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Tuesday, 25 June 1996
Page: 2656

Mr SHARP (Minister for Transport and Regional Development)(4.50 p.m.) —by leave—There can be few issues that touch the public closer than the safety of our public transport. And one of its most sensitive aspects, where there has been grave concern for some time now, is aviation safety.

On 3 May 1994 I rose in this House to speak on the Excise Tariff Amendment Bill 1994 and addressed in my speech the matter of the Monarch air crash that took place at Young, on 11 June 1993, killing all five passengers, the pilot and the co-pilot. I took a close interest in that tragedy because all the passengers were known to me and most of them were my constituents.

It is now over three years after that air crash and, on 6 June this year, the New South Wales coroner delivered his findings at the Young courthouse, following one of the longest coronial inquests in this country's history. His findings have confirmed many of the concerns that I put before the House on 3 May, two years earlier. I told the House then that the Civil Aviation Authority had been aware for some time of the deficiencies of Monarch Air and that, despite recommendations by airworthiness inspectors to ground the operator, these recommendations had been overruled by senior management. I told the House that:

The CAA has obviously fallen down in its prime responsibility to conduct safety regulation of civil air operations in Australia. It has no excuses. The CAA has been given the teeth. The problem is that it is not using them. My constituents, through no fault of their own, flew in an aircraft that operated and that the CAA knew was likely to operate in breach of air safety regulations and were the victims of a fatal accident.

I also alerted the House to the fact that the Monarch case was not the iceberg itself but merely the tip of the iceberg. I cited another airline—Seaview—which was also being allowed to operate despite the recommendation of an airworthiness inspector to ground it. I told the House:

The CAA has been aware of the situation for some time and, once again, nothing has been done to stop that operator from risking the lives of the unwitting passengers despite a CAA airworthiness inspector's recommendation that the operator be grounded.

In the week before I made that speech, a DC3 had crashed into Botany Bay narrowly avoiding sending its 21 passengers—a school party on their way to Norfolk Island to participate in Anzac Day celebrations—to their deaths. My warning regarding Seaview was not heeded. On 2 October 1994, a Seaview plane crashed on its way to Lord Howe Island killing all eight passengers and the pilot.

It is one of the great tragedies of our time that it took the senseless and needless deaths of 16 people to provoke action to deal with the situation that I put before the House on 3 May 1994: that the CAA had clearly lost sight of its primary responsibility for the maintenance of air safety above all other considerations.

When I brought that state of affairs to the attention of the House on 3 May, I said that there were several measures that were essential. I said then that the first action must be for the government to review the priorities of the Civil Aviation Authority. I said that it must investigate the association between flying operations inspectors and airline operators to ensure that no opportunity for corruption can occur. I said that viability must be included among mandatory criteria when the Civil Aviation Authority is considering an air operator's certificate. I also said that insurance arrangements should be changed so that unscrupulous insurance firms cannot weasel their way out of their obligations by claiming that the operator breached safety regulations, thus voiding the policy at the expense of the victims.

Subsequently, I called for the removal of certain senior managers. It is unfortunate that the culture that then existed in the CAA involving a disposition to shoot the messenger rather than to listen to the message prevailed for some time despite the advice that I gave the then minister immediately following my speech in the House on 3 May. I advised the minister that he should separate the regulatory function of the CAA from its commercial service provider functions and should subject the organisation to rigorous examination. I offered him my bipartisan support in doing so.

On the release of the Bureau of Air Safety Investigation report on the Monarch accident in July 1994, the then minister announced the separation of the regulatory function from the commercial function, but under the same chief executive officer. At the same time, he announced a reference to the House of Representatives Committee on Transport, Communications and Infrastructure for an inquiry into aviation safety in general aviation.

The inquiry became one of the most remarkable the committee has undertaken. Chaired by the member for Shortland (Mr Peter Morris), it heard some extraordinary stories and was witness to some of the most acrimonious evidence that could possibly be given to a parliamentary inquiry. The evidence led the committee to conclude that the CAA was an organisation at civil war with itself. It was clear that there were enormous problems based around personalities and interest groups which greatly reduced the effectiveness and capacity of the organisation to perform its duties.

In the chaos that ensued following the Seaview crash, the government of the day finally introduced legislation splitting the CAA into two separate organisations—much as I had suggested to the then minister in May. The House of Representatives Committee on Transport, Communications and Infrastructure was closely involved in the refinement of the legislation, and the resultant bills gave rise to the new organisations known as the Civil Aviation Safety Authority and Airservices Australia—the former regulating aviation safety and the latter providing commercial services.

I have the greatest regard for my colleagues on that committee, and participants in and users of aviation in this country are indebted to them for the work they have done in identifying many of the issues in aviation safety regulation that urgently need improvement. Their report, Plane safe, has made many concrete recommendations, and the government will be responding to these shortly. That response will be a thorough one and a draft is currently undergoing several revisions that I have requested.

One of the most important initiatives to come from the Plane safe report will be a system of public reporting of serious deficiencies found by CASA in individual air operators. This will enable travellers to be informed as to the record of a particular operator. It will also mean that, if a particular operator contravenes regulations, they will pay the price in lost reputation and lost consumer confidence, with market consequences for them.

One of the hardest things for the victims of aviation tragedies—such as the Monarch and Seaview tragedies—to understand is that they live with the consequences of those tragedies daily, yet the operators and regulators who failed to do their jobs properly and who erred seriously in their duty of care seem to escape any consequences. Three years after the Monarch accident none of those who were negligent have been brought to account.

One of the first principles of regulation should be that the regulators themselves are accountable for their actions. They should be congratulated when their efforts to maintain safe travel are properly, carefully and fairly carried out. They should also be accountable when their failure to do so leads to tragedy or when their failure to do so exposes the very people they are supposed to be protecting to danger.

The Monarch coroner's findings have made specific criticisms—some of them about particular people and some of them about the organisation itself. The coroner has made several recommendations, some of which, such as those relating to insurance, have already been implemented. It is now mandatory for aviation operators carrying passengers for financial reward to have non-voidable insurance for their passengers. That has not helped the victims of the Monarch crash, who are still waiting for acknowledgment and settlement of their claims against the insurer of the operator. The changes to the legislation were made necessary largely because of the disgraceful treatment they have suffered, and still suffer, at the hands of Monarch's insurer.

There are other recommendations of the coroner that fall within the federal jurisdiction. I am referring them to the Civil Aviation Safety Authority and Airservices Australia for urgent advice and action.

This government is determined to ensure that the Civil Aviation Safety Authority will not repeat the errors of its predecessor. I personally have a great deal of commitment to this. I have made it clear to the Director of Aviation Safety that I expect his officers to be fully accountable for their actions. There is no place in the new CASA for officers who hide behind a cloak of intimidation and secrecy to avoid the consequences of their failure to carry out their duties to the highest standards.

The Bureau of Aviation Safety Investigation report into the DC3 crash in Botany Bay, released earlier this year, identified several major systemic failures within the CAA and I have sought detailed explanations from the Director of Aviation Safety of what measures are being taken to identify why those failures occurred and who was responsible for them. I am not yet satisfied that everything that should be done to overcome them has been done.

Indeed, the report that CASA prepared for me has raised several issues that I wish to pursue further with the director before I will be satisfied that the problems that led to such major bungles as incorrect classification of the aircraft and improper extensions of engine hours have been adequately addressed and those responsible held appropriately to account.  I am concerned that the old culture still exists despite the change of name.

One of the most unsatisfactory elements of the old CAA was that its officers seemed to believe that they were somehow immune to the consequences of their own wrongdoing. That attitude will have to be well and truly purged from the new CASA. It is the job of the government to ensure that this happens and this government will not be repeating the errors of the previous government in allowing that attitude to continue uncorrected. The Monarch coroner noted:

There is no satisfactory explanation as to why the CAA refused to suspend Monarch's AOC before the crash.

He also spoke of an atmosphere of intimidation of officers who sought to take such action, and referred particularly to a memorandum of a particular officer as having a threatening tone. That kind of intimidation has no place in CASA, or any other responsible organisation.

Further, the coroner identified the Flying Operations Manager at Bankstown as having decided to take no action on the recommendation of an airworthiness inspector to revoke or suspend Monarch's air operator certificate, which had been made only a couple of weeks before the crash. Since the coroner concluded:

It is clear that had the CAA management paid more attention to the law and less to accommodating their "customers", NDU (the aircraft that crashed) would have been grounded and AOC suspended until the plane was safe to fly and these deaths would have been avoided.

This raises serious issues that have yet to be resolved but which must be resolved if the public is to have full confidence in the Civil Aviation Safety Authority. The government agrees with the coroner that the culture that prevailed in the CAA was absolutely unacceptable. It is unacceptable in the CAA's successor regulatory body CASA and the government insists that this be absolutely clear and be seen to be so.

The coroner praised the Reason model of investigation and analysis utilised by the Bureau of Air Safety Investigation, yet counsel for the CAA spent a great deal of time and effort and taxpayers' money during the coronial inquest in seeking to discredit it. It is just that kind of self-interested defensive reaction—at the expense of the taxpayer and the industry—that must be shunned if the public is to have faith in the regulator.

It does not make sense for the regulator to spend more money in defending itself than the claims it was seeking to forestall would have amounted to. All that does is deny the victims' families their due compensation. There must be an open and honest culture, and that is still lacking in the Civil Aviation Safety Authority.

This government expects its safety regulator to admit its errors when appropriate and to take remedial measures to reform its culture in order to make it properly responsive to its very weighty responsibilities. The CAA was dismantled and split into CASA and Airservices Australia, but many of the people who were responsible for the dereliction of duty and the perversion of regulatory responsibility that gave rise to the Monarch, the DC3 and the Seaview accidents, as well as to countless other debacles, are still with the new regulator. It will be a major tragedy if the only thing that happens is that the shingle on the front door is changed.

The Director of CASA has already taken some measures towards cultural change. The government will be ensuring that the change continues and is achieved without delay. I noted in June last year during the debate on the legislation establishing CASA that a great deal of expectation and hope would rest upon the shoulders of the board of CASA. That board, I said, would need to be expert and effective.

This government went into the last election with a campaign commitment to ensure that the board of CASA had the necessary aviation experience to ensure expert and effective oversight of aviation safety. The present board does not in the opinion of the government contain that expertise. There is only one of the four non-executive members of the board with aviation expertise and this is, in the view of the government, inadequate.

On coming into government I made this position clear to the board. The chairman chose not to accede to my request to the board to offer their resignations. In putting their own interests ahead of the need to have the best available people with appropriate expertise and qualifications, the board members were effectively putting their own needs ahead of aviation safety.

Accordingly, the government has introduced legislation which will enlarge the board by two members, one of them in the new position of deputy chairman, to enable the appointment of people with appropriate expertise. I hope that this move to bring to the board of CASA greater expertise and depth will find bipartisan support from the opposition. The people of Australia are entitled to the very highest standards in aviation safety regulation and therefore those who are in charge of that regulatory function must have appropriate qualifications. If CASA is to be able to perform its task adequately, it must be governed by a board that is able to give it expert direction.

The next stage of the change of culture will be reviews of the regulatory framework and of the regulatory role. On 28 June, I will launch some important initiatives towards this end. They will involve the industry itself, through a series of technical committees, in reviewing and writing the rules that govern civil aviation.

The House of Representatives Standing Committee on Transport, Communication and Infrastructure found in its inquiry into aviation safety that there was enormous confusion about the rules and regulations governing aviation safety not only among those participating in the industry but also among those regulating it. The rules conflict, are often ambiguous and are interpreted differently in different areas. The review of the rules will clarify them and rewrite them in ways that ensure they are comprehensible and consistent.

The new government has recognised that the regulatory framework has grown out of outdated regulations with various amendments over the years and that this needs a complete overhaul. This overhaul will be done with full industry participation and leadership. That overhaul will not be effective, however, without a complete and complementary change in the way CASA goes about its business.

On 28 June, the Director of CASA and I will be seeking the comments of industry and its support for the proposed reviews. In particular, we will be seeking a commitment from industry to nominate appropriate representatives to the program advisory panel to oversee the reviews. That panel will nominate people from the industry with the appropriate expertise to work on the technical committees which are a key part of the regulatory framework program.

Industry will have an opportunity to have its input into the direction of the program and the timetable for change and to accept responsibility for applying the new rules in their own environment. However, the greatest challenge will be for CASA itself to accept a new culture of accountability not only to me as the minister responsible but also to the parliament and ultimately to the people of Australia.

The Monarch and Seaview deaths were a shocking waste and have left continuing heartbreak and tragedy for the families of the victims. The only recompense we can give them is the certainty that the lessons have been learnt and action taken to ensure that those tragedies are not repeated. When I spoke in support of the legislation creating CASA, I pledged to continue to act as a watchdog over its operations and to be vigilant. I said that I hoped that others associated with the industry would also be vigilant.

I have now been given a ministerial responsibility that makes that pledge and hope a duty—and one I am determined to fulfil. This government is fully committed to that goal. It will not allow the deaths of the victims of Monarch and Seaview tragedies to have been entirely in vain.

The review that I will launch on 28 June will be the most significant step taken towards ensuring aviation safety for many years and it will be accompanied by this government's insistence on the full accountability of our aviation safety regulators. There is much to do until we can be assured that there will not be another repetition of Monarch and Seaview. I present the following paper:

Aviation Safety Regulation—Ministerial Statement, 25 June 1996.