on 8 December. My strong recollection is that my first knowledge of what that report was going to say was when Allan Hawke came to see me on that morning.
—In support of that, my recollection is that—as I said, we will check it—it was the specific deficiencies that were the subject of an ongoing exchange, rather than the recommendation that BASI made. I am also pretty sure that the advice to Mr Toller on the morning of the 8th would have come as something that he would not have seen before, but he was certainly aware of the nature of the BASI investigation and of its concerns.
Senator O'BRIEN —We know now that BASI said it also sought additional information from the industry, and all of that led to the recommendation that the trial be terminated. Under the heading `Project Monitoring', BASI lists what it considers to be the major safety concerns. Mr Toller, can you confirm for the committee that you had seen the report, and specifically those issues, before you spoke to Mr Smith?
Mr Toller —No, I cannot. I cannot recall whether I saw the report before I spoke to Mr Smith or whether I called Mr Smith as soon as I knew. I believe that I called Mr Smith as soon as I knew what the recommendations were and as soon as I had, effectively, put into place the fact that we would be closing down the trial. I informed him, as our chairman, which is what I would be expected to do. I did not immediately see the report; I was just told what the recommendations were.
Senator O'BRIEN —So you rang him on the morning of the 8th?
Mr Toller —I do not have a diary note of when I rang him, but my guess is that I rang him on the 8th at some stage. I certainly had not seen a copy of the report on the 8th.
Senator O'BRIEN —In response to the question, `What are the critical safety issues?' you reportedly said that there were none that you knew of. You did not know of any that had been brought to your attention by BASI in the lead-up to the draft and you had not read the draft when you spoke to him. Is that your explanation for that statement?
Mr Toller —None, if you like, that had not been ongoing issues dealt with during the trial. It was my view—and I think a lot of people shared that view—that ironically the trial was actually starting to work very well at about the time that we pulled the plug. It was actually just starting to be an effective system and a smooth trial.
Senator O'BRIEN —Mr Smith told us in February last year—I am referring to page 24 of the Hansard—that you had advised that the system on trial was safer, Ansett had said it was safer, and that, in his view, all BASI had to do was to recommend that perceived problems should be fixed. Can you provide me with the basis of your claim at that time to Mr Smith that Ansett considered the trial to be safe?
Mr Toller —I do not believe that I ever said that Ansett considered the trial to be safe. Ansett's position was—
Senator O'BRIEN —Sorry, `safer'.
Mr Toller —I am sorry, I cannot find the quote.
Senator O'BRIEN —It is on the top of page 24.
Mr Harris —Here is the quote:
He had stated it was safer, Ansett had stated to me it was safer ...
So it says that Ansett had stated `to me', as in Mr Smith, that it was safer.
—Mr Smith said that Mr Toller explained to me.
Mr Harris —It actually says that he had stated:
... Ansett had stated to me it was safer, I knew that it was safer ...
Mr Toller —Yes, that is right. It reads that Ansett stated to Mr Smith that it was safer. Ansett's position to me was that, if you like, they did not really want to get involved because they were not operating in that area. They had one service into Ballina that they rerouted out of the area—which was their choice—with a 737, which had a minimal effect on their operation. But basically, as Ansett did not operate in the class G airspace, they were effectively, if you like, participating but not particularly involved.
Senator O'BRIEN —So you are saying that you did not explain to him? The correct interpretation of that passage is that Mr Smith is saying that Ansett had stated to him, rather than you had stated?
Mr Toller —I believe that is how it is read. I do not have any recollection of a statement that Ansett made to me to say class G is safer. As I say, the Ansett position was that they would just stay out of it effectively.
Senator O'BRIEN —On page 67 of that Hansard, Mr Stray referred the committee to what appears to be a very qualified endorsement from the UK NATS safety case. Specifically, he referred to paragraph 3.6 of that report, which refers to the fact that there were still outstanding issues that meant that the safety case was not complete.
Mr Toller —The safety case expert that the UK CAA brought out made the point that the safety case had not been updated with the latest changes and, as a result of that, work was done immediately thereafter on updating the safety case.
Senator O'BRIEN —It says:
In our opinion the planned system performance monitoring during the demonstration would not provide an adequate strategy for risk containment.
Mr Toller —That is right and, as a result of that, the UK CAA made certain recommendations which we followed. They also, you may recall, said that they could see no reason why the trial should not go ahead.
Senator O'BRIEN —So it was qualified support for the trial?
Mr Toller —It was support for the trial but some recommendations on some matters to be resolved prior to commencing the trial, which were addressed.
Senator O'BRIEN —Is it fair to say that, while some of the officers' concerns were addressed by CASA before the trial, not all were fixed? This is on page 68 of the Hansard in the third paragraph from the bottom.
Mr Harris —I do not think there was any doubt that that was a view held by BASI, as Mr Stray has testified. I think in fact on the previous page Dr Lee said that that constituted one of the risks that they had identified in the BASI review.
Senator O'BRIEN —That is right. So some of the concerns were addressed and others were not?
Mr Harris —That is the BASI view, yes.
—Mr Toller, Mr Smith told this committee that you had been lent on, I suppose is a way of putting it, by a senior official from a major airline—and we subsequently found that airline to be Ansett and the employee was Mr Trevor Jensen—to halt the trial. I think you said that Mr Jensen told you that the Ansett board safety committee had met and discussed the class G trial and the company planned to write to you on the day the BASI report was due for release advising that the trial should be suspended or stopped. That conversation took place on the afternoon of 7 December 1998 at around 3.30 p.m. Is that correct?
Mr Toller —That is correct.
Senator O'BRIEN —And the BASI report was released on 8 December. We know that.
Mr Toller —Yes.
Senator O'BRIEN —Dr Lee told this committee that Mr Jensen had expressed concern about the process of the trial—not airspace reform, but the process of the trial—based on the feedback he was getting from his own pilots.
Mr Toller —As I said, Ansett were not operating in the trial area, so I do not think that can be a valid statement. Ansett did a few trial operations using, I believe, their management pilots initially, and they decided that they did not need to be in the area and therefore they would not be in that area, so they did not operate in the trial area.
CHAIR —Does that mean they did not take part in the trial at all?
Mr Toller —No, Ansett's only flight that was affected by the trial was the 737 operation into Ballina and that could be re-routed via the Coolangatta airspace, which was fully controlled, so they went fully controlled all the way. They did not operate into the trial area.
Senator O'BRIEN —Why would they choose to do that, unless they thought there was some problem with the trial?
Mr Toller —I think they were taking an overall view that they were more comfortable operating that way.
Senator O'BRIEN —Their pilots were or they were?
Mr Toller —I have no idea of the basis of that decision as to why it was taken.
CHAIR —So what you are telling us—and these are my words—is they were strongly opposed to the trial and they did not participate in the trial at all?
Mr Toller —I think they had a few flights early on into Ballina and they were flown, as I recall, by their management pilots. I think as a result of that their management pilots decided that it was inconsequential whether they operated in the trial airspace or not. It added a very small amount to their flying time, maybe two minutes in that they had to let down to the north instead of a let down to the south. There were certain advantages in that anyway in that area. They took the decision that they would operate through the Coolangatta airspace.
Senator O'BRIEN —So their management pilots, who were to operate in the airspace that was the subject of the trial, had expressed concern about the environment in which they were being asked to fly and therefore others were being asked to fly?
Mr Toller —I do not know. They did not express to us any reasons why they elected not to fly in that airspace. They just said, `We've decided not to.'
CHAIR —It seems illogical to me. They are not participating yet they oppose.
—If they choose not to participate after an initial experience, that is quite different, Mr Chair, and that is what Mr Toller has said. Mr Toller said that they started in the trial and they changed so they could avoid the space for their 737 service to Ballina. That is what happened.
Mr Toller —I think if I had been the operations manager I might have done the same thing. Ballina is not a natural port for a 737. It is one of these areas which do not have the normal amount of controlled airspace that you would expect for an airport that a 737 is operating out of. Bearing in mind that was probably the only jet operation in the whole of the trial area, I did not find that decision at all an unwise one or an unreasonable one. I thought it was a very sensible one. Had I been a jet captain in the same place or the operations manager of Ansett, I think I would have made the same decision.
CHAIR —Did they explain that at the time?
Mr Toller —I do not believe they explained their reasons why they had elected not to. They just said that they had decided not to, and I said, `Fine.'
Senator O'BRIEN —They had decided not to after their senior management pilots had flown some flights in the airspace. Of the very few flights that they had—
Mr Toller —It is my recollection that they were management pilots. I will have to take that on notice to check.
Senator O'BRIEN —I am going on your earlier answer. I am not trying to put words in your mouth, but that is what you said earlier.
Mr Toller —I am just saying that it is my recollection that they used management pilots, but I am not sure.
CHAIR —We will have a short break now.
Proceedings suspended from 10.29 a.m. to 10.46 a.m.
Mr Harris —Senator O'Brien, the only information we have on the documents you were referring to earlier in relation to interested party exchanges on the interim report is not an interested party document but is, as I was referring to earlier, a very rough draft which was provided to Mr Toller for the purpose of a discussion about the nature of the incidents that BASI was intending to comment on and obviously where they were going as a result of that. It is a rough draft. You will be aware, Senator, that previously, but in different circumstances, we have not put drafts out into the public arena. I can confirm that the specific area that you were looking at—that is, the words `critical safety deficiency'—did not occur in there. In fact, the language used in this rough draft is:
Evidence to date indicates that the safety case justification, overall program management and implementation of the class G airspace demonstration have not assured that all potential safety deficiencies have been identified and addressed.
That is the document that Mr Toller would have seen as the only document preceding the interim report actually being put out on 8 December. The document that he saw did not have the reference you referred to about critical deficiencies.
Senator O'BRIEN —Mr Toller, do you confirm that that is the only document you saw?
Mr Toller —Yes, that is the document we discussed at the meeting we had which, I believe, was on 27 November.
—The reason we can say this is that this comes from my records. It has been exchanged between our officers and it has handwriting on it saying that this was the document that we talked about on that date.
Senator O'BRIEN —Is that going to go on the record now?
Mr Harris —As I said, in separate circumstances—and you will remember that this relates to the final class G report—we have been asked to provide draft reports and we have not. Consistent with the position that was taken last year in the Senate as well as in other circumstances, we would not wish to table this document. I have read into the record the relevant reference in an attempt to meet the interests that you were expressing. I would not want to table this draft. It is not even an interested party copy. It is actually just a rough document which was BASI's first cut. The reason Mr Toller got this—as I advised the committee last year, in February and again this morning—is that we were very keen to ensure that, to the extent that BASI came to identify incidents and draw conclusions from them, CASA was able to make comments on them such that the substantive conclusion, whatever it was that BASI reached, was one where they had the best information available from the people conducting the trial as well as their own.
Senator O'BRIEN —What is the heading on the document?
Mr Harris —It is headed `Draft interim recommendations'. It has a big draft stamp on it. The subject is `Safety concerns related to class G demonstration'. It goes straight to that safety deficiency heading and has under it the words that I have read out.
Senator O'BRIEN —How many pages are in the document?
Mr Harris —Three.
Senator O'BRIEN —I will take your comments under advisement at this stage. We might revisit this matter as it proceeds. I hear what you say. I suspect if we need to take this matter further we will need to go beyond the parties sitting at the table.
Mr Harris —I am taking the position I am because it is consistent with the view that we took in the Senate last year on the class G draft, if you remember. I am trying to be consistent.
Senator O'BRIEN —Is this not the trial draft?
Mr Harris —That is right. This is a draft. We resisted tabling that draft document last year—I can go into the reasons if you would like me to—and it was confirmed to the Senate by Minister Macdonald that it was our view that basically the tabling of these documents did not assist the process of running an investigation and that, in fact, they had compromised our potential.
Senator O'BRIEN —The investigation is over and that may now change that.
Mr Harris —I understand the position you have taken as well. I wanted to make sure that you understood the basis on which I was taking this position.
Senator O'BRIEN —All I am saying is: take that under advisement. I suspect that we would say that it should now be tabled because the issues have gone beyond the position that existed when the original position was taken. Perhaps you need to seek further authorisation to go further.
Mr Harris —Would you like me to obtain a ministerial view?
Senator O'BRIEN —I think that would be wise because I think it should be on the record. Other things are now effectively in the public domain.
—I would then note that our advice to the minister will be not to table it, consistent with our advice last year on the class G draft. But I will obtain the minister's view.
Senator O'BRIEN —Going back to the conversation we were having before the break about Mr Jensen's conversation, it would be a reasonable proposition, wouldn't it, that if pilots who were to operate or who were operating in the airspace that was the subject of the trial expressed concern about the environment in which they were being asked to fly—and obviously they have responsibility for passengers on board—then Mr Jensen would be obliged to take notice of them, would he not?
Mr Toller —Again, we go back to the fact that Ansett were only operating 737s into one port within the area. I do not believe—
Senator O'BRIEN —That is a different question.
Mr Toller —No.
Senator O'BRIEN —We have been through that aspect of it. What I am asking you is: if pilots who would in the ordinary course of events have operated in the airspace that was the subject of a trial expressed concerns, Ansett would have to take notice of that, wouldn't they?
Mr Toller —They would have to take notice of it, yes.
Senator O'BRIEN —According to your evidence, after your discussion with Mr Jensen you then had a number of discussions with that company about its planned actions and the end result was that it would not send the letter but would keep it in the bottom drawer. Presumably those conversations took place on 7 December and possibly on 8 December as well.
Mr Toller —Both occurred on the 7th.
Senator O'BRIEN —Can you tell the committee exactly who you spoke to? We now know that any such conversation you were referring to then took place on 7 December.
Mr Toller —On 7 December on this subject I spoke to Trevor Jensen of Ansett.
Senator O'BRIEN —On how many occasions?
Mr Toller —According to my diary, on two occasions—one at 3.30 and one at 4 o'clock.
Senator O'BRIEN —Were there any other conversations that you had? I presume you noted these in your diary on 7 December.
Mr Toller —I had a conversation in the morning with one of the other airlines, but I do not think there was anything in that conversation that was relevant. It was actually to do with staffing issues.
Senator O'BRIEN —Not class G.
Mr Toller —It was related to class G but it was specifically about staffing issues within that airline.
Senator O'BRIEN —So there are three conversation notes in your diary of 7 December.
Mr Toller —That is correct.
Senator O'BRIEN —You then said you subsequently spoke to the chairman of the Ansett board—subsequent to your conversation with Mr Jensen—and he advised that no such discussion had occurred at the Ansett board safety committee, that the matter had been discussed for one minute and that it was decided not to take a position. That was Mr Eddington.
—That is correct.
Senator O'BRIEN —That conversation took place on 8 December.
Mr Toller —I do not have a diary note of that conversation because it was undertaken at home as a private phone call.
Senator O'BRIEN —Did you then go back to Mr Jensen and seek an explanation as to why he had given you what you tell us now was not correct information?
Mr Toller —I discussed it later with him, yes.
Senator O'BRIEN —Then or later? `Later' could mean a long time later.
Mr Toller —I do not have an immediate diary note of discussing it with him at that time. I think it was later, being days or even weeks later, that we discussed it further.
Senator O'BRIEN —Mr Smith attacked Ansett for the secretive manner in which it advised you of its intention to call for the trial to be cancelled. Isn't it the case that Mr Jensen was contacting you as a matter of courtesy in letting you know in advance of his intentions?
Mr Toller —I believe so, yes. Mr Jensen had been involved in the process throughout. He had attended most of the meetings. He was one of the significant players. We certainly spoke from time to time. I think it is valid to say that it was not unreasonable that he should inform me of what was intended.
Senator O'BRIEN —So he was planning to send a letter at the same time as the BASI report was made public, wasn't he—the next day?
Mr Toller —He originally told me that there would be a letter from his board safety committee coming to me on Monday, on the 7th, to say that the trial must be terminated.
Senator O'BRIEN —We accept therefore that this was not a secretive approach but an attempt to forewarn you of the company's intention.
Mr Toller —That is correct.
Senator O'BRIEN —Can you recall whether Qantas gave you early warning that it planned to withdraw all aircraft from the trial area or whether it just put out a media statement?
Mr Toller —I would have to take that one on notice. I actually cannot recall.
Senator O'BRIEN —In any event, Mr Smith's interpretations of Mr Jensen's actions were wrong.
Mr Toller —I think that Mr Jensen's actions in calling me to inform me of what was happening were totally appropriate.
Senator O'BRIEN —Mr Smith advised this committee again at the same hearing—and that is page 25 of the Hansard—that there appeared to be a campaign within BASI to discredit you. Can you advise the committee of your relationship with BASI around that time? Was it a professional one?
Mr Toller —Around that time, it was no different to how it has been all along. It has always been a good working relationship. I had a particularly good working relationship with Dr Lee in those days as the director of BASI. Although we obviously on occasions have differences of opinion with BASI and with ATSB, the working relationship then and now continues to be a very good one. As you know, Mr Smith had certain views about BASI that were his personal views.
—You do not share them?
Mr Toller —I do not.
Senator O'BRIEN —Mr Smith then said there was a draft BASI report that did not recommend that the trial be terminated and it subsequently changed that recommendation.
Mr Toller —That, I believe, is the document we were referring to earlier; yes.
Senator O'BRIEN —That is the one you saw?
Mr Toller —It is the one that formed the basis of the discussion we had on 27 November, yes.
Senator O'BRIEN —Did you discuss that draft with Mr Smith?
Mr Toller —At the time, no—because I believe that he was overseas.
Senator O'BRIEN —But between then and 8 February 1999 when you gave evidence to the committee?
Mr Toller —We would have obviously had some discussions on the matter, although I think it should be noted that we perhaps did not have the healthiest of working relationships during that period.
Senator O'BRIEN —Do you remember whether you drew that matter to his attention?
Mr Toller —I cannot recall actually specifically drawing it to his attention, but I think he would have become aware of it at some stage from the documents on the file.
Senator O'BRIEN —In relation to the two documents—I will call them that; I think you know the two I am referring to: the first document that you are not going to release and the 8 December draft—
Mr Toller —Yes.
Senator O'BRIEN —what was the difference between the two versions? Were there any recommendations in the first version?
Mr Harris —Yes, there were recommendations in the versions.
Senator O'BRIEN —Mr Smith said that, in that first draft, if I can call it that, it did not recommend that the trial be terminated and it was subsequently changed to make that recommendation.
Mr Harris —I will have to find the document again. The recommendation does not say to terminate the trial. Remember that this is a document of 27 November and a subsequent document of 8 December. I need to check the timing, but I believe that at that point BASI had had 20-odd days of consideration, and incidents were continuing to come in. So, at the point they would have drafted this, they were at the point, as I say, of identifying primarily the substantial nature of the problems that they saw rather than coming to a conclusion. That is one of the reasons we do not like going that far into this. People can draw unreasonable conclusions from point in time analysis.
The fact is that I know the nature of this document. I know why it was prepared. I was involved in the discussion with Mr Toller and Dr Lee about it. The nature of the document was very much to ensure that those things that BASI was proposing to pursue were known to CASA and CASA were able to provide their views on those to BASI. BASI interviewed Mr Toller and also, I believe, other people in CASA. But it was important, in my view, given the substantial nature of this and the serious level of public interest there was in it, for there to be an ongoing exchange between CASA and BASI about where BASI was going. But in the ultimate it was always going to be the case that BASI would come out with its view. I think the record tends to support that. I think all the critical parties are basically saying that they did not know where BASI would come out until very much the last gasp, when the report itself was released.
Examining the draft from the perspective of recommendations has the potential to deceive. The document itself that I am referring to, as I said, is not even an interested party document; it was prepared as a draft so that Mr Toller was aware where BASI were going without necessarily BASI saying at that point that they have formed a conclusion. I might also emphasise that, if BASI had formed a conclusion, we would have wanted them to have published it straightaway. It did not matter: at the point you come to a conclusion that, for example, the trial should be terminated, you do not wait any longer; you put the thing out. In a sense, if this draft had said that the trial should be terminated, it should have been out that day—such is the concern in relation to safety. So the logic of the process, to my mind, demonstrates exactly what we have been saying throughout this.
Senator O'BRIEN —Are you saying that they could not say that in that first draft because it would require them to make that statement immediately without any consultation process?
Mr Harris —It would. In practice, I would not have wanted BASI to have come to a conclusion and not put it out. Dr Lee is not here, but I think he has basically said the same thing himself in the earlier record. If they had come to a conclusion that it had to be stopped, they would have recommended that it be stopped on that day.
Senator O'BRIEN —Even without an interested party consultation process?
Mr Harris —I will have to ask my colleagues, but I believe that `interested party' is a natural justice courtesy and information gathering. It is not absolutely essential. If BASI could see something absolutely serious that was uncompromisingly a breach of safety—not the class G trial, but anything—they could put out a recommendation saying, `We recommend that this stop now.' Obviously the recommendation would go to the party concerned—in this case it would be CASA, but it could be any other party for that matter.
Senator O'BRIEN —In relation to that first document of the two drafts, did you discuss that document with the minister or the minister's staff?
Mr Harris —I have a clear recollection of advising the minister's office that we were in discussion, in the process that I have outlined. I do not think that that document was provided to the minister's office. In fact, the reason I can—
Senator O'BRIEN —No, I asked you whether you discussed it.
Mr Harris —Discussed it?
Senator O'BRIEN —You discussed the document with the minister's staff: is that what you are telling us?
Mr Harris —I really could not tell you. The nature of the way this was conducted was such that the answer is: probably not. We did not want the minister's office engaged in this, one way or the other, for the obvious reason that it was a matter of high public interest. Thus, whatever conclusion BASI came to, we wanted BASI to come to that conclusion pretty much as the independent agency that they are. So I suspect not.
—Mr Toller, can you confirm that you only became aware of the suspension recommendation in that BASI draft report on 8 December, the morning it was released?
Mr Toller —That is correct.
Senator O'BRIEN —Prior to that point, you assumed it was only going to recommend some changes to the trial that was being run?
Mr Toller —The indications from the draft report that we had discussed were that, yes, it would require some review. But there was no indication at that stage that they would be requiring us to stop the trial.
Senator O'BRIEN —You were asked at the last hearing on this matter whether the minister had discussed with you your suspension of the trial. On page 26 of the Hansard, you said:
Only inasmuch as asking me was I 100 per cent convinced that it was safe and did I have any safety concerns.
You also said that he was happy for you to make the decision on whether the trial could continue. You were then asked what discussions took place between you and Mr Anderson that led to your decision to suspend. You responded, `None at all.' That is I think an accurate reflection?
Mr Toller —That is correct.
Senator O'BRIEN —It was then put to you, `There were no discussions with the minister in relation to that,' and you answered, `No.' Then, according to the Hansard record, you said that you advised the minister that you were going to suspend the trial.
Mr Toller —That is correct. I had previously written to the minister, assuring him that I would cancel the trial if any safety concerns were identified either by us or by BASI. Clearly, a BASI recommendation that the trial be terminated constitutes a safety concern which my only sensible response to, and my only justifiable response to, was immediate cancellation of the trial. So I had already informed the minister that that would be my action in these circumstances.
Senator O'BRIEN —Didn't you, in fact, have discussions with at least the minister's staff on the evening of 2 December about shutting down the trial?
Mr Toller —I had a telephone conversation on that evening with the minister's staff, yes.
Senator O'BRIEN —So you did not discuss suspension with the minister; you discussed it with the minister's staff.
Mr Toller —The issue I discussed was whether there were any safety concerns that would justify closing down the trial, terminating the trial, in my view, at that stage; and I said not in my view at that stage. If there had been, I would have terminated the trial, clearly.
Senator O'BRIEN —On 2 December you had discussions with the minister's staff—what, in person?
Mr Toller —No, I was in Darwin on 2 December.
Senator O'BRIEN —So it was by telephone?
Mr Toller —It was by telephone.
Senator O'BRIEN —Whom from the minister's staff did you discuss it with?
—With the minister's aviation adviser.
Senator O'BRIEN —Who is?
Mr Toller —Bill McKinlay.
Senator O'BRIEN —Are you certain the minister was not present?
Mr Toller —There was no indication whatsoever that he was on a speaker phone; it did not sound like it at all.
Senator O'BRIEN —They were consulting you about shutting down the trial?
Mr Toller —He just rang me for a situation report, to see how I felt about how things were going.
Senator O'BRIEN —It is not quite how you conveyed the matter to Mr Eddington, is it? You said, if I can read what I believe to be your writing:
If we go back to the rumour of Thursday, the minister at that stage was nervous, indeed his staff consulted me that night on shutting down the trial.
That is what you told Mr Eddington—
Mr Toller —That is right. They asked me if I—
Senator O'BRIEN —in a letter which is contemporaneous with the actions, I think. You wrote it on 9 December.
Mr Toller —That is right. But what I am saying is that they rang me up to see if there were any reasons why we should be shutting down the trial. I think we were all fairly nervous at that stage because it was—
Senator O'BRIEN —The minister was nervous at that stage.
Mr Toller —I think we were all nervous at that stage. It was a very high profile issue, and it was certainly a very stressful time for all of us involved.
Senator O'BRIEN —I think you said:
The rumour was the last straw for the Dept who recognised that if it were true and the letter was released my position was untenable.
So who from the department conveyed that to you?
Mr Toller —They did not. I think that was my view at the time. I think we have to put that letter in context—that it was not written to be a formal document or anything else; it was meant to be a note to an acquaintance about something that I wanted to discuss in giving some background.
Senator O'BRIEN —We will come to that.
Mr Toller —The letter certainly seems to suggest that someone in the department was influencing the position, if you like. But my view was always that the department would allow BASI to take a totally independent decision of the matter and that that view stands to this day.
Senator O'BRIEN —So on that day, 2 December, you gave the minister's office an assurance that things were okay, and apparently that advice was accepted?
Mr Toller —It was.
Senator O'BRIEN —Isn't that why Ansett's call for the trial to end was such a problem?
—Yes, I would—
Senator O'BRIEN —So, in other words, your credibility with the minister was effectively at risk.
Mr Toller —I think that is true, yes.
Senator O'BRIEN —I just want to counterpose what you said in estimates hearings on 8 February last year, that Mr Anderson was prepared to let you make the decision on whether the class G trial should continue, based on your professional knowledge. But in your letter to Mr Eddington, you stated that the department was not prepared to adopt the same approach and that it used the BASI report to close down the trial.
Mr Toller —I am not sure that those two are connected. I think, as the overall view of the trial, if there were any safety issues or safety concerns from the CASA point of view—in other words, things that we recognised—it was our duty to terminate the trial. The position I took to the minister in writing was that, if either we or BASI had any genuine safety concerns, I would immediately announce the cancellation of the demonstration.
So I think there are two elements to this. One is the decision that I would take on my judgment as a result of CASA input, the other is a simple decision, which is the one I eventually took, which was a reaction to somebody else's judgment, which was the BASI judgment, that the trial be terminated. The BASI recommention is only a recommendation. I think Dick Smith at the time believed that we should not necessarily have accepted that recommendation. I did not hold that view. I believed that the position I had taken with the minister was a valid one, and I complied with that position.
Senator O'BRIEN —As to the BASI recommendation, it was a pretty big straw on the back of the proverbial camel, was it not?
Mr Toller —It was.
Senator O'BRIEN —Fundamental, in fact.
Mr Toller —Yes.
Senator O'BRIEN —Isn't an appropriate view that the department were agitating for the termination of the trial prior to 8 December?
Mr Harris —I think I probably should answer that, and the answer to that is no, it is not the view that the department was agitating for the end of the trial. The department was extremely active in trying to ensure that BASI came to a conclusion as soon as they could come to a conclusion but that that conclusion was as substantially based as it could be.
So we were very actively engaged with CASA and with BASI and, for that matter, in discussions when they occurred with the minister's office and with parties outside the government. But that activity was entirely directed towards ensuring that there was a robust and substantial conclusion drawn for the very obvious reason that this was a matter of high public interest where positions were being taken which potentially could imply to the travelling public that there was a safety issue. This needed to be resolved, so our role was to ensure that the relevant parties concentrated their minds very much on that. That action is easily misinterpreted by someone who wants to misinterpret it, but it is not misinterpretable if you are familiar with the activities of a department of state in a circumstance like this.
Senator O'BRIEN —So did Mr Toller misinterpret it when he said in his letter, contemporaneous with this action:
The rumour was the last straw for the Dept who recognised that if it were true and the letter was released my position was untenable.
When this was all confirmed they took the view that BASI should recommend termination'?
Mr Harris —Mr Toller would need to comment on his letter, but when I have seen that quoted I do not think—
Senator O'BRIEN —No, you can comment on whether he was wrong.
Mr Harris —I can, and I intend to comment. I just needed to reserve the fact that Mr Toller will also need to comment on his own letter. But as far as I am concerned, Mr Toller was drawing a conclusion on the information available to him, which he was entirely able to draw. But it is not the accurate conclusion. The accurate conclusion is that we aimed every one of our efforts at ensuring that as soon as BASI were able to come to a conclusion they published that conclusion, and that conclusion could as much have been a recommendation that a number of safety deficiencies needed to be addressed but the trial could continue. The question was to ensure that it was substantially done.
In terms of the effect on Mr Toller's credibility, absolutely. The Ansett story that has been referred to was one of a number which were circulating during that period. Each one of those stories—I do not talk about the trivial—if they had proven to be substantial would have had a damaging effect, given the position that Mr Toller had taken in his correspondence to the minister that he had yet to see a substantial safety deficiency sufficient to justify cancelling the trial. So in that context obviously any one of these sets of stories that were circulating might have been sufficient to do that. But they were stories that were circulating and we were devoting our efforts not to stories that were circulating but to the substantial conclusions to be drawn by BASI, whatever those conclusions might be.
Senator O'BRIEN —So, Mr Toller, what you said to Mr Eddington was that the department `took the view that BASI should recommend termination'. Where did that come from?
Mr Toller —It didn't. It was my assessment, if you like. It was not based on anything other than my interpretation at the time, which was clearly incorrect.
Senator O'BRIEN —So, from what you heard from officers of the department, that was the view you formed? I am assuming you did not get information by osmosis.
Mr Toller —No, Senator. This letter was written at a fairly emotional time. It was not meant to be an accurate, contemporaneous record of what was going on; it was meant to be some background information for discussion. Had I realised that it would come under this sort of scrutiny, or had I intended at the time to make it an official document, then obviously I would have been much more careful.
Senator O'BRIEN —`Would not have been as frank' might be another way of putting it, Mr Toller.
Mr Toller —Yes, but not necessarily always accurate. One writes in the heat of the moment; one often destroys later.
—We will come to the subject of destroying later. The final ATSB report on the class G trial and the process followed in the production of the report is what I will come to now. The final report, B98/166, which was released in November 1999—so basically it is almost a year from draft to final report—was, I understand, given limited circulation at the beginning of July 1999. Obviously I have to ask ATSB why that process took so long.
Mr Harris —Yes. If you are referring to the interested party copy—when did the interested party go out—I cannot confirm the precise date instantaneously, although that sounds to me quite right. I think it was broadly July, but it could have even been earlier. It might have even been June.
Senator O'BRIEN —I guess we will be asking the bureau to get a copy of the changes made between the circulated draft, the final report and the actual final report and the basis for the changes.
Mr Harris —As I said earlier, we have advised the Senate that we would not wish to provide that information, and Senator Macdonald has confirmed that to the Senate.
Senator O'BRIEN —Again, my response will be that circumstances have changed in the sense that the matter is completed. But we will deal with that subsequently. Mr Toller, can you confirm that you wrote to the bureau, however it was named at the time you wrote, claiming that this report in its draft form contained unfair attacks on CASA's senior management and Mr Smith?
Mr Toller —We provided a significant response to the bureau on the interim party report, including—
Senator O'BRIEN —I presumed that—I think everyone would have assumed that—but that is not the answer to my question.
Mr Toller —I do not actually have a copy of my letter here. I would have to take that on notice.
Senator O'BRIEN —Was there one or more letters?
Mr Toller —To the best of my knowledge, I think we sent one consolidated response to the ATSB, or BASI, interim report. But it was obviously comprehensive.
Senator O'BRIEN —Can the committee have a copy of that letter?
Mr Toller —Yes.
Senator O'BRIEN —Was the report following that amended to CASA's satisfaction?
Mr Toller —As always in this process, some of our points were taken on board and accepted and included; others were not. I think that, overall, as a final report, CASA will say today that it is satisfied with the report.
Senator O'BRIEN —So there are no errors or omissions in the report that you would wish to draw to the attention of the committee?
Mr Toller —No, I do not believe there are. As I say, there will always be slight differences of opinion over various issues, in particular in a report that thick. But I think our belief was that it was, overall, a reasonable report of the situation.
Senator O'BRIEN —So there is no argument between CASA and the bureau about the safety of the class G trial or whether the final report is a satisfactory document?
Mr Toller —No. We have moved on, if you like, to the next phase.
Senator O'BRIEN —I now go to the minute from David Anderson to Dick Smith and Mick Ryan dated 16 March 1999: `Subject: correspondence with Ansett'. Do you know the minute I am referring to?
—I do not have a copy of it; in fact, I probably have not seen a copy of it. It is from the board secretary to the members of the board.
Senator O'BRIEN —Do you want to have a copy of this in front of you?
Mr Toller —If I could, yes.
Senator O'BRIEN —We will just get Mr Toller a copy of this.
CHAIR —Do you want to table that?
Senator O'BRIEN —I do not think it is necessary to table it at this stage. Have you seen that minute before, Mr Toller?
Mr Toller —I have not, no.
Senator O'BRIEN —Were you aware of its existence?
Mr Toller —I am aware of the board resolution and the fact that it was carried out.
Senator O'BRIEN —So this particular minute was on a decision of the board at a meeting at which you were present?
Mr Toller —Yes, indeed, a closed session of the board held on 26 February.
Senator O'BRIEN —So the board initiated the drafting of the minute and approved its circulation?
Mr Toller —It is quoting a board resolution.
Senator O'BRIEN —Can you tell me who approved or requested that your handwritten letter to Mr Eddington be circulated in the first place?
Mr Toller —To board members?
Senator O'BRIEN —Yes, presumably. I do not know how widely it went.
Mr Toller —I personally provided those of them—
Senator O'BRIEN —You circulated it?
Mr Toller —I circulated it. The original request to circulate it was by Dick Smith at a time when I was out of the country. He rang me and asked my permission, and I refused at that stage. There was one board member who declared a conflict of interest over the matter to whom it was not circulated.
Senator O'BRIEN —So you refused, but subsequently you were asked or directed to provide it? Is that the case?
Mr Toller —No, subsequently I believed that the board should take a position on it. If they were going to take a position on it, they needed to know what it said. Therefore, I provided them with copies by hand at that meeting.
Senator O'BRIEN —So at that meeting the decision was taken that the documents circulated should be returned and destroyed?
Mr Toller —The copies of the documents, yes.
Senator O'BRIEN —Did they not simply collect them at the board meeting, or did people have them before the board meeting?
Mr Toller —No, two members were not present.
Senator O'BRIEN —Were they Mr Smith and Mr Ryan?
—Yes, Mr Smith and Mr Ryan.
Senator O'BRIEN —And they had already received it?
Mr Toller —I do not believe that Mr Ryan actually received a copy of my letter, but we know Mr Smith did.
Senator O'BRIEN —Presumably, at the board meeting the copies that they had were handed back in?
Mr Toller —They were.
Senator O'BRIEN —So the only copy that you know of in existence outside of the board meeting was Mr Smith's?
Mr Toller —That is correct.
Senator O'BRIEN —Your memo to board members dated 24 February 1999 and headed `Correspondence between the director and the executive chairman of Ansett' was one of the two documents which you circulated at the meeting but not before the meeting. Is that right?
Mr Toller —No, I believe that was circulated before the meeting by fax to the members of the board.
Senator O'BRIEN —But it did not contain a copy of the letter when it was faxed out.
Mr Toller —No, the final words in that particular minute to the board are: `I will hand deliver copies of the letter to you on Friday prior to the board meeting.'
Senator O'BRIEN —Does the board still hold a copy of the minute and the letter?
Mr Toller —In the board archives. I have them here. These are the embargoed copies of those two documents.
Senator O'BRIEN —So the board have retained copies of both?
Mr Toller —Within the board archives there are these copies, which I have borrowed from the board archives for this hearing.
Senator O'BRIEN —It appears that what we have to grapple with is the difference between your reflection in that letter, Mr Toller, on what took place and what you say now, particularly as to the involvement of the minister and the department in considerations of the closing down of the trial and the BASI recommendation.
Mr Toller —I said that the minister was nervous. I do not think that that was an inaccurate statement because, as I said, I think we were all feeling pretty nervous at that stage. The way that I wrote the fact that the department had suggested the termination of the trial is not supported particularly well, and I think that might have been an inaccurate statement. But the important thing to recognise was that my motive for writing that letter has actually got nothing to do with these sorts of issues. They were just asides. My motive for writing to Rod Eddington was the issue that he was telling me one thing and one of his senior executives was telling me another, and I wanted that result. I thought that needed to be resolved.
Senator O'BRIEN —That is how the letter starts. There is no doubt about that. You talk about TJ—Trevor Jensen, I presume—ringing back and saying:
Don't want to force you to resign. Letter will be kept in bottom drawer ... Now only strongly suggesting termination.
You asked him to fax you a copy of the words, which he did shortly thereafter. You read them and then, to your chagrin, apparently, shredded them. Then you say:
The last piece of the jigsaw is a call from Paula Catty to Peter Harris of the Department (or possibly W).
Who is W?
Mr Harris —I think that was possibly the other way round.
Mr Toller —That is VV.
Senator O'BRIEN —The letters come together to look like a W.
Mr Toller —Sorry, that is my writing. I am surprised that you have the handwritten copy.
Senator O'BRIEN —That is why I told you earlier that I was having trouble with your handwriting. I gave you a clue. The letter continues:
Peter tells me the message was that the decision had been taken by the Board Safety Committee to demand the trial cease.
Peter Harris told you—is that what you are saying?
Mr Harris —That is correct, I did.
Senator O'BRIEN —No, I am asking Mr Toller to confirm what he is saying in his letter. I not asking what you did, Mr Harris.
Mr Toller —Peter told me—that is correct. My conversation with Peter Harris was that the decision had been taken by the board safety committee to demand the trial cease. My information from Rod Eddington was that it had not even been formally discussed by the board safety committee. That was the issue that I was trying to bring up.
Senator O'BRIEN —The letter continues:
... the letter to me stating this would be released at the same time as the BASI report.
The letter suggests that someone called Paula was passing this on to Peter Harris from operations.
Mr Toller —That was Pamela.
Senator O'BRIEN —I apologise for my reading of your handwriting.
Mr Toller —I thought you would use the Alan Ramsey version.
Senator O'BRIEN —I always like to go to the original source. Yes, the word looks more like `Pamela' on second reading.
CHAIR —Could I clarify whether the letter in the Sydney Morning Herald—the Alan Ramsey version, as you call it—is a verbatim version of the real letter?
Mr Toller —It is. I checked it right through and it is verbatim.
CHAIR —Do you wish to now put a copy of that letter on the public record?
Mr Toller —I am very happy to put a copy of that letter on the public record. If it is necessary, I think Senator O'Brien could perhaps put a copy of the letter on the public record.
CHAIR —The matter is somewhat different. I now have a copy of the letter, too. It is a somewhat different matter to us having a copy of the letter from you actually putting it on the public record yourself.
Mr Toller —I am very happy—as long as I get it back, because it is the original for the board minutes—to tender that for the record.
Senator O'BRIEN —You were pretty upset with Trevor Jensen because you say in the last paragraph:
I think we have to consider a position that TJ's actions are such that CASA cannot have trust in him in any future discussions and the impact of that on AN/CASA's relationship.
Mr Toller —At the time, I was very upset with Trevor Jensen. I was fairly emotional at the time, which is a stress related issue. I felt that, if it were true that what he had told me had been a complete distortion of what had actually happened—which is what I believed at the time, based on what Rod Eddington had told me—that was not an unreasonable statement. I think the truth actually lay halfway between those positions, as is so often the case.
Senator O'BRIEN —Thank you.
CHAIR —I have some questions about the letter that was written by Dick Smith as chairman of the committee. In particular, I want to put on the public record that, when Alan Ramsey rang me about this, he had a copy of the letter and, at that particular time, I had not received it. I assumed that, because there were quotes, the document existed, but I found the matter less than satisfactory. The letter states:
Dear Senator Crane
I have recently found out that the class G inquiry has been killed off without even one public hearing. Now the truth may never come out.
I know that both you and Mr Harris are aware of the fact that we decided not to continue because we believed that the main issues and the terms of reference, on the advice that we had been given, had been covered in the ATSB report. We did not see any point in revisiting that—in doing it all over again. From your perspective are there any issues that were not covered, bearing in mind what our terms of reference were at that time? If you want to have a look at the terms of reference, I have a copy of them here. Do you believe there are any issues that the ATSB report did not cover that we could possibly have looked at or would we just be repeating the exercise that had already been done?
Mr Toller —No, it is my view that the ATSB report on class G airspace comprehensively covers all of the issues involved, including the issues of CASA management, board involvement, personalities and so on. I think it is all covered in there and I do not think there would be any value in reopening things and looking at the same issues again.
CHAIR —I guess, in view of what has occurred since then, it may well become necessary for us to have further hearings separate from estimates, because we cannot go into these matters in such committees and take confidential evidence. That is a possibility. We have not made a decision on that yet, but we will be considering it as a committee very shortly. My next question refers to some of these articles. I have already cleared up the fact that what appeared in the Sydney Morning Herald is a direct replica of the letter that you wrote. Part of what was quoted is as follows:
I wonder what type of message this has given to the people at CASA, who in the line of their work have to stand up to powerful forces in the interest of aviation safety. It is stated there is now no need for the Senate inquiry to continue because of the ATSB report, which did not even mention the allegations in relation to the Jensen letter, let alone investigate them.
What is your reaction to the proposition that there are powerful forces within management? Do you or Mr Harris wish to comment on whether this is in fact impeding the work of the general staff in CASA?
Mr Toller —I think that is so far from the truth that it is hardly worth considering. I can think of no reasonable grounds for supporting that view.
CHAIR —Mr Harris, would you like to comment?
—On 8 February last year, in answer to a question from Senator Woodley, Dr Lee noted that this issue—that is, of there being some kind of pressure from the major airlines to determine the ATSB's recommendations—was `quite bizarre'; those were his words. I think it is worth noting that Dr Lee and his people, who were the authors of this recommendation, are refuting that claim. From the department's point of view, there is no doubt at all that within the aviation industry there is a tremendous amount of interest taken when BASI run an investigation of this kind, and no-one should deny that. But there is no practical possibility, given the way that BASI conduct themselves, that such a level of pressure could influence them. They run, within a tightly controlled investigative process, quite a transparent series of exchanges on what is going on.
CHAIR —When you say `empowers people,' do you mean `empowers CASA employees'?
Mr Harris —CASA employees, even over the interests, for example, of their management. They are able to comment directly to ATSB investigators on what they think occurs. That is the conduct of an ATSB inquiry. If you pick up the report you will find this. I do not know whether they actually name individuals. I think basically they say `The person in a particular position held this view,' and those views are critical, in some cases, of their own chairman, of particular organisations within the aviation industry and outside it—for example, some of the airlines. This is a complete exposition of the views of all of the interested parties who have standing and are capable of taking a view. How can you allege as a result of that that CASA employees are disempowered or otherwise given the message that you cannot take a view because a big airline will contradict you? The ATSB report is a massive contradiction of that it its own terms. You just have to leaf through it page by page to see that. The people who are considering the views that have been expressed on that should really pick up the ATSB report and see how robust some of that criticism is and how clear-cut it is. You can disagree as an individual with whether those people are right or wrong, but there is no doubt they are empowered and able to make comments. There is no doubt the confidential reporting system that ATSB operates provides exactly the same opportunity in a different context. So I do not believe that anybody in CASA would feel disempowered as a result of the conduct of this inquiry: I would have thought far more the reverse is the case.
CHAIR —Mr Toller, does CASA have a confidential reporting system where employees can raise issues of concern with them without jeopardising their position?
Mr Toller —We have various systems in place. Whether we actually have one that is secretively confidential, I do not think that is fair, because that is against the nature of our business. Our very business is open and based on fact. But we certainly encourage a situation—and there are plenty of examples of it within the organisation—where people bring to the attention of management, or even to me direct, issues that concern them. I have gone on record as saying I have a metaphorical open door policy, which includes the fact that I am quite comfortable for any of the staff to email me direct with any issues that they want to raise with me direct, and they do.
CHAIR —If I can just put that into another context, with the BAe 146 inquiry, for example, both Ansett and Qantas, just to name two, have told the committee quite clearly that they do have a system where an individual can raise an issue—and obviously they have got to substantiate it in raising that particular issue in the process—without fear or favour and not having to be identified, because of the fears of a kickback. That is a real thing in real life. I have seen it many times. I thought that you may have also had some system of that nature where issues could be raised and dealt with.
—We are in a very different position in that we are the regulator and, as such, any point that any person brings up which has the strength of the law behind it is going to be taken into account, because that is the very nature of their job.
CHAIR —I know there is a difference, but I am talking about the principle in terms of that. You are the regulator. There is no question about that.
I will now quote some press articles and ask you some specific questions. One of the issues that has been raised is safety and the position of contracting out. Do you have any information at all for the committee with regard to those claims that have been made against Qantas in particular? If I am asking this question in the wrong place, please say so, but do you have any information at all as to the percentage of contracting out that is being done currently by Qantas?
Mr Toller —Yes, I believe the figure is about 12 per cent for Qantas, and about 15 per cent for Ansett.
CHAIR —An article, entitled `How Qantas sprung a leak', by Murray Mottram and Gerry Carman says:
"Workers who have been at Qantas for 20 or 30 years are being told they have to compete for their own jobs against cheap labour in places like Thailand and China at a time when the company is making massive profits," says Cameron. "We can't compete, we shouldn't compete and we won't compete."
In view of the fact that you have just told us that in excess of 85 per cent of the work is not contracted out and is done in-house—that is my interpretation of what you said; correct me if it is wrong—have you any comment to make in terms of the situation with the work in this particular case where they nominate Thailand and China, because obviously with an international airline there would have to be some done internationally?
Mr Toller —I will make the general comment initially that subcontracting work—which is another word for outsourcing, getting other people to do it for you—is common and normal practice in airlines. Some airlines go as far as to subcontract 100 per cent of their maintenance. A classic example of that is my former airline, which did none of its own maintenance; it subcontracted it. Singapore Airlines has a subsidiary, which is a separate company, which looks after its maintenance, as does Lufthansa. Therefore, it is not an unusual commercial arrangement, for a start.
Secondly, there are areas where the technology is such that the equipment required cannot be provided on an airline by airline basis; it is much better provided specifically and most normally by either the manufacturers or large companies which particularly specialise in areas of maintenance. The sorts of areas we are talking about are obviously tyres, brakes, undercarriage systems, engine parts and those sorts of issues, where all airlines throughout the world will be doing the same as Qantas and Ansett and subcontracting that work. There are other jobs which you can or cannot do yourself, such as painting your aircraft. It does not really matter who paints it, quite honestly. Generally, I think people are finding that is cheaper to paint it elsewhere than it is in places like Australia or the United States at the moment, and that is a fairly common occurrence.
CHAIR —How does Qantas rate with other airline operators in terms of its maintenance work and where it is done? I refer here not necessarily only to Ansett but to other international airlines.
—The Boston Consulting Group has suggested that airlines worldwide on average outsource 37 per cent of their maintenance work. As I say, you have to take into the balance that some are doing 100 per cent outsourced and therefore will obviously distort the figures. I would have thought that for airlines that did not 100 per cent outsource both Qantas and Ansett, at 12 and 15 per cent, were in the normal figures for the airline industry.
CHAIR —I just go back to a question I did not ask previously. I do not think Senator O'Brien asked this. Is there a known copy of the Jensen letter anywhere?
Mr Toller —I believe Senator O'Brien has one.
Senator O'BRIEN —I believe the chair has one at the moment. But I think the chair is asking if you know where they may have originally come from, from your known circulation of the letter and those that were returned.
Mr Toller —I think it is reasonable to assume, but not absolutely guaranteed, that Rod Eddington did not copy nor circulate it. The only other copy that I gave out—other than to the board members, which were collected in—was to Dick Smith.
CHAIR —But you do not still have a copy?
Mr Toller —Personally, I do not still have a copy, no. There is a copy that I have brought today which is held within the board archives.
CHAIR —I will just go back to the safety issues and, in particular, to the reference to the statement with regard to Tasmania. An article that appeared in the Mercury on 4 April says:
"Tasmania's airspace is unsafe and some near misses have been covered up," says respected Australian aviator Dick Smith.
What information or records can you give the committee relevant to Tasmania? You will have to give us a history of what has occurred in Tasmania in the last 12 months, as this article refers to the last 12 months. It goes on to say:
"It is an absolute nightmare flying in Tasmanian airspace and potentially dangerous," he said yesterday.
Mr Toller —There have not been any changes that I am aware of in Tasmanian airspace in the recent past and, in fact, probably for not some considerable length of time. I think that Tasmanian airspace is as safe as any airspace in Australia. I cannot even start to imagine what the grounds for his particular statements were.
CHAIR —Mr Harris, do you have any comment? These are pretty serious allegations. If I was Senator O'Brien I do not think I would be going home this weekend!
Mr Harris —I have just been handed a piece of paper which is long and detailed and obviously relates to picking up the media report. Perhaps I could give you an answer after the lunchbreak, after I have had a chance to read through the 20-odd pages just to see whether there is any substance left at the end of 20 pages. It is not that we would not take such a claim seriously or that some people have not tempted to look into it. I just do not know what it says, so could we perhaps come back to you after lunch on that.
CHAIR —You do not know what the article says?
Mr Harris —I do not know what the response to the claim is. I am just reading through what is a long set of exchanges between people. Can we come back to you after lunch?
CHAIR —You certainly can.
—On safety issues, there is no change to Tasmanian airspace, and we are not aware of any safety issues in Tasmanian airspace. Whatever concerns were expressed for whatever reason they were expressed, then, other than the response that Mr Harris might give you, I would imagine it must be an Airservices issue, because we do not have any safety reports regarding Tasmanian airspace.
Senator O'BRIEN —It is ideal pilot training airspace.
Mr Toller —Yes, and it is a beautiful place to fly as well.
Senator O'BRIEN —Yes. Indeed, Mr Chair, I find it hard understand that comment, given that Mr Smith sat in my office for as long as I would let him, telling me that we should be closing the towers down at Launceston.
CHAIR —I will now move to the issue of Canberra and Brisbane. In the Sydney Morning Herald on 15 April this year, a report quotes from a letter written by Mr Smith to Mr Anderson. Mr Smith says:
This is because of the complete vacuum provided by your leadership. It is now over 12 months since access to radar was turned off between Canberra and Brisbane and we are actually no closer to using that radar ... than we were eight years ago.
Do you have any comments on that? If you are the regulator, I would have thought that you would have made sure that the radar was turned on between Canberra and Brisbane.
Mr Toller —The radar was never turned off, I think, is the first statement. The radar has continued to exist there and continued to be used, but I think that this is very much inherent in what followed the class G demonstration and the moves towards the new what is known as the lower airspace management program, which is being driven by Airservices; and therefore it is probably a question that is better directed to Airservices.
CHAIR —I will certainly do that, but I just wanted to get your reaction. Mr Harris, have you have any comments, or do you want to wait for Airservices?
Mr Harris —I support Mr Toller. I believe Mr Pollard has strongly advised this committee in the past that he is very irritated by claims that `the radar has been turned off' because it simply is not true, and that extends to the utilisation of the radar as well, from his terms. But perhaps this is something that might be better dealt with by Airservices.
CHAIR —I will just go back now to the Mottram-Carman article in the Age on 20 May. It says:
A CASA check earlier this year of pilot training found some shortcomings in "systems and procedures" and the airline was advised to make improvements, including in its publications to keep abreast of developments overseas.
Can you comment on that?
Mr Toller —Is this talking about Qantas?
CHAIR —It says:
A CASA check earlier this year of pilot training found some shortcomings ...
I can let you have this and you can come back to us after lunch, if you like?
—No. We can respond to that, but what did the last bit say?
CHAIR —It says:
... some shortcomings in "systems and procedures" and the airline was advised to make improvements, including in its publications to keep abreast of developments overseas.
Mr Toller —I might finally come off the stage and leave Mr Foley to answer that one.
Mr Foley —There was an audit carried out of Qantas in respect of the pilot training. Since undertaking that audit process, Qantas have provided us with an action plan, and we are currently working through that action plan. However, a point I would like to make at this stage is that, in the last 12 months, CASA have changed the way they conduct surveillance activities. CASA now focus on looking at the operator systems that they are required to produce—safe safety outcomes. In the past, we focused—and this is going back 10 years—on inspecting the final product only. I think this change in focus has been evident over the last 12 months. When looking at the systems, we look at not only the product—we are still continuing to look at the product—but also the records and we witness the task being undertaken. And that is a significant change from the way that we did it in the past. I think the results are now coming through, and we are identifying the real underlying safety issues.
CHAIR —Thank you. I understand we are going to be given some figures with regard to various international incidents and others that have occurred recently in Australia. That is going to be done in the Airservices component of these hearings, is it not?
Mr Harris —Information in relation to what?
CHAIR —My understanding is that Qantas, for example, were going to provide you with some information in terms of their historical records insofar as incidents that have occurred, and with a longer term comparison and whether or not their incident performance has got better, worse or not changed at all relative to the number of flights they now fly, and the severity of the incidents.
Mr Harris —We can provide you with information. I think we have on notice provided some information as it is, but we can provide you with further responses to questions as they are raised. On the issue of identifying by carrier, I suggest to the committee, we again have concerns about dealing with this in an open forum, primarily because the level of incidents does not necessarily relate at all to the level of safety. But we would like to deal with that, if we could, when ATSB is up in front of the committee, if that is acceptable?
CHAIR —That is fine—you can deal with it then.
Senator O'BRIEN —Firstly, we have on the public record a copy of your memorandum to Mr Eddington of 9 December, but we do not have a copy of the memo of 24 February that you provided to the board. Can that be tabled as well, please?
Mr Toller —It can.
Senator O'BRIEN —There is just one matter I wanted to pick up on. You talked about this open door policy with staff. I have been told there is some directive that staff are not to have access to Hansard. Can you tell us about that?
—There is no such directive. I had concerns at the last Senate estimates that there was so much interest, particularly in the IT issue, that most of the staff would try to watch the proceedings via the Internet, which is a new issue that has now arisen. The set-up that we have is such that, once we had a certain number of staff on, (a) no more staff could get on and (b) it would block access in and out of our Internet site because it would prevent any further traffic in and out of our server. As such, on that particular day I asked that access to the Parliament House Internet site for that day be blocked.
Senator O'BRIEN —For all sites around Australia?
Mr Toller —From CASA sites, yes.
Senator O'BRIEN —Around Australia?
Mr Toller —Yes.
Senator O'BRIEN —So if someone was looking at that site in Darwin, it would have affected everywhere?
Mr Toller —Technically, I am not sure. Certainly in Canberra it would. I am not sure to what extent we all go through the same link in Canberra. It is a growing concern. There is obviously a lot of staff interest in something like this, but if it blocks access to our web site then obviously that is not acceptable. It also has some interesting productivity issues, of course.
Senator O'BRIEN —It might have some other interesting consequences which some people, I suppose, suspected were part of the motivation. I do not think we are debating that here today.
I want to go on with the issue that the chairman raised and what has become known in the media as the Qantas issue, but I do not regard it as the Qantas issue. They have had a number of problems, mostly minor, I would think. The issue we have to address here is the performance of CASA over the recent past. That is where this committee should be focusing its intention, rather than singling out any individual operator. It is my view that, if we had in place an appropriate regulatory and surveillance system, that system would single out wayward operators and ensure that they performed in a safe manner. So it is the regulatory environment and the surveillance of companies that operate in the environment that are the keys to the whole issue, isn't it, Mr Toller?
Mr Toller —Yes. The regulatory environment and ensuring that there is compliance with that regulatory environment are important parts. There are education issues as well.
Senator O'BRIEN —The right safety regime properly enforced is, in fact, the most effective way of ensuring the safety of the travelling public.
Mr Toller —I do not think anybody could disagree with that statement.
Senator O'BRIEN —It is my view that, based on what we now know and what we should have known if we had been provided with the material we require to do our job, this committee has little choice but to take this matter further. The Australian Transport Safety Bureau told us that between January 1998 and February 2000 there were 2,946 occurrences from Qantas and Ansett reported to it. That is in an answer to a question on notice, ATSB1, from 2 May. We have been advised that 1,032 of these have been investigated, 988 of those investigations are complete and 44 are still under way.
There has been a lot of discussion about these issues publicly. I suggest we seek a detailed briefing from the ATSB, and I imagine that encompasses issues that were known to BASI. If there is sensitivity about it, that may have to be in camera, although that is a matter I think the committee would have to take under advisement. The committee has been advised by CASA that it is not prepared to provide a copy of the report of the independent review of its surveillance of Qantas's operating procedures in the estimates context. I take it that means there might be a different approach if the matter is dealt with in another forum where that is not necessarily on the public record. Is that right?
Mr Toller —I wish to protect, in the same way as ATSB wish to protect, the ability for us to have cooperation in investigation because I think that is a critical facet of flight safety. In any investigation, as far as the ATSB is concerned, it has always been the issue that there would be no blame. As far as CASA are concerned, obviously we are keen to prosecute those who wilfully disregard the law, and we are also keen to ensure that the systems that exist within the industry to ensure the safety are as good as they can be. Frankly, we could go in as policemen on a daily basis and never find anything because people are very good at hiding things, but if you have some cooperation and people are helping and there is almost a partnership in safety between the regulator and the industry, that works much better. I do not want to destroy that by making everybody realise that, if they show us their warts, their warts become public all the time.
Senator O'BRIEN —The key words are `all the time'. For example, on Thursday, 27 April, there was a Sydney Morning Herald article titled `CASA steps up audit amid safety concerns' which had this passage:
A spokesman for CASA said an internal review after the accident last September had pinpointed cabin procedures and safety levels as well as some concerns about "training and checking" of pilots.
So CASA is prepared to go on the public record from time to time about safety issues about particular operators.
Mr Toller —In the broad sense.
Senator O'BRIEN —About a particular operator in this case.
Mr Toller —Yes.
Senator O'BRIEN —The point that I am making is that, equally, this committee is entitled to have a look at that record. If we accept your position that that should not necessarily be thrown onto the public record in a block, then it may be that the committee would be happy to take that material in another forum where it would be initially able to take from that matters which were not necessarily pertinent to the public record and those which were. Is that something that CASA and the government would be happy with?
Mr Toller —I cannot answer for the government. I think from the CASA point of view, as I said, we would wish to ensure that the audit process remains an open and efficient process. We would also not want to do anything that was not going to further the interests of aviation safety. If you believe that discussing these matters in camera with you would further the interests of aviation safety, then we would do it.
Mr Harris —Would it be possible in such an environment for Qantas, Ansett and others, for that matter, to also provide comment or otherwise answer the questions from the committee in such a different context?
Senator O'BRIEN —I think it would be essential.
—As I have said, we as a committee will probably need to have a separate session under the powers we have to look at departments and what have you, which also allow us to go into committee and call outside witnesses. I cannot comment on behalf of the committee yet because we have not finalised that, but we decided we would go though the process of additional supplementary estimates and then this one. If I were a betting man, I would put about 99.9 per cent on the fact that we will do that.
We have to finish this process, but Ansett and Qantas are also entitled to put their position on the record, as much in public as they can and, whatever is necessary, in private. In addition, some of the other operators of the smaller ones have the same rights to appear and do that. Having said that, I think that almost says that it will happen. The next private meeting is on 6 June and we will make a decision then. I did have the request that we take some information from you in committee and, as that came from the department, I cannot imagine the committee denying that request. I think Senator O'Brien agrees with those comments.
Senator O'BRIEN —Yes, certainly. We cannot pre-empt what the committee determines. It will be essential that those who are involved in the process and may well have concerns have an opportunity to attend. It is essential also for members of the committee to be able to ask questions.
Mr Harris —We would agree with that process, but it is obviously a matter for the committee.
CHAIR —We are meeting on 6 June, so we will make a decision then. Certainly my strong recommendation to the committee would be that we do just that.
Senator O'BRIEN —Mr Foley, can you confirm that Mr Leaversuch from CASA wrote to both Qantas and Ansett last August soon after he took his current position as General Manger, Airline Operations and told both airlines in that letter to bring their procedures for training, checking and operational matters into line with the regulations?
Mr Foley —I cannot answer that, but Mr Leaversuch is present, and I will get him to step forward and comment on that aspect.
Mr Leaversuch —When I read the article, I asked for a search of the files for a letter of about that date, and I was unable to find any letter of that kind.
Senator O'BRIEN —You do not recall any such letter?
Mr Leaversuch —I do not.
Senator O'BRIEN —So, to your knowledge, the passage in the article of the Financial Review of Tuesday, 9 May, `Minister to grill Qantas on safety', is totally inaccurate, there has not been a written notice? It may not be a letter. He says `a written notice'. I presumed it was a letter. Is there a written notice?
Mr Leaversuch —No, there is no written advice of that kind. Certainly there were face-to-face meetings with all the major airline operators, and those sorts of discussions were held, but there was no letter.
Senator O'BRIEN —So there were face-to-face meetings with Qantas and Ansett and those sorts of discussions were held?
Mr Leaversuch —Yes.
Senator O'BRIEN —Can you advise the committee of the timetable Qantas is working to on this matter?
—No, I do not recall the timetable, but I believe it is the end of June. We have a detailed report from Qantas which specifies time lines for each of the items that were mentioned to Qantas.
Senator O'BRIEN —So the time line from last August was through to the end of June this year?
Mr Leaversuch —No, I am sorry. I misunderstood. I thought you were referring to the audit that was undertaken of Qantas quite recently.
Senator O'BRIEN —When was that? It would have been fairly early this year, would it not?
Mr Leaversuch —March, I believe.
Senator O'BRIEN —In your discussions with those airlines, presumably they responded positively that they would take the actions that you were requesting of them?
Mr Leaversuch —They did. They were enthusiastic about the concept of auditing as opposed to product checking and inspection, and they were anxious to cooperate in that process to improve their documentation and to make their standards and practices compliant with all the legislation.
Senator O'BRIEN —So presumably notes or minutes were kept of these face-to-face meetings which recorded this information?
Mr Leaversuch —There were, yes.
Senator O'BRIEN —And they are a matter properly held within the files of CASA?
Mr Leaversuch —They are.
Senator O'BRIEN —CASA's high capacity surveillance inspectors are based in Melbourne, Sydney and Brisbane, as I understand it; is that right?
Mr Leaversuch —They are now, yes, that is right, Senator.
Senator O'BRIEN —How is the management structure for high capacity RPT surveillance set up?
Mr Leaversuch —As you say, there are offices in Brisbane, Sydney and Melbourne which have flying operations and airworthiness inspectors, amongst others. For flying operations, the systems assessment process was put in place nearly two years ago, and a national program was organised which began in June 1999 and has continued throughout 1999-2000. For the year 2000-01, both flying operations and airworthiness will have a systems based assessment program for the major airlines.
Senator O'BRIEN —But, in terms of the management structure, is it a top-down system?
Mr Leaversuch —Who makes the decisions on the surveillance program?
Senator O'BRIEN —Yes.
Mr Leaversuch —I do with Mr Foley.
Senator O'BRIEN —Who makes the communication with the relevant district offices? Are one of you two gentlemen responsible?
Mr Leaversuch —The three offices have an office manager who reports directly to me. Each of those office managers has a team leader in flying operations and airworthiness who reports to them.
—To add further information to who makes the decision on the surveillance level, that is done through a process of getting all the team leaders to come together and they then input into the total program. That is reviewed by the general manager and then the final submission on surveillance levels, who we are going surveil when, et cetera, is put up to me for final tick off. That is the way it is done.
Senator O'BRIEN —So the buck stops with you, Mr Foley? Mr Leaversuch is the link between the district offices in the process?
Mr Foley —The buck stops with me on the overall surveillance program. I participated for a short period this year in the development of the program. Every person was given the opportunity to speak at the meeting. There was a fairly large number of people there and they spoke. That is the way the process was carried out. At the end of day, the buck stops with me for the overall program.
Senator O'BRIEN —As I understand it, the Melbourne office mainly looks after Ansett. Who else does it look after?
Mr Leaversuch —National Jet Systems, Southern Australian Airlines and a number of high capacity freight operators.
Senator O'BRIEN —And Sydney looks after Qantas, Impulse, Eastern and will look after Virgin when it gets going, if ever?
Mr Leaversuch —Yes, and Hazelton. Melbourne looks after Kendell.
Senator O'BRIEN —Kendell is looked after from Melbourne?
Mr Leaversuch —Yes.
Senator O'BRIEN —Who does Brisbane look after.
Mr Leaversuch —Sunstate and Flight West are principally the airlines in Brisbane.
Mr Foley —And also Air North.
Senator O'BRIEN —Mr Foley, you talked about team leaders. Is that what the senior officers in these key district offices are called?
Mr Foley —The senior technical discipline heads are called team leaders.
Senator O'BRIEN —Is it FO3 inspectors who look after high capacity operators?
Mr Foley —In the main, yes. On the flying operations side, if you looking across the board, we also have degreed engineers, cabin safety people and airworthiness maintenance people. All disciplines are involved in oversighting the high capacity operators.
Mr Leaversuch —FOI3s look after aircraft greater than 29 tonnes.
Senator O'BRIEN —That is—
Mr Leaversuch —That is F28s and above, essentially.
Senator O'BRIEN —I am not that familiar with the weight designation of the various aircraft. Do the operators that we have mentioned at the three ports have the vast majority of all of the fleets or only some of them?
Mr Leaversuch —That is most of them. The division for FOI3s is not so much related to the airlines but to tonnage. The truth is that there are FOI2s in all those offices who deal with airlines with aircraft less than 29 tonnes.
Senator O'BRIEN —Yes.
—Dash 8s and those kinds of aircraft.
Senator O'BRIEN —The Dash 8 is an important part of the Southern and Eastern fleets.
Mr Leaversuch —Correct, and Kendell and so on have the Saab 340.
Senator O'BRIEN —Although they may not last that long. What about the Queensland operation, are they—
Mr Leaversuch —F100s and Shorts aircraft. The F100 is an FOI3 aircraft greater than 29 tonnes.
Senator O'BRIEN —How many FOI3s are located in each of these offices—that is, Sydney, Melbourne and Brisbane?
Mr Foley —I will get Mr Leaversuch to answer that. I think an important point to focus on is that we do not see the FOI3s, if they are in Brisbane, as being only responsible for the operators in that state and vice versa in Sydney and Melbourne. The way that we have now gone with the systems approach, we believe it is important that you have, for example, people located in Brisbane looking at Qantas and people in Sydney looking at operators in Brisbane and the same in Melbourne so that you have an ongoing process of various people looking at these operators. At one location you might have an FOI with specific industry skills on, say, 747s and you would use him on a national basis to look at those aircraft. Vice versa, if you had a person in Melbourne with specific skills on an aircraft type you would use him in Brisbane. That is the way we are managing it. It is no longer a location specific issue, it is using the resources on a national basis. I will get John to give you exact numbers at each location currently.
Mr Leaversuch —There are four and a team leader flying operations inspectors in Brisbane.
Senator O'BRIEN —Is a team leader an FOI?
Mr Leaversuch —Yes, he is. There are five FOI3s in Sydney and two FOI2s. There are the same in Melbourne as in Sydney, each with a team leader. There is a total of eight in each place.
Senator O'BRIEN —How many FOI3 inspectors have taken packages from CASA since 1 January 1998?
Mr Leaversuch —I could provide that number very quickly, but I would have to work it out.
Senator O'BRIEN —We will come back to that. Is it true that a number of FOI3 inspectors who have retired have come back to work in these three offices on special contracts?
Mr Leaversuch —No, that is not true.
Mr Toller —We have a policy, Senator, that anybody who takes a voluntary redundancy is not allowed to be employed, even on a contract, within 18 months of taking that voluntary redundancy.
Senator O'BRIEN —I said retired.
Mr Toller —Retired as opposed to VR.
Senator O'BRIEN —Yes.
Mr Leaversuch —That is true.
—I was very deliberate not to say those who had taken packages. I said the number of FOI3s who had retired and come back to work on special contract.
Mr Leaversuch —How long are we looking back?
Senator O'BRIEN —For the period since the redundancies took place, for starters.
Mr Leaversuch —The answer is none.
Senator O'BRIEN —So there are others who retired previously who came back before? Are they still on special contracts?
Mr Leaversuch —There is one.
Senator O'BRIEN —So there is one who operates intermittently under special contract?
Mr Leaversuch —Correct.
Senator O'BRIEN —Mr Foley, as I understand it, you and Mr Leaversuch have been visiting Sydney to talk to the five FOI3s and the two FOI2s about their performance in the Sydney office?
Mr Foley —We have certainly visited them but not to talk to them about their specific performance. A number of them requested a meeting to discuss where their futures lie in the organisation and how they fitted into it. That is certainly correct.
Senator O'BRIEN —Can you confirm that you visited the Sydney office in part because of a memo from a former CASA officer highlighting major deficiencies in staffing numbers and training at that location?
Mr Foley —I am not aware of that document.
Senator O'BRIEN —You are not aware of such a document?
Mr Foley —No.
Senator O'BRIEN —If such a document existed, you would be aware of it? You would have seen it, wouldn't you?
Mr Foley —I do not know. Until I see the document, I am not aware of it.
Senator O'BRIEN —If it exists within CASA, it would not be kept a secret from you, would it?
Mr Foley —It may not necessarily be given to me.
Senator O'BRIEN —Mr Toller, if there were such a document, wouldn't Mr Foley see it?
Mr Toller —It would depend on who it was addressed to. At a low level, no, he probably would not. If it were addressed to me, he most certainly would. But I am not aware of such a document either.
Senator O'BRIEN —What was the outcome of the visit to the Sydney office?
—The visit came about from one person in particular who wrote to me and said, `What is my future in the organisation? Is there potential to move into other levels of aircraft?' Based on that, I went and spoke to him personally. I said that, yes, we would certainly encourage him to stay and use the skills that he brought to the organisation and we certainly gave him a commitment to improving those skills. At the same time, I was approached by another FOI who had not approached me prior to that and he asked to have an audience with me. I said that it would not be until a couple of weeks time. He said that that was all right. I am in the process of making arrangements to see him. They are the only two people in recent times—and I am talking recent times—who have approached me directly.
Senator O'BRIEN —Is there any other outcome, any change in personnel?
Mr Foley —We are in the process of recruiting into a number of vacant positions.
Senator O'BRIEN —In Sydney.
Mr Foley —In Sydney, and that process is close to being completed.
Senator O'BRIEN —How many of the five FOI positions are you recruiting for?
Mr Foley —We are recruiting—and I may stand corrected by Mr Leaversuch—for three new positions in Sydney and transferring one of the positions to Brisbane.
Senator O'BRIEN —What does `three new positions' mean? Three new people or three new positions?
Mr Foley —Three new people.
Senator O'BRIEN —So there are three vacancies and a fourth person is being transferred to Brisbane. Do I understand that correctly?
Mr Foley —A fourth position is being transferred to Brisbane.
Senator O'BRIEN —So it will go from five to four positions. Is that what you mean? I am trying to understand what you mean.
Mr Leaversuch —No, the position was transferred to Brisbane to increase the number to four, as I indicated to you. It was taken from the Bankstown offices.
Senator O'BRIEN —It was not taken from this area.
Mr Leaversuch —No.
Senator O'BRIEN —Of the five FOI3 positions in Sydney, three are vacant or being filled on a temporary basis?
Mr Leaversuch —Three have been vacant for a short period of time, since the last voluntary redundancy.
Senator O'BRIEN —Is there a team leader in Sydney?
Mr Leaversuch —There is.
Senator O'BRIEN —Is that position vacant?
Mr Leaversuch —No, that is a permanently filled position.
Senator O'BRIEN —There has been no change there. So it is the people under the team leader who have left.
Mr Leaversuch —Correct. That person has been in that position for more than a year now.
Senator O'BRIEN —There was a change about a year or so ago, was there?
Mr Leaversuch —Yes.
Senator O'BRIEN —That would be some time early in 1999. That was about a year after the redundancy process.
Mr Leaversuch —Commenced?
Senator O'BRIEN —Yes.
—I do not recall how long ago the redundancy process commenced, but it was about a year ago. It was when I left there, and I know that that was a year ago.
Senator O'BRIEN —So of the five FOI3s in Sydney, the team leader has been there 12 months. One other person has been there for a longer period?
Mr Leaversuch —Two other people have been there for a great deal of time. Two other people have been there for an extended period of time.
Senator O'BRIEN —Hold on. There are three vacancies that you are filling.
Mr Leaversuch —Correct.
Senator O'BRIEN —That leaves two of the five remaining.
Mr Leaversuch —No. There is the team leader and five. The team leader has been there all the time and we have had two people for an extended period.
Senator O'BRIEN —Is the team leader an FOI3?
Mr Leaversuch —He is.
Senator O'BRIEN —It was not clear from your earlier answer. And that is the same for Melbourne.
Mr Leaversuch —Yes, it is the same for Melbourne.
Senator O'BRIEN —So there are six in total.
Mr Leaversuch —No, there are two level 2s in Sydney as well.
Senator O'BRIEN —Yes. Six FOI3s in total.
Mr Leaversuch —Yes.
Senator O'BRIEN —One of whom is a team leader.
Mr Leaversuch —Correct.
Senator O'BRIEN —That team leader took that position about a year ago.
Mr Leaversuch —Correct.
Senator O'BRIEN —Two of the remaining FOI3s in Sydney have been there for some time.
Mr Leaversuch —Correct.
Senator O'BRIEN —And three positions are currently vacant and you are seeking to fill them.
Mr Leaversuch —Correct.
Senator O'BRIEN —So where will you get the people from to fill those positions? What sort of people will you be looking for?
Mr Leaversuch —The aviation industry has provided us with the three people who will be offered the positions. There was an extensive international and national advertising campaign for people with airline experience both as pilots and engineers. As a result of that program, we have selected three people for Sydney.
Senator O'BRIEN —So it was not possible to fill those positions within Australia.
Mr Leaversuch —No, I did not say that. We did advertise internationally as well as nationally. We had applicants from inside Australia and outside.
—I guess the question is: was it necessary to advertise internationally? Did you have concerns that the skills might not be present here and therefore you felt you needed to advertise internationally or is there some other reason?
Mr Toller —There is clearly a large expatriate community of experienced aviators.
Senator O'BRIEN —So you are only considering expatriate aviators.
Mr Toller —Expatriate aviators are Australians who are working elsewhere in the world.
Senator O'BRIEN —Yes, but is that all that was being considered by virtue of this international advertising process?
Mr Toller —Yes.
Mr Leaversuch —No.
Senator O'BRIEN —Mr Leaversuch is saying no and you are saying yes.
Mr Toller —If you advertise internationally anybody can apply, but we were deliberately appealing to the expatriate aviators. The problem you have in Australia, as far as we are concerned, is the lack of retirement age. Other regulators elsewhere in the world take on retired senior airline pilots at the age of 55 and they can then give 10 years service as good regulators. Because domestically in Australia there is no retirement age, that is a source that really is not available to us. Internationally in Qantas it is 60. So we are now looking at people who are significantly older. But there is a large expatriate community of aviators with experience out there who want to come back to Australia and to whom we would always appeal. That is not to say that all of them would be suitable, but they are obviously a very good source of experience for us. They also bring in a slightly broader view, if you like. If you are brought up in Ansett or Qantas, then you have a fairly narrow view of the world. If you have wandered around the world from job to job and reached senior management positions, then you obviously have a broader view. I would like to get away from this differentiation of FOI3 and FOI2 and things like that.
Senator O'BRIEN —That is what they are called now.
Mr Toller —Yes, that is what they are called at the moment. But what I have said to the FOIs as a group at a forum that we held with them all and what we are progressing now with a large working group is that we are looking again at the whole role of the FOI so that we use them more efficiently. Instead of expecting them all to be generalists, experts in everything, I would much rather we looked at people who had particular skills and used their skills. As examples, we have an FOI1 in Darwin who is only allowed to look after small charter operations who is a very experienced 747 captain. We have an FOI2 in the Sydney airline office who is an ex-747 pilot. I believe it is crazy to turn around and say, as the system said previously, that these people are not allowed to work with the major airlines because they are FOI2s and they are not allowed to join, if you like, what was the old FOI3 club. I would rather make sure that all the FOIs realise that they are a resource for the authority, that we will use their skills and give them, in the process, some form of career development which does not exist at the moment.
Senator O'BRIEN —Getting back to the Sydney office and the officers who have left you: you had a team leader leave early in 1999. What were the reasons given, if any, by that person?
—I think we would have to take that on notice. I think the previous team leader might have only been acting for a fairly lengthy period of time, and the previous permanent person I am not aware of. We would certainly have to take that—
Senator O'BRIEN —That predates your appointment, does it, Mr Foley?
Mr Foley —That predates my appointment.
Senator O'BRIEN —So he was acting for about a year at least?
Mr Leaversuch —That was me. I was there for a year.
Senator O'BRIEN —You were there for a year and you got out?
Mr Leaversuch —All of 1998. No, I presumed you were talking about the person who preceded me, who was a long-serving team leader.
Senator O'BRIEN —So you were the team leader in Sydney who was replaced in early 1999?
Mr Toller —We might be getting our terminologies mixed up there. I do not think we actually ever had team leaders before. I think the team leader is a new position, is it not?
Senator O'BRIEN —I am not inventing it. I am responding to the suggestion that there were five FOI3s and a team leader.
Mr Toller —I realise that. I am trying to make sure that we are not confusing the issues. `Team leader' is a recent addition. Before that, we had the district flight operations manager. That is the position, as I recall it, that was held by Mr Leaversuch in Sydney before he came to Canberra as the general manager. So, in terms of team leaders, that is a very recent thing. I am not sure that we had one before the present one.
Mr Foley —That is correct.
Senator O'BRIEN —Hang on. I was told earlier the team leader that you were talking about in this group, the one over the five FOI3s who is also a FOI3—that is what you told me—
Mr Leaversuch —Yes.
Senator O'BRIEN —Is that the position you were describing where a person left and was replaced early in 1999?
Mr Leaversuch —Yes.
Senator O'BRIEN —As distinct from your previous position, Mr Leaversuch?
Mr Leaversuch —No, it was the same position.
Mr Toller —He became the team leader.
Mr Leaversuch —We used to call it the district flight operations manager; it has almost the same duties and it is called the team leader. I replaced the district flight operations manager in 1998 and served in the Sydney office through 1998.
Senator O'BRIEN —The current team leader replaced you?
Mr Leaversuch —Correct.
Senator O'BRIEN —In your feedback discussions with the Sydney office, have there been complaints about the workload required of the officers there and the resources provided to them?
—I may stand corrected—Mr Leaversuch may correct me—but the only discussions we have had with staff from the Sydney office that have brought up specific issues of workload have been with the airworthiness inspectors. That has been brought about by a number of resignations where our staff have gone to the potential new operators. They were not redundancies; they were resignations.
Senator O'BRIEN —The airworthiness inspectors being a group distinct from the group we have been talking about?
Mr Foley —That is correct.
Senator O'BRIEN —How many resignations are we talking about?
Mr Leaversuch —I would have to go through that and recall those; there were a number.
Senator O'BRIEN —Please provide that. Who directs the use of those resources—that is, the eight FOI operators in Sydney, the eight in Melbourne, and the five in Brisbane to become six?
Mr Leaversuch —Five in Brisbane.
Senator O'BRIEN —It is five now, but you are going to give them another position, aren't you?
Mr Leaversuch —No, it is from four to five.
Senator O'BRIEN —Who directs the prioritisation of their work: the team leader?
Mr Leaversuch —No.
Senator O'BRIEN —The team leader in consultation with you, Mr Leaversuch?
Mr Leaversuch —Yes. The team leader directs the day to day, month to month work, based on a national annual program.
Mr Foley —It is also worth adding that, depending on what the issue is—whether it is a significant audit that has to be undertaken—it would be discussed between me and Mr Leaversuch in consultation with the various team leaders as well, depending on the size of the task we were going to undertake. Issues such as new entrants are also done in the same manner, whereby Mr Leaversuch and I would discuss that with the various team leaders to draw on the best people for those teams.
Senator O'BRIEN —When the redundancies of FOIs took place from the beginning of 1998, what was the numerical strength of each of those offices in Sydney, Melbourne and Brisbane?
Mr Leaversuch —I would have to go and find that figure for Sydney for you, but Melbourne is the same as the one I have just described to you. For Brisbane, there was no airline office at the beginning of 1998.
Senator O'BRIEN —You were there up until 1999. If you can give me a figure and then check it, I would be happy with that.
Mr Leaversuch —The number of FOIs in Sydney?
Senator O'BRIEN —Yes.
Mr Leaversuch —Seven plus a team leader.
Senator O'BRIEN —So there were seven plus a team leader. That is eight, as there are now. That has always been the number, has it?
—Seven FOI3s plus a team leader.
Senator O'BRIEN —So the total number has not changed, from what you are telling us; it is just that the designation of two of them is different.
Mr Leaversuch —It is more complicated than that because, during 1998, two FOI2 positions were moved from Bankstown to the Sydney office to deal with the activities of the appropriate airlines, so in fact the numbers went to nine.
Senator O'BRIEN —Nine plus the supervisor?
Mr Leaversuch —Yes, that was in 1998. It has since come back to—
Mr Foley —To give an accurate picture, as I think we are just confusing the situation, we need to come back after lunch, and we will give you the detail on what the actual situation was with FOI2s, FOI3s, et cetera.
Senator O'BRIEN —What role do the FOIs play in the auditing of, for example, the Qantas flight training system? Any?
Mr Leaversuch —An extensive role.
Senator O'BRIEN —What role would they have in overseeing Qantas maintenance procedures?
Mr Leaversuch —Under the old system of surveillance, almost no activity in maintenance. Under the new system, they would have some activity involved in audits.
Senator O'BRIEN —Who did that surveillance before?
Mr Leaversuch —Of maintenance? The airworthiness inspectors. Now, with the systems assessment, the auditing is done as a team comprising flying ops and airworthiness, amongst others, whereas in the past the inspections were done by discipline, by individuals.
Senator O'BRIEN —With the situation of the Qantas maintenance and engineering operations where the US FAA suspended certification for some of Qantas's Sydney based operations, what would CASA's role have been in identifying those irregularities?
Mr Foley —I think it clearly illustrates that the process CASA was using in the past when looking at the product is not the way to do auditing. The FAA identified a number of issues. And I think we have to clearly distinguish that they did not remove the 145 approval per se; they removed an aspect of the 145 certificate. I think that needs to be clearly understood.
Senator O'BRIEN —The article that I read says, `US regulators have withdrawn approval for Qantas to repair some parts on American aircraft.'
Mr Foley —Yes. But they still hold today, and will continue to hold in the foreseeable future, a 145 approval from the FAA. They removed it on a specific part of Qantas. We then took the action of putting in place our own audit team to look at that particular aspect. While we identified a number of deficiencies, we took the view, based on the audit team's recommendation, that we did not need to remove that part of the organisation. That was based on a number of facts—that their on-wing life of engines is well above the international average that an engine performs in service. There was no identification to us that the deficiencies they had identified had led to a degradation in the safety standard.
Senator O'BRIEN —Do you agree that there were deficiencies properly identified?
—There were deficiencies identified, but you then have to look at what the deficiencies were. A number of the deficiencies that were identified were issues outside the control of Qantas. I can give you an example. The manufacturer requires a specific cleaning substance to be used. That substance is banned in Australia; for environmental reasons, it is not allowed to be used in Australia. The problem that Qantas face is that, to have an alternate process approved, under the CASA system, they must have a delegate that can put in place an alternate process or material. That is done under civil aviation regulation 36. Because it is an American manufacturer that manufactures the engine, the only way that an alternate process can be approved is by a person in the American system that is approved by the FAA. Such persons are called design engineer representatives, DERs. The FAA does not permit that sort of authorisation outside of the United States. So it then puts people who hold 145 approvals in a difficult position in having alternate processes approved.
CASA did identify some other issues. We believe that Qantas responded very quickly—and that is what we look at. In auditing, you identify the problems. But the key element of the audit process is: how does the auditee respond when those deficiencies are identified? Qantas responded very rapidly to address those deficiencies. We have had ongoing discussions with them on the deficiencies. The process that we follow in auditing is that the audit team will meet with Qantas again and ensure that those processes or the actions Qantas has taken satisfy the audit team. That is the process that we follow.
Senator O'BRIEN —I was using that merely as an example because it seemed that those deficiencies which CASA have now identified may not have been identified had the spotlight not been cast on the problem by the FAA.
Mr Foley —Auditing is only a sample process. You look at an organisation the size of either of our two major airlines, and you can only sample and check a certain level within that organisation on a 12[hyphen]monthly basis. That is where we identify what we consider to be the high risk areas. That is what CASA's focus and resources go into. Other intelligence, such as we received out of the FAA process, then diverts and raises the profile of a specific aspect, and that is where we then divert the resources to. That is the way that it works.
Senator O'BRIEN —When would the routine inspection of the Qantas maintenance and engineering operators, particularly the bearing and seal shop, have been conducted in the absence of the FAA inspection? Was it scheduled?
Mr Foley —I would have to take that on notice and look at the specific audit program for Qantas. I do not have that information with me. We could certainly get back to you on that.
Senator O'BRIEN —So a document exists, which is of some history, which would set out when you were planning to do that inspection?
Mr Foley —That would be my understanding.
Senator O'BRIEN —Can that be supplied to the committee?
Mr Toller —Yes.
Senator O'BRIEN —So that will set out your routine of inspection for Qantas?
Mr Toller —Yes.
Senator O'BRIEN —What is the state of the authority's record system in relation to high capacity and low capacity RPT operators, Mr Toller?
Mr Toller —I am not sure that I understand the question when you say, `What's the state of it?'
—Is it in order? Are the records easily accessible, allowing you to ascertain the historical record on easy inspection and to ascertain what has been done and what has not been done?
Mr Toller —I think there are some issues as to documents they hold in the district offices as opposed to those held in Canberra, and there has certainly been criticism in the past of our record management in these issues. But, in terms of the low capacity and high capacity RPT operations, I believe that our records are easily accessible.
Senator O'BRIEN —So there are no problems with your paperwork in that regard?
Mr Toller —Not that I am aware of.
Senator O'BRIEN —Has there been any erosion of staff numbers, skills or experience and possibly misallocation of work priorities in the area of surveillance of high capacity RPT operators or that sector of the industry?
Mr Toller —I believe that we are moving to a situation whereby we are using more skilled people rather than less skilled people. We had a situation in the past where promotion into the FOI3 rank was specifically about length of time within the authority; it was done by steps, going up by aircraft type, until you reached the largest type. So, when I arrived in the Sydney office, the situation was one where we had people there who had never flown anything bigger than a twin-engine piston aeroplane who were responsible for aircraft of a type similar to or the same as the 767. I think that is totally inappropriate. I think we need to be using airline experienced people to look after airline issues. We also had a lot of people in the past who had solely military experience and not civil experience. From what I have heard so far of our last recruiting campaign, I think the authority is now—probably for the first time for a very, very long time—going to be adequately skilled and sensibly resourced in this area.
Senator O'BRIEN —So you think we are better placed now than we were in the past in that regard?
Mr Toller —By the time we bring on the three people for Sydney and the other people we have just taken on who have good airline experience, I think we will be much better resourced than we were before—and that is in terms of people's skills.
Senator O'BRIEN —We are looking at the last two years. Was there a deficiency in the last two years that you will address with these three people?
Mr Toller —I think the deficiency existed in terms of skills in the Sydney office when I took over. I think, to a large extent, that has been put right with the present incumbents. But we are short on numbers, and we recognise that. I think the additional people who are now filling the positions in Sydney and the skills that they have will give us the best skilled team that we have yet seen in that area.
CHAIR —I call the committee to order. We shall resume.
Senator O'BRIEN —Just briefly returning to what we were discussing this morning in the context of the minute that was tabled this morning—the 24 February minute—which I think indicates that what you told the board, Mr Toller, was that at the time of your conversation with Mr Jensen you did not believe that any threat was being made by Mr Jensen.
Mr Toller —That is correct.
Senator O'BRIEN —And that is contained in this minute that went to the board. Do I presume correctly that that is what you told Mr Smith prior to writing this minute?
Senator O'BRIEN —Prior to 8 February 1999?
Mr Toller —Yes.
Senator O'BRIEN —Prior to the time that he said it was his view that you had been threatened? He did in that Hansard.
Mr Toller —Yes, indeed. That was his view, and my view was that I had not been threatened.
Senator O'BRIEN —Did you feel it necessary to put that on the record at that time?
Mr Toller —I felt it necessary to put it on this record at that time, yes.
Senator O'BRIEN —Before the board, but not in the public domain where Mr Smith's comments were?
Mr Toller —No.
Senator O'BRIEN —I found the comments relating to the department interesting in the context of your recitation of the events between Mr Harris, Ms Katty and Dr Hawke. I simply say that to draw attention to those remarks on the public record, to the extent that that is necessary, on the last page of your document, and ask: do you feel there is any need to put anything further on the record in relation to those comments?
Mr Toller —No, I do not. This was the position that I felt strongly ought to be put to the board at that time, and I think it stands in its own right as a historical document.
Senator O'BRIEN —It is not absolutely clear to me on a quick reading of the document, but it appears to be the case, that you provided Mr Smith a copy of the letter to Mr Eddington dated 9 December on the basis of an undertaking that it would be kept confidential?
Mr Toller —That is correct.
Senator O'BRIEN —So there is no doubt that he received it, having given you an undertaking that it would remain confidential?
Mr Toller —It is my strong belief that he made an undertaking to me at the time that he would keep it confidential.
Senator O'BRIEN —I am not absolutely clear when you first gave it to him, but it was before this particular—
Mr Toller —It was some time in January, I think, when he was making allegations about me that I knew were without substance. But I realised that the only evidence that I had that could refute his allegations was the letter that I had written at that time, albeit what I had considered at the time to be a private letter to Mr Eddington.
Senator O'BRIEN —Is that when you were on leave in Canada or before then?
Mr Toller —No, it was before I went on leave in Canada. It was some time in January.
Senator O'BRIEN —Thank you for that.
CHAIR —Are you getting into a different round of questions?
Senator O'BRIEN —I am going back to what I was on before, if you want to touch on that.
CHAIR —No, I will come in after you have done that. I have got some questions on a different issue.
—You might as well do that now before I start, if you like.
CHAIR —In terms of reporting incidents and accidents, could I ask you to define when an incident becomes an accident or the definition of an incident and the definition of an accident? I think this is probably a question for Mr Bills.
Mr Harris —Mr Bills will answer that. He will have the information readily to hand.
Mr Bills —The definition is derived from annex 13 of the convention on civil aviation and is in the Australian Air Navigation Act, section 19AA. It is a reasonably long section in terms of definition of `accident', and then there are a number of other sections—19(a), (b), (c) and (d)— in terms of incidents and safety deficiencies. I am not sure whether you want me to read them out.
CHAIR —Would you like just to table them? We can organise to get them photocopied, or can you give us a copy of the full booklet?
Mr Bills —I can certainly do that, although I am loath to part with this until we have finished the hearing today.
CHAIR —I am not asking you to part with that. We might just hijack you around the back afterwards.
Mr Bills —That is fine. We will make a copy.
CHAIR —What did you call the booklet?
Mr Bills —These are the relevant parts of the Air Navigation Act that deal with air investigation.
CHAIR —Okay. Could you table that for us when you have finished?
Mr Bills —Yes.
CHAIR —My first question is: what would your view be about an airline that reported no incidents?
Mr Bills —Basically, every transport activity includes some risk and every transport activity involves human action, so there will always be problems and things that could have become problems—that is, incidents. An accident in a broad sense, without going into the definitions in the act, is where there is damage to an aircraft which will affect the safety of flight. An incident is broadly where something could have led to damage and affected the safety of flight. There will always be both accidents and incidents in any transport endeavour. If there were an operator that was not reporting accidents and incidents to us, we would firstly question whether they realised that it was mandatory to do so under the legislation, which it is. Australia has probably the most comprehensive mandatory reporting requirements in the world. Secondly, if they did know about the legislation and they said they did not have accidents and incidents, we would not believe it. That is broadly the position.
CHAIR —The last line was the answer to my question. How do the major airlines improve their policies with respect to reporting incidents?
—I think it is important to note that, with the major operators in Australia, in terms of jet operations, there have been no accidents involving fatalities at all in Australia. That is an almost unique safety record. Before this hearing, I had a quick look at some of the other sites: the NTSB for the US and the TSB for Canada. I also looked at the ICAO web site last night. Last year and in 1998, internationally there were 20 larger jet accidents worldwide that involved fatalities. We have never had any, which is commendable. That is worthy of note. If you look at the accidents that our operators have had, with the exception of the most recent couple that Qantas have had in Bangkok and in Rome, most of them are fairly minor accidents, including such things as vehicles in an aerodrome hitting a plane when the plane is stationary. That sort of thing is classified as an accident but is not necessarily serious because the aircraft is of course on the ground.
It is difficult to say whether safety has improved. That is not an easy concept to measure. What we can say is that Qantas and Ansett have in recent years been increasingly reporting every occurrence to us that could potentially lead to a safety of flight issue. The number of occurrences reported by the two major airlines has grown in recent years, particularly since the middle of 1998. Part of the reason for that is that we have encouraged fuller reporting. The airlines themselves have encouraged their own staff to report things more fulsomely, including things that may appear to be a minor occurrence, because it is possible that if you get a number of minor occurrences pointing in one direction they may lead to an investigation of a particular problem down the track. You just do not know.
I want to give you an example of where we stand compared with other countries because I think there has been a lot of misunderstanding in the media recently that increasing numbers of occurrences are of concern. British Airways, just as an example, encouraged a confidential reporting system in their company in the 1990s. Since implementing that confidential voluntary safety reporting system, British Airways has seen a steady increase in the volume of reports from about 2,500 in 1992 to more than 8,000 in 1999. That is not regarded as a problem for British Airways. In fact, it is regarded as commendable because the safety culture of British Airways is becoming more and more entrenched so that anything that is potentially reportable is being reported and therefore is being looked at. Qantas and Ansett are doing the same thing, so their numbers have also been increasing in recent years. That does not mean that those airlines are less safe; it means that they are being more thorough in their reporting.
CHAIR —Has the introduction of collision avoidance systems had any effect on the number of incidents or accidents reported?
Mr Bills —I mentioned that particularly since the middle of 1998 there has been an increase in the number of occurrences reported to us. One of the reasons for that is the introduction of aircraft collision avoidance systems, including TCAS. That has had an effect. Other things that have had an effect are increasing reporting of bird strikes and the recording by us of bird strikes in our database. The third factor I will mention is the one I was alluding to before—that is, the airlines have been encouraging their own staff to report everything to us, no matter how seemingly trivial. That has also led to an increase in reported occurrences.
CHAIR —Could you also tell me whether the American and British safety investigators have the same success in encouraging airlines to report incidents? I think you partially answered that to my third question. Do you want to add anything? You did not mention America; you mentioned British Airways.
—I think I did say in the first comment I made that we have the most comprehensive reporting system in the world, so we have obviously had more success, partly because of our legislation but also because we have been working hard with the airlines to encourage reporting. In particular, that happened in 1997-98, but it has been an ongoing process where we try to make sure that we have a healthy professional relationship with them and they realise that we are using this data to improve safety. Therefore, they are encouraged to report more fulsomely to us. The British basically focus just on accidents, but a lot of incidents are a near miss, which is potentially of much more concern. The British will look at some of those things but nowhere near as great a number of incidents as we look at.
CHAIR —A near miss is an incident?
Mr Bills —Correct. A breakdown in separation, for example.
CHAIR —Yet what happened in Bangkok, for example, where the plane was not even off the ground, was an accident?
Mr Bills —Bangkok was an accident because there was major structural damage to the aircraft.
CHAIR —What about Rome?
Mr Bills —Rome was an accident as well.
CHAIR —I want to change the subject for a moment. Where is the investigation up to with regard to the avgas contamination? Have you got anything to add to what you gave us at supplementary additional estimates?
Mr Bills —I want only to say that we hope we will have completed gathering data this month and the analysis phase of the investigation will then be under way. I think I said last time that it is a pretty complex investigation. We had never done anything like it before and, as the committee knows, there has never been anything like this before internationally, so it is probably going to be another few months before we see a report based on the analysis.
CHAIR —I will just request that, as you were doing before, you keep the committee informed as things evolve and what have you.
Mr Bills —Yes.
CHAIR —We would certainly appreciate it in view of our role and interest in it. It is interesting to note that BP now are having major waxing problems with diesel in Western Australia.
Senator O'BRIEN —I would like to clarify a point. I was not sure what you were saying when you were talking about the relatively minor nature of the matters reported as incidents or accidents. I thought you said that the QF1 incident in Bangkok was a relatively minor occurrence.
Mr Bills —I do not recall saying that. That was definitely a major occurrence. It was an accident and it was a serious accident. Our report into that accident will be very thorough and I am sure that a lot of lessons will arise from it when it is released. I was trying to make the distinction between that and the accident in Rome, which is very significant compared with the thousands of occurrences that are reported to us—most of them are of a very minor nature. The fact that so many are reported to us is, I think, indicative of a good safety culture in both Qantas and Ansett.
Senator O'BRIEN —To return to the matter that I was dealing with earlier, it seems that what you are saying, Mr Toller, is that the organisation of the record system of CASA is not as you would desire.
—I think I said that we knew it had had problems. These were brought out in the Skehill report, along with a number of other issues. We have a good records management system. My belief is that we are now using that record system significantly better. I doubt if we are yet perfect—I doubt if any organisation is perfect—but we have certainly improved significantly. I am much more comfortable with it—more than I was, say, a year or 18 months ago.
Senator O'BRIEN —I thought there was a comment—and I thought you made it—that some of the records were still in district offices and that you had difficulty accessing them.
Mr Toller —Some are still kept at district office levels. That does not necessarily mean that that is a problem—that may not be inappropriate.
Senator O'BRIEN —When you say that that is not necessarily a problem are you saying that there is no problem with them being there?
Mr Toller —I am saying that all of these systems are dependent on a range of human issues and sometimes it is not as easy to access files as it should be if the system were working properly.
Senator O'BRIEN —That raises the issue of Audit Report No. 19 of 1999-2000 by the Audit Office of the Aviation Safety Division of CASA, signed off on 22 November last year. I would regard it as a damning document. Without going through all the findings again I would say it clearly showed that the resources within CASA were badly misallocated away from safety and surveillance issues. I placed a number of questions on notice following the release of that report. They were questions Nos 1819, 1820, 1821 and 1822. As I said, those questions related specifically to Audit Report No. 19. The minister refused to provide answers, claiming that there was too much work involved in collecting the information. These questions focused on high-capacity and low-capacity RPT operators—the passenger-carrying operators—and they related to the issuing of air operating certificates and variations to those air operating certificates. I wanted to know whether CASA officers were satisfying themselves that flight crews were properly qualified, in line with section 28 of the Civil Aviation Act. I wanted to know how many breaches of AOC conditions by high- and low-capacity operators there had been since 1997 and whether compliance statements had been properly lodged with applications for AOCs. I got the same answer to each of those questions, as follows:
It would be necessary to manually review each high-capacity and low-capacity regular public transport operator's file and personnel licensing files for all relevant flight crew during the entire period from 1 December 1997. This would entail the examination of many thousands of electronic and hard copy documents, both in CASA's central and area offices and up to hundreds of staff working hours to answer each those questions.
Mr Toller —I think the level of detail you were asking for in those questions would not be included in a centralised database. There is a centralised database of the significant issues, but to have been able to give you a full answer to every single one of those questions would, I think, have required us to look into the individual file of each of the operators and into each of the personnel files.
Senator O'BRIEN —There is an individual file for of each of the high-capacity regular public transport operators. So how many files are there?
Mr Toller —Approximately 15.
Senator O'BRIEN —And there would be many more for the low-capacity regular public transport operators?
Mr Toller —I would like to take that question on notice.
Senator O'BRIEN —I am not going to bind you to those numbers. As ballpark figures would 15 and 50 be about right?
—I would hope so.
Senator O'BRIEN —I am happy for you to correct the record with precision later. Whether there are one or two more or less is not germane to these questions. Since 1997 there would not have been too many AOCs issued?
Mr Toller —New AOCs, no. But do not forget that each AOC is effectively reissued every year.
Senator O'BRIEN —So there would be 65 instances at least each year where there would be an AOC?
Mr Toller —In the RBT section, yes.
Senator O'BRIEN —To ascertain who had an AOC where would you need to go for the files?
Mr Toller —That information is readily available in Canberra.
Senator O'BRIEN —And would that show when the AOC was issued?
Mr Toller —Yes.
Senator O'BRIEN —So that information is readily accessible?
Mr Toller —The dates of those AOCs are readily accessible.
Senator O'BRIEN —So that question could easily have been answered?
Mr Toller —Which question was that?
Senator O'BRIEN —It was 1819, question 1.
Mr Toller —Yes.
Senator O'BRIEN —Question 2 asked the name of the company issued with the certificate and the date when each certificate was issued. Would that information have been readily accessible?
Mr Toller —It would.
Senator O'BRIEN —So that question could have been easily answered?
Mr Toller —It could.
Senator O'BRIEN —Since 1 November 1997 on how many occasions have the certificates identified above been reissued and on each occasion what was the date when the certificate was reissued? I think you have already told me that they are reissued every year, so that is the same file, isn't it?
Mr Toller —Yes.
Senator O'BRIEN —So that question could have been easily answered?
Mr Toller —It could.
Senator O'BRIEN —In each case where a certificate was reissued was there any variation in the terms? Is it easy to ascertain whether the terms of the certificate have been altered?
Mr Foley —That aspect would not be readily available. You would have to go into each individual file to ascertain that aspect.
Senator O'BRIEN —Each of the 65 files?
—Yes, you would have to go into the 65 files. And those files are located at the area airline offices. They are not located in Canberra as such.
Senator O'BRIEN —So you would have had to email these questions to the area offices to get them to give you that information?
Mr Foley —They would have had to research that information.
Senator O'BRIEN —They would have to look at those files?
Mr Foley —They would have to access those files and go through them.
Senator O'BRIEN —Are they hard to access?
Mr Foley —They are not hard to access in the offices, but bear in mind that the number of new entrants which we have currently got before us has provided a significant impact on all of our staff.
Senator O'BRIEN —By `the number of new entrants' are you talking about Impulse and possibly Virgin?
Mr Foley —There was the upgrade of Kendell.
Senator O'BRIEN —But they are not a new entrant, so that is a different issue.
Mr Foley —No, but in the process they go through for such a significant upgrade in aircraft type they are regarded as a new entrant. They are totally reassessed. There has been a number of those: there has been Virgin—
Senator O'BRIEN —Okay, but that impacted on the workload at that time. Kendell were in on 13 December 1999, were they not? Canada Air had been approved, had it not?
Mr Foley —No, when you have got a new entrant—and they are all regarded as new entrants—it is not only then that it impacts; there is an ongoing process of carefully monitoring those operators for a fairly extensive period, and that does have a significant impact on the workload.
Senator O'BRIEN —So you do not keep any duplicate information centrally. This information is distributed around the country, and you would have to go to your Melbourne office to get the Kendell information.
Mr Foley —That is correct.
Senator O'BRIEN —And you would have to go to Brisbane for—
Mr Foley —Air North.
Senator O'BRIEN —Yes.
Mr Foley —That is correct.
Senator O'BRIEN —And you would have to go to the Sydney office for Qantas—
Mr Foley —That is correct.
Senator O'BRIEN —or would that be in Canberra?
Mr Foley —No, that is correct. That information is kept at the local office. They deal with them on a day-to-day basis, and that is the way that it is managed.
Senator O'BRIEN —And there is no separate record kept and there is no database?
—The only database that is kept gives you the broad aspects of who is an AOC holder and some other limited information. It does not get down into specific details. If you are talking about audit processes, that is kept on a different system.
Senator O'BRIEN —Is there no record kept of variation of AOCs? Do you have a process that is followed and someone who deals with those issues?
Mr Foley —At the area or airline office they deal with that. I will just confer with Mr Leaversuch. Mr Leaversuch has advised me there is some limited information on a central basis, but when we get down into fairly detailed information we would have to search and get that information provided from the regional offices.
Senator O'BRIEN —Can Mr Leaversuch come forward and tell us what is on the database?
Mr Leaversuch —In the airline office we retain a copy of all the air operating certificates issued. The differences would be evident from those, but the reason for the differences would not be evident from those documents.
Senator O'BRIEN —So you would not have to go around the country to find out which ones had been issued or when they had been issued?
Mr Leaversuch —In the airline office, no.
Senator O'BRIEN —Could you trace that back for a couple of years?
Mr Leaversuch —No, only since I have been there—a year, I think.
Senator O'BRIEN —So that has not been the case in the past; that is a new system?
Mr Leaversuch —That is right. But the operators that we referred to, the 50, would not be available to me. They are not operators that report back to the airline office. So a large number of those operators would have been out in the district offices.
Senator O'BRIEN —So the high capacity ones are centralised—
Mr Leaversuch —That is right.
Senator O'BRIEN —but the low capacity RPTs are not.
Mr Leaversuch —That is right.
Senator O'BRIEN —And on that database have you got the name of the operator and the details of their certificate, or the certificate itself?
Mr Leaversuch —A copy of the certificate.
Senator O'BRIEN —The date it was issued.
Mr Leaversuch —Yes.
Senator O'BRIEN —But only for the 15.
Mr Leaversuch —Yes.
Senator O'BRIEN —How many offices would you have to go to to get the information about the low capacity RPT operators?
Mr Leaversuch —Eleven in total—three airline offices, seven area offices and one additional one in Darwin.
Senator O'BRIEN —What is involved in accessing the files? Would they have a central file, like you have, with all the certificates on the one file?
Senator O'BRIEN —So each of those 11 offices could go to that one file and get the details of the current AOCs and when they were issued.
Mr Leaversuch —I cannot answer for the offices. I can only answer for the airline office. I would hope that would be true, but I cannot be sure.
Senator O'BRIEN —Are you saying that it should be that way?
Mr Leaversuch —It works best in the airline office that way, yes.
Senator O'BRIEN —If I were to ask you the question `In relation to the reissuing of certificates, are the operators of high capacity regular public transport and low capacity regular public transport required to apply for a new certificate?' could you answer that?
Mr Leaversuch —Can I answer that?
Senator O'BRIEN —Yes.
Mr Leaversuch —Yes, they are. The answer is yes.
Senator O'BRIEN —So if I asked that question on notice the minister could have answered me with one word.
Mr Leaversuch —Well, I would have answered it with one word, yes.
Senator O'BRIEN —If I wanted to find out since 1 December 1997 when each certificate holder in those two categories—high and low capacity RPT—applied for a new certificate, what would you have to do to find that?
Mr Leaversuch —Search the files in the offices.
Senator O'BRIEN —How many files would you have to search?
Mr Leaversuch —For the number of operators. Each operator would have an air operators file.
Senator O'BRIEN —In your experience with the files for the high capacity RPTs is there a file relating to the air operating certificate—
Mr Leaversuch —There is.
Senator O'BRIEN —or is it distributed across a number of files for each location?
Mr Leaversuch —No, there would be an air operator file.
Senator O'BRIEN —So those 65 would each have an individual file located either centrally or in the 11 regional offices.
Mr Leaversuch —I would hope so, yes.
Senator O'BRIEN —And by looking at that one file—in each of those cases, obviously—that question could be answered.
Mr Leaversuch —Yes.
Senator O'BRIEN —If you wanted to know whether the applications were lodged after the expiry date of an existing certificate—if such is the case—what would you have to do?
Mr Leaversuch —Search the files.
Senator O'BRIEN —Look at the same 65 files? And if you wanted to find out if an airline was allowed to operate without a valid certificate, where would that be recorded?
—It would never be allowed.
Senator O'BRIEN —So the answer to the question is that there are no such circumstances.
Mr Leaversuch —Air operations without an air operating certificate would never be allowed, no.
Mr Foley —I think, Senator, we also need to give you further advice on how each individual office actually manages the system that relates to the AOCs. Some of them may for a particular operator be spread over a number of files. We would want to verify that they do have a central file in each office and that they just do not retain the records on that file that pertain to that particular operator.
Senator O'BRIEN —So the desirable method is not followed everywhere, to your knowledge, Mr Foley? Is that what you are saying?
Mr Foley —I would want to take that on notice and verify that that is the case.
Senator O'BRIEN —You are suggesting that there may be some other circumstance. I want to know whether you have ever experienced that circumstance.
Mr Foley —I am saying that Mr Leaversuch has made a statement to say that they are all contained on a central file. I want to verify that that is the case and that they are not maintained on a number of files.
Senator O'BRIEN —I am happy for you to check and verify that. I want to be certain that the information you are volunteering is not simply speculation. I think you are saying that you are speculating that that might be the case.
Mr Foley —I want to check that that is the case—that the statement that Mr Leaversuch has made is correct.
Senator O'BRIEN —Who determines what record systems are kept? This is part of the overall record system of the authority, and you have disseminated this information around the country where you say it should be. Is there no direction as to how those records are to be kept?
Mr Foley —The record system has been in place for a number of years; I would hesitate to say for how long. I think, as Mr Toller indicated earlier on, through the Skehill review of Aquatic Air there were some deficiencies identified with record management, and that is an area that we are working on to significantly improve.
Senator O'BRIEN —Have you identified any deficiencies in this area of record management, or have you just not looked at it?
Mr Foley —We have looked at some areas, and the airline office is one where we have made some significant changes in the way that we manage that process.
Senator O'BRIEN —But you have not looked at the regions?
Mr Foley —I personally have not looked at the regions.
Senator O'BRIEN —I am not asking whether you personally have. I am asking if someone from CASA looked at them. You know of a process to upgrade the records.
—The record system comes under the management of another area—record management.
Senator O'BRIEN —I am asking you, because you have some involvement with the files relevant to air operating certificates, which are located in 11 offices, whether you, knowing that there is this ongoing review of your record system, have made yourself aware of just what goes on in these areas, given that it has been discovered in other areas that there have been deficiencies with CASA's record systems?
Mr Foley —I think, to be correct, the internal audit process oversights that process. To my knowledge, it has not been drawn to my attention in recent times that there has been a deficiency against our management record process.
Senator O'BRIEN —So until they discover a problem, you are happy for things to continue whether or not there is a problem?
Mr Foley —I personally cannot get out there and manage the management system. I have to have confidence in the process that the organisation has in place for record management and that the internal audit process system is working as intended.
Senator O'BRIEN —And you do not view it as your role to make some inquiries as to what is going on in those 11 offices under your control?
Mr Foley —If I requested certain information and it was not available, then I would raise the question. At this stage when I have requested information I have had it made available on specific issues.
Senator O'BRIEN —So when there is a problem, you will deal with it.
Mr Foley —Until I become aware of a problem, then I will deal with it. At this moment I have not been informed that there is a problem.
Senator O'BRIEN —And you are not going to look for it until there is a problem or someone draws one to your attention?
Mr Foley —You can work only within the framework of the organisation. I personally cannot get out there and manage the record system.
Senator O'BRIEN —I do not think that you have to personally get out there and manage. You have an email system. You can ask some pertinent questions, can you not, Mr Foley, through that system?
Mr Foley —I can ask the question, but at this stage I have not identified a problem.
Senator O'BRIEN —But you have not asked the question, have you?
Mr Foley —I have not asked the question on the record management system.
Senator O'BRIEN —To ascertain information about air operating certificates for 65 operators going back to the beginning of 1997, is it fair to say that, to answer a number of questions, you would not have to examine a great many documents, and certainly not thousands of electronic and hardcopy documents, in CASA's central and area offices?
Mr Toller —I think you are certainly talking about a fairly significant effort.
—Perhaps the question is the one that I want you to address, rather than putting it the way that you might think is appropriate. I want to know whether to answer at least a significant number of the questions that I put on notice would really require you accessing many thousands of electronic and hardcopy documents?
Mr Toller —In order to give you a thorough answer to all those questions, we probably would, and that would also have to be done by the inspectors who are effectively responsible for those files and the contents of those files. I think there was a general feeling at that time that, while we were short of resources—and people were certainly complaining fairly loudly about our inability to provide the necessary level of service in the issuing of new AOCs, et cetera—it was important that we used all of our resources fully on those issues. It would have taken certainly many man hours to do it, probably in each case.
Mr Leaversuch —An air operator certificate is issued every time there is a change in anything the operator does. Whether that is a new route or a new aircraft type, exactly the same process is followed. It is not a factor of one per year; in some cases it is many a year.
Senator O'BRIEN —They would be on individual files?
Mr Leaversuch —Yes, and each of those has had to be dealt with in exactly the same way. And each one results in a new certificate issue.
Senator O'BRIEN —And there would be a file for each operator which would have those certificates together?
Mr Leaversuch —I would hope so.
Senator O'BRIEN —That is desirable. Have you played any part in communicating with the area offices about how they keep their records?
Mr Leaversuch —No.
Senator O'BRIEN —Would anyone else in the management team have that role and responsibility?
Mr Toller —I think the record system as it exists is a reasonably new one and a sophisticated one. I think we have had problems with it in the past and a lot of that was due to training issues, and we do concentrate on training in the record management system. It will periodically be audited by our internal audit bureau, and I think that is a reasonable and sensible process.
Senator O'BRIEN —You are saying that the record system is fairly new, but I understood the system that has been operating in the regions has been there for some time. Which is true?
Mr Toller —I understood that it was put in by my predecessor.
Mr Foley —I think we have to differentiate between the way that the records are kept and stored and the way that they are managed when they are transferred from one place to the next. If you look at how the records are retained, they are retained in hard copies in the main on either aircraft or organisational files. They are hard copy. The way those files are then transferred around is done by what is called the TRIM management system and that is only fairly recent, but the way that the files and the records are put on the files, that process has been in place for time immemorial, I would suggest.
—I hope not.
Mr Foley —It has been in place for a long time. It is the way the files transfer is managed that is fairly recent.
Senator O'BRIEN —So if you want to look at the history of air operating certificates and breaches, what files do you go to?
Mr Foley —You would go to the aircraft file if it related to a specific aircraft or, if you wanted the AOC holder, you would go to the hardcopy files, and with the larger organisations there may be up to eight files you would have to review.
Senator O'BRIEN —What period would eight files cover? A long period? A decade?
Mr Foley —That would probably be in the last five to six years. If you are looking at significant AOC changes, which Mr Leaversuch touched on, if they are introducing a new type, you would then have to look at aircraft files as well, so the number rapidly increases.
Senator O'BRIEN —So if you issue a new certificate, the terms of the certificate are not recorded with it but are on a separate file? Is that what you are saying?
Mr Foley —If you put some condition on it, it would be recorded on the AOC file in hardcopy.
Senator O'BRIEN —If you looked at one AOC and the next, you would see what the differences are?
Mr Foley —You would see from one to the next.
Senator O'BRIEN —And they would all be on one file?
Mr Foley —Depending on the period.
Senator O'BRIEN —In this case we are talking about a three-year period.
Mr Foley —I would say possibly it would flow on to two files.
Senator O'BRIEN —In the case of a limited number of operators. Isn't that the case?
Mr Foley —No, if you wanted the details you are talking about, you would have to go to that specific AOC file which may cover a number of files. Depending on the number of upgrades or changes they have, that information would be contained for that AOC holder over a number of files. If they had had none or very little, it might be on one file.
Senator O'BRIEN —Do you keep any records of tardy operators who do not do the necessary things to lodge their applications for reissue of a certificate at the appropriate time?
Mr Leaversuch —In the airline office, yes. We track the operators and establish whether or not their certificate is coming due.
Senator O'BRIEN —So there is a tracking system separate from the files?
Mr Leaversuch —Yes.
Senator O'BRIEN —How long has that been in existence?
Mr Leaversuch —Since I have been there.
Senator O'BRIEN —Pre January 1997?
Mr Leaversuch —No, I cannot say that. I've only been there a year.
—To that extent, and to the extent that it has gone into the past, you would be able to access that sort of information fairly easily? If someone was late in lodging it, because you had tracked it, you would be able to identify that fairly easily?
Mr Leaversuch —We would know from the files if they were late.
Senator O'BRIEN —Are there any cases where a new AOC has been approved at the time an existing AOC has ceased to operate?
Mr Foley —Sorry?
Senator O'BRIEN —You have an AOC which has an expiry date, and an application has been lodged prior to the expiry date but not approved until after the expiry date. Are there any cases where that occurs? In other words, there is a gap where there is not officially an AOC.
Mr Foley —I am aware of two that have not been approved, and one of them still has not been approved after some considerable time—not in the high capacity area. Is that correct, John?
Mr Leaversuch —One in my area.
Mr Foley —One in John's area, and I am aware of one in the low capacity area.
Senator O'BRIEN —So question No. 9 could have been answered fairly simply as well. We were seeking just that information. That is right, isn't it, Mr Foley?
Mr Foley —I beg your pardon?
Senator O'BRIEN —The question I asked seeking just that information could have been answered fairly simply and easily, couldn't it?
Mr Foley —Correct.
Senator O'BRIEN —And the question of whether those particular airlines would be allowed to operate without a valid certificate and, if this occurred, what the duration of such operation was would be fairly simple to answer, wouldn't it? Your answer would be no, wouldn't it?
Mr Leaversuch —Yes.
Senator O'BRIEN —Mr Toller or Mr Harris, it seems to me that, notwithstanding the histrionics of the answer, a great many of these questions could have been answered from the record system, not that the record system is perfect. I am not sure who drafted the answer. Obviously, the minister is finally responsible.
Mr Harris —The normal process for a question of this kind is that the agency does the draft, the department scrutinises the draft and then the minister's office agrees the draft or disagrees the draft. I think in this circumstance it is probably as much a question of, as the answer is trying to say, the sheer breadth of the requests. Perhaps a better way of looking at this for the future might be to say, `Where you can answer some, you answer some, and say if you can't or if it takes too many resources to do the others.' I have not seen these so I am just commenting off the top of my head, but I have always found that to be a rather difficult argument to sustain, because where do you draw the line of where you are prepared to put some resources in but not this much? It is a highly judgmental and difficult task, and I suspect that is why the answer is framed as it is.
Senator O'BRIEN —So if instead of lodging four questions I had multiplied that by 10 to ask 40 questions, you would have answered some of them. Is that what you are saying?
—No, I was thinking more the reverse. If you had narrowed it—
Senator O'BRIEN —No. If I had lodged those separately, the answer for each of those questions could not possibly have been the same as it was in aggregate.
Mr Harris —Literally, that is correct. That is not where I was going, but literally that is correct.
Senator O'BRIEN —In light of those answers, Mr Toller, are you still saying that, generally speaking, the paperwork record system is up to scratch?
Mr Toller —I think we have made the position on our record system fairly clear. I think on reflection, yes, we could have answered some of those questions fairly easily and some of them would have taken a large amount of time. Maybe a better answer would have been to have answered as many as we possibly could rather than to have aggregated them.
Senator O'BRIEN —That is an answer to another question. You are just saying that the record system does not have problems. Is that what you are saying?
Mr Toller —We are a large organisation dealing with a lot of organisations on some complex issues, so the size of our records is clearly very large. Therefore, there are always going to be issues of accessing that information. It is not everything simple on a simple database. However, I accept that some of these questions are relatively simple and some of them are as simple as a yes/no. Therefore, we could have answered those reasonably easily.
Senator O'BRIEN —Is there debate within CASA as to the state of CASA's records and the level to which that might expose CASA and the minister if there were a more serious accident than those which have occurred in the past?
Mr Toller —That was an issue of debate as a result of the Aquatic Air accident and the Skehill report. As I say, my belief is that our records management is much tighter now than it was then.
Senator O'BRIEN —That was then. Is there debate now, or is that debate resolved?
Mr Toller —There is no debate at the moment.
Senator O'BRIEN —There is no view current within the organisation that more has to be done or an omission might occur which would expose the organisation and the government legally as well as publicly?
Mr Toller —There is a strong awareness throughout the organisation of the importance of the record keeping. I think overall we are good record keepers.
Senator O'BRIEN —That is since the Skehill report, is it?
Mr Toller —I think that that is as a result of reviewing things and after the Skehill report, yes.
Senator O'BRIEN —Perhaps you could advise the committee, on notice, as to what processes have been put in place and steps taken to improve the record system of CASA since that time. Alternatively, you could direct me to where on the public record that answer already exists.
Mr Toller —Certainly, Senator.
Senator O'BRIEN —Have you answered the question that I thought you took on notice—I do not recall seeing the answer—as to whether you were completely satisfied that Qantas pilots were properly licensed?
—We did answer that one on notice, and the answer is we are completely satisfied they are properly licensed.
Senator O'BRIEN —What did you have to do to satisfy yourself, since the last hearing, that that was correct?
Mr Toller —I was pretty certain at the time, but I just wanted to be absolutely certain. It was just a matter of making sure that we did not have on file any instance where they had not been correctly licensed, and we did not.
Senator O'BRIEN —So you had to check the Qantas personnel files, is that what you are saying?
Mr Toller —Individual personnel files, no. It was an issue of checking CASA's authorisation of Qantas's check pilots, which we did.
Senator O'BRIEN —If the check pilots were authorised as distinct from properly licensed, having satisfied the terms of their licence, are you satisfied yourself that they would nevertheless be able to provide the necessary training to allow the other Qantas pilots to satisfy the requirements of their licences? Is that what you did?
Mr Toller —The issue is that, if the Qantas delegates are correctly authorised, the legality of the process is correct.
Senator O'BRIEN —Is there an issue as to whether you can licence people who themselves are not properly licensed, whether that fails at law?
Mr Toller —No. I am trying to answer you in a way that cuts down the number of supplementals on this one. Our authorisation of a testing officer will be subject to certain conditions. It is absolutely impossible for us to ensure that every test is always conducted by somebody who has fulfilled all the conditions. We would have to be present at every test in order to do that. However, we have not been made aware of any discrepancies that have appeared with Qantas.
Senator O'BRIEN —The answer you are talking about is CASA 9?
Mr Toller —Yes.
Senator O'BRIEN —I do not have it in my pack.
Mr Toller —CASA 9 says, `CASA has provided the following advice: CASA is satisfied that there were no technical licence breaches.'
Senator O'BRIEN —So you are satisfied that the check pilots were properly licensed as well as the pilots? Is that what that answer means?
Mr Toller —We are satisfied that there are no breaches that we have been made aware of where they were other than fully licensed.
Senator O'BRIEN —That you have been made aware of?
Mr Toller —Yes, and the system requires that, obviously. As I say, we cannot be present at every test.
Senator O'BRIEN —As I recall, the initial issue was over whether there had been some failure of the check pilots to fill the qualifications of their licences and, if that was the case, notwithstanding the delegation of authority to check other pilots, whether there was some legal failing. I have now received CASA 9, and I put that on the record for Mr Harris's sake.
Mr Harris —I am not sure why you have not received it, Senator.
—It just was not in the pack.
Mr Harris —It is down on our list as having been sent.
Senator O'BRIEN —Yes, it is listed, but it is not in my pack. That is why I had not seen it. We get these things so late it is very hard to keep on top of them all.
Mr Harris —I acknowledge that, Senator.
Senator O'BRIEN —Going back to the questions on notice, I asked a second set of questions relating to the first set after receiving that answer—Nos 1853 and 1939 to 1942. I guess that is a demonstration that it was possible to answer at least part of the earlier questions, is it not?
Mr Harris —We have that 1939 to 1942 went to the Table Office on 11 May. I do not have the actual answers here with me.
Senator O'BRIEN —I am not saying that you had not answered them; I am saying that you had and that they actually followed the non-answer to the first set of questions. I just put on the record that they demonstrate that it was possible, in fact, to answer part of the first series of questions.
Question No. 1939 went to the issue of air operating certificates and lodgment of compliance statements by Qantas and Ansett, and Mr Foley may well be the person to answer this. CASA told us that, since 1 December 1997, Qantas has been issued with 15 AOCs and Ansett has applied for and been issued with eight AOCs, and the compliance statements are required so that the regulator can see exactly how the conditions of an AOC are being complied with. That is the position, is it not, Mr Foley? Are compliance statements required so that you, the regulator, can see exactly how the conditions of an AOC are to be complied with?
Mr Foley —Or how any potential upgrade is going to be addressed.
Senator O'BRIEN —According to the answer, since 1 December 1997 Qantas has not provided any compliance statements.
Mr Foley —That is correct.
Senator O'BRIEN —But Ansett had been submitting compliance statement since December 1997?
Mr Foley —That is correct.
Senator O'BRIEN —You advised me that the AOC manual does not and cannot legally require an AOC applicant to lodge a compliance statement. You then say that compliance statements are required in accordance with the approval forms issued by the Director of Aviation Safety under section 27AA of the act. Are the approval forms legally enforceable? Are they legal instruments?
Mr Foley —I will ask Mr Peter Ilyk to respond to that.
Mr Ilyk —Section 27AA of the Civil Aviation Act says that an application for an AOC must be in a form approved by CASA and the approved form actually includes provisions for a compliance statement.
Senator O'BRIEN —When I am told that the manual does not and cannot legally require an AOC applicant to lodge a compliance statement, that is not right, is it?
Mr Ilyk —It is right. It cannot.
—The manual cannot, but the act can?
Mr Ilyk —The act can and it does. The manual is only a guidance document for CASA personnel. The legal obligations are imposed under the act and the approved form is something required under the act.
Senator O'BRIEN —Whatever is in the manual, unless the Director of Aviation Safety has issued an approved form requiring that there is no obligation—
Mr Ilyk —That is right. The director has issued approved forms under 27A on several occasions. There have been a number of variations to each of those since they were first introduced in 1996.
Senator O'BRIEN —Do they go to Qantas and to Ansett?
Mr Ilyk —They apply to all AOC applicants.
Senator O'BRIEN —I am still trying to understand. If they are required to complete the form, do I assume correctly that the form requires a compliance statement?
Mr Ilyk —I do not have the answer here, but I think the issue was that there was some confusion as to what the application form actually required.
Senator O'BRIEN —On Qantas's part, do you mean?
Mr Ilyk —No, not just Qantas, but a number of applicants. There was a provision in one of the earlier forms which did not require a compliance statement where the applicant had an existing AOC and was simply requiring something additional to the existing AOC. I think that must be in the answer because we included the forms. Back in December 1997, it was not clear whether, in the case of existing AOC holders, a compliance statement was required for minor changes to the AOC. I understand that some officers believed that it required a compliance statement for every AOC application and some believed it did not require them for minor changes. The new form in October made it clear that applications which were lodged by existing AOC holders before the end of November 1999 did not require a compliance statement unless there was a major change to the AOC. If Qantas was applying for a change to the AOC which only required a new aircraft or a new route to be added to the AOC, that was not considered to be a major change. The new approved form also made it clear that every application which was lodged after 1 December 1999, irrespective of what was required, would require a compliance statement.
Senator O'BRIEN —So there was a gap in this process? I think it has been accepted that it is there so the regulator can see how the conditions of an AOC are being complied with. There was a gap where that information was not required—at least there was debate about whether it was required.
—The whole notion of the compliance statement was originally brought into operation because section 28 of the act said that CASA must issue an AOC only if it is satisfied that the applicant has complied with or is capable of complying with the provisions of the act and the regulations relating to safety. That was a discretionary power which was imposed on the delegate and the delegate was unclear as to how he should satisfy himself. Different delegates were taking different views. The decision was taken that one way for the delegate to satisfy himself was if an applicant provided a compliance statement showing how he would comply with the act and regulations. That would be a factor which the delegate would take into account in determining whether or not to issue the AOC under section 28. Section 28 itself does not require a compliance statement, it simply makes a statement that CASA can only issue an AOC if it is satisfied about certain things. The difficulty was how the different delegates satisfy themselves consistently. It was thought that the compliance statement would be one means whereby the applicant would have some onus of having to show to the delegate that he has the capability of complying with the act and the regulations.
Senator O'BRIEN —What was the out for Qantas? Why was Ansett lodging compliance statements from December 1997 and Qantas was not?
Mr Ilyk —I cannot answer that. I think the answer is in relation to the types of matters that were going onto AOCs for Qantas. As I understand it, the Qantas AOCs were only to add a different aircraft or a different route but Ansett were actually upgrading, they were going to much more complicated aircraft on their AOC and that was considered to be a major change.
Senator O'BRIEN —Do you mean Canada Air? That is Kendell, is it not?
Mr Toller —That refers to Ansett international rather than domestic. Kendell is separate. They are on their own AOC. Certainly, within that period, Ansett international upgraded from the 747 classic to the 747-400 which is a major change from a three-crew aircraft to a modern two-crew aircraft.
Senator O'BRIEN —Just to be clear, in December 1997 CASA 82/97 came into force, in October CASA 413/98 came into force, in February 2000 CASA 48/00 came into force and in March CASA 112/00 came into force. The October 1998 change has been explained. Can you give further explanation of the other three instruments? Why have there been so many changes, for example?
Mr Ilyk —There have been a number of changes simply because people are wanting different information from AOC applicants. There were changes made as a result of decisions taken as to the Mobil fuel crisis. If you were affected by the Mobil fuel crisis and you wanted to add a particular aircraft to your AOC, then you would not have to go through the full process if it was purely to do with the fuel crisis. There was the change to make it clear what a major change to an AOC was. It tended to be fairly technical detail like that. The approved form went out. A number of staff would have looked at it, had to work with it, were unsure about some of the matters, so changes were made to try to clarify the intent of the approved forms.
Senator O'BRIEN —Since December 1997 you have issued or reissued 80 AOCs for high capacity operators. Does anyone know how many beyond Ansett have lodged compliance statements over that period?
Mr Foley —We would have to take that on notice to get the exact number.
Senator O'BRIEN —In answer to question 1853, related to the number of compliance notices issued in the regular public transport sector, you said that that information was commercially sensitive. You then said:
It has been determined that the NCN process is not effectively communicating the required changes to practices in the industry, especially in the high capacity regular public transport sector.
What exactly does that mean?
Mr Toller —I think it is basically saying that we have done away with the NCN process. It was not an effective means of ensuring what we wanted came out of the audit process. So the whole concept of NCNs has now gone and has been replaced with a new system.
Senator O'BRIEN —What sort of new system?
Mr Foley —It fits into the new safety system approach. If you go back—and I think this question emanated from the ANAO audit report—
—That is right.
Mr Foley —The issues they picked up on were non-compliance notices which had been outstanding for a period of time. But when you looked at what the non-conformance notices were, they were level 5.
Senator O'BRIEN —Instead of reviewing them or policing them, you are going to do away with them?
Mr Foley —No. I think you have to understand: is a level 5 critical to safety? The answer would be no. If you look at a level 1, yes, a level 1 would be. So you have to have a system that really defines clearly what impact it has on safety. If you look at a level 5, it may be referring, for example, to some error in their documentation—page numbering may be incorrect or something of an insignificant nature but something they could look at to improve their system. So we have now gone to a system that clearly identifies safety impacts. So if we issue a request for corrective action, that impacts on safety and must be fixed within a defined period. If you identify other issues which could improve on their overall system but does not impact on safety, that would be an observation. It is to clearly define the difference between safety and what may be nice to do. That aligns with the commercial world, accepted on an international basis, in the way that requests for corrective action observation works across a number of industries.
Senator O'BRIEN —I am interested where you say that the NCN process `is not effectively communicating the required changes' and your response is that you have done away with part of that process. A cynical person might say, `You will get fewer occasions when you have not followed up on non-observance.'
Mr Foley —It may be an inappropriate term but the underlying principle is to clearly define what is safety related and what is nice to do. The past system did not do that and it often gave the incorrect message.
Senator O'BRIEN —Being what—that attention to detail, to the little things, was not important; it was the big things that counted?
Mr Foley —It is safety related. You could have a little thing that could be safety related and that would be identified as a request for corrective action. But if it is only relating to what might be nice to do or the opinion of an auditor on some aspect of documentation, you raise it as an observation.
Senator O'BRIEN —So we will have RCAs and observations.
Mr Foley —Requests for corrective actions and then observations under the new system.
Senator O'BRIEN —What happens with the observations?
Mr Foley —You raise the observations. They are reviewed by an organisation. I have seen probably two audit reports and in all cases the organisation has addressed all the observations. They may in some issues decline to do so. We would then at the next audit look at whether they have addressed the observations and look at whether that has had an impact on safety. If it had, we would then raise the classification.
Senator O'BRIEN —Does that change the audit need of individual operators? It changes the audit process somewhat. There is no change to the frequency of audit. It is the same audit process.
—The whole system of audit process has changed. Going back two years, it has changed on the airline operations initially and that is now going through to all levels of industry.
Senator O'BRIEN —The response from CASA since the report is interesting, given that the Audit Report says:
CASA consider NCNs to be an important source of information for:
.assessing operator compliance;
.assessing sector/industry compliance;
.highlighting areas for regulatory change; and
.providing feedback to the industry and CASA staff.
You have just restructured the system. Is that how I should understand it? They are still important, but you have just restructured the system.
Mr Toller —We have gone from five tiers to three effectively and, instead of blanketing them under all one name in which case what we are probably trying to say is that the worst and the best get almost considered equally, we are, by virtue of renaming them and putting them into three different levels, making sure that those that are of immediate safety priority get actioned immediately and those that are valid observations but not critical are treated as such.
Senator O'BRIEN —How has it changed when, according to the Auditor's report:
NCNs covering surveillance deficiencies in commercial organisations/operators include a grade to indicate the severity of the non-compliance. Grade 1 refers to passenger-carrying operations using Australian registered aircraft; grades 2 to 5 were for remaining non-compliances. Grades 1 and 2 related to high safety risk non-compliances, Grades 3 and 4 for medium safety risk and Grade 5 for lower risk.
Now you have three. How should we understand those three in the context of what the audit has reported?
Mr Foley —I think it is really to take the confusion out of what was there in the five tiers. If you look at the new system, we are talking about immediate safety impacts, and then about requests for correctional action which may be given a period of grace. The Auditor has then put on specific time frames when the problem has to be rectified. Then we go down to the third tier, which is the observation.
Senator O'BRIEN —You have two RCAs, and the third tier is observations, is it?
Mr Foley —The third tier, if you are looking at tier levels, is the observation level. Really, all it is doing is simplifying the process which was in place before, so there is not the confusion about whether it is a level 2, 3, 4 or 5. Looking at the inconsistency that used to apply, it will remove that inconsistency.
Mr Toller —The top level is now called `safety alert, immediate action required'. I think that says everything: `This is something that we have found that needs to be addressed immediately.' The requests for corrective action are for things that need to be corrected but that can be done over a period of time. The observations are things that we think should be corrected and we think it would be better if they are corrected. At the end of the day, the final decision is up to the operator, but clearly we will be looking at these things in the future. We are flagging things that we will be looking at.
Senator O'BRIEN —Therefore, the final decision is with CASA?
Senator O'BRIEN —Doesn't that mean that you have taken probably most of those NCNs that were not followed up from the previous system and put them in a system where you have a process of following them after each audit but no follow-up in between?
Mr Toller —As observations, they are responded to. Action is not required, but they obviously become subjects for discussion, at the very least, at the next audit of the organisation.
Senator O'BRIEN —That is exactly what I said, isn't it?
Mr Toller —It closes that loop.
Senator O'BRIEN —That is exactly what I said. What you have done is taken them out of the NCN category system, and you have done away with that system.
Mr Toller —Yes.
Senator O'BRIEN —You have prioritised higher risk, but then you have put the category 5s—and I do not know this—and probably a lot of the NCNs that were not followed up into an area where you have a follow-up at each audit but not in between.
Mr Toller —That is correct, yes.
Senator O'BRIEN —Then subsequent follow-up may or may not occur, depending upon how serious that matter is.
Mr Toller —Yes.
Senator O'BRIEN —Is there something that I am missing?
Mr Toller —No, not at all.
Senator O'BRIEN —I will now go to the performance indicators that appeared on page 133 of the last budget statements.
Mr Harris —Those of 1999-2000?
Senator O'BRIEN —Halfway down the second box on the right-hand side of that page, it refers to development and promulgation of standards governing aviation maintenance activity and associated guidance material with a target date of June this year.
Mr Toller —Yes.
Senator O'BRIEN —Can the committee be provided with a schedule of all the standards referred to in this performance measure? Do you have such a document?
Mr Toller —This is part 149 that I think you are referring to of the new civil aviation safety regulations.
Senator O'BRIEN —Is that what you are referring to in the budget document: that is the question.
Mr Toller —The development and promulgation of standards for self-administering sports aviation organisations is, in shorthand, part 149. That has been strongly on track for the target date of June 2000, but it ran into a small hurdle at the beginning of this month and is due to be discussed again at a board meeting next week.
Senator O'BRIEN —So that is the only standard referred to there?
Mr Toller —It is.
—Aviation maintenance activity and associated guidance material: that is 149?
Mr Toller —Sorry, no, I was on the one below that, the sports aviation organisations. I apologise. You are on aviation maintenance activity? I will get Mr Yates to comment on that one. I think this is parts 43 and 145 and associated.
Mr Yates —I think we are referring here to CASA part 145, which is the set of regulations that is in preparation to govern approved maintenance organisations. That material is currently with the Attorney-General's Department for legal drafting, and it is intended to circulate it for formal public consultation as a notice of proposed rule making in June.
Senator O'BRIEN —So it will not be achieved by the end of June?
Mr Yates —It will not be achieved by the end of June.
Senator O'BRIEN —What is the new target date for that?
Mr Yates —I do not have that detail to hand today. I can provide it to you on notice if I may. The precise target dates for the full regulatory reform plan are being revised as we speak.
Senator O'BRIEN —You talked about a public consultation process. What actually will that entail?
Mr Yates —With respect to part 145?
Senator O'BRIEN —Yes; I am going to the standard in the PBS.
Mr Yates —There will be a meeting in early June, prior to circulating the proposed material, with the maintenance standards subcommittee of a new body that we have just recently established, the Standards Consultative Committee. Following that meeting with the industry representatives, the material will be released for public consultation and in late June—I think it is to be the 21st and 22nd—there will be a public forum in Sydney to which the industry has been invited to come and have the whole of the maintenance material explained to them and to discuss issues arising from the material that will have been circulated for consultation by that time.
Senator O'BRIEN —When will the detail as to the guidance material you are actually referring to in that box be available?
Mr Yates —The aim with respect to the guidance material is that it should be a complete package of regulations and guidance material. The aim is to have it all together.
Senator O'BRIEN —Ready to go out at the beginning of June?
Mr Yates —The NPRM should be going out early next month, yes.
Senator O'BRIEN —Is it possible for copies of that material to be supplied to the committee, if it is not out by then?
Mr Yates —Certainly, yes.
Senator O'BRIEN —Over on page 134, the performance indicators for aviation safety compliance are audits on renewal of holders of certificates of approval, AOC, aerodrome licences, instrument of authority and certificates of delegation. I asked Mr Toller about this matter last June and, Mr Toller, you said you could not give me a meaningful answer because of the diversity of operators involved. Is that still the case?
—In terms of instruments of authorisation and certificates of delegations, yes, it is. However, we are taking steps to replace the current system with a system that will allow us to audit, prior to renewal, all delegates on probably a three-yearly basis.
Senator O'BRIEN —What targets will you hit with this indicator?
Mr Toller —I believe that at the moment, as far as the audits on renewal of the holders of CofA and KOC and aerodrome licences are concerned, we are on track As far as the certificates of delegation are concerned, I think it will probably take us another year because I want to set up a training system to ensure consistency between all the delegates. Obviously that will take time. It will then take time to roll the system in because we have so many delegates, and the number of delegates will be reviewed within that process.
Senator O'BRIEN —Do you have any information on how many audits have been carried out for each category so far this year?
Mr Toller —I am sorry?
Senator O'BRIEN —Do you have the number of audits carried out for each category so far this year?
Mr Toller —Yes, we would have that.
Senator O'BRIEN —That could be compared with the numbers for 1998[hyphen]99?
Mr Toller —I believe so.
Senator O'BRIEN —If you would supply that, I would appreciate it.
Mr Toller —We will.
Senator O'BRIEN —Over the same two 11-month periods, what percentage of those renewals covering the five categories were audited?
Mr Toller —We will take that on notice and add that information, certainly.
Senator O'BRIEN —Is it possible to differentiate between high capacity and low capacity RPTL?
Mr Toller —Yes.
Senator O'BRIEN —Mr Toller, I think we dealt partly with this earlier today, but I will just go through it for clarity. You told the committee last June:
FOI3s are the ones that are responsible for auditing Qantas, Ansett, National Jet, and Skyways. The FOI2s look after the Kendalls, the Easterns, the Southerns ... FO1s look after the small charter operators who are dealing with aircraft that are under 5,700 kilos ...
That was the baseline when the rules were changed. Is the baseline still the same?
Mr Toller —Yes.
Senator O'BRIEN —You have given me data of the number of officers in various categories within CASA in the past. But, to ensure that I am comparing the same categories, can you give me the numbers for these three categories that undertake auditing as at May 2000, May 1999 and May 1998?
Mr Toller —Of FOI1s, FOI2s and FOI3s?
Senator O'BRIEN —Yes, as applied to those categories.
Mr Toller —Yes.
—Obviously I want to know the number of qualified CASA officers that have been available to do these audits and have been doing the audits for high capacity, low capacity and charters over the period.
Mr Toller —Yes.
Senator O'BRIEN —There certainly have been a number of separation packages offered to people in recent times to get out of the authority. I think at one stage there was a discussion about the fact that there was basically a blanket offer to all FOI3s at one point.
Mr Toller —There was indeed; that still exists. Effectively, it has been put on hold in agreement with the pilots union, while we rediscuss the role of the FOI. They say they cannot make a decision if they do not know what their future role is likely to be, and I say that is not unreasonable. At the same time, as was discussed earlier, we are bringing in as much expertise from industry as we can.
Senator O'BRIEN —Yes, I heard your earlier answer. Do you know how many people have left purely and simply because the package was offered? I presume it would be those who have taken the package.
Mr Toller —Are you talking just FOIs?
Senator O'BRIEN —Yes.
Mr Toller —Because, of course, others have taken a package in other areas. The figures I have here—which I will check—are that, from January 1999 until March of this year, within flying operations, we have got 14 voluntary redundancies.
Senator O'BRIEN —So what is that? Fourteen months: one a month?
Mr Toller —Yes, although not necessarily on a straight line.
Senator O'BRIEN —We have heard of the three who have gone in Sydney.
Mr Toller —That would also include the level of management that we removed.
Senator O'BRIEN —The level of management that you removed?
Mr Toller —In terms of the district flying operations managers in the areas, at the area office level. That level of management was seen to be unnecessary and was replaced effectively by an area manager who was responsible for managing all issues within the area.
Senator O'BRIEN —The next indicator was the follow-up and correction of deficiencies identified during these audits. What details can you give us on that performance indicator? What was the target?
Mr Toller —We will take that one on notice. The information is available.
Senator O'BRIEN —Do you know what the target was?
Mr Foley —I would have to take that on notice.
Mr Toller —I think we said—probably at June last year—that we felt slightly uncomfortable with these indicators which we did not think were particularly effective ones. Since then, we have had our new corporate plan, and I think our ability to measure against the corporate plan is coming together well. I think it is fair to say that our measurements have improved immensely in the last year and our ability to measure has improved immensely in the last year. We have not necessarily, though, been measuring exactly what we said we would measure in the PBS because the corporate plan effectively almost overtook that.
—Thank you for taking that on notice. The next is the definition of regulatory services and the measurement of service delivery against those requirements. Is that one that you have ditched?
Mr Toller —No; in fact, to the contrary. That became very much the focus of the whole new regulatory service division. Previously that had been a compliance action and it was seen that, as we have discussed, there was something of a conflict of interest there. But, with the regulatory service division, they are measuring the time taken to comply with regulatory service requests. We have defined what those regulatory services are, we are measuring our service delivery and we are in the process now of setting targets for that service delivery.
Senator O'BRIEN —So can you give me the definitions of the regulatory services?
Mr Toller —We will provide that to you on notice.
Senator O'BRIEN —Secondly, can you give me the details to hand on how service delivery to the industry has measured up against those definitions?
Mr Toller —We will.
Senator O'BRIEN —And what were the targets that you actually set for yourselves?
Mr Toller —We will.
Senator O'BRIEN —The next performance measure is the incorporation of safety audit programs into the surveillance program by June 2000. You told me last June that you thought this process would be complete for the top end—I assume that is high and low capacity RPT operators.
Mr Toller —That is correct.
Senator O'BRIEN —Is that now the case?
Mr Toller —That is exactly what we were discussing earlier about the safety systems audit, yes.
Senator O'BRIEN —That is complete, is it?
Mr Toller —That is complete.
Senator O'BRIEN —And can you tell me how your safety management education campaign has progressed? Was there a target for this year?
Mr Toller —We have, during the current year to 31 March 2000, set ourselves a number of seminars and training programs that we wanted to set out. What we have been measuring is the attendance at those seminars. I am happy to table the list of the seminars and the attendance numbers.
Senator O'BRIEN —Okay. Does that mean you are meeting your targets?
Mr Toller —I think we actually exceeded our target in terms of the number that we were intending and the attendance that we actually got. We have been particularly comfortable with the whole of this area. We have been getting a lot of support. An example, if you like, is that we put on a special evening program of flight safety seminars, trying to attract the young flying instructors who are busy during the day and who could not spare weekends when we normally have them. We actually had to turn people away. I think we had over 300 and we had to turn them away and put on a second program at a later date. So we have been absolutely delighted with the response to these programs.
—That is very good. Can you also tell me when your education campaigns for pilots and AOC holders regarding changes to airspace procedures will be fully developed and implemented? Will it be by the end of next month in line with your performance target?
Mr Toller —I think that was assuming there would be changes to the airspace procedures, which in fact are not proceeding at the pace that was originally anticipated, and therefore the education campaigns are not, at this stage, necessary.
Senator O'BRIEN —Thanks for that. In an answer to a question on notice last June—that is, CASA's 14 and 15—you advised that, while 87 per cent of those who attended briefings as part of this education program said they were committed to developing a safety program, CASA follow-up revealed that implementation was low, and your judgment at the time was that this was because the industry needed more comprehensive implementation assistance. You advised me in that answer that you planned to recruit additional expertise to deal with this matter.
Mr Toller —We are at the moment developing a follow-up program to the original program with the intention of reinforcing the message and assisting its implementation in the lower part of the industry. So that is one of our major projects within the safety promotion area at this stage.
Senator O'BRIEN —Have you actually engaged anyone?
Mr Toller —Whether we actually engaged somebody new or whether we took somebody from another part of the authority I would have to take on notice.
Senator O'BRIEN —Okay. Is there a budget for the program for the current financial year and the financial year that was the subject of the last budget?
Mr Toller —I would have to take that one on notice as to whether it is actually a specific item within the budget, but it is certainly agreed that it is part of the total span. But I will check that.
Senator O'BRIEN —Mr Toller, you told this committee last June that CASA was planning to do a baseline survey of industry attitudes towards the authority, and you said that survey would be done around the middle of the year. I assume you meant the financial year. Has that work been completed and, if so, what were the results?
Mr Toller —No, it has not yet. But it has been incorporated into the three-year corporate plan. I cannot immediately remember the exact time line, but it is certainly a part of the corporate plan milestones.
Senator O'BRIEN —For the coming financial year?
Mr Toller —It is not in the current financial year in the corporate plan, and therefore it will be in the forthcoming financial year.
Senator O'BRIEN —2001-02?
Mr Toller —No, 2000-01.
Senator O'BRIEN —I am sorry. Okay. As I mentioned last time, AQIS took a similar approach—with very good effect, I must say. That organisation was happy to release the findings of its survey because AQIS saw it very much as an open process. I assume you will take the same approach?
Mr Toller —Very much, yes.
—I now go to the performance targets CASA sets itself in this year's budget statement—pages 127, 128 and 129. I want some more information on the dot points in the boxes on these pages. For output 1, `Aviation safety standards', the target is the number of staff and industry personnel trained prior to the implementation of the new revised standards. What is your target for this indicator? How many people did you train in the current financial year and how many do you expect to train in the next financial year?
Mr Yates —I will have to take that one on notice.
Senator O'BRIEN —Do you actually have a target for next financial year—that is, 2000-01?
Mr Yates —During the next financial year there are a considerable number of new CASA parts that will be completed and we will then be commencing training for the implementation of that material. We have not set targets at this stage.
Senator O'BRIEN —When was this part of the PBS developed?
Mr Yates —Can you say that again, please?
Senator O'BRIEN —When was this document developed? It has got performance indicators. Are you saying that you will develop the performance targets later?
Mr Yates —To the best of my recollection, we were to report on the number of people that had been trained without actually setting a target. It was just the number of people that we have been able to provide training to—both our own staff and industry personnel. One would hope that the target would be all those people required to have the training.
Senator O'BRIEN —Do you know how many people within CASA will need this sort of training?
Mr Yates —It would depend on the subject area of the particular regulations that we are talking about. For example, if it were maintenance regulations, it would be airworthiness inspectors that were going to be overseeing the enforcement of that material. If it were operational standards, then it would be flying officer inspectors that were overseeing the compliance for the operational standards.
Senator O'BRIEN —So there is no knowledge about any proposed regulatory changes upon which you could make those judgments now?
Mr Yates —I do not quite understand the question, I am sorry.
Senator O'BRIEN —We have heard today—in fact, you told me—about the proposed regulatory change. You do not know exactly when it is going to happen, but you are assuming it will happen in the coming financial year?
Mr Yates —The development work is ongoing right now, and some of that material will be completed and start to go through the legislative process to become law. A training package will then follow to assist both the authority staff and those people in the industry who are affected by that material so that when it is implemented, which will be at the end of a transition period, all parties concerned should be ready to work to the new rules.
Senator O'BRIEN —Precisely. When do you expect it to be implemented?
Mr Yates —The dates of the proposed completion of the material and the subsequent implementation of those CASA parts will be reflected in the regulatory plan that I mentioned earlier, the dates for which are just being finalised this week.
Senator O'BRIEN —Do you expect that it will be within the coming financial year?
—For some parts it will, but not for the full spectrum.
Senator O'BRIEN —For those parts that you expect to take effect in the coming financial year, surely you can say, `We're going to need to train these people and therefore we can ascertain a number.' Isn't that the purpose of your performance indicators? You have to have an idea of what you are planning. You can have an explanation as to why you did not achieve it if it is based on certain things.
Mr Yates —I think the idea behind this one is that a new set of regulations will have been developed, and the people who are affected by those new sets of regulations will need to be trained accordingly. Of course, what the regulations are will dictate or determine the population that needs to be addressed with the training. This training will be made available both to the authority staff and to industry personnel, but we will not be able to coerce industry personnel to attend training. We will stage roadshows providing this training, and we will do our very best to encourage maximum participation, but it is very difficult to set a precise target as to what our expectation should be as to numbers.
Senator O'BRIEN —But you could do that for staff, couldn't you?
Mr Yates —I am sure that we could do that for staff.
Senator O'BRIEN —We have made the point. How many regulatory impact statements did CASA produce last year, 1999-2000, and how many do you think CASA will need to complete in the coming financial year?
Mr Yates —I would like to take that one on notice, please.
Senator O'BRIEN —Okay. I will now go to the quality box. Has CASA produced a set of regulatory performance indicators, or will that work be done in the coming year?
Mr Yates —The regulatory performance indicators are required to be produced for the Productivity Commission as a matter of routine. That was done, as I recall, in the last financial year and will be done for this financial year. It is a routine annual submission. I do not have that precise material to hand, but that can be made available to the committee.
Senator O'BRIEN —Thank you for that. I will go to output 2 on page 128, `Aviation safety compliance'. Under the quantitative performance indicators, the first dot point refers to the `number of regular/scheduled industry audits completed'. I presume that the records are kept to find out how many of these types of audits were carried out in high capacity and low capacity RPT for the 1999-2000 financial year and that CASA would have a target for the coming financial year.
Mr Toller —Yes, this is our audit plan for the year. As we discussed earlier, that is put together by the compliance division.
Senator O'BRIEN —Can you give me the numbers of the unannounced audits for those two categories for 1999-2000?
Mr Toller —For the coming financial year?
Senator O'BRIEN —Yes.
Mr Toller —We will.
Senator O'BRIEN —But not right now?
Mr Toller —When the financial year has finished.
Senator O'BRIEN —Can you tell me what the numbers are to date, then?
—Sorry, Senator, were you talking about unannounced audits?
Senator O'BRIEN —Yes, unannounced audits.
Mr Foley —We will take it on notice.
Senator O'BRIEN —Have you planned the other unannounced audits that you are yet to do this financial year?
Mr Toller —For next year, not yet. Even if we had, I do not think I would announce it.
Senator O'BRIEN —I am sure you would not announce where you were going to have your unannounced audits, but it was the number I was looking for.
Mr Foley —Looking at the unannounced audits, we set aside an amount of time that each office will do unannounced audits in. Often you cannot decide until the last minute that you need to do an unannounced audit on a particular organisation. We have already talked today about issues which have arisen in the industry. You need to keep a block of time available for staff to be able to do unannounced audits. That is the way we are dealing with them. We have broken it down into time for scheduled audits and time for unannounced audits.
Senator O'BRIEN —So you have a target number of hours?
Mr Foley —We have a target number of hours set aside for non-scheduled audits.
Senator O'BRIEN —And you can assess actual hours against the target hours?
Mr Foley —We will then monitor those to ensure that we are meeting that target. There may be the need to transfer hours from one office to another, and that is what we will do.
Senator O'BRIEN —Have you similarly got a target number of hours for surveillance activity in general areas?
Mr Foley —For general aviation?
Senator O'BRIEN —No, for surveillance activity generally.
Mr Foley —Yes, we have target hours. We have our surveillance activity broken up into target hours for airworthiness, participation, cabin safety, the engineering group and the flying ops, and we target that across all the areas and break it down into specific target areas.
Senator O'BRIEN —Is that a document that you could supply to the committee?
Mr Foley —That is a document that we can supply, and that applies to both general aviation and airline operations.
Senator O'BRIEN —In terms of surveillance activity, in a similar measure the Auditor-General found the number to be 15 per cent to 17 per cent of activity in the year that was the subject of the audit, last financial year.
Mr Foley —That is correct, but that is based on an old system. The new system has gone away from people simply ticking boxes and deciding basically what they are going to do. The system is now centrally controlled. We have sat down with the team leaders. We have come up with risk profiles. We have gone through that process. We have identified them, based on what we see as the key risk areas, and that is where the surveillance will be targeted.
Senator O'BRIEN —Is the level of actual surveillance as a percentage of planned surveillance higher than 15 per cent to 17 per cent now?
—If we look at the new regime doing the system audits to date in the airline office, I may stand corrected but I believe it is around 100 per cent of what was tasked and what is being met.
Senator O'BRIEN —If you plan it, it is being done. Is that what you are saying?
Mr Foley —All planned surveillance in the airline operation group is being done, high capacity.
Senator O'BRIEN —What about low capacity and charter?
Mr Foley —In the next financial year, that is being converted into the systems approach, where people will be working in teams and will be looking at the system within the organisation, not just going out and ticking boxes.
Senator O'BRIEN —Is that some form of audit of individual operators that you are talking about? When you are talking about the system approach and going out in teams, as distinct from just ticking boxes, as you put it, I am trying to understand what you are talking about.
Mr Foley —In the past, we looked purely at the product. That could be just sitting in the cockpit observing certain operations. That has not—and I think it is clearly evident—identified the underlying problems within organisations. You have to look at how the organisations manage the safety aspects within their organisation, and you have to do that by looking at the system within the organisation and how they put that system into place so that you then pick up the product side. You then look at unannounced audits so that you can pick up whether they are deviating from what they are telling us and what they are demonstrating at that time. You have to make an all-encompassing process rather than going out there and saying, `They're doing ASSP number so and so and ticking it all.' You have to look at the system and the workings of the organisation, and we have not done that aspect in the past.
Senator O'BRIEN —Does dot point 5 in the top box on page 128 mean that your target is a risk assessment of all certificate holders in 2000-01?
Mr Foley —That has been completed. We can provide the documentation. We have done 952 air operator certificate holders, and 797 certificate approval holders have been assessed for risk.
Senator O'BRIEN —That is for the current financial year, 1999-2000?
Mr Foley —That is correct.
Mr Tolley —We got a bit ahead of ourselves. Because it is fundamental to what we do—it is a risk analysis of where we need to put our resources—we accelerated that through. So it has been completed in this financial year rather than in the coming financial year.
Mr Foley —I think it is a fundamental issue in identifying the correct surveillance levels for the various sectors of the industry.
Senator O'BRIEN —There are 952 air operator certificate holders and the 797—
Mr Foley —And 797 certificate approval holders.
Senator O'BRIEN —All have been the subject of risk assessment?
Mr Foley —All have been assessed.
Senator O'BRIEN —When was that concluded?
Mr Foley —I would have to take that on notice, but about two months ago would be my best guess. We can confirm the exact date.
—So you will not need the $24.466 million set out at the top of that box because you have completed part of the work. Is that what you are saying?
Mr Foley —No.
Mr Tolley —Now we know where to spend the $24.466 million.
Senator O'BRIEN —I was just interested to know why it is there if it was completed.
Mr Tolley —I think because at the time we were writing this it had not been completed.
Senator O'BRIEN —How old is this document?
Mr Tolley —We probably put it together two to three months ago. I certainly have not yet seen the final results of that risk assessment. So when we say it has been completed, it has not reached beyond the chairman of the safety committee or come to me as chairman of the safety committee. In saying that it is completed, I would clarify that the full process has not yet been completed but I am very comfortable about the way in which it is proceeding.
Senator O'BRIEN —Can you also give me the details of the number of enforcement actions, broken down into the categories referred to at dot point 6, that have been undertaken in the 1999-2000 financial year to date?
Mr Foley —Yes, we can do that. To 31 March 2000, they are: show cause, 60; conferences held, in terms of the informal conference process, 15; variation to certificates, five; suspensions, 16; and cancellations, 16.
Senator O'BRIEN —Under the `Qualitative' heading in the next box on page 128 you refer to the number of enforcement decisions overturned as a performance indicator for 2000-01. What was the number for 1999-2000?
Mr Foley —I cannot give you the exact figure, but we will probably arrive at about a 96 to 97 per cent success rate.
Senator O'BRIEN —So that is your target?
Mr Foley —Our target is 100 per cent.
Proceedings suspended from 4.14 p.m. to 4.32 p.m.
Senator O'BRIEN —We will just finish off this little area. For output group 3, `Aviation safety promotion', can you get me the number for this financial year—that is, 1999-2000—in the quantity box, please?
Mr Toller —Yes, I believe we can.
Senator O'BRIEN —Can you get me the number for the second dot point in the quality box at the bottom of page 128—`Percentage of industry actively participating', et cetera?
Mr Toller —Yes.
Senator O'BRIEN —Can you get me the numbers for the three quantitative targets on the top of page 129 under output group 4?
—This is the regulatory services division, which is effectively new during this financial year. It is setting itself certain preliminary targets. The reason for that, to a certain extent, is that the exact structure and composition of regulatory services is subject to the function and resource analysis which is going on at the moment. Therefore, I am not sure whether these are necessarily the best quantity or even quality indicators that we could have, but they are a start. What we are doing at the moment, on dot point two, is simplifying a number of the processes, including the process of the compliance statement, which—while a significant necessity for a high-capacity operator—is actually a millstone for a small aerial work operator. And I think the number of regulatory service tasks completed provides an analysis of just how much regulatory service we do, which I do not think we have known very accurately up until now.
Senator O'BRIEN —So are you going to have some qualified targets, or are you just going to leave them blank?
Mr Toller —I think in the first year we probably will not. I think we will just have to take raw numbers in the first year, while we discover just what the issues are and what targets we should have. We will be introducing anyway, as part of this, service delivery targets, obviously, in terms of time to respond and time to complete.
Senator O'BRIEN —I suppose, Mr Toller, the best targets to have are those that you do not set.
Mr Toller —That is always true. There is also not much point setting unrealistic or meaningless targets.
Senator O'BRIEN —Sure. This document was prepared two to three months ago. It is a published document as a guide for the performance and expenditure of about $6.7 million. If you do not really have targets, the question is: why do you present them? As I say, the best targets to have are those you do not really have, but to indicate that you actually have a quantity target in the document and not actually have one raises the question: why do you express it that way? Is there some direction that you must express it that way?
Mr Toller —I take your point. I do not think they are the best of targets. I think that, in the corporate plan, the quantity indicators on regulatory services will be much more focused on what is being done and how it is being done.
Senator O'BRIEN —I will go now to Link and LARP. Mr Comer, welcome back. Can you tell me what work was done on the old LARP system—the entire system, including all its modules—to see whether it could be made Y2K compliant?
Mr Comer —I think you might be aware that the strategy changed with LARP during 1999. We were at a point where we were looking to replace the resident systems on LARP, but by about June last year it was realised that we would not be able to do that. In fact, attention was then focused on how to make the LARP platform Y2K compliant. That was where the body of work in the latter part of 1999 was addressed. If you want to go into the technical detail of the type of work that we actually did, I could get Mr Minns to describe that for you.
Senator O'BRIEN —I think we will leave that for the moment. Who did the work? When was it done? What was the outcome of the work?
Mr Comer —It was done over a period of time.
Senator O'BRIEN —Which period?
Mr Comer —Again it is difficult to give a precise answer because there was work continuously going on in terms of aiming at replacing systems and, as a contingency, we had continued to test LARP. Then when we realised that we would not be able to replace the system, the body of work intensified. It would have been, I imagine, continuous over the period of 1999, but more intense in the latter part of 1999.
Senator O'BRIEN —Who did it?
—We would have had our external consultants working on that. I could take that on notice and give you a list of those. Mainly our work in relation to that is that we have a couple of LARP people who are on our CASA staff, but we also bring in external people.
Senator O'BRIEN —And what was the outcome of that work?
Mr Comer —The outcome of that work was that the LARP platform was made Y2K compliant as of 31 December. But as you are aware, the rollover issue continues with us even now. We have other dates that are relevant, such as the end of February; and there are other dates which in fact span out one or two years. Since January, the testing and monitoring work on LARP has continued. If we put any new piece of material or write new code for LARP, we then have to do further rollover date testing to make sure the system is not vulnerable.
Senator O'BRIEN —I think you have given me a cost for the work on LARP to make it Y2K compliant?
Mr Comer —We provided that in the earlier answers.
Senator O'BRIEN —As I said earlier, the difficulty when we receive these answers very close to the appointed time is that it is a lot of information to assimilate in a very short time.
Mr Comer —It would be in CASA 17.
Senator O'BRIEN —I do not have that here.
Mr Comer —CASA 12 also provides additional information.
Senator O'BRIEN —For some reason, I do not have that here. Can you tell me what the figure is?
Mr Comer —The figure is $1,011,313.88.
Senator O'BRIEN —Is that broken down by different contractor sources?
Mr Comer —In the answer to CASA 12, we did list the external agencies that were involved.
Senator O'BRIEN —But not how much they were paid?
Mr Comer —Not how much they were paid, no.
Senator O'BRIEN —Could you easily add to the answer you have given in CASA 12 the amounts each of the contractors were paid?
Mr Comer —I will take that on notice. It is possible that some of those contractors were involved in multiple systems. Perhaps we could take that on notice.
Senator O'BRIEN —Essentially, when it became clear that the endeavours on the Link system were not going to bear fruition by 31 December 1999, that little bit of work that had been done on LARP was accelerated and most of the expenditure occurred in the latter part of 1999?
Mr Comer —That is my understanding. It was certainly an intensified program from about July onwards is my understanding.
Senator O'BRIEN —So when you went to OGO seeking funding, there was not actually a full consideration of whether LARP could be upgraded?
—Where that was picked up because of that change in focus, you might recall an earlier answer I gave you was that OGO had a company called Admiral come in to do an audit. That was in the latter part of the year. It was during that time that we validated with OGO the shift in focus in relation to the program. But, in totality, it was still comprehended within the program; it was just a shifting of the resources.
Senator O'BRIEN —`It was comprehended, but it was just a shifting of resources' means you thought this was an opportunity to get a new system out of this approach? Is that what you mean?
Mr Comer —No, what I am suggesting is that the dollar amounts in terms of allocated resources were intensified to make the infrastructure Y2K compliant. When the initial program was provided to OGO, we did list the projects which were comprehended in that program. I cannot recall, without digging back into papers, whether we were prescriptive at that time about funds allocated to each of the six items, I think it was, that made up the program. We would have to review that and look at that. Certainly, in an official sense, the shift of the resources to making the platform Y2K compliant was dealt with with OGO in conjunction with Admiral when that audit was done.
Senator O'BRIEN —So when you got the $6.634 million, you had the Admiral consultant's report and the focus was Link, not LARP? In other words, that was where most of the money was going to be spent and you did not decide to spend the additional money on LARP until the end of 1999?
Mr Comer —I have just been corrected on some of my dates. When Admiral came in, it was in fact in July 1999 so that validation process took place reasonably early.
Senator O'BRIEN —When did you get the OGO money?
Mr Comer —We got the OGO money in tranches. You might recall that we did not get some of the money in fact until very close to the end of the 1998-99 financial year.
Senator O'BRIEN —But when did you ask for the OGO money, even though it was paid in tranches?
Mr Comer —I am not sure that that was our prerogative.
Senator O'BRIEN —Sorry? You are not sure whether it was your prerogative to ask for it?
Mr Comer —Whether the draw down on the OGO funds was our prerogative.
Senator O'BRIEN —But you applied for an amount of funds and they gave you funds that were paid over a period of time?
Mr Comer —Yes. You might recall that our initial bid was for $7.3 million and what we were finally allocated was $6.634 million. We received $4.657 million of that total amount in May and June 1999.
Senator O'BRIEN —And you got the balance earlier?
Mr Comer —Yes, the balance was between November 1998 and January 1999 and that figure was $2.6 million.
Senator O'BRIEN —So you got $4.657 million in May-June 1999?
Mr Comer —To use round figures, it was $2.6 million in the November-January period and $4.7 million in May-June 1999.
Senator O'BRIEN —So $7.3 million. Is that right?
—That adds up to $7.3 million, doesn't it? That is the original bid. We might just need to double-check our figures and make a correction. They were the requests. The actual moneys were different and we would need to correct the record as to what the exact amounts were and when they were received.
Senator O'BRIEN —So you do not have that information there?
Mr Comer —Not in my briefing notes at the moment, Senator.
Senator O'BRIEN —In the answer CASA 12, you say that, within the OGO Y2K seed funding project—this is the $6.634 million you are talking about—$1,011,313.88 has been paid for Y2K testing and certification work for LARP and its supporting infrastructure. Was that figure, or anything like it, specified in your request to OGO for funds? In other words, was there an indication as to how you would break down the expenditure of the $6.634 million?
Mr Comer —That is the question I took on notice earlier. I do not have in front of me whether we prescribed the amounts. I assume we did prescribe the amount of $7.3 million when the initial OGO program was lodged. It is such a precise figure that I can only assume that it would have had project figures alongside each of the items.
Senator O'BRIEN —I assume that there is a document that you lodged that you can supply to the committee.
Mr Comer —We can supply that to the committee, yes.
Senator O'BRIEN —Would that document set out that, in applying for the funds, you were basing your application for that amount of money on the basis that LARP would be completely replaced by December 1999?
Mr Comer —The systems comprising LARP, yes. I would, again, assume that, when the initial bid was lodged, there was an assumption that it may be achievable to replace the systems on LARP. That was subsequently changed. There were frequent reports to OGO during the period of that seed funding and also the Admiral audit which were mechanisms by which organisations could vary against their original estimates. For example, in the event, very little work was finally done on one of the items that was in the original program.
Senator O'BRIEN —Perhaps when you supply that you can indicate which of the projects and itemised amounts set out in the original application were the subject of, as you put it, `very little work' and those that were completed. Can I go back to the Aspect Computing contract. As I understand it, in order to replace LARP, CASA had intended to write a number of modules and that Link Base and ARN were two modules. That discrete project was given to Aspect Computing to complete; is that correct?
Mr Comer —The contract that was entered into with Aspect on 24 December 1998 was what was generically called Link Phase 1. That phase 1 comprised what we call AOCs, the certificates of approval, our aircraft registration number, aerodrome registration, carriers liability insurance compliance and ASP. That was the original contract that was entered into.
Senator O'BRIEN —How many modules did that require Aspect Computing to complete?
Mr Comer —There were six different projects there.
Senator O'BRIEN —Were they six different identifiable modules?
Mr Comer —Yes.
Senator O'BRIEN —So there were achievement criteria in the contract with Aspect Computing on each of those modules?
—They were deliverable. There would have been deliverable dates for each of the modules. Remembering that Link was in fact that generic term used to describe all of the projects we would link together to replace LARP. They did an interim release of Link Phase 1 in March 1999 but, as that year unfolded, more difficulties were experienced, and that is when the contract started to get into difficulties.
Senator O'BRIEN —As I understand it, personal licensing was another module and that work was given to ITS.
Mr Comer —That is correct.
Senator O'BRIEN —There was an airworthiness module, and that was the subject of a letter of intent to ITS, but the company never actually commenced work on that?
Mr Comer —That is correct. There was some initial scoping work done but, when the Aspect contract was terminated, there were negotiations that took place with ITS. They concentrated their work on PLS, and the work in relation to airworthiness was left aside, and still remains so.
Senator O'BRIEN —So a fair bit of time and money was spent on developing the specifications for the airworthiness module. Can you give me the details of the cost of that work and whether the work remains of any value?
Mr Comer —I will take that question on airworthiness on notice, Senator. My recollection is that it was confined to scoping work, but we will dig out the precise figures and provide those to you.
Senator O'BRIEN —Will you tell me whether the work has been written off or whether it will be of some use down the track?
Mr Comer —We will do that.
Senator O'BRIEN —Mr Comer, at the last hearing you told the committee that the initial strategy was a two-phase program, and you said that that involved the redevelopment of a system that was at risk from Y2K, and the second was Y2K compliance testing and remediation. You said that, from 1996 onwards, there was development work towards replacing the LARP system and that by mid-1999 it was clear that the replacement work would not be completed before the end of 1999 so you stepped up the testing of the LARP system, and you confirmed that today. You then said:
It was not a rewrite of the total system as is inferred in the article;—
that is, the Canberra Times article—
it was simply the putting of that platform into a Y2K compliance situation.
Am I not correct in saying that there was to be a rewrite of the whole system until well into 1999, when the strategy changed?
Mr Comer —I think there is a confusion of terminology again. I also mentioned at the last session that the ultimate replacement of LARP will probably be a two- to three-year program.
Senator O'BRIEN —But I am talking about the intent prior to the point where the project hit some very significant impediments. In other words, there was no way it was going to be anywhere near implementation by the end of 1999, and at that point, as I think you have confirmed today, there was an acceleration of the process. But, until that point, you were rewriting the whole system.
Mr Comer —There was always that objective to replace that legacy system.
—That is what I am saying. The work on Link Base and all of the application developments—the personal licensing system and airworthiness developments—were all part of the total rewrite, were they not?
Mr Comer —If you are referring to the contract with Aspect—
Senator O'BRIEN —There were a number of contracts. I am not isolating it to a particular contract but, if you put all of that work together, they are all a rewrite of the system to replace LARP with the new Link system with all of those components, and that was the priority until the latter part of 1999 when you knew that that was unachievable in the time frame specified. That was the focus until then.
Mr Comer —Yes.
Senator O'BRIEN —None of these modules have been completed, have they? There was a separate system that was completed.
Mr Comer —That was the medical records system. That is a correct observation. I think the point we were skirting around was when you use the expression `a complete rewrite' of the LARP system versus making the platform Y2K compliant, you are talking about two different issues.
Senator O'BRIEN —That is right. One could take the view that CASA was opportunistic in seeking to replace a computer system that was heading towards its end around the Y2K issue and that it was going to have to spend a lot of money on. It was probably very wise and very timely to replace the system. I am not debating that here. The point I am making is that millions of dollars were spent on this replacement of the platform. Is it not the case that the output from all of that work cannot be used in any production environment?
Mr Comer —That is not correct. What we are saying is that we made the LARP platform Y2K compliant. That has enabled us to continue running systems on LARP over that roll-over period. So you cannot say that the—
Senator O'BRIEN —Let us exclude the $1.011 million that was eventually allocated to getting the LARP system Y2K compliant. That leaves $5.5 million roughly. You said that all of that will be spent. Is it not the case that, after spending all of that money to rewrite the system, there is actually no output that is usable in any production environment, excluding the medical records system?
Mr Comer —I think we mentioned that we were in the process of contract negotiations with ITS in relation to the licensing system, the POS. Those negotiations are still proceeding. In the event that ND4 becomes a non-viable product for future development, CASA will have to consider, in the light of the results of those negotiations, whether it writes off those expenditures that it has put into ND4. Until that point in time, we have not put a definitive position before ITS in order to preserve our contractual position.
Senator O'BRIEN —I think you told us last time that you had not paid for ND4 and that you were in dispute with the software provider about payment.
Mr Comer —That refers to the ND4 licence.
Senator O'BRIEN —You cannot use that product without a valid licence, is that correct?
Mr Comer —It is a non-operating ND4 licence at the moment. It is a question of whether we ultimately pay the amount of money which I think we identified as being a net figure of about $18,000.
—Yes, I recall you saying that. So the question mark remains, in your mind at least, as to whether any of the previous work will be redeemable, and that turns on whether you can use ND4? Is that what you are saying?
Mr Comer —We are just going through the figures that we showed in answer to CASA 17. It is a fair observation that CASA currently hold a risk that some expenditures that they have made on ND4 will need to be written off. That point, until we conclude our negotiations and decide on the future of ND4, is not conclusive. In relation to the amount of—
Senator O'BRIEN —You have paid certain amounts of money to organisations such as Object Oriented Pty Ltd. Is the work that arose from that contract, in your view, able to be used subject to this current negotiation?
Mr Comer —There is a reasonable prospect, but I think there is a risk that some of that work can continue to be used. OOPL delivered their first two contracts, which was ASSP and a lot of modelling work which they did for us. It was in relation to the third where the hard yards were encountered. In relation to the first two contracts—money paid, products delivered.
Senator O'BRIEN —That you cannot use yet?
Mr Comer —ASSP is in full use.
Senator O'BRIEN —That is under the LARP system.
Mr Comer —The ASSP system is separate. We put on the record all the dates that those products were delivered. So we got value for money in relation to the first two contracts with OOPL and there was a settlement in relation to the third contract, and that is the subject of our confidentiality agreement.
Senator O'BRIEN —OOPL was paid the total of just under $510,000 for ASSP. That is money well spent in your view?
Mr Comer —Yes, product delivered, contract met.
Senator O'BRIEN —We have eroded roughly $500,000 off the $5[half ] million, which I mentioned earlier, so we are down to $5 million.
Mr Comer —I think we need to clarify that the days of OOPL preceded OGO funding.
Senator O'BRIEN —So we do not take it off. Thank you for correcting me. It is still $5[half ] million. Were there any other payments made to that company which have not been included in that number. I think the answer is yes. Is it fair to say that other moneys have been paid to that company?
Mr Comer —The simple answer is that OGO funds were not used in any payments to OOPL.
Senator O'BRIEN —Were moneys other than OGO funds specified in CASA 11 paid to OOPL?
Mr Comer —The answer to CASA 11 is entirely devoted to the ASSP system. There were other moneys. In terms of the second contract that I have been referring to, there were further moneys paid to OOPL.
Senator O'BRIEN —How much was that?
—I do not have that exact information available to me at the moment, but the contract sum at the time was $200,000. I would have to verify what was actually paid for the modelling work they delivered. I would have to verify whether we came in under that figure.
Senator O'BRIEN —You have given me some numbers to date from the last hearing as to payments to other companies: Aspect Computing, Interim Technology Solutions, Solution 6, Acumen and Power of 10. Can you give me the same information—that is, moneys paid and the contracts they were paid for for each of those five companies? If they are included in addition to the material in CASA 11 about the amount paid, then obviously you would not put it in this other document I am talking about. I am trying to exclude LARP payments, which you will set out for me in your update of the table in CASA 12. But could you provide me with the details of the payments made and the work performed, completed or part completed, in contracts with each of those five operators? The ITS branch is another one you could include. Could we get the details of payments made to Mallesons Stephen Jacques for legal advice on all contracts? Could you include Psycopic Pty Ltd, who I think did an independent review of the Link architecture, in relation to that work? Am I correct in saying that some of these funds that have been paid to Acumen, ITS and Power of 10 relate to the medical records system?
Mr Comer —Yes, that is correct.
Senator O'BRIEN —But the vast bulk of funds paid to those three companies relate to the Link system.
Mr Comer —We will provide the details to that rather than speculate on precisely how that was allocated.
Senator O'BRIEN —The picture I am trying to get is the precise amount of money that went into the Link system, separating it from medical records, separating it from LARP upgrades.
Mr Comer —That is substantially provided in the answer to CASA 17.
Senator O'BRIEN —You paid $4.6 million of the OGO funds. The commitment of $760,792 was in relation to what? This is on CASA 17.
Mr Comer —I do not have a break-up of that figure.
Senator O'BRIEN —What sort of work? Some of it is still on the LARP system, is it, or is most of it on the LARP system?
Mr Comer —It relates to payments or commitments in relation to contracts. But I would have to get a break-up of what that precisely relates to. I would imagine that there would be some LARP funds in there, some MRS funds, but we will confirm that.
Senator O'BRIEN —The balance remaining is $1,259,466. You say that it is CASA's intention to fully commit all OGO Y2K seed funds by 30 June. I presume they are already committed. What have you committed those funds to?
Mr Comer —We have not committed those funds, as that is saying there, at the moment.
Senator O'BRIEN —Do you know what you are going to commit them to?
—We are still in that hiatus, pending these negotiations with ITS. We have done, as is shown in the table above, a fair amount of work on airworthiness. I think we may have ducked that question previously, but there is a figure there which indicates how much has been spent on airworthiness from OGO funds, which is mainly business scenario modelling work. So that is retrievable work. In relation to the uncommitted funds, if we cannot resolve our contractual problems and we do not have projects which fit within the OGO program, we will then have to have further discussions with them on any balance that is outstanding once we have resolved that contractual position.
Senator O'BRIEN —So, in other words, it is the intention to carry those funds over.
Mr Comer —If it is at all achievable within a proper contractual sense, we would like to see those funds committed, yes.
Senator O'BRIEN —My advice is that, in relation to the medical records system, Solution 6 was paid about $200,000 for its work on that system. Is that accurate?
Mr Comer —I cannot comment on that at this stage. CBSI were engaged in a contract with work with MRS. I do not have in front of me the separable figures of that $883,000 which was paid to them. I do not have the amount paid to CBSI as part of that $883,000 figure. We can provide that to you, but I do not have that with me at the moment.
Senator O'BRIEN —I am told that ITS and Acumen were paid a total of around $400,000 for the provision of staff to test and retest the medical records system. Is that accurate?
Mr Comer —I will take that on notice.
Senator O'BRIEN —While you do that, can you get me some advice on the extent of testing and retesting that has been required to get the medical records system up and running?
Mr Comer —We will do that.
Senator O'BRIEN —Along with the cost, of course. Wasn't the contract for work on the medical records system written in such a way that the contractor had to provide a system that worked properly?
Mr Comer —That is an interesting question. By the way, the company name in relation to MRS is ITA as distinct from ITS which is involved with the POS system.
Senator O'BRIEN —Thank for that. When you say it is an interesting question—
Mr Comer —Your question is that we had a contract with a company which did not require them to deliver a product. Is that the assertion?
Senator O'BRIEN —A properly working system. If my information is correct and there was a lot of money paid to companies to test and retest the system—
Mr Comer —There were versions, as is typical of that type of contract, or releases provided by the contractor. They would have been tested. I do not have information immediately to hand which indicates who did the testing, but that testing would certainly have to have been done to test the fact that releases were working.
Senator O'BRIEN —Was it the case that there was significant work after that date to get the system running properly?
Mr Comer —I will confirm that.
Senator O'BRIEN —While you are looking at that, could you find out whether the contract provided for the original contractor to fix the system and not require CASA to pay for it, or whether that was an omission in the original contract?
Mr Comer —I will take that on notice.
Senator O'BRIEN —The MRS system went into operation in mid[hyphen]December last year, as I understand it.
—I think the date was 5 December, from memory.
Senator O'BRIEN —Can you confirm that there were major problems and that the system then went through another four months of testing and error correction and that it has only finally been accepted recently?
Mr Comer —There were certainly post[hyphen]implementation issues with MRS, and we did look at further releases to make the system more efficient.
Senator O'BRIEN —To get it to work properly, do you mean? To get it to the stage you wanted it at?
Mr Comer —That is correct. Whilst it was Y2K compliant and was into production, it was not producing results as fast as we wanted it to.
Senator O'BRIEN —But it was producing the medical certificates, for example?
Mr Comer —Yes. It is an interesting system, in that it has built into it automated processes for medical certificates. What was being found at the time was that those processes were unexpectedly slow and, therefore, there was corrective action that was necessary to speed that process up.
Senator O'BRIEN —When you say `unexpectedly slow', we are not sure what the expectation was. Can you give us an idea of what you mean by that?
Mr Comer —We will clarify that. But there are certain targets set in terms of processing time that we will come back to you on, just to give you that detail.
Senator O'BRIEN —You can tell us what the targets were for processing time and what the actuals were?
Mr Comer —We can give you information on what the schedule was setting up in terms of delivery requirements. I think you will see from that that there was improvement work required to meet the targets that were initially set.
Senator O'BRIEN —With the system working at a less than optimum level, did CASA need additional staff or staff working overtime to deal with the problem?
Mr Comer —That is correct; we did.
Senator O'BRIEN —Has that been costed in as part of this exercise? Has it been funded by the OGO funds, or funded out of CASA's budget?
Mr Comer —It would depend on who was doing the work. It would go back—
Senator O'BRIEN —Did CASA need additional staff or have staff working overtime?
Mr Comer —My answer to the question is that I understand that some staff were required to work overtime to process the medical certificates, and that would have been done within the operational area and, as such, would have been costed against operating expense.
Senator O'BRIEN —Perhaps you can advise us what that cost was, Mr Toller?
Mr Toller —We will do that.
Senator O'BRIEN —Thanks. You have just given me a figure for the actual amount of OGO money spent on the MRS system: could you remind me of what that was?
Mr Comer —It is on CASA 17.
Senator O'BRIEN —That is $883,070.04. Are you going to give us a breakdown of who got what and for what?
—We can give you the actual spending allocation of that figure.
Senator O'BRIEN —And what it was for? For example, I have asked you some questions about test and retest, and whether it was for that or the original contract.
Mr Comer —We will give you a detailed breakdown.
Senator O'BRIEN —Going to the Sun system ND4: you told us that the outstanding amount of money in relation to Sun was around $18,000. I am assuming there was some correspondence between CASA and Sun in relation to that tool: is that correct? There would have to have been to lead to an agreement. An amount of money might possibly be payable. Or is there some other arrangement which would explain it?
Mr Comer —I will have the files researched. My understanding, though, is that there were numerous discussions with Sun, which led to credit notes being issued against the original invoices—which brought the figure back to this net amount of $18,000.
Senator O'BRIEN —What were their original invoices? Do you know how much that was? They have credited back part of it?
Mr Comer —I am advised that the original bill was in the order of $60,000 from Sun.
Senator O'BRIEN —So the $60,000 was paid, and they have credited back $18,000: is that right?
Mr Comer —No, sorry; there was no amount paid. The bill, the invoice that they submitted to CASA, was in the order of $60,000. The advice is that subsequently a credit note arrived. But the immediate advice I am getting is that there does not appear to have been a lot of correspondence with Sun in relation to that, so it remains an outstanding issue.
Senator O'BRIEN —There was a credit note that arrived—presumably for $42,000? That is the difference? Is that what you are telling us?
Mr Comer —Yes.
Senator O'BRIEN —But you are not sure and you would need to check that: is that what you are saying?
Mr Comer —I think we need to check the steps, to make the record accurate, and revisit the credit note to see what information it had on it.
Senator O'BRIEN —Okay. No payments at all have been made to Sun for the ND4 tool?
Mr Comer —That is correct.
Senator O'BRIEN —For any other software? I suppose that is a broad question.
Mr Comer —I would have to take that on notice.
Senator O'BRIEN —Software being what it is! In relation to the Link project: I guess I am asking in case another bit has slipped in there that is hidden away somewhere in a file where there are other moneys that are being committed or being paid to Sun. You could check that. I am assuming that your answer is no, but that you will advise me if that is not the case. That is probably the best way of putting it.
Mr Comer —If precisely your question is `Were moneys paid to Sun in relation to ND4?' I think we have given you a clear answer to that.
Senator O'BRIEN —Yes.
—If your supplementary question is `Were amounts paid to Sun in relation to OGO funds or—
Senator O'BRIEN —Any CASA funds, for that matter.
Mr Comer —Any CASA funds—at any point in time?
Senator O'BRIEN —In relation to the Link or any of the other projects that we have been talking about. It may well be that you have other software that is totally unrelated to this. How long have you been negotiating with Sun on this issue—if that is the correct way of putting it? Or have you been negotiating with Sun on this?
Mr Comer —I will take that on notice. I do not know.
Senator O'BRIEN —Was a report on all of this work prepared by Mr Brian Pearce and provided to CASA?
Mr Comer —We engaged Brian Pearce as an independent expert.
Senator O'BRIEN —As a consultant?
Mr Comer —Yes; to review the product ND4 and to comment on other possible options in lieu of ND4.
Senator O'BRIEN —He has done that work and reported?
Mr Comer —He has completed that report.
Senator O'BRIEN —What did that work cost? Is that included in the figures you have given us so far, or is that another amount?
Mr Comer —My recollection was that the cost was in the order of $20,000, but again I would need to verify that.
Senator O'BRIEN —Okay; and can you check whether it is included in any of the figures you have given us in CASA 17?
Mr Comer —We will do that.
Senator O'BRIEN —In other words, whether it will be paid for with OGO funds or in some other way?
Mr Comer —I understand that.
Senator O'BRIEN —Can the committee have a copy of the report itself?
Mr Comer —I do not see any reason why not, except in the context of our contract negotiations with it perhaps being retained as a commercial-in-confidence document. It is impacting on our negotiations with ITS because it is guiding us in terms of whether that product is suitable or viable for long-term systems development.
Mr Toller —Can we think about that one? There may be some implications with that one.
Senator O'BRIEN —Yes, I am happy to wait a little while if it will assist in resolving the negotiations. When are they likely to be resolved?
Mr Comer —We are hoping to do that as quickly as possible. We are currently reviewing some options, and we are using further external advice to help us with that. That will provide a stronger point in our negotiating position with ITS on where we feel we want to end out in that contract.
Senator O'BRIEN —Who decided to engage Mr Pearce?
—That was a decision of what we call the executive information management group. That is a group comprising basically all of the executive of CASA, excluding the director.
Senator O'BRIEN —The implications of the Pearce report have been considered. Is it true that Mr Pearce advises that what you want for the Link system cannot be delivered using ND4?
Mr Comer —I will take that question on notice because it is very relevant to the answer I have just provided.
Senator O'BRIEN —Please take this on notice as well: can you confirm that Mr Pearce has advised that none of the code written using ND4 can be reused? That is obviously on the assumption that you cannot use ND4.
Mr Comer —We will take that on notice.
Senator O'BRIEN —If that is the case, you will have to throw away every line of code that was written in 1999, won't you?
Mr Comer —That is why I indicated earlier that there is a risk for CASA in relation to the product ND4.
Senator O'BRIEN —So the answer to my question is yes?
Mr Comer —There is a risk with ND4 at the present time.
Senator O'BRIEN —There is obviously a risk as to whether you will keep using it or not or whether you can find a solution. But, if it is the case that ND4 is not appropriate, doesn't it follow that all the code written during 1999 which was based on ND4 will be useless?
Mr Comer —Any of the ND4 code that was the personnel licensing system and Link Base would fit into that category, if it is our decision finally to move away from ND4.
Senator O'BRIEN —Was it ITS or ITO that picked up after Aspect left?
Mr Comer —It was ITS.
Senator O'BRIEN —Can you supply the committee with the letter of intent that formed the basis on which this work was done?
Mr Comer —The letter of intent in relation to—
Senator O'BRIEN —The letter of intent which was the basis of the ITS work.
Mr Comer —Again, that is wrapped up in this whole contract negotiation process. We would take that on notice as well and come back to you on that point.
Senator O'BRIEN —Can you confirm that a contract with ITS was never signed for that period, which was about three months?
Mr Comer —We discussed that very issue at the last proceedings, and I believe our responses to you at that time were that there was a letter of intent that had requests for certain work to be undertaken expressed within it. But, in the event, there were no payments made in respect of that letter of intent—apart from some scoping work, which was the subject of a specific reference—until the contract was signed, which was a period of approximately three months.
Senator O'BRIEN —So the letter of intent was the contract for the three months. Is that what you are saying?
—That is correct. There were certain things in that letter of intent which would constitute a contract.
Senator O'BRIEN —We will wait to see that. For that three[hyphen]month period, ITS was paid $163,851, according to CASA 15. Presumably you have taken advice within CASA as to whether this was a satisfactory arrangement from a legal point of view. Mr Ilyk, was this letter of intent arrangement satisfactory from a legal point of view?
Mr Ilyk —I think the unsatisfactory point about this is that it is actually called a letter of intent, because this letter of intent was actually a contract.
Senator O'BRIEN —The letter comprised an offer and acceptance, did it?
Mr Ilyk —Absolutely. It included details of what was expected, what payments; there was a consideration. It was actually a contract and should actually be referred to as a contract rather than as a letter of intent.
Senator O'BRIEN —So, in your view, it is a properly executed contract, misdescribed?
Mr Ilyk —Absolutely. It was actually a negotiated contract, which was an interim contract pending the detailed contract. But, in itself, it was a fully executed and proper contract.
Senator O'BRIEN —Apart from the misdescription, that is an appropriate way to proceed to commit funds for work?
Mr Ilyk —On the basis that it was an actual legal contract that detailed the rights and obligations of both parties, it was a correct and proper way to do things.
Senator O'BRIEN —Was the detail satisfactory for the performance of the work in question, to your knowledge?
Mr Ilyk —I cannot remember the exact details of the contract, but I recall looking at it fairly recently and some of the background papers to it. CASA were very conscious of making sure that we included in that letter of intent or contract—whatever you want to call it—what we expected of the contracting party to deliver to us in exchange for the money that we were going to pay them. But it had a limited life span; it was only going to operate for three months.
Senator O'BRIEN —We understand that. What is the difficulty, if any, with supplying that to the committee?
Mr Comer —Could I just give Mr Ilyk the background to that? When I answered that question earlier, it was on the basis that we have yet to conclude our negotiations with ITS and it may be relevant in the context of those negotiations.
Senator O'BRIEN —But it is a contract that has been concluded, isn't it?
Mr Ilyk —It has; it is the concluded contract.
Senator O'BRIEN —And payment has been made?
Mr Ilyk —At the end of the day, I guess the committee can require CASA to produce that document.
Senator O'BRIEN —I cannot see how it prejudices negotiations over other work, it is a matter of fact if it exists, and its production seems to me not to prejudice negotiation on what is contained in the document which is known to both parties.
—As I say, I am not aware of what the negotiations are. I am not involved in them. In terms of the contract itself, as I said, the committee can require production of it and CASA would obviously comply with that requirement. If Mr Comer believes that it is subject to current commercial negotiations, then Mr Comer will have to answer that part of the question.
Senator O'BRIEN —I am trying to understand why it cannot be released in that context unless there is something that applies beyond the period covered by the letter of intent.
Mr Ilyk —It may be that the two are so interrelated. I cannot recall the details of both the contracts, but it may be that the initial letter of intent actually is part of the larger contract and the two are still intermeshed. Until such time as that is completed, they are really inseparable.
Senator O'BRIEN —But you are not contesting that there is a contract in that letter—
Mr Ilyk —No, there is a contract.
Senator O'BRIEN —And there is no contesting, as I understand it, payment for that period.
Mr Ilyk —Yes.
Senator O'BRIEN —I am trying to understand why it is contentious.
Mr Comer —I think clarification is that the schedules that were attached to the letter of intent subsequently formed part of the later contract.
Senator O'BRIEN —Okay, but we are not revealing anything that is not known to both parties?
Mr Comer —That is correct.
Senator O'BRIEN —We are not revealing any strategy in relation to that by revealing the letter of intent itself, are we? I presume you have not written all over it what your strategy is?
Mr Comer —Let us reflect on the position in relation to that.
Senator O'BRIEN —All right. I think I have made my point. Thank you, Mr Ilyk. Mr Toller told us at the last hearing that the audit branch works on a project throughout the life of the project rather than coming in at the end and saying, `This is what you did right and that's what you did wrong.' That is Hansard, page 115, of 2 May. Can you confirm for me, please, that an audit report was written in November last year specifically on the personnel licensing system project? Mr Comer or Mr Toller—whoever knows the answer.
Mr Comer —I think when we discussed this last time there was confusion about which audit report was being referred to. We assumed that it was a report which was still in the gestation period, if you like, in terms of discussions between audit and IT and, as such, did not have any status; it had not been referred to any parties in a completed sense. What Mr Toller was referring to also in his answer was that we have project control groups that work in relation to any project and internal audit members of what we call a PCG. And then periodically they may do reports, depending on how long a project is, the point being that their work is not confined to doing a post-audit; it is an iterative process where they are there advising the project control group as well as legal representatives who are part of that PCG. So it is a comprehensive representation on that group.
Senator O'BRIEN —So the answer to my question is?
—The answer to your question is: if you are referring—and we not sure which report you are referring to—to a report of late November or late last year, our understanding is that it would most likely refer to this draft report that is still now the subject of clarification in discussion with internal audit. It has not been completed. But there would have been previous reports, as we have said, in relation to the project as a whole, so it is a matter of you having information which we have not, and we are not too sure which report you are referring to.
Senator O'BRIEN —Specifically on the personnel licensing system—I said in the question.
Mr Comer —My understanding is that this draft audit report refers to all IT projects, not just the PLS.
Senator O'BRIEN —So you do not think there is a report specifically on the personnel licensing system project?
Mr Comer —As a unique report in its own right, I do not believe so.
Senator O'BRIEN —Can the committee be supplied with a schedule of all audit reports considered by the audit committee of the CASA board over the last three years, please?
Mr Toller —So all audit reports that have gone to the audit committee?
Senator O'BRIEN —Yes.
Mr Toller —Yes.
Senator O'BRIEN —And, perhaps on notice, the details of how the audit branch of CASA operates.
Mr Toller —Yes. It is about to change.
Senator O'BRIEN —It is about to change?
Mr Toller —Yes, we have a review going on at this stage of how we undertake our audits and putting together our audit strategy plan.
Senator O'BRIEN —Is it the common process that the audit branch investigates a matter, produces a draft audit report, allows comment on the report, then finalises the audit? Is that the process now?
Mr Toller —That is the standard process at the moment, yes.
Senator O'BRIEN —And, following that, the report would be submitted to the CASA board or the audit committee?
Mr Toller —It is submitted to me and to the CASA board audit committee, and the board audit committee reports on it to the board.
Senator O'BRIEN —And you are reviewing that?
Mr Toller —As a process, not necessarily; as the way we do it, then, yes.
Senator O'BRIEN —Is it usual for an audit report to, as Mr Comer tells us, hit the deck as some form of draft in November and still remain outstanding approaching eight months later? I think it is eight months later.
Mr Toller —We have a six-monthly audit plan of audits to be undertaken within that period, which of course is updated. I am not aware of this being one of the audits on that audit plan. This appears to be something outside the standard audit plan, so I am a little confused by it as well.
Senator O'BRIEN —But you told us that the audit branch works on a project through the life of the project rather than coming in at the end and saying, `This is wrong and this is right.'
Mr Toller —Yes, they do.
—So you would expect the audit branch to have been involved in this in very significant financial terms?
Mr Toller —Very much so, yes. But not as an independent audit in the way that standard audit reports are that come to the committee.
Senator O'BRIEN —Would the production of some sort of audit report indicate concerns by the audit branch during the course of a project which it felt required some sort of report?
Mr Toller —I think the answer to that is I do not know. The whole reason for having the audit team involved in a project is so that they can contribute positively to the project where they see that there is need for improvement. I do not think the fact that a report exists means that there was anything seriously wrong; I think it just means to say that they have inputs that they wish to make.
Senator O'BRIEN —Unless we see the report I suppose we do not know what the concerns are. Have you inquired into this matter since the last hearing?
Mr Toller —There is still, as far as I am informed, not a report that is at the stage where anybody has signed off on it and therefore would be submitted to me. In other words, there is a draft paper—I think it is called an audit report; maybe I am wrong, but it is a draft paper, as I understand it—that is subject to discussion between the parties involved.
Senator O'BRIEN —So it is an indication. We were talking about BASI and the class G airspace earlier where there was a process: a document discussion, a draft and, many months later, a final report. Is it the normal process in CASA in terms of audits that they get lost in the process somewhere and, many months later, you come out with a report?
Mr Toller —No, I do not think they get lost in the process normally. I think they go through the process quite normally but, as I say, we have scheduled reports and this is not one of the scheduled reports. They certainly follow through the process with ad hoc issues like this. There is no time line on them. My view of audit with reporting direct to me is that I want the audit in that role to be, as some companies call it, a business improvement department. I want them to be adding to the value of the process. In other words, they should be there helping to point out things that may not be being done as well as they could be.
Senator O'BRIEN —Did you actually ask the audit branch why they did this audit if it was not scheduled?
Mr Toller —No, I did not ask that question.
Senator O'BRIEN —Can we ascertain that?
Mr Toller —I can ask the question.
Senator O'BRIEN —Will you tell us the answer?
Mr Toller —Yes.
Senator O'BRIEN —Thank you. Have there been any other audits on the work which we have been discussing: the Link project and the other related projects? We are going back to 1996. Are there other audits in the system? Are they part of the ongoing process, or is the document that we have been discussing the first of any internal audits? There was another audit, wasn't there?
Mr Comer —Yes, concerning OGO.
Senator O'BRIEN —And that is OGO's document?
Senator O'BRIEN —Has CASA got any objections to OGO releasing that document?
Mr Toller —I do not believe so, no.
Mr Harris —It would be a matter for them.
Senator O'BRIEN —They may well say, `We're not sure what CASA's position is.' I think we have satisfied that part of the matter anyway. For these projects, the OGO project, et cetera—I think you know what I mean, Mr Comer—are minutes kept of all project control meetings?
Mr Comer —The structure under our project management manual is that, for each designated project, there is a project control group. They meet regularly. I would expect that they would keep minutes of their meetings. At times, those PCGs involve the relevant contractor. For example, it could be ITS. In relation to the POS project, there could well be some sensitive material in there in terms of our contractual position with ITS. Certainly the more recent PCG meetings would be of that calibre.
Senator O'BRIEN —Would there be a list of attendees for all the meetings?
Mr Comer —I would expect that there certainly would be if there were minutes kept of the meetings. Sometimes PCGs meet in a very ad hoc manner to debate issues, but where they have their monthly meetings I would expect that there would be minutes of those meetings.
Senator O'BRIEN —When they have an ad hoc meeting, you do not expect that there would be minutes?
Mr Comer —It depends what the meeting is called for. It might be just to shoot the breeze on a particular issue. We require them to have formal minutes for their routine meetings, but I would expect that there is quite a lot of interaction by members of the PCG during the course of a project.
Senator O'BRIEN —Would you supply the committee with a copy of the minutes from those PCG meetings for these projects? It is obvious they exist. If there is sensitive material—that is, material relating to particularly sensitive commercial matters which are the subject of negotiation—it has been the practice to obliterate that from view. Can you supply us with copies of the minutes on that basis?
Mr Comer —In relation to which project?
Senator O'BRIEN —There has been a project control group for all the Link projects and I assume the LARP projects, or are they ad hoc?
Mr Comer —I would have to take advice on the LARP project because they were focusing on making the platform Y2K compliant. That may not have assumed the discipline of a particular project, but I would have to check on that. In relation to the ITS contract, the POS, we would need to review that and look at the confidentiality of it.
Senator O'BRIEN —I am suggesting a way of dealing with the confidentiality of particular contributions and matters recorded, but I would assume that the records would be sufficient to show us participation, consideration of financial matters and the like.
Mr Comer —That is correct.
Senator O'BRIEN —And work done that is not the subject of any current disputes.
Mr Toller —We will supply that for you.
—Thank you very much. We will await all of that information. Mr Comer, it may be that we need some other format to complete this matter. I now want to go to the air facilities matter. As I have only just received CASA 20, I have not had a chance to properly consider the material. I want to work through the issues, and I will have to rely on Mr Foley to draw on the material that he has provided as appropriate. It is possible that, as I have only just received the material, I will have to come back to the matter at a later time. At the last hearings, I asked whether the actions of this company, in falsifying its maintenance records, placed it in breach of the Crimes Act. You said that you would consider that. That is on page 98 of the Hansard. Have you considered that matter? Can you now respond to that question?
Mr Foley —Yes, I can respond. However, I would like to draw to your attention the fact that my understanding is that you have only just received the brief on this matter and it is spelt out in the brief. The answer to this question is in the brief.
Senator O'BRIEN —I know you gave it to me. I have just discovered that I have left it in my office. You said the answer to the question is in—
Mr Foley —Sorry, I have misunderstood. What was the question again?
Senator O'BRIEN —At the last hearings, I asked whether the actions of this company, in falsifying its maintenance records, placed it in breach of the Crimes Act. You said that you would consider that. Have you considered that? Can you now respond to that question?
Mr Foley —Yes, I have considered the matter and the answer is no.
Senator O'BRIEN —On what basis?
Mr Foley —The basis is that you said—and I think this is the wording you used—they participated in some act to not record the maintenance defects. That is not correct. They did record the maintenance defects, but they recorded them in an unimproved maintenance system. When they purchased the aircraft from the previous owners that was the system that was in place. There were not—as I think was indicated at the last hearing—a series of exercise books. It was a formal, documented, serial-numbered system, and those defects were recorded into it.
Senator O'BRIEN —But they were not the records that were available to CASA. We are talking about the second set of books. Whether they were recorded in an exercise book or a morocco-bound folder is immaterial. It was still a secret system that was concealed when your inspectors went there—until they turned up with a search warrant.
Mr Foley —I think if we go back in time there was a special audit carried out on that organisation in 1998. As a result of that, the then acting regional manager wrote to that organisation and said that they were an exemplary organisation.
Senator O'BRIEN —Was that before or after the new owners took over? You just said that there was a change in ownership of the company.
Mr Foley —There was no change in ownership.
Senator O'BRIEN —I thought you just said that there was. Maybe I misunderstood you.
Mr Foley —There was no change in ownership of the company.
Senator O'BRIEN —So there was an audit and it was said that they were an exemplary organisation in 1998?
Mr Foley —Yes. This issue arose shortly after that, when this was brought to our attention.
—That they had a second set of books that you were not seeing? That is what was brought to your attention, wasn't it?
Mr Foley —No, I disagree. They were misinformed or they mistakenly thought the system that they had purchased with the aircraft was appropriate for them to use. It is a system well recognised throughout the industry in terms of the way to approach and enter defects. It is not as though they told the pilots, `Do not enter the defects.' The pilots were told to enter the defects into this system and the defects were then rectified.
Senator O'BRIEN —This is the company that was taking the books out and sticking the real books—the ones that were exemplary—in the boot of the car when they knew inspectors were coming.
Mr Foley —I am not aware of that. Where is that spelt out?
Senator O'BRIEN —You are not aware of that? Are you saying that that has never been drawn to your attention?
Mr Foley —No. When the investigators went in they went through a certain process. It was then established that when the company offered to show them the full details of how the defects had been closed off the investigators declined—and this is documented—to follow through with the full investigation process. That is what I am saying. We then determined that there was this alternate system in place which, if they had had it approved—and that was their error, but it was in use within the organisation that they purchased the aircraft from—would not have been an issue.
Senator O'BRIEN —So they had this other system in place that I think clearly showed there were defects on flying aircraft for which there were not a permissible MEL.
Mr Foley —There was an approved MEL system for those aircraft, and that is a fact. The way that they were recording the defects was to put them in what is commonly called a defect log, and that was their failing. It was not as though they were not recording defects. I have seen the defects that they were recording and, in my view, they went overboard in the defects they were recording. They were recording things which did not need to be recorded. When we did an audit of them, and I believe—but I would stand corrected on this—that was done on the Monday, they could identify no defects on any of their aircraft.
Senator O'BRIEN —So they had had them fixed over the weekend?
Mr Foley —No, as we have previously said, when these defects were entered into the tech logs, as we call them, they were then transferred onto the work sheets and fixed. It was not as though they set out to say, `We are not going to rectify defects identified on these aircraft.'
Senator O'BRIEN —Is it true that this company kept two sets of records?
Mr Foley —I am not aware of that. I am aware that they kept the normal maintenance release and a document which supported entering the defects into that. I would like to turn to the comment made by the district airworthiness manager and read it into the record, because I think it is very pertinent. He stated:
However, now looking at what it was and how it was done and his explanation of why, it possibly enhanced the defect recording process as it tended to or possibly completely overcome the longstanding pilot culture of not wanting to write anything in the maintenance release. He claims that it allowed him to keep a good record of defects and claims the defects themselves were cleared immediately.
Senator O'BRIEN —Where is that from?
Mr Foley —I am reading this from the documentation that we supplied.
—Which page—which particular document is it?
Mr Foley —It is dated 24 February and was sent by the district airworthiness manager, who looked after that operator—
Senator O'BRIEN —Who was that?
Mr Foley —It is in response to CASA 20.
Senator O'BRIEN —Yes, but there are a number of emails attached to it, so you will have to be a bit more specific. A number of them are dated 24 February. There is your email and a number of emails copy other emails.
Mr Harris —It is on the third last page of the attachment, with page 2 at the bottom of the page. It is the second bottom paragraph.
Senator O'BRIEN —I have taken some time to read that, Mr Foley, if you now want to read it into the record—or have you already put into the record what you wanted?
Mr Foley —Yes.
Senator O'BRIEN —That was written by Mr Garland. What was Mr Garland's position in CASA at that time?
Mr Foley —He was the district airworthiness manager and we also received a similar statement from the district flying ops manager. I asked them both specifically, through the regional manager, whether they were safe operators and what their reasons were for making that statement. That was in line with the recommendations contained in Skehill's report on Aquatic Air—that is, that the operatives at the working level needed to make the judgments on these matters and make the recommendations.
Senator O'BRIEN —Was that recommendation the basis for you revoking the suspension?
Mr Foley —That was my basis. I asked: are they a safe operator; are they not? I also took into account that prior to this incident Air Facilities had never come to the attention of operators under the review. They were not an organisation that appeared for misdemeanours in the past. Also, there was the special audit which was done on them, and there were no significant issues or outstanding issues identified at that time.
Senator O'BRIEN —So the advice you relied upon to revoke the suspension was from Mr Garland, Mr Priestly and Mr Burley?
Mr Foley —That is correct. Also Mr Hoy, who was the acting regional manager.
Senator O'BRIEN —Where does he make that recommendation?
Mr Foley —He was copied in through it, and he was the person that actually provided me, at the end of the day, with the letter of reparation of the suspension.
Senator O'BRIEN —Was he the one that provided it to you to sign?
Mr Foley —He provided it to me to sign.
Senator O'BRIEN —You made the decision and you asked him to provide it, did you?
Mr Foley —No. I discussed it with him. It was also discussed with the regional legal counsel. It was also discussed with the then acting enforcement manager, Narelle Tredrea. And that is contained in that documentation. I am not sure what the number is, but it is contained in that package of documentation.
—You would not be surprised that, with the amount of information you supplied us with today, you are going to have to take me to those matters. Can you show me where in that information you have a written recommendation from Mr Hoy or Mr McKenzie?
Mr Foley —Narelle is on page 1, after the question and answer. The email is dated 25 February.
Senator O'BRIEN —I have found it. That is subsequent to the revocation of the notification of suspension, is it not?
Mr Foley —That is correct.
Senator O'BRIEN —So that is not relevant to that issue, is it?
Mr Foley —It is inasmuch as putting in the correct process to be followed.
Senator O'BRIEN —After the event, yes. But it is irrelevant to your decision making process, I would suggest.
Mr Foley —No, there were verbal discussions, both with her and the legal counsel that was located in the New South Wales then regional office.
Senator O'BRIEN —When were these discussions with Narelle Tredrea?
Mr Foley —That would have taken place on Wednesday the 24th.
Senator O'BRIEN —The email does not confirm that.
Mr Foley —What email?
Senator O'BRIEN —The one that you have just referred me to.
Mr Foley —The email is talking about—
Senator O'BRIEN —Something else.
Mr Foley —No, it is going back and talking about what process we are following.
Senator O'BRIEN —It says `During the 3 months of the AOC life', and that is after the event. I just want you to show me where this email confirms what you say was the subject of discussions prior to the sending of the email.
Mr Foley —I would have to take that on notice and go back and search.
Senator O'BRIEN —You have got the document in front of you. Show me where it says that. You are saying that it says something; I want you to show me where it confirms that you had a conversation and that Ms Tredrea was approving of your decision to revoke the suspension. It does not say that, does it?
Mr Foley —No, Ms Tredrea was involved in the whole process. Her position at that time was to manage the investigation process. She was involved—and I would have to take on notice the exact days—from my recollection in the vicinity of two months before this date. So she was fully aware at all times of what was happening. We are going to go back and provide further information on that aspect.
Senator O'BRIEN —This email from Ms Tredrea says:
You have provided me with a copy of the letter to Arcas dated 24 February with supporting emails from the Wagga DAM and DFOM for my comments.
That is what she says. And the comment is:
The statements seem positive and the attitude of the Managing director constructive of wanting to comply with his legal obligations.
That is her comment. I am trying to understand. You did say that you made the decision to revoke the suspension based on advice.
Mr Foley —And I did.
Senator O'BRIEN —And I am asking you to show me where that advice is, consistent with your answers at the last hearing and the material you provided.
Mr Foley —When we go back to Wednesday, 24 February, to the email from Mr Hoy, who is the actual regional manager—
Senator O'BRIEN —That is at 5.05 p.m. That is after you have revoked the suspension.
Mr Foley —There is an email dated Wednesday, 24 February from Mr Bob Hoy that says:
As per discussions with Garth and myself, attached is the letter covering the revocation of the suspension letter.
You will note that in the last paragraph on the first page we have clearly advised ARCAS of our attention to carry out unscheduled surveillance as of to-day.
Such activity will commence to-morrow, with two AWIs going to Albury. (unannounced.)
Senator O'BRIEN —So you say that letter is Mr Hoy's recommendation to you; that he submitted that letter to you—
Mr Foley —That is correct. But up until that time there have been ongoing discussions, and that is confirmation of the discussions. It says that, based on the discussions that have taken place, there are recommendations from both the district airworthiness manager and the district flight operations manager. They are the people at the coalface; they are the people who give advice and give their views of the operator. For example, the email from Vic Garland says:
I recommend the operation be allowed to continue, and if that is finally to be the case, I will ensure ...
And then he goes on to list what he proposes to do to support his recommendation.
Senator O'BRIEN —Where is that one from Mr Garland? What date is it?
Mr Foley —It has not got a number on it, but it is dated 24 February 1999.
Senator O'BRIEN —Is it 11.35?
Mr Foley —It is 14.27. But at the top of the page it says `HOY, ROBERT (BOB)' and `Wednesday, 24 February 1999 13:43'.
Senator O'BRIEN —I have got one that says `13:45'.
Mr Toller —That one is relevant to a certain extent.
Senator O'BRIEN —It says `13:43', sorry.
Mr Toller —Of interest, there seemed to be a one-hour time difference between Sydney and Wagga that day.
Senator O'BRIEN —Does it mean that?
Mr Toller —He forwarded it at 13:43 and the email was written at 14:27, according to the system.
Senator O'BRIEN —Which means he has not changed his clock!
—I think it is fairly obvious that Garland is saying that he recommends that the operation be allowed to continue. He is the operative, as Mr Foley said, at the coalface. If you look at the email from Hoy at 13:45, which is actually forwarding an earlier one from Priestly to Hoy, eight minutes earlier seemingly, Priestly at that stage is saying to Hoy, who is his immediate manager, that he believes all these things should take place—DCITA briefing, increased surveillance, et cetera:
If all of the above are satisfactory, I would recommend the AOC renewal for three months. Then a revised surveillance plan put in place and monitored.
I will generalise the total situation with this operator as I see it. No, they were not a marginal operator in the way that we defined marginal operators at the last hearing, as demonstrated by the fact that they were described earlier as being exemplary. Certainly I have had feedback at various times from senior people in the industry who are arguably their competitors—but not direct competitors—and who have said that they were an outstanding operator. So they were not one of the ones that we would be targeting as a marginal operator. They had a system that appears to have been contrary to the legal requirements. We threw a brick at them—and it was a pretty big brick. We reviewed the situation and said, `Actually when you look at it, it is not legal.' But it was a good system, and it certainly was not a safety issue. In fact, if anything, it was a safer and better system than the one that is legally required. At this stage we asked, `How do we treat them from here on in?' The answer is: we put them on notice to the fact that their system was illegal. We put them in a situation whereby we keep a very close eye on them, and we do that by unscheduled audits and by renewing their AOC for only three months. At the end of that three months, we review the situation. I think that in general sums up the whole situation.
Senator O'BRIEN —I think there are a few other issues, Mr Toller. Just going to a point that has been made, I have been told that CASA issued a non-compliance notice to this company in March 1998. In fact, it was issued along with a number of other NCNs. One of those non-compliance notices was issued because this company failed to record defects in its maintenance releases.
Mr Foley —We would have to take that on notice.
Senator O'BRIEN —You are not aware of any, obviously, Mr Foley?
Mr Foley —I went back through the audit report which was done in 1998 and it made comments on documentation—and I would have to clarify this. I was not aware that it related to not recording defects, but I may stand corrected.
Senator O'BRIEN —I may stand corrected. I am telling you what my advice is, Mr Foley. If you do not know the answer now, can you check that?
Mr Foley —I will clarify it. I will certainly check it.
Senator O'BRIEN —Can you also tell me, if it exists, when that NCN was acquitted? As I understand it, the acquittal only required the operator to return to CASA a correction action slip that was attached to the notice.
Mr Foley —I would have to check that.
Senator O'BRIEN —Is that the right process for NCNs at that time?
—It depends on the level of NCN, which we have discussed before. If it was of a serious nature, the office would have to revisit and visually ensure that the corrective action had been carried out. If they considered it could be closed off by looking at a change in procedural process by documentation, they could close out the NCN by that process. It would depend on what level the NCN was rated. If it was a level 1, they would have to revisit; if it was only a level 5, they could close if off purely by sighting some documentation.
Senator O'BRIEN —Would all of this be on the file of this operator in the district office?
Mr Foley —It would be on the file in the district office.
Senator O'BRIEN —Is there any other place where that information would be recorded? Is there a check to see that what is on the file there is a proper record of what has taken place?
Mr Foley —No. It would be contained on the aircraft or operator's file—that is where it would be located. At that time, the NCNs would not have been retained at a central location. That has changed in recent times.
Senator O'BRIEN —You told us at the last hearing that you could not answer the question as to why a search warrant was sought in relation to this company. You signed off for the issue of the search warrant on 10 February, and it was executed by investigators Haslam and Cummerford on 15 February. Are you now able to tell the committee why search warrant was issued?
Mr Foley —They requested it and at that time there was not the policy which we have in place today in respect of search warrants. They believed there was a need for it. I agreed that there was a need, without going into any in-depth discussion on the issue.
Senator O'BRIEN —They simply asked for it and you issued it?
Mr Foley —They simply asked for it and I issued it.
Senator O'BRIEN —And that was the process at that time?
Mr Foley —That was the process at that time.
Senator O'BRIEN —When did that process change?
Mr Foley —That process changed when we brought on board the permanent manager for the enforcement section, which was probably about two months after that.
Senator O'BRIEN —I think you have told us on notice that only two search warrants had been approved in the last three years.
Mr Foley —That is two search warrants for airline operations as distinct from other operations.
Senator O'BRIEN —Is this signing off on search warrants a regular thing or a fairly irregular thing?
Mr Foley —It was a fairly irregular process.
Senator O'BRIEN —I would have thought so; it is not something that you would be doing every week. So you did not ask why these investigators wanted a search warrant? Is that what you are telling us?
—At that time, I took the recommendation. The recommendation would have come from Narelle, that she believed a search warrant was appropriate, and I would have issued it.
Senator O'BRIEN —So Narelle Tredrea recommended it?
Mr Foley —She would have recommended it to me.
Senator O'BRIEN —Would that have been in an email?
Mr Foley —That would be in an email, I suspect, if not a hardcopy document.
Senator O'BRIEN —Can we have a copy of that, please?
Mr Foley —Yes.
Senator O'BRIEN —The change to the search warrant system occurred midway through 1998?
Mr Foley —That is to the best of my recollection.
Senator O'BRIEN —Flowing from the exercise of a warrant by the AFP in Melbourne, as I understand it? Is that why it changed?
Mr Foley —I think it came about really by the need to better manage the way we carried out investigations. They needed to be centrally tasked in the way that we managed them and I think, importantly, that we concluded investigations—that they just did not go on and that there was no conclusion.
Senator O'BRIEN —Going back to who advised you to revoke the suspension, you told us last time, according to Hansard, that it was the acting regional manager and the general manager?
Mr Foley —It passed through them.
Senator O'BRIEN —Who were those two gentlemen at the time?
Mr Foley —At the time Bob Hoy was the acting regional manager and Clinton McKenzie was the actual general manager.
Senator O'BRIEN —So is there an email from Mr McKenzie to you making such a recommendation?
Mr Foley —No. After checking on the records, it has only gone through him. There is no specific one from him to me, and I can explain why that occurred. At that time, he was involved in area manager training and it was handled by a gentleman called Mr Bossie in Clinton McKenzie's office who kept him informed of what was happening. That was the process at that time.
Senator O'BRIEN —So he did not make a recommendation to you?
Mr Foley —He did not make it directly, but he was copied in to what was happening.
Senator O'BRIEN —He was away on a course or something?
Mr Foley —No, he was conducting training for the area managers in Canberra at that time.
Senator O'BRIEN —You say that Mr Hoy made the recommendation by sending you, for your consideration, the recommendation from local people such as Mr Garland?
—That is correct, in conjunction with that and verbal discussions with Bob Hoy.
Senator O'BRIEN —So you are saying that Mr Hoy recommended you adopt the course proposed and revoke the suspension?
Mr Foley —That is correct.
Senator O'BRIEN —In verbal discussions with you?
Mr Foley —In verbal discussions.
Senator O'BRIEN —Prior to the issue of the document?
Mr Foley —And, I think importantly, he had the letter drafted in consultation with the legal counsel of the New South Wales regional office as it was at that stage.
Senator O'BRIEN —When in the day did you make the decision to revoke the suspension?
Mr Foley —It was after discussions with Mr Hoy and the legal counsel in New South Wales. As to the exact time, I would have to go back and research that aspect and see if there is some note on the actual letter. To follow on from that point, at the end of the day there is only one delegate and that delegate has to weigh up all the facts and the information given to him and then make the decision. Based on the recommendations from the operatives at the working level, I supported the decisions and the process and, following the discussions with Bob Hoy, we then went through the verification process.
Senator O'BRIEN —As to the occurrences on the 24th, I understand that two officers from Wagga were sent to Albury to assess the extent to which the maintenance problems identified in the second set of books had been addressed. That followed an assessment of the information contained in the previously concealed maintenance records which were undertaken in Sydney, as I understand it. The officers from Wagga were Mr Lynn and Mr Gardiner. Is that correct?
Mr Foley —That is correct. I do not have that information in front of me. I would have to take it on notice, but I know that two officers went. I would have to confirm that they are the correct names.
Senator O'BRIEN —I am told that those two officers were forced to issue two permissible unserviceability schedules, one relating to an unserviceable fuel gauge. Do you know if that is correct?
Mr Foley —I am not aware of that. I went back through the permissible unserviceability levels, and that was not evident on our preliminary review of that document.
Senator O'BRIEN —Did you look at the files as they are maintained in the district office where all this material would be, or did you review information that was sent to you?
Mr Foley —I reviewed information that was sent to me at that stage.
Senator O'BRIEN —Did they send merely what you asked for, or did they send a copy of the file or what was purported to be a copy of the file?
Mr Foley —No, they sent a listing of the PUSs which had been issued for a period of time.
Senator O'BRIEN —Did that period include 24 February?
Mr Foley —I would have to take that on notice. I would expect so.
Senator O'BRIEN —I would too. I have just checked my records and that date may be 25 February. It could be either of those two days.
—I think the audit and review were carried out on the 25th, not the 24th.
Senator O'BRIEN —So the audit would have been the assessment of the extent to which the maintenance problems identified in the second set of books had been addressed?
Mr Foley —Just to confirm, it was carried out on Thursday, the 25th.
Senator O'BRIEN —Does that document say who carried it out?
Mr Foley —No, it does not. I think where the confusion has arisen is that, as well as the airworthy assessment on that date, there was a flying ops inspection carried out on the aircraft itself on the 25th by David Burley, where he conducted a number of inspections on various aspects of the organisation.
Senator O'BRIEN —So you have no record of Lynn or Gardiner being there?
Mr Foley —Not in front of us directly.
Senator O'BRIEN —Can you check whether they were there and whether they did issue two PUSs? In relation to answer CASA 5 and if the PUSs were issued on the 25th and not the 24th, you would have to check that answer where you say, `No special permissible unserviceability schedule.' I do not know whether there is such a thing as a `special' PUS. I do not know whether that was a factor in your answer, was it?
Mr Foley —To refer to the answer in part (b)—
Senator O'BRIEN —No, part (a). It may have been my terminology, but it says issued a `special permissible unserviceability schedule'. Your answer is, `No special permissible unserviceability schedule was issued at that time.'
Mr Foley —There is no such thing as a `special'.
Senator O'BRIEN —I understand that, and `special' might have been used to note that this was exceptional rather than special. In any case, were any PUSs issued at that time? It may not have been the 24th, but it could have been the 25th. Are you saying that you have already checked that, or have you simply got the answer to my question from the district office?
Mr Foley —No. I would have to go back, but we did request a listing from that office for that period of time of all permissible unserviceabilities which were raised.
Senator O'BRIEN —When was the new chief pilot appointed? You said `shortly after 24 February'. Do you know when?
Mr Foley —No. I would have to check on the exact date. That is an issue that is handled at the local level.
Senator O'BRIEN —I am advised that negotiations between Mr Sears from Air Facilities and Mr Haines about the future of this operator started around 15 February and that those negotiations involved you. Is that correct, Mr Foley?
Mr Foley —On 15 February? That is certainly not correct from my recollection. With respect to what?
Senator O'BRIEN —It was about the future of this operator. In other words, Mr Haines played a role in assisting the operator to get their act together, did he not?
Mr Foley —That is my understanding from this. My recollection is that that did not occur until much later, but I will have to take that on notice and look at specific dates.
Senator O'BRIEN —What did not occur until much later?
—My recollection is that he was not involved until I actually issued the suspension letter. That is my recollection. I have no knowledge of his being involved prior to that.
Senator O'BRIEN —To your knowledge there were no discussions between Mr Haines and anyone from Air Facilities about parole for him there prior to the issue of the suspension?
Mr Foley —That is correct. I certainly have no knowledge of that. He may have had business dealings with that organisation but certainly not with respect to this matter.
Proceedings suspended from 6.41 p.m. to 7.33 p.m.
ACTING CHAIR (Senator Ferris) —The hearing of the Senate Rural and Regional Affairs Legislation committee is resumed. We are currently covering CASA.
Senator O'BRIEN —Mr Foley, you asked me earlier today about where the information was about the treatment of the real records that it took the search warrant to discover. My understanding is that the detail about how those real records were hidden from a normal inspection process was revealed to CASA investigators. Are you saying that you are not aware of any such revelation?
Mr Foley —In so much as the statements that have been made about them—the way that they were hidden—no, I am not.
Senator O'BRIEN —What are you aware of in that regard?
Mr Foley —I was given advice on the investigation.
Senator O'BRIEN —To your knowledge, what did this operator do with the real set of books that required a search warrant to discover them?
Mr Foley —After the event, I would question whether we needed a search warrant. We used a search warrant at the time but, in hindsight, I question whether we needed a search warrant.
Senator O'BRIEN —Where were the books discovered?
Mr Foley —The books were located in the top drawer of the filing cabinet of the office.
Senator O'BRIEN —Were other books discovered as well?
Mr Foley —I would have to take that on notice. I would imagine there would have been books in there, such as the log books and other operational documentation, but that is something I would need to check on.
Senator O'BRIEN —As I recall it, there were special attempts made to make sure that the operator did not know that CASA investigators were arriving. That is the fact, is it not—that investigators not known to the company were flown in?
Mr Foley —The investigators are not known to the company, but that would apply to any investigation. Once the investigators become involved they are not the people who the operator deals with on a normal basis.
Senator O'BRIEN —So, if the operator saw people who normally inspected records, the operator could take steps to make sure only those records which the operator wanted seen were available. Are you aware of the basis for the request for the search warrant? Have you been made aware of any information received by CASA officers about a procedure to conceal records?
Mr Foley —I would have to check the records.
—So you do not recall any such—
Mr Foley —Not at this stage I do not.
Senator O'BRIEN —In your reviewing of the matters following the last hearing, have you come across any such information?
Mr Foley —Not that I am aware of.
Senator O'BRIEN —It was only a couple of weeks ago. You have only reviewed it in the last couple of weeks. Perhaps I am assuming too much. Have you reviewed the information in the last couple of weeks?
Mr Foley —I have not personally reviewed the files. I have asked for the Manager, Investigations, and the General Manager, GAO, to review the files. The information that such an issue has existed has not been provided to me at this stage.
Senator O'BRIEN —In the records which were discovered by the investigators exercising the search warrant there were, from what I am told, six defects recorded. Do you know whether that was the case?
Mr Foley —I would have to check on that information.
Senator O'BRIEN —That has not been provided to you?
Mr Foley —I am not really sure what it relates to. When the inspection was carried out—I think the next day—there were no defects evident on the aircraft.
Senator O'BRIEN —Do you know whether any of the defects recorded would have led to a cautious operator grounding the aircraft until the defects were fixed?
Mr Foley —I could not comment on that. Again, I would have to take that on notice. The advice I had from the district airworthiness manager and the district airworthiness flying ops manager was that that was not the case. A subsequent review by the current general manager and the manager of the enforcement area has not revealed that aspect.
Senator O'BRIEN —All of this occurred in February 1999, did it not?
Mr Foley —That is correct.
Senator O'BRIEN —On 29 July 1998, did you sign off a preliminary report on the Aquatic Air accident?
Mr Foley —I signed off the initial aspect of the Aquatic Air.
Senator O'BRIEN —There was a preliminary report on a minute paper of some sort.
Mr Foley —That is correct.
Senator O'BRIEN —You say on page 5 of that report, in relation to that incident:
The GM ASC—
ASC stands for air safety compliance, doesn't it?
Mr Foley —General Manager ASC. I presume so.
Senator O'BRIEN —That is my presumption. It goes on:
was generally kept aware of the progress of this matter—
This is the Aquatic Air matter—
although I note that the Manager SE Region did not always respond to the GM ASC's request for information or expressions of concern in a comprehensive and timely manner.
That was part of your finding in relation to question 5. Question 6 reads:
As a consequence of this accident, is there an immediate need to change CASA practices and procedures?
Your response—it appears to be signed off by you—is:
In my view, there is no immediate need to change CASA practices and procedures. The process of centralising the decision making relating to suspensions of AOCs that is presently in train will address some of the problems I have identified.
That is what you said then. My understanding of the problem with Aquatic Air, and other problems, is that the regional people were acting somewhat protectively of the regional operators, and for that reason it was appropriate to have centralisation of decision making on suspension of air operating certificates. That is correct, is it?
Mr Foley —That is correct.
Senator O'BRIEN —Yet in this case essentially all of the actions you took were based on the advice of people from the district office.
Mr Foley —Yes, and that was appropriate. If we go back to the Aquatic Air accident, there was a different structure in place to what there was with the Arcas flight. If we look at that structure, we were still working with the regional concept, and that is why there is that terminology. I think you referred to the General Manager ASC: that position ceased to exist. At that time the general manager had no power over what was done at the regional level. That changed after that incident. On the recommendations put forward by Stephen Skehill, there were significant changes made. I am not sure what recommendation it was, but Stephen made it quite clear that people at the working level, the people who did the oversighting, needed to be involved in the final decision process, to give advice. If you look at Aquatic Air, the people who had oversight of that operator were not involved in the recommendation on whether the airline was suspended or what action took place. That was the point Stephen made. The people who were directly responsible for the oversight were not involved. The people who had prime carriage of the oversight on a day-to-day basis were not involved in the decision making process. The people who were involved were people in the regional level who had no direct input or oversight responsibility for that operator. That is where the significant change has taken place.
Senator O'BRIEN —So in this case you signed off for a search warrant with no information.
Mr Foley —I signed off for a search warrant on the information provided to me at that time. I do not, at this stage today, have a recollection of what that was. We can certainly provide the information of what the recommendation was.
Senator O'BRIEN —You signed the suspension of the air operating certificate based on the report of the investigators?
Mr Foley —It was based on a recommendation I received, not on the report of the investigator.
Senator O'BRIEN —It was simply a recommendation. It did not present the facts.
Mr Foley —It was simply a recommendation. I think I could not remember an instance when we have carried out action purely on the recommendation of an investigator without input from a number of other sources, including the people who were involved on a day-to-day basis. It must have their input.
—Nevertheless, you signed the suspension without that. Is that what you are telling us?
Mr Foley —I signed the letter on the basis of receiving a number of inputs, not purely on the advice of the investigator.
Senator O'BRIEN —You signed the letter notifying that you were going to suspend their licence based on all of that information.
Mr Foley —That is correct.
Senator O'BRIEN —Immediately after, you then signed a revocation based on the recommendation of the Wagga based gentleman.
Mr Foley —It was not immediately. I think a number of days had elapsed because the letter of suspension, from memory, took place on late Friday evening. The letter of revocation took place on the Monday.
Senator O'BRIEN —No, it took place on the Wednesday I think.
Mr Foley —I would have to clarify that.
Senator O'BRIEN —All of that is on file, is it?
Mr Foley —That is all on file.
Senator O'BRIEN —You say you had no involvement in the engagement of Mr Haines by the company to rectify their affairs.
Mr Foley —They came forward with a name of someone who would assist them, but my understanding and recollection is that that was dealt with at the local level. I think that is evident in the emails which were sent, saying that they believed that he would be an appropriate person to assist in addressing this situation.
Senator O'BRIEN —He was your former business partner.
Mr Foley —He was never a business partner.
Senator O'BRIEN —Never?
Mr Foley —Never.
Senator O'BRIEN —Did you work with him?
Mr Foley —I have worked with him over many years both in the industry and in the department of transport CAA days.
Senator O'BRIEN —The suspension was due to take effect at 5 p.m. on Wednesday, 24th, and you revoked it at about 4 p.m.
Mr Foley —That is correct, if they are the correct dates. I thought it was on the Monday, but I may be incorrect on that.
Senator O'BRIEN —I am just going on the days. You have given us the emails and the emails for the date of—
Mr Foley —It was to take effect at 2359 hours on 24 February, which is the normal process of making it midnight.
Senator O'BRIEN —You signed it just before the close of business.
Mr Foley —It is to make sure that if there are any aircraft in the air, they can be on the ground when that time elapses.
—No, I am saying that you signed the revocation late in the afternoon.
Mr Foley —I do not have that document in front of me, but I believe that is correct.
Senator O'BRIEN —I think this is the second time we have spent time on this matter, but I can indicate that I believe this is quite a serious matter. Earlier in the day, Mr Toller, you gave an answer that indicated that where there was a flagrant disregard for the law by operators that you would be seeking to prosecute them. It may or may not be that that is the case in this matter. I am not satisfied on the answers we have received so far that that could be ruled out. I will be asking that either CASA provide all of the files relating to this company and related matters to this committee so that they can be reviewed, and all relevant files pertaining to the matters which have been discussed so they can be reviewed, and we can then make a judgment on whether this matter can be closed or taken further.
Mr Toller —I note your comments, Senator. The definition of the marginal operators that we were targeting were those who frequently continually find ways to breach the law, to bend the law, to circumvent issues. As I say, nothing that I have seen of this particular operator suggests that they fall into that category.
Senator O'BRIEN —But you have not seen the files, either.
Mr Toller —I have not seen all the files.
Mr Harris —Senator, an examination of the files is the sort of thing that may or may not lead anywhere. I mean this quite honestly. It is also a pretty dramatic step. Is there not any intervening level of information that could be provided to assist you rather than to look at that path?
Senator O'BRIEN —I have twice asked a great many questions about this matter now, and on each occasion Mr Foley has not got the information to answer me and needs to take matters on notice. And it appears that he has not seen the files either. I would rather we short-circuit that process and see these documents so that we can decide whether the matter needs to be taken any further. If there is a means of doing that, not as part of this committee but in some other way but where we can be satisfied we have seen all the relevant files, I am quite happy to hear about it.
Mr Harris —Senator, we may have a proposition that is probably worth discussing separately further between us whilst the estimates committee is still in session, and perhaps we can bring that back to you. It just seemed to me that trawling through files is not necessarily likely to be productive and potentially can be just as frustrating as the provision of individual documents step by step. If what you are really looking at is the substance of what Mr Toller has said, as in `Did this operator do something which would suggest that they should have been treated more harshly than they actually were,' there may be other ways of trying to provide something which could assure you on that. Perhaps Mr Toller and I can talk about that further and then see whether that meets your interest or not. You can always reserve your position on this.
Senator O'BRIEN —I am happy to leave that to occur. I am open to persuasion that there is a better course. At this stage I have expressed my view, and I am happy to hear from you as to alternatives.
Mr Harris —We could discuss that and perhaps bring something back to you, if that is possible.
Senator O'BRIEN —I want to ask some questions I was about to ask last time when I was told Mr Yates was not here. There he is; he is up the back of the room.
—Senator, while Mr Yates finds his way to the front, Airservices did arrive while we were at the dinner break. We can retain them and proceed to their issues later in the evening, if that is what you would like. Alternatively, we can persist with CASA and then run the other divisions. I think you were going to clarify over the break how you would like to play it. Both sets of options are there for you. What we have done, though, is to allow all people who are non-aviation to go. That does include, I should advise you, some ATSB people who work on the safety side in terms of roads and related—
Senator O'BRIEN —Most of my ATSB questions are to do with matters other than aviation. They have been of assistance during the day in answering other questions by me and Senator Crane. I am quite happy for them to come back tomorrow if I miss something.
Mr Harris —We have Mr Beresford-Wylie here, who handles heavy vehicles.
Senator O'BRIEN —I am not sure whether we will get to them, particularly if we do Airservices. I can do them next or after the aviation division. Either way, it does not matter. It is up to you.
Mr Harris —Effectively, we had three sets of people here, and I think it is improbable that we will get through three sets of people after CASA. I guess what I am asking is: which of the three?
Senator O'BRIEN —Is remote air services—
Mr Harris —Remote air services belongs to the aviation division.
Senator O'BRIEN —There are some questions on airports. That will see you out. Mr Yates, I am following up some issues from the last hearings, related to pilot training and pilot checking. I want to go to the record of the meeting between the Ultralight Federation and CASA which took place on 28 March. The record is in the form of an email from Paul Middleton to a number of people, and dated 9 March—I presume that meant 29 March. It refers to a meeting between Mr Middleton, you, Mr Rob Collins and other CASA officers on 28 March. Have you seen this document?
Mr Harris —I have, Senator.
Senator O'BRIEN —You have a copy there apparently.
Mr Harris —Yes.
Senator O'BRIEN —Can you point out any inaccuracies in that email?
Mr Yates —That particular email was one that was attached to a letter sent to a variety of people by the General Aviation Professional Association on 3 April. Following the meeting on 28 March, Mr Middleton of the AUF sent a letter to me which was received a few days later. The record of the previous meeting at the beginning of this month, where the statement was made that I took issue with the accuracy of Mr Middleton's version of events, was referring to the letter that was sent to me on 28 March but not to the email that was circulated, which we did not see until about a week or so later.
Senator O'BRIEN —So you do not have any problems with what is set out in that email? It is a two-page email.
Mr Yates —I do have some difficulty with some of the content.
Senator O'BRIEN —What is the difficulty?
—Going through what is presented in this email, the point with respect to the board's decision as far as AOC requirements is basically correct but the way it is presented is perhaps not quite a full reflection of the discussion that took place on 28 March. Effectively, on 28 March we discussed the board's decision with respect to AOCs and how this might be accomplished. We then went on to talk about the proposed recreational pilots licence, which is something that is still be formulated. I have not gone through this email to identify precise details. I would have to sit here and do that; so I would prefer, if I may, to give you a written submission following this hearing on precisely where there are differences. I have not prepared to go through giving differences in this email. As I said earlier, there was a letter to me from Mr Middleton dated 29 March which is not identical in its content to that email. The statement about my recollection and comparison of events was made at the last hearing.
Senator O'BRIEN —I think we had better identify things a bit further. Did Mr Middleton's letter of 29 March have any attachments?
Mr Yates —No. It is a 1[half ] page letter. I have no record of attachments to it.
Senator O'BRIEN —No record of any attachments?
Mr Yates —As I recall—and as I have it here—the email that you refer to did have some other attachments, one of which was the letter that was addressed to me and the other was just over a page with some problems, as the AUF saw them, and some questions that, I think, Mr Middleton used during the meetings we had on 28 March.
Senator O'BRIEN —How did you receive this email?
Mr Yates —This email was an attachment to a letter that was addressed to the Deputy Prime Minister. It was also copied to a number of other individuals. You were one copy addressee. I received a copy of it from the copy that was sent to the director. I received it by fax, if I recall correctly, when I was up in Brisbane at an international conference that we were hosting.
Senator O'BRIEN —So you want to respond to that email in written form?
Mr Yates —I would prefer to do that because I have not written on this email where I take issue with what is reflected here. The director did send a letter—
Senator O'BRIEN —Did you write to Mr Middleton following receipt of the letter?
Mr Yates —I did not do so. The director wrote to Mr Middleton on 7 April. In that communication we put the record straight on the position that was taken by the authority at the meeting we had on 28 March.
Senator O'BRIEN —Can the committee be supplied a copy of that letter?
Mr Yates —Certainly.
Senator O'BRIEN —Just going back to the meeting on 28 March, what was the purpose of the meeting?
Mr Yates —The purpose of the meeting on 28 March was to inform the AUF about the board's decision, to explore ways in which that might be put into effect and also to discuss the proposed recreational pilots licence, which will have some impact on the AUF's flying training activities.
Senator O'BRIEN —Was there an intention to discuss the timeframe that the CASA chairman put in his letter to the minister relating to all flying schools having air operating certificates?
—The timing was discussed, if I recall correctly. But we also discussed it in the context of the intended preparation of CASA part 149, which will be the set of requirements that apply to aviation administration organisations such as the AUF. The intention was that that work should be completed by the end of June this year and then go through the legislative process to become legislation. There was some discussion as to the likely timing and the way in which the authority would deal with the certification of these flying training organisations in view of the fact that part 149 was not too far away.
Senator O'BRIEN —Was there discussion about the cost of the schools, how much CASA would charge?
Mr Yates —The discussion in that context was restricted to the amount of the charges for the authorities' issuing of the AOCs. The basic conclusion that was discussed was for the AUF as, if you like, an umbrella body for ultralights to effectively do the AOC entry control process and then make a recommendation to the authority. That would be dependent upon the authority being satisfied with the AUF's capability to do that task. But on the basis that all was acceptable, the amount of time that was likely to be required to review the recommendation and sign the certificate would be fairly limited. It was estimated by the Acting Assistant Director for Regulatory Services, Mr Rob Collins, that that would probably be in the order of about 20 minutes work which would translate, taking the fees regulations as they are into account, to about $25.
Senator O'BRIEN —Was there some indication that CASA was helping financially in that costing?
Mr Yates —With respect to the certification aspects, there was some discussion about the possibility of, if you like, engaging the AUF outsourcing that activity. The idea was floated that if it was agreed that that was the way that we should proceed there may be some remuneration for that certification preparation activity undertaken by the AUF. But one of the problems I had with the letter that Mr Middleton sent to me was that it could be implied from what he wrote that some commitment had been given by those of us from the authority present that we would undertake this, and that was not the case. We discussed possibilities and there was nothing further than that.
Senator O'BRIEN —Can you comment on the impression apparently going by Mr Middleton that the AUF only needed to get one school up and running with an AOC and the rest would be okay?
Mr Yates —I cannot really comment. The point made to Mr Middleton was that the board's decision was that all of these organisations undertaking client training should be subject to an AOC, or if regulations were changed an equivalent process under which the AUF would do that. There was some discussion about how long it would take to go through the whole process if the regulations were not changed under the existing system. I do not think that any particular time frame was given but it was felt that, because of the number of flying training organisations, which I think is in the region of 70 or 80, it would take some considerable time. There was then the discussion about the prospect of the finalisation of part 149 and some discussion of how many flying training organisations could be given an AOC prior to 149, and so on. But I do not recall any discussion specifically saying that if one flying training organisation were given a certificate that would keep people quiet, as such, no.
Senator O'BRIEN —Mr Middleton referred to a Mr Fisher in the minister's office as being responsible for that initiative. Is that Mr Ron Fisher he is referring to?
Mr Yates —I believe so.
—In Mr Middleton's letter, he refers to the fact that he will work with CASA to prepare the AOC's requirements. Is that addressed in the director's letter, which has now been tabled?
Mr Yates —What it says in the director's letter of 7 April, at the first point on the second page, is that the Chief Executive Officer of the AUF `would make a recommendation to CASA that an AOC should be issued'. That would then be assessed by the CASA delegate. As to working with the AUF—
Senator O'BRIEN —It is a matter of interpretation, is it?
Mr Yates —I think so.
Senator O'BRIEN —Has work started on that process?
Mr Yates —As the director mentioned earlier, this issue is still the subject of some discussion. In fact, the board is having set aside a considerable portion of next Monday afternoon to, hopefully, finally settle on precisely which way we are going to handle this particular problem. So it is a little difficult to give a clear answer at this stage.
Senator O'BRIEN —So there is no formal relationship, contractual or otherwise?
Mr Yates —The only sort of formal relationship with the AUF, as is the case with several other sport aviation organisations, is that, as I think you will be aware, the authority provides a certain amount of funding to these organisations for regulatory tasks that they undertake on behalf of the authority. This is not a new thing; it is something that has been going on for some time. The arrangements for this current financial year are the same as for the last one, and they will be the same again in the next financial year.
Senator O'BRIEN —Subject to any change.
Mr Yates —I suppose so.
Senator O'BRIEN —Mr Middleton's letter, as distinct from his email, has the heading `Proposed recreational pilot licence'. Perhaps you can point me to where this is dealt with in the director's letter. I want to know whether CASA agrees with the form of words used at the end of Mr Middleton's letter under that heading.
Mr Yates —At the first paragraph or at the second of that last section?
Senator O'BRIEN —At the end.
Mr Yates —About the AUF objecting strenuously to the proposal as outlined?
Senator O'BRIEN —No. The paragraph that says:
The government had not withdrawn their policy that "self administration should be confined to sport aviation sectors, i.e. the disciplines covered by the existing sport aviation bodies." There was absolutely no concern that the AUF was not discharging its responsibilities properly, nor were there any safety concerns with the present arrangement.
Mr Yates —With respect to that particular paragraph, Senator, I do not have any major difficulty with the words presented. There are no statistics of which I am aware that indicate that there are safety concerns with the current situation.
Senator O'BRIEN —Those words do not mean that CASA is not going to properly apply all the provisions of the Civil Aviation Act, do they?
Mr Yates —They do not imply that, I do not think.
—As to the attachment to the letter, I assume it went to those people who received a copy of the letter rather than to CASA. I am not sure. You have seen it, so perhaps it did. The document has two headings, `Problems' and `Questions'. Would you comment on a couple of points, please? Under the `Problems' heading there is a reference to CASA probably being in breach of the government agreements in relation to competitive neutrality. I assume that refers to the conditions met by the general aviation sector compared with conditions met by the ultralight sector in relation to training. Based on that assumption being correct, what would your comment be to that `Problems' headed point?
Mr Yates —I am not familiar with the legislation that applies to competitive neutrality, so it is a bit difficult for me to respond.
Senator O'BRIEN —Perhaps you would take that on notice.
Mr Yates —Okay.
Senator O'BRIEN —Under the `Questions' heading there is a reference to the AUF working with the department on a code of conduct for aerodrome operations. Can you explain exactly what is involved and what role CASA has in that process?
Mr Yates —I do not understand that particular point. It does not make any sense to me, I am afraid, that particular point. No, it does not make any sense. There are some regulations with respect to heads ATS and some parts of aerodrome regulations that have been out for consultation, but I do not think this is talking about that at all.
Senator O'BRIEN —I understand that requirements for issuing of air operating certificates used to be in regulations which enabled some discretion to be applied by the authority but that once those requirements were included in the primary legislation that discretion disappeared. Is that correct?
Mr Yates —I will defer to Peter Ilyk, if I may, on that.
Mr Ilyk —The legislation I assume that you are talking about is CAR 206?
Senator O'BRIEN —Yes. I do not have the reference in front of me at the moment.
Mr Ilyk —CAR 206 is essentially an interpretative provision which prescribes the commercial purposes for which an AOC is required under section 27(9) of the act. There is no discretion in that. All it is is an interpretative provision, and it is a question of interpretation whether a particular operation falls within one of the categories of CAR 206. If it does, then it would require an AOC.
Senator O'BRIEN —As to general policy 19, which is headed `Regulation of sport, recreational and aviation'—I think I have the right one—the GPN is marked as issue one dated 1 July 1998 and signed by Mr Pike. I wonder if you could supply a copy of that to the committee.
Mr Yates —Certainly, Senator.
Senator O'BRIEN —And also the predecessor of that provision. You may not have that with you.
Mr Yates —The policy notice?
Senator O'BRIEN —Yes.
Mr Ilyk —I am not sure that there was a previous—
—Could you confirm that on notice and, if there was in fact, supply us with a predecessor?
Mr Yates —Yes.
Senator O'BRIEN —Were there two versions of GPN 19—one with the sunset date of 1 July 1999 and a second version the same with the sunset clause removed?
Mr Yates —I do not know, Senator. I will have to take that on notice. That precedes my joining the authority.
Senator O'BRIEN —I have some other questions but they are dependent on what the situation is with that. Does CASA have a view as to the position of the Australian Ultralight Federation vis-a-vis its provision of training and whether that is in compliance with the Civil Aviation Act?
Mr Toller —The provision of ultralight training under the rules that are set down in the operations manual of the AUF are in compliance with the Civil Aviation Act. The area where we get into this sort of grey area is the issue of commercial flying training. The sports aviation bodies were set up to cover sports aviation, and it has become increasingly apparent that there is some training undertaken in ultralights which is just done on a commercial basis. The board has taken the view that the act does not differentiate between sports aviation and any other form of aviation when it says that commercial flying training requires an AOC. However, it is also mindful of the reason why all the sports aviation bodies were set up in the first place—that is, to allow people who wanted to go and have fun to do it sensibly and safely but without diverting vast resources of the government's money unnecessary. Our view on flying training as exists for ultralights at the moment is that when it is done by the Ultralight Federation to their rules and regulations then it is in accordance with the act.
Senator O'BRIEN —Whether commercial or otherwise?
Mr Toller —The commercial area is the grey area. I think the problem is that we have a status quo that has existed for a very long time which is perhaps technically not defensible. Therefore the board has taken the view that we must review the situation, and that is what the meeting will be about—taking that one step further—next week.
Senator O'BRIEN —So, essentially, that training, that might be described as commercial, from the Australian Ultralight Federation falls into the grey area, which you do not think is defensible?
Mr Toller —It appears to be contrary to the Civil Aviation Act but it has probably existed since the time the sports aviation bodies were first set up back in the late 1980s.
Senator O'BRIEN —But the board of CASA has recently confirmed that commercial flying training in an ultralight aircraft requires an air operating certificate or is subject to regulatory certification equivalent to that afforded by an AOC.
Mr Toller —That is the position that the board has taken.
Senator O'BRIEN —Is there another decision that says that the AUF is exempted from that decision?
—Not at all. To a large extent the purpose of my letter to Mr Middleton was to make it clear that that was what we believed the situation to be. Clearly, you are not going to resolve that situation overnight. Therefore, we have to work on the best way of solving that situation. The board's view at this stage is that it would be best if the AUF took that responsibility on itself and worked to the same rules that CASA would work to but do it for its membership, and that could apply to any other similar ultralight body. There is a need to ensure that there is a level playing field on standards at the commercial level. If people want to learn to fly for sport and fun and share the cost of the learning, that is fine, that is up to them. They can do that entirely within the auspices of the Ultralight Federation.
Senator O'BRIEN —If they want to learn for commercial purposes, they can go to the AUF and get it on the one basis or go somewhere else and get it on another.
Mr Toller —I believe that is a sensible and defensible position but I believe that the standards of commercial flying training should be the same whether the aircraft is registered by CASA or registered by the Ultralight Federation or any other ultralight body.
Senator O'BRIEN —And probably be in breach of the law?
Mr Toller —Indeed, and probably has been for 12 or 13 years or so.
Senator O'BRIEN —Was the decision of the board to enforce the provisions of the Civil Aviation Act in this regard, other than against the AUF, conveyed to the minister or his office?
Mr Toller —I believe that the chairman wrote to the minister and that he did that on 9 February. He was updating the minister at that stage on a number of issues to do with CAR 206, which was discussed at the last Estimates as one of our more complex pieces of legislation.
Senator O'BRIEN —And this is part of it?
Mr Toller —This is a small part of it, yes.
Senator O'BRIEN —Was the determination of the board prompted by any particular matter or communication?
Mr Toller —It is fair to say that it has been the subject of considerable correspondence from the general aviation professional association over a period of time. I think that as such the board recognised that it was something that they had to consider.
Senator O'BRIEN —There was no formal request or direction from the minister in this?
Mr Toller —Not that I can recall.
Senator O'BRIEN —If your recollection were prompted by a further inquiry, you could let us know. Has CASA provided a briefing to Mr Anderson in response to what I understand to be Mr Fisher's frequent correspondence?
Mr Toller —We have written to him in February to give him a preliminary response on our views on the whole of CAR 206. We are overdue for a further report to the minister at this stage.
Senator O'BRIEN —No other briefing has been provided?
Mr Toller —No.
Senator O'BRIEN —Has Minister Anderson been advised of the arrangement with the Ultralight Federation and as to the legality or otherwise of the situation?
Mr Toller —In those straight terms, no. In the letter that was written to him by the chairman it was stated that under existing legislation we believe that commercial flying training in ultralights requires an AOC, so he has been informed of the general terms. The AUF specifically were not discussed in that but it was certainly said to the minister that the board regarded commercial flying training as an operation that required an AOC under the act.
—But the exception to the rule was not pointed out?
Mr Toller —What was said to the minister was that the intention at the time was to amend the CAOs under which the ultralights operate to enable them to give the equivalent AOCs on our behalf. In other words, we flagged the situation where we thought that the Ultralight Federation should actually take on this responsibility for us if they wanted their members to have access in their aircraft to commercial flying training.
Senator O'BRIEN —What is the relevance of the receiving of a payment for ultralight training as against providing training for nothing? Is that relevant in considering this matter?
Mr Toller —If I understand you correctly, you are just talking about what is the definition of commercial, I think. If somebody is doing it for profit then we would regard that as commercial. If within the auspices of a sport people are sharing the learning of that sport and receiving some payment for the costs incurred but not doing it as a business, then I do not think that would be regarded as a commercial operation. So what we are targeting is those people who have a business that is there for profit that is trying to sell flying training.
Senator O'BRIEN —Is the issue whether the organisation is registered as a non-profit organisation or whether a fee is charged?
Mr Toller —Whether the AUF is a non-profit organisation?
Mr Ilyk —I think the issue really is whether they are operating as a business. If they are operating as a business and running a flying training school, that would be considered to be commercial.
Senator O'BRIEN —So it is not an issue as to the form of their registration but rather as to whether in its general form the organisation is a for-profit organisation. Or is it separable down to whether the operation of ultralight training is provided at a cost recovery plus profit margin basis?
Mr Ilyk —Under the existing legislation, CAO 95.55, which regulates ultralights, expressly allows ultralights to be used for the purposes of flying training of their members. In circumstances where flying training is conducted in accordance with those provisions, not for gain but simply as part of the AUF teaching their own members, that does not require an AOC. It is only where some of the members get together and say, `We believe we can make some money out of teaching individuals to fly in ultralights' and running a commercial business that it would be caught by CAR 286 as a commercial purpose. It is not the AUF itself that is doing all of these, it is elements within the AUF.
Mr Yates —My understanding is that there are between 70 and 80 such groupings that provide some flying training to AUF members. My understanding is also that of that number only two are, shall we say, full-time ultralight flying schools. The rest are all part time, many only one or two days a week, often at weekends for purely recreational purposes.
Senator O'BRIEN —So the general aviation operators, which I suppose is anyone who is operating for a profit, have to operate under the Corporations Act and the Civil Aviation Act in the provision of training, but the AUF does not.
—As the director pointed out, I do not think it was ever envisaged when the AUF was set up and the regulatory regime for the AUF was set up that there would be commercial flying training. It was always intended that there would be flying training in ultralights, and that has been permitted for 20 years without the requirement to have an AOC. It is only in recent times that there appears to be a movement for some individuals or parts of the AUF structure to start conducting commercial flying training. That is the issue that currently needs to be considered by the board.
Senator O'BRIEN —I understand there are two notices of proposed rule making, 0007MS and 0008OS, that relate to CAR 103 and CAR 149. As I understand it, this is quite a voluminous set of documents—196 pages. Can you explain what these two new regulations will in fact do? You have confirmed that the period for community input into the form of these two regulations was originally only about three weeks.
Mr Toller —Both of those NPRMs were withdrawn almost immediately after they were released.
Senator O'BRIEN —That is right.
Mr Toller —That, again, is an issue which will be discussed by the board on Monday.
Senator O'BRIEN —Can you tell me details of the concerns as to why they were withdrawn—because Mr Kimpton expressed the concerns?
Mr Toller —I think that the board did not consider that they adequately addressed some of the issues that we felt strongly about, particularly in terms of barriers of entry—protecting against large numbers of small new organisations flooding into the sports aviation arena. In other words, we did not want little clubs of five all being able to call themselves a sports aviation body. Also, the board wanted some clarification on the qualifications required by key personnel and the quality assurance processed required by the organisations. That is being worked on at this stage before they are reissued.
Senator O'BRIEN —Mr Yates, can you confirm that you have on a number of occasions advised people within the aviation sector that this sort of public consultation must run for at least two months, if not three?
Mr Yates —I have said that, in my opinion, wherever possible the normal minimum consultation should be two months. There may be circumstances under which it is necessary to curtail that period. In the past before my arrival, I understand there were often consultations periods that were of only four weeks duration. When I arrived, I felt that was inadequate. If a proposal is particularly voluminous or particularly complex or both then it is reasonable, in my opinion, that it should be extended for a longer period of time.
Senator O'BRIEN —Mr Toller, it appears that, if the NPRM comes out in a complex and voluminous a form, an extended period of consultation would be required. Do you think that will be given positive consideration by the board?
Mr Toller —I think it will. All the indications are that, having missed an original deadline that the board had set, we will now accept a full eight-week period or more of consultation.
Senator O'BRIEN —Finally on ultralights, am I correct in saying that CASA must approve the AUF operations manual? I assume that is to ensure the industry operates in a safe manner. The copy I have of that manual is an older version so it may have changed, but section 2.05 states that only a financial member of AUF can hold a pilot certificate. Does that mean that CASA approved this particular clause?
Mr Ilyk —I think the order itself, when it talks about approving the AUF's operations manual, only talks about those parts relating to operations and maintenance. All the other administrative parts are not approved by CASA. That is a matter for the AUF.
—Mr Toller, on 18 May the CPSU wrote to you with safety concerns about the transfer of directed traffic information into the TAAATs system on 6 June 2000. That letter raises a series of questions about the safety of the proposal, relating to human factors and licensing issues for ATCs. The letter asked CASA to cancel the transfer or delay and modify the proposal. Has CASA responded to that letter?
Mr Toller —We have. We responded to the CPSU yesterday, I believe. I signed the letter yesterday afternoon. Whether they have the letter yet or not I do not know, but I responded yesterday afternoon.
Senator O'BRIEN —They have put quite a lengthy and detailed position. Can you summarise the response of CASA to their concerns.
Mr Toller —As much as I can summarise the fairly detailed, as you say, issues. For a start, CASA basically understands from Airservices that there is effectively no difference in the standard of service being provided. Under the current arrangements regarding airspace management, Airservices are required to provide us with a safety case of any changes to any services that are provided. This is a change to the way the service is provided but not to the actual service that is provided. As such, there is not a safety case that would be required to come before CASA.
There was a statement made by the CPSU that the provision is below the standard set by ICAO. We do not believe that to be the case. We believe the standards currently in DTI to be quite significantly above the ICAO standard for class G airspace. The new arrangements, although providing them in a different way, continue to give a service that is above the required standards of ICAO.
There were some issues to do with the ability to call on HF radio. Our understanding is that, although there had been proposals for a rationalisation of HF coverage that are reflected in the CPSU's letter, in fact in the changes of 15 June they do not eventuate and there is effectively the same amount of HF coverage existing as before. There is a point there that relay officers are therefore used to talk through the HF. CASA notes this but also points out that that is true under all Oceanic air traffic control, anyway. It is not an uncommon arrangement for there to be a third party relaying information.
There are certain issues there about training for the changes and the insufficient staff numbers. Audits that we have done of Airservices training and other issues do not substantiate those claims. So we could not find anything there which gave us any concern over the changes as a result of the points made by the CPSU.
Senator O'BRIEN —So you do not think that directed traffic information is a flight service?
Mr Toller —No. There is no definition that says it must be provided by any particular person. Directed traffic information is a bonus. That information can be provided by either an air traffic controller or a flight service officer. There is nothing in the ICAO rules that says that it cannot be provided by whoever is trained to provide it and licensed, whether they be an air traffic controller or a flight service officer.
Senator O'BRIEN —How does the CAR 112 affect it? It is in the PSU letter that says `that person shall not act in any capacity in flight service unless ...' I am interested to know how that affects it.
—I am just looking up CAR 112 to see what it actually says. It would be rather strange to suggest that somebody with a higher form of licence could not provide the lower service, and therefore the matter of rendering an air traffic licence valid under regulation 118 for the provision of flight traffic information—which is not a requirement of class G airspace, anyway—does not provide us with any issues, I do not believe.
Senator O'BRIEN —So you are saying that these people who are performing the directed traffic information would have a higher licensing standard than this would require. Is that what you are saying?
Mr Toller —Most definitely, Senator.
Senator O'BRIEN —On the issue of regulatory reform, I want to ask a couple of broad questions about the CASA process to draft a new regulatory framework. I understand the submissions have now closed for the notice of proposed rule makings for a number of key areas for air traffic services, rescue and firefighting services, aeronautical telecommunications and radio navigation providers and air traffic service personnel licensing. What happens now with those NPRMs?
Mr Yates —Senator, could I respond to that. What is currently going on is that the comments that were received about those NPRMs that you referred to are being reviewed, and the proposed regulations that were circulated are going to be revised in light of some of the comments that have been received on the technical content of the legal draft material that we consulted upon. Then, in the next few weeks, that material will be passed to the Attorney-General's Office of Legal Drafting in the form of revised drafting instructions for the proposed regulations. I believe we are pretty close to being on track with this to have the material back and in its final rule form by the end of June, which was the deadline that was put upon this material by the minister. Commensurate with the drafting instructions being finalised, a `summary of responses' document will also be generated by the technical officers concerned, and it will be published for the community.
Senator O'BRIEN —I appreciate that. Are the actual submissions available to the committee?
Mr Yates —When the summary of responses is generated, that document which gives a summary of the submission and the disposition will be available. Do you want the actual submissions?
Senator O'BRIEN —I am just asking whether they can be made available to the committee.
Mr Yates —The summary of responses is a public document.
Senator O'BRIEN —Not that—the submissions. How many submissions were received in relation to each of the NPRMs?
Mr Yates —I cannot answer the question. I would have to take that on notice, but I can provide that information.
Senator O'BRIEN —Is there a time frame for the process now?
Mr Yates —As I said, the time frame is that the authority finishes its work, which includes the legal drafting activity, by the end of next month.
Senator O'BRIEN —A status report that I have cited dated 12 July 1999 in paragraph 2.2 refers to a project definition study, `Competitive provisions of tower air traffic control services', which was prepared by a group called Ambidji Group Pty Ltd, dated February 1999. Is that report available to the committee?
—It is available, Senator. I do not see why it should not be made available to the committee.
Senator O'BRIEN —Thank you.
Mr Yates —Could I just explain why that document was generated? The ATS working group, which I chair, employed Ambidji to do some preparatory work prior to the actual formulation of the NPRMs that you referred to. The report that they prepared put forward a variety of options as to how the problem should be tackled.
Senator O'BRIEN —The status report also says, `This project definition study has been used as the main reference for the development of the regulatory framework and project plan.' Is the Ambidji group the same company or related to the company that is providing the certified air ground operator services at Yulara airport?
Mr Yates —Yes.
Senator O'BRIEN —Is Ambidji Group Pty Ltd the same company or a related company to that which prepared the report evaluating the CAGO trial at Yulara, the Certified Air Ground Operator trial?
Mr Yates —I cannot recall precisely. I would need to refer back. I would like to take it on notice as to which organisation provided that service. The nemesis of the results of that trial, however, were undertaken by some of our staff.
Mr Harris —My recollection is that that was a CASA report, not a Nambidji report.
Senator O'BRIEN —I am asking the question. The answer may be no.
Mr Toller —We will take that one on notice because I am not sure, either. I thought it was a CASA report.
Senator O'BRIEN —Has the Ambidji Group Pty Ltd or other related companies prepared any other reports for CASA? What is their relationship?
Mr Toller —We will take that on one on notice, Senator. They are one of the very few consulting groups in the area, I think it has to be said.
Mr Harris —Certainly they have provided this sort of advice offshore as well by my recollection.
Senator O'BRIEN —Did Ambidji Group or a related company prepare a report for CASA relating to the management and operation of the national airways system or in relation to the facilities management of the national airways system?
Mr Toller —I am going to have to take that one on notice, Senator. I am not aware of such a report.
Senator O'BRIEN —If so, can the committee have copies of the report?
Mr Toller —I think we would have to look at the context as to, if they exist, why they were written in the first place.
Senator O'BRIEN —Is this company a potential bidder for any of the services that are being privatised?
Mr Harris —I do not think the government has a privatisation program in this area, Senator.
Senator O'BRIEN —Air traffic services, rescue and firefighting services?
—I think we have had this discussion before. We consider that the introduction of competition in that area is not equivalent to privatisation. In fact, privatisation as far as the government is concerned involves the sale of an asset. We are not selling an asset here as far as I am aware. If we were selling an asset it would be being done.
Senator O'BRIEN —Devolving a responsibility, might be a better way of putting it, where there is a potential for a commercial gain for private operators.
Mr Harris —Providing an alternative private supplier to the existing public supplier would be another way of looking at it. But again, we would deliver on whether that is privatisation, and that is an important difference from our perspective because privatisation carries connotations that we do not think are appropriate. This is an intention to provide an opportunity for an alternative supplier to provide a service.
Mr Toller —It also and importantly for the first time actually sets out the standards that are required in those areas, which are not defined at this stage, and that is a critical part of the process.
Senator O'BRIEN —I guess the point is how you want to categorise the transfer of certain services, for which a fee will have to be paid, by someone with, say, Airservices responsibility to the private sector where a company is involved in making assessments and, at the same time, is involved and/or potentially involved in businesses which stand to make a gain out of that change in the situation. How could CASA be convinced that the issues of gain for that company were not being put before safety or other public interest concerns?
Mr Toller —Because the role that CASA is playing is to set the safety standards. The issue of who provides the service is of no consequence to us. Clearly, we have equally had inputs from other potential providers in terms of comment and, obviously, from Airservices in a big way along the way of writing these standards.
Senator O'BRIEN —But doesn't that miss the point? It is not a matter of where the commercial gain lies being a concern for you; it is a matter of whether you are taking advice from someone who is likely to have just that concern as to whether there is a commercial gain in the outcome of your determinations.
Mr Toller —No, because our determinations are purely about minimum standards to be delivered, nothing else. It matters not who delivers those standards; they are only about what those minimum standards should be, and they will be the same for any provider.
Mr Harris —Indeed, I think when you see the Ambidji report you will see that the nature of it is not something which has prescribed in any way the proposition that went out as a notice of proposed rule making.
Senator O'BRIEN —Perhaps when we see the report—
Mr Harris —As Mr Yates has said, it was a tour de horizon of a range of options and issues that would need to be addressed in examining this. It was very much the preliminary work that CASA would need to undertake before they could, in the working group that was actually responsible for developing the proposed rules, start to develop it. So it is a preliminary document but a substantial one. I am not belittling it by saying that, but it is certainly not in any sense an ability for a private party to write a regulation or rule.
Senator O'BRIEN —I wanted to ask a few questions about the Parachute Federation. That will conclude my questions to CASA this evening. How does CASA regulate sporting organisations such as the Parachute Federation? Are they self-regulating? Where does the power to devolve that function come from, assuming that there is such a power?
—It is no different to the ultralights; they are yet another sports aviation body that are self-regulated.
Senator O'BRIEN —Is there any specific provision that you can refer me to in the Civil Aviation Act?
Mr Ilyk —The basic authorisation that at least the Australian Parachute Federation operates under is a specification issued under regulation 152, which says `parachute descents shall not be made unless authorised and conducted in accordance with the written specifications of CASA'. CASA has issued detailed specifications for the conduct of parachute descents by the members of the Parachute Federation.
Senator O'BRIEN —Is that the only organisation for which there is such a determination?
Mr Ilyk —As far as I am aware, that is correct. There is a general order in the 95 series which sets out general rules for anyone who wants to conduct parachuting operations; but in relation to the Parachuting Federation, there is a specific document just for the members of that organisation.
Senator O'BRIEN —What authority or regulatory role does CASA have in relation to the organisation? Do you audit them? Having delegated that authority to them, how do you go about—
Mr Ilyk —I am not sure that we have delegated any authority to them. What we have done is said that, if you want to conduct parachuting operations, they must be conducted in accordance with these rules. We have set the rules for them to operate under.
Senator O'BRIEN —Do you audit their observance of those rules?
Mr Ilyk —We have areas—
Mr Foley —The sports aviation area does audits on all sporting activities.
Senator O'BRIEN —How often would these audits be conducted on organisations such as the Parachute Federation?
Mr Foley —There is an audit program. We could make available to you what the frequency is on that aspect.
Senator O'BRIEN —Thank you for that. How long has the Australian Parachute Federation been regulated in this way?
Mr Ilyk —I am not certain, Senator. I recall that there has been a specification in place for several years, at least since 1995 or earlier. I cannot recall whether there was anything in place before then, other than the general rules set out in the 95 series orders.
Senator O'BRIEN —Could you let me know how frequently the Australian Parachute Federation has been audited in the last five years. If someone in the federation were jumping in accordance with the rules that you have laid down and they were injured in an accident at a jump field, is there a mandatory reporting process?
Mr Ilyk —I cannot recall what is in the specifications. There may be something in that which requires reporting of accidents and incidents. I will take that on notice.
Senator O'BRIEN —Thank you for that. And you might find out whether officers of CASA would automatically have a role in investigating an incident that is reported. I assume that would provoke further orders.
Mr Ilyk —I am sorry. I missed that.
—I would presume that, if you became that there was an incident or an injury, it would provoke further orders, or would you simply rely on the club to do it?
Mr Yates —My understanding is that the APF investigates accidents and incidents itself. The reporting requirements to the authority, I am afraid I do not know about. We agree to provide that information.
Senator O'BRIEN —Thank you very much for that. If the federation does their investigation and someone involved is unhappy about how it has been conducted or any findings, do they have an option to go to CASA directly? What do they do?
Mr Ilyk —A member of the federation?
Senator O'BRIEN —It might be someone related to them, if it were fatal.
Mr Ilyk —Anyone would have the right to come to CASA, lodge a complaint and ask for an investigation to be conducted. Ultimately, CASA has the responsibility over parachute descents.
Senator O'BRIEN —Mr Bills, does ATSB have any role in the investigation of incidents in organisations like the Australian Parachute Federation?
Mr Bills —Not with parachuting, Senator.
Senator O'BRIEN —Just the plane that they drop out of?
Mr Bills —Yes. If there is a problem with the plane, then we could get involved, but not with parachuting per se.
Senator O'BRIEN —Does CASA keep records on the number of fatalities that have occurred through skydiving each year?
Mr Toller —I am not aware of it, Senator. I can take that on notice?
Senator O'BRIEN —I would like to know how many fatalities have occurred in each of the past 10 years, if you have the record.
Mr Toller —I don't think we do, but we will have a look.
Senator O'BRIEN —Do you keep records on how many incidents have been recorded involving skydiving?
Mr Toller —Again, we will take that on notice. ATSB will have records on instants with aircraft involved in skydiving, but in terms of actual skydiving, I do not think so. The issue with all sports aviation is that people do it for fun understanding the risks. That has been the whole policy behind it.
Senator O'BRIEN —It is an interesting thought. I hesitate to say that those people fall between different things because they obviously do, but where something is happening and someone has a gripe, who is keeping the statistics?
Mr Toller —I do not believe it is in the CASA domain, but we are certainly happy to have a look at it.
Senator O'BRIEN —But you do regulate parachuting.
Mr Toller —We regulate parachuting in that we devolve the responsibility to the sports organisation which is the APF.
—I have been made aware of circumstances of an incident involving a fatality in 1995, a student parachutist. It happened in New South Wales at a place called Picton. Would CASA be made aware of an incident involving death? Would that automatically come to you or is that simply a matter for the coroner?
Mr Toller —I cannot say it would automatically come to us. There are occasions when we are certainly informed, but I would not say that it necessarily automatically comes to us. Apparently the local police normally inform us, but not always.
Senator O'BRIEN —I would appreciate it if the committee could receive some details of CASA's involvement or non-involvement in the monitoring and regulation of this area of—I think it is air safety. Some would question that.
Mr Toller —We will do that, Senator.
Senator O'BRIEN —Thank you.
ACTING CHAIR —That completes the questions for CASA. I thank all the officers who have stayed on tonight.
Proceedings suspended from 9.09 p.m. to 9.27 p.m.