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Administration of the Civil Aviation Safety Authority

CHAIR —I welcome officers from the Civil Aviation Safety Authority. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim.

Mr Byron —I do have a couple of comments to make, and my colleagues the deputy CEOs have some brief comments to make, to perhaps clarify a couple of issues that came out of yesterday’s hearing. We will be as brief as we can. Thank you for the opportunity to make this statement. The committee today and yesterday heard evidence from a range of aviation industry participants. The committee has received almost 50 submissions from interested parties. You have received evidence from the families of the victims of the Lockhart River tragedy. Again I would like to put on the record my sincerest sympathy to Lockhart River families who have lost their loved ones. The loss of life on 7 May 2005 was an absolute tragedy.

Yesterday and today you have heard from a range of organisations and former employees of CASA. It is important for the committee to note that CASA does not have a direct regulatory relationship with the four associations you heard from yesterday. They represent about 7,000 or 8,000 people. By no means do they represent all of the 37,000 pilots, all of the 13,000 owners of aircraft or the 100,000-plus people who are in some way connected to the industry. As a regulator, those who we do have direct relationships with are the almost 2,000 certificate holders—none of whom have appeared before you today but who I understand have made submissions. Our principal focus is the safety of passengers. A key element of our change program has been increased surveillance of that sector of the industry, and that has been achieved. Our major domestic airlines arguably transport about 96 per cent of passengers travelling in Australia on any given day, and although they have made submissions they have not been present for a public hearing or questions about their relationship with the regulator.

It is indicative of our industry that there are many voices, all wanting to be heard, with many differing points of view. Some of the information you have heard, we believe, is not correct. Many of the associations yesterday asserted they have not been adequately consulted on regulatory reforms like the introduction of the testing of alcohol and other drugs. It seems that sometimes our views on consultation differ. Many groups consider themselves to have been consulted only if their point of view is taken up.

To use the introduction of the new regime for the testing of alcohol and other drugs as an example, we have conducted 34 national workshops as well as numerous meetings with industry and employee representative bodies. Senators, it is up to you to decide whether we consult generously enough. I think, from the statistics, we do consult extensively. It is just that sometimes some stakeholders do not get what they particularly view as the outcome.

In fact, you have heard some criticism that sometimes we overconsult with the industry. I have told you today that we have replaced almost 50 per cent of our staff. Earlier today you heard from some former employees of CASA who were not on the journey with us. Again, it is up to you to decide if you are hearing from disaffected employees and their relative importance in determining whether CASA is moving forward.

Some stakeholders take issue with the way a firm regulator goes about doing its business. I am the first to say that we, CASA, do not have an easy job, but I stand by the record of my organisation over the last few years. We do not expect to receive bouquets for the work we do, but I would like to believe that most of the industry, from time to time and on considered and calm reflection, acknowledges and generally accepts that CASA delivers real safety outcomes and we play a pivotal and constructive role in managing Australia’s air safety regime.

Mr Carmody —I have one matter first: I have to table the implementation of the regulations paperwork that Senator O’Brien sought yesterday so that you can see which regulations have been implemented and which ones are waiting to be implemented. I want, firstly, to echo some of the things that Mr Byron said and also to cover a couple of points from yesterday. The Transair accident on 7 May was indeed a tragedy. It was certainly a tragedy for the families of the victims, and they have our sincere sympathies. As a regulator, we must do all we can to make sure these sorts of things do not happen again, and that is very much our aim. I want to talk briefly about the critical matter of the Federal Court decision on Aero-Tropics yesterday but, in doing so, it is important to put it in the context of the lessons we have learned from the Transair tragedy.

As I have said many times, this was a tragedy. Although we do not agree with all aspects of the ATSB report, it was certainly comprehensive. We do agree on many aspects of the report including that there were no mechanical problems with the aircraft, that the pilots made deliberate decisions and that the ATSB’s two-year investigation of Transair clearly showed inadequacies in Transair’s check and training regime, in their pilot management and in their safety culture. Those things feature in the ATSB report and we agree with them.

The requirements on CASA as a regulator are onerous. In 2006, well after the accident and as a result of a lot of detailed investigation into Transair by CASA, we issued show cause notices on Transair. On 26 August we issued a supplementary show cause notice. On 24 October we issued a notice of cancellation of their air operator certificate and they were immediately given an automatic stay by the Administrative Appeals Tribunal.

In late November 2006, ATSB, whose investigations into Transair were still continuing, provided CASA with information on deficiencies in the check and training regime of Transair. We did not have this information in the past. We acted immediately. We sought to obtain the records, and they refused us. We used our serious and imminent provisions and we grounded the operator on 25 November 2006. Two days later Transair surrendered its air operator certificate.

 I raise these matters because they relate directly to the current matters with Lip Air or Aero-Tropics. I have one more example, though, before I move to Lip Air. Last year we had serious safety concerns with the chief pilot of a helicopter operation in Western Australia. In September 2007 we issued a show cause notice. In December 2007 we cancelled his chief pilot licence and private pilot licence. In December 2007 the decision was stayed by the AAT. It is still stayed and he is still flying passengers. We consider it a serious and imminent risk to aviation safety but we have done all we can. There have been many other examples in the last few years.

Now to Lip Air. To me the parallels between Lip Air or Aero-Tropics and Transair are horrifying. We have found the same sorts of problems in Lip Air as were discovered in Transair after the accident. We have discovered them before an accident. Using the limited powers we have available over 10 months we have conducted an investigation of an airline that anecdotally in the community is known to be dodgy. We have evidence that indicates that aircrafts and pilots were not in the places they said they were in, when they were checked and certified, to conduct certain activities. We have what appear to be pre-signed flight approval forms. We have records that appear to have been designed to deceive us. In March 2008 we issued them with show cause notices. In May 2008 they responded unsatisfactorily. We then suspended the approvals of the chief pilot and the check pilot, effectively closing the airline on 2 June. On 5 June the operator went to the Federal Court and received a 24-hour stay. On the next day they went to the Administrative Appeals Tribunal and they received a stay until 21 July. We conducted further investigations and on 27 June we used the strongest powers we have—again, the ‘serious and imminent’ provisions to ground the airline. Yesterday we were in the Federal Court, and once again the Federal Court ruled against the serious concerns of the regulator and allowed the airline to continue to fly.

The concerns of the safety regulator are genuine, and we try and learn lessons. The rules under which we operate—the laws that were passed by this parliament in 2003—severely inhibit the way we operate. The concept that a tribunal can grant an automatic stay against the strong recommendations of the safety regulator and allow airlines to continue to operate and carry passengers is of serious concern. The unbelievably onerous requirements for CASA to use its extremely limited powers to continually rebuild its case, only to have it overturned by the courts, is frustrating and demoralising.

Yesterday Senator Heffernan spoke about passion. Australia has a highly professional regulator and we are passionate about aviation safety. Now is the best opportunity that you have to do something about aviation safety as well. This restrictive regime, one in which the regulator’s hands are effectively tied, needs to be dealt with. This regime, where safety judgements are reviewed by the courts, and almost invariably overturned, is untenable. One of these days there will be an accident during one of these stays—and as you said yesterday, Mr Chairman, the response will be ‘woops’.

To conclude, if we cannot ground a small airline like Aero-Tropics, which almost no-one had heard of until last week, on serious and imminent safety grounds in an effort to prevent future accidents and protect the travelling public, then I ask you: what do you expect we will be able to do with a medium or a large operator with money, time and legal representation? If we had similar safety concerns, we would not be able to progress. There are a number of simple fixes to this legislative problem that will restore balance in aviation safety, and I implore you to consider them in your deliberations. Thank you.

CHAIR —Thank you, Mr Carmody. Mr Quinn?

Mr Quinn —If I could link that with how we got to the position that we established on Lip Air—prior to an accident, which I guess is the key role of a regulator: to be ahead of the game rather than behind the game. Senator Heffernan asked me yesterday a question specifically about what had happened since Transair. If I could elaborate very quickly on a few procedural aspects, and a couple of new activities that have been introduced into CASA that enabled us to get to where we got to with Lip Air prior to that becoming a repeat accident. We have introduced aspects, both on a people and procedural level in terms of new reporting requirements in monthly management reports, and operational management reports, which report specifically on the surveillance activity in the various offices so we know what is going on. This includes the publication of senior management instructions, which give us the ability as a management team to be able to direct the field officers based upon risk, as to where we want to see the activity and what type of activity we want to see, and the introduction of risk based surveillance—that is, operational surveillance or targeted surveillance, where we have a no-notice turn-up at the door and enter the facility, which we do on an ad hoc basis; enhanced capability with our front-line staff in terms of training. With our air transport officers we have introduced a four-week inspector training course, covering new skills to the inspectorate, like human factors, threat and error management, lead auditor training, certificate in management training, and safety management systems; the implementation of certificate management teams, looking at multidisciplinary teams of focused people into an organisation and assessing the organisational health; and lastly, and very importantly, a coordinated enforcement policy, where the operational field officers liaise with our compliance and enforcement team to determine what is the most appropriate line of action we may need to take using the spectrum of tools that we have available to us. That gives us a summary of what has gone on and what is going on in CASA today compared with what was going on in CASA prior to the events outlined yesterday.

CHAIR —Thank you. Just to clear up a few things, of the 50 submissions that we got, there were two from the major RPT operators. Both of them said that they had no desire to appear in front of us but if we really wanted them they would come—just to get that very clear. There was short notice. There was no denying them the opportunity to put their case forward, and you do not suggest that. It would be helpful if you have more information—and you can take this on notice—about the helicopter pilot in that operation. I have an interest as a Western Australian senator who spends a little bit of time on helicopters in WA. If you could provide the committee with that, that would be good. I take your criticism of the laws that were given to you by this parliament in 2003. Did CASA raise that with the previous transport minister? Has that been raised?

Mr Carmody —We have raised the problems with the serious and imminent and automatic stay provisions over the last couple of years. It is fair to say that every time we experience something that is not successful we learn a little bit more about the process. We are trying to work our way through it. We have raised it. It is one of the areas that could be dealt with.

CHAIR —You have a regulation in terms of CAO48 and there is nothing stopping you enforcing that regulation.

Senator O’BRIEN —Mr Quinn, you talked about managerial instructions and enhanced capability of front-line staff in terms of training. Can you give us more details about that? Is there a manual that front-line staff get that says what they are expected to do?

Mr Quinn —The current activities are outlined in two specific manuals, the surveillance procedures manual and the air operators certificate manual. Both of these manuals are currently under rewrite.

Senator O’BRIEN —Are they in operation or not?

Mr Quinn —They are in operation.

Senator O’BRIEN —How long have they been in operation? Are they being rewritten now because that has not been done for years or is this a regular rewrite that is done every 12 months? What is the story?

Mr Quinn —I would have to defer to one of my colleagues. That was before my time. The purpose of the senior management instructions is to complement the new activities that I outlined. These will be incorporated in the rewrite of a manual. As such, every manual is a live document and should be amended. Also, the compliance and enforcement manual is part of the list of activities that are utilised by the front-line staff.

Senator O’BRIEN —So these manuals are currently the subject of a rewrite. Is that what you just told us?

Mr Quinn —Yes.

Senator O’BRIEN —You are not sure how long it is since they were rewritten. Mr Byron, can you tell us whether they were rewritten after you took over or do they predate you assuming the position?

Mr Byron —They were certainly initiated prior to my arrival. There have been progressive amendments to them over the last few years. What Mr Quinn is talking about—

Senator O’BRIEN —Wholesale or at the margins?

Mr Byron —Progressive amendment. We have increased the amount of surveillance that we do and it is important that the manuals reflect that sort of approach. There has been a progressive amendment of those manuals.

Dr Aleck —The enforcement manual was revised considerably in 2003 in light of the new legislation. There were—

Senator O’BRIEN —You would have to do that, wouldn’t you?

Dr Aleck —Yes, of course. In addition to that, representatives of what was then the Office of Legal Council, including Mr Ilyk, the head of what was then called the enforcement and investigations branch, travelled round the country to explain the way those processes acted. That manual has been revised again. It is about to be re-released. I must say that substantively there are no major changes at this point, but it enhances it and clarifies some ambiguities. In the meantime, in terms of enforcement related matters, the coordinated enforcement process that Mr Quinn referred to has been issued as a policy notice. It is obligatory for all managers and staff to have regard to it and to adhere to it. It addresses some of the matters that were raised earlier in a very constructive way.

Senator O’BRIEN —Could we have copies of those policy notices that would assist us to understand the evidence you are giving about the nature of the instructions to enforcement staff?

Dr Aleck —Certainly in terms of enforcement that is not a problem at all.

Senator O’BRIEN —Regarding the training that you spoke about, Mr Quinn—the enhanced capability of front-line staff in terms of them being provided training—what is the training program? I thought we were hearing yesterday that there had been a bit of a hiatus with that because certain courses were not available.

Mr Quinn —We introduced a new form of capability into the organisation in the form of roles of safety systems specialists and air transport inspectors. The role of these inspectors and these specialists is to complement the technical skills of the flying operations inspectors and the airworthiness inspectors. However, the remit that they have is to look at an organisation more from a system safety perspective and more from an organisational safety and health point of view. So, therefore, the skill set required by this group of individuals, and to be consistent, is different to that you would expect of a technical person. I mentioned the areas of human factors—basic introduction and understanding of human factors. Most of these people come armed with these skills, so it is really a refresher to update them. The CASA view on safety management systems has been detailed in this organisation for quite some time. CASA ran a series of seminars back in the early 2000s regarding SMS—and this is just a continuation of that theme—on threat and error management training, understanding risk in real terms and lead auditor training. That is being provided to that group at the moment as they are inducted into the organisation. That will be eventually rolled out to all the air transport office staff.

Senator O’BRIEN —Is that an area that ICAO would have looked at?

Mr Quinn —That is correct. It was on the ICAO remit. This is, again, part of the softer skills. They were looking more at the technical skills as part of the audit program. Also, there were courses run for the FOIs and AWIs on 21 May 2007, 6 August 2007 and 19 May 2008.

Senator O’BRIEN —The FOIs and the?

Mr Quinn —The AWIs—the airworthiness inspectors.

Senator O’BRIEN —Was that general or was that just for an intake of people who were filling those positions?

Mr Quinn —I am not familiar with the specifics of the course. Most of those courses were prior to my time.

Senator O’BRIEN —Can you help us, Mr Byron?

Mr Byron —I will ask Mr Wight to give the detailed answer.

Mr Wight —The induction courses that we have just outlined were for the introduction of our new capability staff for the air transport inspectors. The first course that we ran as a result of intake was on 21 May 2007. With that, we have integrated training with the flight operations inspectors and the airworthiness inspectors as a part of those courses. We have run three courses. There have been new inspectors brought on and existing staff are being brought through the courses as we continue to run the courses.

Senator O’BRIEN —Those courses are on those aspects of training systems, safety perspective, human factors—

Mr Wight —Safety management systems; threat and error management.

Senator O’BRIEN —Is there a part of those courses that deals with the philosophy of CASA as to how one should operate in terms of relationship with industry, obligations of the regulatory regime et cetera?

Mr Wight —Probably part of the certificate management team training covers that aspect. Some of the other aspects would be covered in the general induction training in Canberra.

Senator O’BRIEN —Do you have a curriculum for each of these courses?

Mr Wight —I could provide an outline of the courses for the inspector training, yes.

Senator O’BRIEN —Are those the courses you just mentioned?

Mr Wight —The four-week induction course I mentioned? Yes, certainly there is a curriculum and outline of the course.

Senator O’BRIEN —That would be good. Thank you very much for that. I am not sure what you meant, Mr Quinn, when you said that this is what is going on today as distinct from yesterday, given that we were at a hearing yesterday. I was not sure that you were referring to ‘yesterday’ in that sense, but I want to be absolutely clear what you mean by that.

Mr Quinn —My apologies for that. I was referring to the questions asked by Senator Heffernan on the points that have been outlined in the ATSB Transair report which were critical of some of the CASA activities. Senator Heffernan asked me, ‘What has been done to ensure that these things are fixed?’ And that is what I was referring to. This has been a constant and gradual change. It is ongoing and will continue to develop.

Mr Carmody  —May I add something about training. Firstly, one of the things that has not been mentioned is that our induction courses have been running since late 2006. We have probably put about 200 staff through our induction course into the organisation. The course introduces all new staff from around the country to the regulator, what we are doing, how we do it—those sorts of things.

Senator O’BRIEN —Is that a standard course for everyone?

Mr Carmody —Absolutely. There is a syllabus available, if you would like to see that.

Senator O’BRIEN —Thank you.

Mr Carmody —It is a standard induction course for the organisation. Also a lot of the points that I think Mr Quinn was alluding to are picked up in our Diploma of Aviation Safety. A lot of these things are covered in the diploma course and the certificate course. Finally I would like to table, if I may, the interim results of the ICAO universal audit oversight program, which I have in a chart summary form. Even though these are the interim results, if you would be happy for me to table those I will do so.

Senator O’BRIEN —Certainly. That is an ICAO document you are tabling?

Mr Carmody —This is a comparison of Australia’s level of implementation of the eight critical elements of the safety system based on the ICAO report provided to Australia in May 2008.

Senator O’BRIEN —So it is a CASA document?

Mr Carmody —Yes. I will table that, if I may.

Senator O’BRIEN —Thank you for that. The chairman asked if, when staff attended the induction course, they get a tie.

Mr Carmody —You did notice.

Mr Wight —Or a blue shirt.

CHAIR —I was not sure whether Mr Byron had brought them all back from his last overseas trip for you, but I did note that they were all the same!

Mr Byron —My last overseas trip was a holiday. Perhaps members of the committee would like a CASA tie?

CHAIR —Thank you for dobbing me in, Senator O’Brien!

Senator O’BRIEN —I have had those sorts of things in the past.

Dr Aleck —Quickly to the remarks about training, one of the longer sessions in that standard induction course has to do with the approach and regulatory framework of CASA. I conduct that session myself, so I am aware of what is in it. One of the things that became clear as a result of that was that, certainly for operational people, a longer period of focused attention on those issues was in order. That has been developed. The only thing we are waiting on now are dates for this to be conducted. So that will add that element to it as well. That will be conducted in the field.

Senator O’BRIEN —Okay. We received some evidence today about the state of liability insurance and the impact that that has on CASA’s role in a coronial inquiry. Have you got anything to tell us about that?

Mr Byron —I certainly have. I will ask Dr Aleck to give you the detail.

Dr Aleck —First of all I will just mention in passing that for a year now CASA has been involved with Comcover. We no longer have external overseas underwriters, so we are part of the Commonwealth framework on that score.

Senator O’BRIEN —Since when—what is the date?

Dr Aleck —This came into effect I think in July 2007. It has been about a year. I will get that for you.

Senator O’BRIEN —So incidents prior to that are the subject of previous insurance arrangements and obligations?

Dr Aleck —No, as far as that is concerned, let me say that—and perhaps this is the best time to say it—I worked for Mr Ilyk for many years. I have great respect for Mr Ilyk and over the years we have respectfully disagreed on a couple of points. I have not had direct involvement in the insurance related matters involving Seaview and Monarch, although I was involved in peripheral issues. I did have very direct involvement in the issues involving the Transair matter in the coronial. As a matter of law, an insurer is responsible to its insured. When counsel are engaged to represent the matter, they are legally bound to represent the real party and interest. I recognise that there are financial realities and it is in the insurer’s interest to minimise loss. It is difficult for me to imagine many situations in which CASA’s interests and the insurer’s interests would depart considerably, but I can say unequivocally that, in so far as the way CASA’s relationship with the lawyers who represented CASA in the coronial proceedings is concerned, those were in no way, shape or form driven or run or managed by the insurer. As it happens, the law firm that was contracted by the insurer to represent us is a member of our panel of firms. They met regularly with us. I saw the dispatches that went from our counsel and our legal team back to the insurer reporting on what we had done. I am convinced, because I was there, that the perspective and the strategy—if that is the right word—and the attitude and the orientation about how our representation was to be handled were driven by the executive management of CASA and not by the insurers. That is certainly true in this case.

Senator O’BRIEN —So to the extent that there has been comment on the strategy, the management of CASA accepts full responsibility?

Dr Aleck —I think I know what you are driving at there.

Senator O’BRIEN —You know what I am driving at, don’t you? It is no secret. It has been in Hansard.

Dr Aleck —If you are referring to the coroner’s comments—

Senator O’BRIEN —Yes, sure.

Dr Aleck —The coroner was referring to the mode in which counsel represented. I do not think, frankly—and with respect—that is entirely true. I think I have said before in estimates—

Senator O’BRIEN —So the coroner was biased? Was the coroner unable to accurately detect the nature of the strategy?

Dr Aleck —The coroner made an observation expressing his perception and his view of the way in which these proceedings were conducted, and he formed the view that counsel would not have proceeded in that way unless they had been instructed to. I think this was in the context of an attack on the integrity of the ATSB. I would say that is not true.

Senator O’BRIEN —That is where you and the coroner obviously do not agree, and I am not in a position to objectively rule on the matter. I have to make a decision as to whose view I accept. But let us get back to the question that I asked, which is this: in the environment where you were privately insured, who selected legal counsel?

Dr Aleck —The insurer would identify the lawyer.

Senator O’BRIEN —So they would select the lawyers?

Dr Aleck —They would. But also if CASA as the insured had a difficulty with that I am confident that our view would be taken into account.

Senator O’BRIEN —Was that ever the case?

Dr Aleck —Not in my experience. But, as I have said, the only matter in which I was directly involved was the Transair coronial proceedings, and the firm that the insurer selected was a member of our legal panel.

Senator O’BRIEN —So could you tell us without fear of contradiction that the instructions that those lawyers received were entirely under the control of CASA?

Dr Aleck —I cannot say what instructions they may have received from the insurer. What I can say is that the way in which they conducted this matter reflected—I would say ‘entirely’ but I would be happy to defer to our executive—the views and preferences of our executive management. As to if those happened to coincide with instructions that they have got from their insurers, that may be. I do not know what the personal exchanges were entirely. I did see the reports back to the insurers, but there may have been others that I was not aware of. But I was not troubled by them.

Senator O’BRIEN —In terms of the nature of what—I am not sure how to put it; whether it is instruction or consultation or information—was exchanged between the insurer and CASA, was that managed by CASA or by the insurer?

Dr Aleck —Between the insurer and CASA?

Senator O’BRIEN —Yes.

Dr Aleck —I think the nature of our relationship with the insurer began and ended with our notification of the possible claim, and from that point forward all of our involvement was with the lawyers. There was no need to be directly involved with the insurer, and no need arose for that to be handled so.

Senator O’BRIEN —So there was no input from CASA to the insurer after that point on that matter?

Dr Aleck —Certainly not from the Legal Services Group, and I do not believe from the rest.

Mr Carmody —Not from management either, Senator. I make that clear.

Dr Aleck —Other than the initial notification.

Senator O’BRIEN —I was taking that to be the meaning of the answer, Mr Carmody. I can assure you I did not interpret that there was a barrier between you in relation to that answer.

Mr Carmody —I am sorry; Dr Aleck just said not from Legal Services, so I was expanding it just to make it clear, thank you.

Senator O’BRIEN —Thank you for doing that. In terms of other matters, Dr Aleck, you had some knowledge of this in the past, I assume?

Dr Aleck —I have had involvement before. Over the years I have served as senior legal counsel in the same office. My recollection is—and I do not want to speak with any specificity because I do not recall any particular cases—that we did not have much direct involvement with the insurers at all. Our involvements were exclusively with the lawyers—and I am going back to CAA days—that the insurers had paid to represent us. I guess that is the critical thing. It is not different, I think, from an automobile insurance arrangement. If you are involved in an accident and you are insured and it involves the need for legal advice, it is your insurer who will pay for that. But the lawyers will talk to you once you make that arrangement. I think if an issue arises where your interests begin to diverge from the insurer’s interests, there are ways and means of dealing with that to ensure that conflicts of interest do not obscure the progress of the matter.

Senator O’BRIEN —Mr Byron, this morning we were given a printout from the SEEK website, which has a link with CASA, which still contains the passage:

CASA works to be a valued partner with the aviation industry ...

Mr Byron —Yesterday the context of a question was: do we include that in advertisements? I have asked for a check of all advertisements for the last 18 months to be done. It excluded, I think, a couple that were done by search agents, and the advice I have got this morning is that none of the specific advertisements that were put in the newspapers included the sole words of partnering with industry. If I can see what you have there, I would be happy to check that.

Senator O’BRIEN —It is off the SEEK website. It is a link to your website with a commentary about CASA and what is new at CASA.

Mr Byron —So it is not an advertisement for a job?

Senator O’BRIEN —It is not obvious from the page that I have whether it is in connection with a particular job. It is a link from their website, under ‘EXECUTIVE JOBS $10K+’—but I am not sure that that is relevant. It is a reference on this website, with a link to your website, which I presume would have something to do with your sponsoring that sort of thing.

Mr Byron —I will certainly check the detail of this, but in the checking that I have done so far this morning no specific advertisements have included that stand-alone comment. From my point of view, I do not want to see that comment there as a stand-alone comment without the balancing of the fact that when at times we have to be a firm regulator that is what we have to do. I will check that.

Senator O’BRIEN —When senior officers communicated views to you about what was happening in CASA, what was your response, Mr Byron?

Mr Byron —It would depend upon what the nature of the issue was. Normally, if someone had a serious issue they would come and talk to me about it. Sometimes I got the views of senior management in writing by email—that type of thing. To the best of my knowledge, with any concerns that I have received I have always dealt in some way with the individual, either accepting what they have said and done something about it or rejecting it for whatever reason.

Senator O’BRIEN —Did you tell people not to bother sending you that material again?

Mr Byron —I certainly do not recall ever doing that, no.

Senator O’BRIEN —Did you recently send out a message to staff telling them you did not want any surprises, particularly in relation to concerns that you had that perhaps there was an enforcement issue that you did not become aware of until it was brought to your attention by management?

Mr Byron —I certainly recall in the last few months having an issue to deal with where technical officers had not communicated rapidly enough to senior management what they were doing. The message that was certainly given was that officers had an obligation to do that and if they were dealing with industry and a sensitive issue was being raised then we wanted to hear about it.

Senator O’BRIEN —A ‘sensitive issue’ being?

Mr Byron —A regulatory decision of some sort.

Senator O’BRIEN —Okay, some enforcement.

Mr Byron —Not necessarily enforcement. It might have been an interpretation. It might have been a restriction on an AOC or something like that which might have been sensitive. One of the things we have been trying to do for the last approximately two years, putting a bit of focus on it, is to make sure that the operations at the front line—which to a large extent were quarantined during the large change program and have since been bolstered—are starting to provide us with information into a central location, not my central location necessarily, but the deputies’, so we know what is going on in the big picture. In fact, I recall that, when Mr Quinn arrived in the organisation, I gave him written instructions about making sure we established that capability in the operations part of the organisation so that he knew exactly what was going on in the various parts of the organisation. Mr Quinn might like to give his views about how I relayed that and that type of thing, but certainly it is important that if there are regulatory decisions being taken or restrictions being placed on industry at an operational level that have significant implications then we want to know about it.

Senator O’BRIEN —Is that part of an ongoing instruction, or is that something you have recently added to the level of instruction?

Mr Byron —I remember communicating by minute that to—that really is an expectation that I would have of—

Senator O’BRIEN —Until you minuted it, it has not been something that has been part of a manual or something?

Mr Byron —No. It is a reminder about good management practice, if you like.

Senator HEFFERNAN —Mr Quinn, I am still trying to get my head around the massive criticism against CASA about how it is being deskilled. I cannot make a judgement on that, but plenty of other people have made that judgement. You have a pilot background, don’t you?

Mr Quinn —Correct.

Senator HEFFERNAN —So when you came to CASA, did you get reskilled? Did they get you in a room and say, ‘You were a pilot, Son; now this is your new task’?

Mr Quinn —Senator, I should elaborate. I did not join CASA as a pilot or a flying operations inspector; I have come in as a senior executive with a significant background in safety management, air safety investigation and risk management.

Senator HEFFERNAN —So you demonstrated your skills at your interview rather than you were retrained.

Mr Quinn —Flying operations retraining for me is not part of my remit.

Senator HEFFERNAN —As you know, I am not into bloody sooks. Someone gets stuck into me, I let them go. It is therapeutic for them and it is probably therapeutic for me. But the constant criticism is that in the huge turnover—I do not think anyone disagrees that there needed to be reform—the place is gradually being deskilled. One of the things that was put to us, either today or yesterday, was that if you come into CASA as an inspector with a flying background, which is probably a good thing—do you put them through a course and say: ‘You’re no longer a pilot or whatever you were. This is your new job.’ Do you give them lessons? If you worked for Kendall airlines and came to CASA and then fronted up to someone at Mascot or somewhere, if you were not on top of your brief, as it were, if you were a bit vague about the interpretation of how you prosecute this particular regulation, you could react in a defensive way by being offensive. Most people who go the knuckle are self-sufficient; their self-esteem is not what it ought to be. You ought to be able to express yourself without doing your block. This is probably a bloody good essay on me; I am always doing my block. Do you accept the criticism that the place, by minute cuts, might be becoming deskilled?

Mr Quinn —Let me put it this way: deskilled or the experience levels changing, it is certainly a challenge for us. They are two very different things. We have specific requirements for people joining us as flying operations inspectors. We have certain criteria outlined for that. For whatever particular position we want, whether it be in general aviation or in the air transport area, where a pilot will have heavy jet experience, the skill level is what is different. This is where it changes. This is where there has been some commentary within the organisation, particularly with the new skill set that we have in the organisation. I referred before to the safety system specialists and the air transport inspectors. They are a new breed of people that are new to the organisation. Many of the old-school people believe that this is an inappropriate for the future, and I believe you have heard that this morning. I believe, as a 20-year safety specialist, that this is the right way. It is the correct balance of those two that we need to complement and to continue to build. We are currently still recruiting technical staff.

Senator HEFFERNAN —It is a dynamic industry. No doubt there are a whole lot of likeable rogues in the industry. There is no industry that does not have likeable rogues in it. You have to round up those rogues, I suppose you could say, with people who might find the rounding up of rogues a new job description for them. Do you put them through a course? If I am burnt out pilot and I come to work for CASA as one of these new generation inspectors, is there a course whereby I can come out the other end of it with a ticket that says, ‘Son, you are qualified.’

Mr Quinn —I will defer to Mr Wight, who is in charge of the area for flying operations inspectors, but let me start by saying this. I think I made the comment yesterday about the skill set, particularly in the heavy jet industry, whereby I challenged the validity of having flying operations inspectors qualified on a heavy type of aircraft actively occupying a control seat, and that being some sort of regulatory oversight. What does it really mean? We have moved to a regime where we take a much broader view of what is compliant, what is safe and where the risks are in the organisation. We have moved away from strictly that—saying, ‘You will be an FOI. You must fly this aircraft, and you must fly it so often.’ There are also certain risks in that for CASA, keeping competency and proficiency levels high. We have moved away from having a combination of that skill set and occasionally doing that. Certainly not in the heavy end of the industry anymore, but in the general aviation industry control seat occupation still goes on occasionally. On how a flight operations inspector joins the authority and how they transition into being active as an inspector I will ask Mr Wight to comment.

Mr Wight —It is probably fair to say that people join the authority—if you are talking about flying operations inspectors—because they have been pilots. They do not join the authority, particularly the air transport end—

Senator HEFFERNAN —Are you a burnt-out pilot?

Mr Wight —I have been a pilot in the past, yes. They do not join the inspectorate to be a pilot, effectively; they join to become a regulator. As far as maintaining skills, certainly in the air transport end, we provide some simulator training for the crews to maintain currency for their instrument ratings. As to their occupying a control seat in the air transport end, that basically does not occur at all. Their role is to observe what the airline is doing. As far as new technologies coming into the country are concerned, we have operators who will be bringing in 777s. We have been able to source some expertise from overseas with the required skills for the 777. We will be providing the appropriate training for staff dealing with new technologies like the 787. With the Airbus A380, we have been provided with training from the manufacturer for our own existing staff. We talked before about the initial induction training for the new breed of staff and for the existing staff. Where we require our staff to have specific skills, either we can bring in the expertise or we can provide the training to our existing staff.

Senator HEFFERNAN —But if you are a pilot and you come into the CASA organisation to become an inspector, can you inspect areas in the industry other than the area of expertise that you have come out of? Who inspects the inspectors? How do you know that your airframe inspector is competent, or that he is not losing his skill for some reason? It might just be because of old age, like me.

Mr Wight —Are you talking about the airworthiness inspectors?

Senator HEFFERNAN —You bring in people from a wide range of sources. There is churning in the industry, and new faces turn up. Some of them might be pilots—and bloody good pilots at that—but they are sick of being away from home all the time. Do you reskill them so that they can go down to whatever person’s workshop and say, ‘Son, that nut is on back to front?’ Or do they just do the flying part of the inspection?

Mr Wight —We have people with various skills as flying operations inspectors.

Senator HEFFERNAN —But he is this multiskilled person, isn’t he?

Mr Wight —No. We have the flying operations inspector, who is a person being employed as a pilot. We have airworthiness inspectors, who are basically people who have been engineers. The safety system specialists and the air transport inspectors come from various backgrounds, and they are basically the systems specialists.

Senator HEFFERNAN —The skill they inspect is the competency which they have come out of.

Mr Wight —They are complementing the work that the technical inspectors are doing, which is essentially the flying operations inspectors and the airworthiness inspectors.

Senator HEFFERNAN —But the competency in which they inspect as a CASA inspector is the technical competency which they have come out of?

Mr Wight —There are two issues. There is where we look at technical issues. That is essentially where we look at product, which is the term that has been used, where we actually look at systems within organisations. That is where we have the systems specialist.

Senator HEFFERNAN —But the bloke who lifts the bonnet, as it were, has had a life of looking under the bonnet before he starts to inspect the bloke who is looking under the bonnet.

Mr Quinn —It is important that I make a clarification here. CASA’s role in the industry is not to tell the industry how to operate. It is to ensure that they are compliant.

Senator HEFFERNAN —With the regulations.

Mr Quinn —In terms of technical skills, I do not want flight operations inspectors out there commenting on techniques that operators are using to operate an aircraft. I want them to have the knowledge and the background of the operation to be able to determine and understand whether something is compliant with the regulations.

Senator HEFFERNAN —Surely you need a person who can tell by having a look whether the regulations are being adhered to. For example, there is a thing over in Europe called the OIE. It is a global oversight of animal health. They have inspectors and a set of regulations. Recently, they gave certification, with a set of ticks and crosses, to Brazil that their beef herd had a certain status. As a consequence of that, Australia went over and bought some of their beef and brought it back to Australia. That was on the basis of the OIE certification only. They said, ‘It is certified; let’s bring it in.’ I think we sent Dateline over there to have a look at their foot-and-mouth-free status. It was complete baloney. They had no status at all. But the official document, ticked off by the regulator in Europe, said they were AOK. If any of the most basic farmers had visited Brazil, they would have seen that it was not so.

When someone in your organisation takes the sheet out to wherever they go and they tick all the things, how do they really know that what they are ticking has actually happened? The instance we were given was in relation to the FOI and the 777s not being inspected, but they were flying. How do we know whether a bloke might not know what the job is? Who is inspecting the inspector?

Mr Quinn —We do have people who do that, we do continue to do targeted surveillance and we do have capability to do that.

Senator HEFFERNAN —I am not saying you do not; I am just asking you to tell us about it.

Mr Quinn —We do. In terms of the comment that was made about the resources in the Sydney field office yesterday, regarding oversight of Qantas, I can say that we have ramped the technical skill base there to conduct that type of activity based on familiarity, alongside the new breed who spend more time in the management offices and the boardroom than out there in the hangars and in the flight operations training.

Mr Byron —There is a little bit of looking under the bonnet, I think.

Mr Quinn —Yes.

Senator O’BRIEN —We did say that we would give CASA some time to put some material before us in camera. Are we ready to do that now? We were scheduled to conclude at 12.45.

Mr Byron —Prior to that, there was some evidence given to the committee this morning that we would like the opportunity to very briefly provide our view on. Could we have a couple of minutes on that?


Dr Aleck —Obviously, I listened very carefully to what Mr Ilyk had to say and I read his submission closely. There are a couple of assertions I would like to respectfully disagree with—some of which may be a result of the fact that he had been away from the organisation for a while, though some of them actually existed and occurred at the time he was there.

ACTING CHAIR —He did qualify some of the things he said by indicating that they were limited by his knowledge and he had not had direct contact since he left.

Dr Aleck —He did. It is in part for that reason that I want to add to some of those things. Firstly, I have spoken about the role of the insurers—I will not go on about that. In terms of the enforcement mentality, I will not labour that in any great length except to say that it is well recognised that enforcement is a key core function of CASA in the act. It is also one of the few obligations on Australia that is specified in the Chicago convention, not in an annex to the convention, so you do not file any differences to that. In August 2006, I spent a day with Mr Byron outlining the kinds of things I had in mind for enhancing and developing, amongst other things, the enforcement function of CASA. Since then, I would have to say that we have progressed considerably down that road. Are we there yet entirely? Certainly not. But I also believe that, in many respects, the best is the enemy of the good in some cases and I am pleased for the progress we have made and I am pleased for the progress we are making.

There was a suggestion that there was little or no, or is little or no, legal involvement in the legislative drafting process. That function has been taken away from CASA, and the consultative groups working in the regulatory development management branch are involved in developing the policy, but now, as a result of some changes that we oversaw, there is a cooperative relationship between the regulatory development area as well as the legal area to ensure that some of the policy objectives that are being articulated in legislation are in fact within our gift legally. It makes no sense to develop a comprehensive set of regulations which for reasons that go beyond CASA’s remit do not comply with Commonwealth requirements. Not only is that involvement on an ongoing basis; there is an arrangement now whereby any new regulatory proposals or any amendments to regulatory processes, whether in the orders or the act or the regs, are done in consultation with the legal services group. So that is happening and has been.

The aviation rulings, of which there have never been many, was a notion set up at one time that CASA should be able to articulate a sort of organisational view on what the law means. The problem in Australia, unlike some other jurisdictions, is that we do not know what the law means finally until a court says: ‘This is what it means.’ We can give our opinion, but our opinion stands no greater force in the face of a tribunal or a court than the opinion of someone who objects to what we say. A number of those aviation rulings are, I think, dubious, to be honest. Before we embark on a program of generating many more of them, we want to be sure that the content of those things is consistent with the law and with the policy of the organisation.

There is a suggestion that managers should manage and take advice and not be driven by lawyers. There has been a perception that lawyers were overly involved in decision making. The reality is—and I do not think anyone would object to this—that a lawyer’s job begins and ends with giving advice. It is the client’s or the organisation’s responsibility to accept that advice or reject it in whole or in part. Over the past several years, the degree to which the legal services group has been contacted by various levels in the authority from the most senior levels down to the operational field has increased considerably. So I would not say that there is any active or, to my mind, clandestine discouragement to seek legal advice. I recognise there is a tendency sometimes on the part of many to say, ‘The lawyer said to do this, so I’ll do it.’ We go out of our way to make sure that, if the law requires something, we are explicit about that. But in many cases the law does not require a specific outcome in a prescriptive sense; it requires that certain things be taken into account before a technical decision is made—and we actually play an active role in ensuring that that happens.

When it comes to some of the developments in the US and Canada, we have heard back and forth stories that we are too lenient; we are too harsh; we overregulate; we under-regulate; we are prescriptive; we are flexible. If I say that if everybody says this then perhaps we are doing something right, that is glib and flippant, and I do not mean that. But over the years the fact that we have been challenged and indicted in many ways for being one or the other of the extremes suggests that it is a difficult balance to manage and we are trying to achieve that balance in a more effective way.

The enforcement decision-making process—and Mr Quinn alluded to it—through the coordinated enforcement process is a significant development. I emphasise that operational and technical decisions to vary, suspend or cancel someone’s authorisation is a decision taken at the operational management level. It is not a decision taken in the enforcement area. What is required now is consultation between the operational areas and the enforcement area. Matters over which the enforcement area does have some responsibility include—while not autonomous, the decision-making authority rests in that office—the decision to initiate an investigation with a view to the preparation of a brief of evidence for submission to the prosecutor’s office and to issue infringement notices. That authority rests in the Enforcement Policy and Practice Branch on the basis of matters that are referred to us. We do not initiate those on our own. As soon as matters come to us they are given a fair and even-handed consideration, and amongst the documents that we will be tabling is the way that process works.

Finally, I think the only thing I will comment on is that Mr Ilyk made some references to developments in the US and Canada, and I made some references to that myself. There are many similarities and many differences between the regulatory regimes in the United States and Canada and Australia. Certainly as far as the United States’ regimes are concerned, I am not unfamiliar with them. There is a danger in assuming that everything they do there is right or in assuming that everything they do there is wrong. On the one hand you could say that the FAA has come in for significant criticism these days because of its oversight problems, but you can also say that the dollar amounts of the civil penalty fines that are imposed on operators in the US are in the millions every quarter. It is a different scheme, though. It is a civil penalty scheme and, if the FAA assesses a $300,000 fine against a major carrier, that matter is not resolved for several years. It is negotiated—the term is ‘compromised’—and at the end of that exercise it is oftentimes considerably less than that; not always, but oftentimes. I think it would be ill-advised for Australia to go down that route. If you think the lawyers are overly involved in decision making now, wait till you see what would happen if that kind of scheme were in place. There are lessons to be learned from that and from the Canadian system too, and I think that we are taking those lessons on board fully. That is all, I think.

ACTING CHAIR —Senator Siewert wanted to know, when you talked about 93 per cent of prosecutions succeeding, whether that means that 93 per cent of matters that you referred to the DPP were taken to prosecution and succeeded, or is there some lesser—

Dr Aleck —It would include matters that were prosecuted and resulted in a conviction or a finding of guilt—there is a slight difference and I will not labour that—or in a situation where the defendant entered a plea. Those are what is included. Of the matters that went through prosecution, there was a 76 per cent success rate after they went before a court. Those are DPP figures and that was up to 2005. We can provide further figures as soon as the DPP provides them to us.

Senator HEFFERNAN —The agricultural blokes who were here this morning thought it would be a good idea—and I reckon that it does not sound a bad idea—to have a DLO type person they can ring up in CASA, a person that is peculiar to their particular idiosyncrasies.

Mr Carmody —I listened to that too, and it might be a good idea. One of the things that I would say is that we have got a very large industry that we are trying to regulate and that gentleman represents 130 operators.

Senator HEFFERNAN —I understand that.

Mr Carmody —But, at the same time, I think that his point is valid and we could probably see whether we could find a way to work with them. We have been working pretty closely with them.

Senator HEFFERNAN —We have a DLO in immigration whom we ring up to bypass all the bloody rigmarole. Do you think that there is going to be a point where airlines cannot cut any more costs before they start to endanger the safety of the flying public?

Mr Byron —Obviously that point is out there somewhere—

Senator HEFFERNAN —It is a bit like a peak oil.

Mr Byron —Yes.

Senator HEFFERNAN —It is a bit of a worry to me.

Mr Byron —I mentioned yesterday the issue of looking at the changing nature of the industry and the forces that act on it. Our emerging risk study was principally initiated because of the changing nature of the industry, particularly the fare-paying passenger sector and particularly with the changes in the large new carriers, the low-cost carriers, and that type of thing. We are going to be taking a very active look at those sorts of issues.

Senator HEFFERNAN —So there would be little identifiers coming—you would have identifiers, like little warning signals, surely? The equipment you put on a plane to get a warning of the ground approaching, whatever you call that—for some planes that equipment is dearer than the plane it is on.

Mr Byron —Yes. Certainly, as those things become regulated—like EGPWS is regulated—the attitude of the operator to install that equipment is becoming part of a dialogue that we are getting in our operations part of the organisation.

Senator HEFFERNAN —I am pleased to hear that. There must be a light blinking somewhere on this stuff.

Mr Byron —We are starting to use the word ‘intelligence’ a little bit more now, and I think that fits in that area.

Senator HEFFERNAN —Finally, with regard to Transair and the evidence that they may have been having paid endorsements on fare-paying flights—which you say is a serious misdemeanour—how do we prevent that in the future?

Mr Byron —I would like to make a brief comment and then I will pass to Dr Aleck. Certainly the suggestion that operators have done or may be doing that is a significant concern for me. Last night I initiated a program where we are going to take a look at some sectors of the industry—the low-cost area; the smaller regional carriers—to see if we can determine whether that practice is currently being undertaken by operators. Certainly, if we do find that we will take appropriate steps to look at it from a financial viability point of view. But probably more importantly, we will look at the way in which that affects the ability of an operating crew to effectively work together, if one pilot is paying for the privilege. Dr Aleck, would you like to comment on the legalities of it?

Dr Aleck —Only to confirm, I think, what Mr Byron suggested yesterday was a preliminary legal view on it, and that is that the kinds of activities that can be conducted during a revenue flight in the flight deck cannot include flying training in the formal sense—the law prohibits that. But as Mr Byron also suggested, accruing hours as pilot in command can be had in the situation they call ‘in command under supervision’, so that the fellow in the right seat is actually flying the aeroplane. You will often hear them announce before you take off from Canberra to go off somewhere, ‘My first officer is going to be conducting this flight.’ Charging for that—

ACTING CHAIR —They will not let you get off when they say that!

Dr Aleck —That is true!

ACTING CHAIR —The doors are closed when they tell you!

Dr Aleck —That is right. But, in fact, if you look at the legislation, the person who is flying the aeroplane in those circumstances is fully qualified to act in that condition. They are simply getting hours to enable them to achieve different qualifications later on—they need to have a certain number of hours acting in command. But the point is that, whilst those things are permitted and certain things are prohibited, the idea of charging someone to do what they are permitted to do under the legislation is potentially problematic for the reasons Mr Byron said. But the fact is that at this point there is no legal reason to prevent that. We are not an economic regulator. But to the extent that those economic arrangements may affect the safe operation of an organisation, that is certainly something we would have a look at.

Senator HEFFERNAN —It would not have been news to you, although it was news to me yesterday. Have you been familiar with this as an issue for many years?

Dr Aleck —The charging aspect of it?

Senator HEFFERNAN —On a fare-paying flight, yes—paying for my endorsement hours to the operator on a fare-paying flight by the operator.

Dr Aleck —I had not heard much about that, frankly, over the years. The fact that they were doing those kinds of things is not new. The fact that it might be some sort of side business was news to me.

Senator HEFFERNAN —We were sort of told it was the most profitable part of this organisation’s business.

Dr Aleck —I had not heard that before yesterday.

ACTING CHAIR —And I think what you said was that if it was not to be endorsed as ‘in command under supervision’, it was not worth anything.

Mr Byron —That is correct—it would not be worth someone paying to accrue copilot hours.

ACTING CHAIR —So if it was about copilot hours it does not make sense.

Mr Byron —No.

ACTING CHAIR —If it was about in command under supervision, it does make sense.

Mr Byron —Yes. I think I mentioned yesterday—

ACTING CHAIR —And you say, I think, that that would be inappropriate.

Mr Byron —It would be quite inappropriate. As Dr Aleck said, we probably do not have a legal basis, but it certainly would give us indicators to go and look at other aspects of the operation, like the crew operating procedures. You can imagine a copilot sitting in the right-hand seat saying, ‘I’m paying for this flight, Captain.’ That is quite inappropriate. We have to take a look at that. That is a concern.

ACTING CHAIR —Or, ‘Shut up; you’ll do what I’m telling you, because I’m the real pilot and you’re not really even on staff.’ Thank you for that. There are a lot of questions we could ask, but we did commit to concluding before now. We will now go in camera for those comments for that short period you asked for.

Mr Quinn —One last thing: I have the agenda of the induction training course that you asked for, so I can table that here if you like and I can also provide the curriculum of the course.


Evidence was then taken in camera—

Committee adjourned at 1.16 pm