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Rural and Regional Affairs and Transport Legislation Committee
18/11/2013
Estimates
INFRASTRUCTURE AND REGIONAL DEVELOPMENT PORTFOLIO
Civil Aviation Safety Authority

Civil Aviation Safety Authority

CHAIR: Welcome back to Senate estimates, and we are on CASA. It seems to me, having watched for many years—probably longer than even you, Mr McCormick—the interaction between the Rural Fire Service and aviation, that the guy who got killed down the coast the other day should not have been killed. The Dromader, we know, is a plane that was fitted to carry 1,000 litres originally. We have a guy who was cleaned up on the Bethungra Hills a few years ago. The difficulty, as you may know, with the Dromader is that they are seriously upgraded with a powered-up engine, a powered-up load from 1,000 litres to probably 3,000 litres, and I think with the powered-up engine they are legal at about 2,400. They generally carry the full load and, as you would be aware, they do not power up the airframe. The rougher the weather the more speed they have on to put the fire out, and the more load you put on the wings. Hence, the wing fell off this plane and it should not have fallen off. Those guys are crop sprayers normally and they go in with 1,000 litres et cetera.

Can I just say that I am disgusted because I am informed that on that day it was pretty rugged weather. The Rural Fire Service blokes seem to be outside the ambit of the safety guidelines. I do not know what the interaction is with air safety and CASA on these operations. These guys did not particularly want to fly because it was bad weather and they were taunted by the Rural Fire Service blokes by saying, 'Real men and real pilots should be up there.' If that is the attitude of the Rural Fire Service something needs to be done between CASA and the relationships with the Rural Fire Service and air firefighting.

As you would know, Mr McCormick, a lot of this stuff looks great on TV and is useless for putting the fire out except if you are going to dump it on a house with the Elvis. If you dump 1,000 litres on a fire with low humidity and no mop up it looks great on the telly but it is a waste of time. So, could you tell me what the working relationship is between CASA and the Rural Fire Service on having some sort of civilised operation with these planes. Sure, they are grounded, but they should never have been allowed to do the things they were. I have spoken to guys that I have known for years,—I will not name them as we may have an inquiry into this—as I am an old pilot, as you know. You can actually overload a plane, especially if you are expecting it to go down ravines and up and over and in high weather and high sheer. Would you like to reflect upon that death and the operation of that plane on that day, and what is the working relationship, so that we can have a safe regime for Rural Fire Service firefighting by aircraft?

Mr McCormick : As you say, Senator, the Dromader has been the subject of a number of supplemental type certificates over the years allowing increase in weight and increase in horsepower, one before the other generally. There have been some aerodynamic refinements required to the aeroplane as well to take the extra power. We have been working with the Dromader operators for some time around those STCs and the effectiveness of them. They date back quite a long way. With the Dromader itself, there was a failure in Western Australia, which I thought you might be referring to, a few years ago. I cannot remember exactly which year. The wing failed due to fatigue. We did quite an extensive investigation into that and found that some of the requirements, which were placed on the operators after they had incorporated the supplemental type certificates to increase the weight, may not necessarily have been followed, particularly in the recording of hours, the amount of bank angle they were allowed to use, the amount of G they were allowed to use, et cetera.

CHAIR: That is what it is all about.

Mr McCormick : In reality, once the aircraft is certified and has a type certification data sheet that says it can operate at these particular weights it is just like any other aircraft to us in terms of the onus being on the operator to operate within the bounds of the flight manual and the flight envelope of the aircraft.

As far as the Rural Fire Service goes, generally speaking I think in New South Wales in particular nearly everyone that undertakes fire bombing is contracted to the bush fire service. We provide air space issues around the operation. I think we have discussed here before that some of the operators of these aircraft—not only the Dromader; the Air Tractor and others—wind up using multiple radios talking to fire controllers et cetera. We generally rely on the operators to know what is safe and what is in their operations manual that we look at and how they interact with the Rural Fire Service. We do not have a head of power, as such, to impose anything on the Rural Fire Service but we certainly have not finished looking at this. Those particular Dromaders are just now coming back into service, with another inspection regime in place. We have not finished that body of work. Luckily, there are not a great many Dromaders. It is unfortunate that the tragic accident killed people. There are not a lot of these aircraft in service and we will continue to work with them.

CHAIR: By the way, these standby fees cost a lot of money. I know of one instance—I had better not name the plant but it was an expensive piece of plant—where two of these were contracted on standby to a Rural Fire Service somewhere in Australia. The standby fee enables this particular operation to buy one new plant every year. That is how expensive it is.

If I am contracted to the Rural Fire Service and there is a fire they may say to me, 'You're the contractor; get up there and dump on that fire.' If the flying conditions are not safe and I am contracted to do the flying they may say to me: 'Are you a man or aren't you? We want you to get a VC out of this and put the fire out even though it is not safe.' What protection does the pilot have, other than his saying no when he is contracted? You will close Sydney airport if it is not safe. How do you 'not safe' firefighting from the air?

Mr McCormick : We do rely on the expertise of the people that are involved in the firefighting—both the on-ground commander and particularly the companies that contract to them. We have a lot of faith in the people who do this fire bombing work. They are normally pretty big organisations, so we let them understand the risks and decide what should happen. It is terrible if they are being intimidated to fly.

CHAIR: That is my understanding, from a pilot. They feel obliged, and every now and then it all turns to custard.

Mr McCormick : I can give you an answer on notice, if you like, about the relationship between us and the Rural Fire Service.

CHAIR: I think it is not between the pilot and the Rural Fire Service; it has to be between you and the Rural Fire Service. There needs to be some steadying influence in the cowboy attitude at times. I am not alleging anything, broadly, but it is an uncomfortable feeling that a lot of very learned, experienced pilots have. This guy was disgusted that a remark would be made: 'Are you a man or aren't you? Get up there!' I can give you the details.

Mr McCormick : We will look into that.

Senator FAWCETT: There are a few issues I would like to cover. First, can you give us an update on what is happening with Barrier Aviation. It is some months now, I understand, since they were given a 'show cause' and ceased operating. Can you give us an update on what has occurred there?

Mr McCormick : I will ask my general counsel to give you the time line on that. While he is coming forward to the desk I can tell you that we started on 23 December with a 'serious and imminent risk' situation. At this moment we have no application on record from Barrier Aviation to continue or appeal their air operator certificate cancellation. But I will leave that to my general counsel.

Senator FAWCETT: You say you have nothing on record. My understanding is that they have sought, numerous times, to appear before the AAT. Are you saying that they never have or that there is nothing currently on record?

Mr McCormick : I will defer to my general counsel.

Mr Anastasi : In relation to the question you just asked, there was an application by Barrier on 9 May 2013 for the reissue of its AOC, air operators certificate. That followed CASA cancelling the air operators certificate on 13 March 2013. In relation to the more recent application for the AOC, CASA refused to issue that AOC on 31 July, and that was largely on the basis of the reasons for which it cancelled the AOC. Barrier sought review in the Administrative Appeals Tribunal of both of those decisions and, ultimately, after a hearing was listed in December, withdrew both those applications on 16 October.

Senator FAWCETT: Would you clarify it for me, though. My understanding is that CASA sought on a number of occasions, or at least one if not more, immediately after Barrier's ceasing operations—so we are talking early 2013—a delay in the proceedings of the AAT. Would you clarify if that is correct.

Mr Anastasi : I do not think it is correct that CASA sought any delay in the hearing of the tribunal proceedings. It was in fact Barrier Aviation that on a number of occasions did not comply with the directions of the tribunal to file evidence and other documents. On that basis, the tribunal listed non-compliance directions hearings to ascertain Barrier's position in that regard. It was one year, almost to the day, from the time that CASA suspended the AOC to the time that the matter was listed for hearing, and I can say that that was largely because of the way in which Barrier represented itself in the tribunal. It never sought expedition of a hearing. CASA invited Barrier to do so and said that we would not oppose any expedition of a hearing, which would often be the case where there is a suspension in place and an applicant would seek an expedited hearing. They did not seek that.

Senator FAWCETT: To clarify, what you are telling me is that a company has been grounded and at no time did it seek to expedite a hearing before the AAT, nor did it comply with the requirements of the AAT to provide the evidence that the AAT said it needed, and that at no time did CASA come to the AAT and seek an extension because CASA did not yet have its evidence or its brief ready to take to the AAT?

Mr Anastasi : In relation to the first question, my understanding is that at no time did Barrier seek expedition of a hearing. It did at one point complain to the tribunal when December dates were offered—this was in around August or so—but at that late stage that was all the tribunal could offer. In relation to the compliance by Barrier of the tribunal's directions, it did not comply with some of the directions. I did not say that it failed to comply with all of them. As to whether CASA complied with the directions of the tribunal, my understanding is that it generally did. If it did not, there may have been an occasion where there was a one-week or so delay in the filing of documentation, largely because of the size and complexity of the issues at hand.

Senator FAWCETT: So CASA, with all of its resources, having determined that the company was not fit to fly, still at some point felt that it did not have enough evidence to comply with the AAT's requirements. Surely, before you actually took the decision to essentially demolish a business you would have all your facts established. Is that not a reasonable assumption?

Mr Anastasi : We had that evidence, but in these types of matters it is common for the applicant to file its evidence first and CASA is given an opportunity by the tribunal to respond to that evidence. Therefore, CASA has to take into account and examine that evidence and then respond to it. There were some factual issues that were raised for the first time with CASA, and CASA had to deal with them and put its own position. I should highlight that, in that respect, there were many hundreds of pages of evidence and attachments filed by Barrier that CASA had to respond to in, I think, a four-week period.

Senator FAWCETT: Could I clarify something. My understanding is that Barrier had three core areas of operation and that CASA's concerns related to incidents at one of those sites. Is that correct?

Mr Anastasi : The concern centred on its Horn Island operation—that is correct.

Senator FAWCETT: There were no issues at the other two locations. Is there any reason why the restrictions on their AOC covered all of their operations rather than just the one that could have had the focus on it?

Mr Anastasi : My understanding is that, whilst Horn Island was the focus of CASA's investigation, there were some regulatory compliance issues at its Darwin operation and more generally in relation to the operator as a whole, which was based in Cairns. But, if it was only the Horn Island operation where CASA detected the main issues, I think it would have been a very artificial position for CASA to say to an operator, 'You're a serious and imminent risk to safety at one of your ports, but you will fly in relation to the other two,' especially when CASA has to have regard to the fact that there is a common management structure across all the operations. This was largely a family owned business with a very small management structure. So for CASA to take that view I think would have been a very artificial way of approaching the safety risk they had identified.

Senator FAWCETT: How much of the safety risk that was identified was based on the notes that were taken by, I believe, a CASA employee or delegate on Horn Island?

Mr Anastasi : They were largely based upon a diary that was seized by CASA under a search warrant. That diary had been kept by a Barrier Aviation base manager at Horn Island, and that was the principal basis for the suspension.

Senator FAWCETT: Sorry, yes, you are correct—it was a base manager up there. Did CASA ever seek other opinions on the validity of some of the entries in the diary? My understanding is that some of them went to things like a rough-running engine. In the industry, people have talked about different situations that will cause rough running and that no maintenance action may in fact be required for that to be rectified. Were they taken just on face value or was there an attempt to get some context put around those statements?

Mr Anastasi : Firstly, the main attempt to do so was to review the aircraft maintenance documentation. That was done. There was also effectively a peer review of some of the matters by CASA's airworthiness engineering branch. I think it is fair to say that CASA ultimately only relied upon a relatively small number of those entries—mainly those that were such that CASA was confident constituted a major defect and having regard to its description and its comparison to the maintenance records, that it was likely that there was a defect in the aircraft at a particular time, as described in the diary.

Senator FAWCETT: Had any of the operations ever had an accident or an incident?

Mr Anastasi : I understand there had been a number of incidents. There was an accident involving an aircraft, but there was a dispute with Barrier as to who was the operator of the aircraft. Barrier said it was not the operator, yet one of its pilots was flying it.

Senator FAWCETT: Was he employed by Barrier at the time, as in was he flying it as a Barrier pilot or was he just a person who normally worked for Barrier who was flying the aircraft?

Mr Anastasi : My understanding is that that was a pilot employed, effectively, by Barrier, preparing the aircraft for it, but I think that ultimately that featured very marginally in CASA's decision.

Senator FAWCETT: So we have a company where there has not being an accident, except one in dispute—

Mr Anastasi : Not an accident where people were killed, but there were a number of incidents involving its aircraft.

Mr McCormick : That was a fatal accident—the one with the pilot.

Senator FAWCETT: I understand that, but there is some dispute around that. What I am trying to establish is: we have a situation here where CASA, with very deep pockets, has run a process that has gone over a number of months and a company that, barring that accident, does not appear to have had a bad safety record. Two of its operations appear to have had quite contemporarily good records in terms of engagement in the industry. I am puzzled as to the fairness of a process whereby they are yet to have their day before the tribunal. The feedback I get from their side of the story is that they have attempted on a number of occasions to appear before the tribunal, and the delays are not on their side. What I am trying to clarify exactly from CASA's point of view is what has caused the delay as to their having their day in court.

Mr McCormick : I think it was open to Barrier on the very next day after we took the serious and imminent risk action to go to the Federal Court and attempt to get an injunction. To my knowledge, there were a number of taxiing incidents that had not been reported to the ATSB, collisions between aircraft and that sort of thing. There is an extensive number of maintenance issues in this manual and we have not ever actively tried to prevent Barrier from appearing at any venue it wishes to appear at—and we would be there. As Mr Anastasi said, we took a week longer to respond to Barrier's evidence. Barrier changed legal advisers a number of times.

We were at all stages prepared to meet them somewhere, and, given the amount of publicity that went around this, particularly in the local press in Cairns, I very much would have welcomed the opportunity to have these issues pulled out into the open so that we could see exactly what maintenance has been going on.

We have not necessarily finished with some of the maintenance providers, but they are not actually actively doing anything at the moment. There are extensive issues—and this goes to what Mr Anastasi said—unpicking the organisation and saying that only Horn Island is involved. With these types of operations—multiple use of aircraft and multiple use of pilots—it is not possible to unpack the AOC in that manner.

But the option has been open to Barrier at any stage to bring this on in the Federal Court. Indeed, when we did go to the Federal Court, on 22 February, the Federal Court did make an order under section 30DE(2) saying just that—prohibiting Barrier from doing anything authorised by its AOC until such time as the matter was heard. The matter has been open to Barrier to bring on.

Senator FAWCETT: I will come back to that at another time. Thank you for that clarification today. On another issue of safety, does CASA have any record of incidents or accidents in Australia arising from pilots who have a colour vision deficiency?

Mr McCormick : I will have to take that on notice.

Senator FAWCETT: Are you aware of the case of the Commonwealth versus Denison, in the late 1980s?

Mr McCormick : No, not personally.

Senator FAWCETT: It is a trial case that was put up to determine whether pilots with a colour vision deficiency should be able to operate in night operations, RPT operations and commercial operations, and it was found that they could. In fact a whole new test was devised—the tower-gun test—to clear that, and we now have pilots who have been flying for a number of years and thousands of hours in RPT aircraft, single-pilot operations with multifunction displays, very safely. To my understanding there have been no incidents. Can you confirm whether or not it is correct that CASA is looking to review that, on the application of one of the pilots who seeks to become a captain, exercising the rights of his ATPL, on the basis of the safe flying record, and that CASA is looking to challenge that and obstruct it in the AAT?

Mr McCormick : My understanding is that following on from an AAT decision about colour deficiencies—it may very well be the case you are referring to, but I am not sure—CASA now allows pilots with colour deficiency to fly, up to commercial pilot licence standard. To my knowledge we are the only major regulator in the world that allows this. The FAA does not allow it, neither does Canada and the ICAO standards do not allow it. I believe the matter before the AAT—and I will refer to my general counsel if necessary—involves the pilot applying now to go not only from commercial but he wants an Airline Transport Pilots Licence. We are already out ahead of the world on this. The actual matter is before the AAT, hence I would prefer not to comment on it until we get a result. But as I said we are very liberal with this already, compared with ICAO and the rest of the world.

Senator FAWCETT: I recognise that, and if you look at Australian aviation history, with things like DME and T-VASI we have led the world on a number of occasions and the rest of the world now thanks us for that. My concern is that there is considerable talk and concern within the industry that CASA is not only seeking to prevent this person from exercising the privileges of an ATPL but is in fact seeking to wind back the decision to pre-1989—pre the Denison case—to realign itself with the FAA and other people. I am just trying to understand whether there is in fact that intent, but, also, if the evidence base is very clear both in the Denison case and in the thousands of hours of flying since, that pilots can operate safely, then what is the safety case for not actually allowing someone to exercise the privileges of an ATPL?

Mr McCormick : As to the exact nature of the AAT proceedings, I would prefer not to talk about it. We will take on notice your question about whether we are attempting to withdraw anything. The issue around medical standards is that quite a lot of these medical standards are not set by CASA. In fact we do not set any medical standards. We use whatever the expertise in that particular area says is the requirement, unless we have good reasons to do otherwise. The fact that we have had many years without accidents or incidents—and I will assume for the moment we have not, but I will take that on notice—I think we are in a situation where, to go even further, we would need more than a safety case. We would most probably need medical science to tell us that that is probably not too far. As I said, we are already out in front of the world on this. So, we are not actively trying to stop anybody doing anything, but we do have to exercise some degree of caution.

Senator FAWCETT: I look forward to your answer on that. Coming back to the approval that engineering firms need to manufacture parts to place on the market as a manufactured spare part for aircraft, I am getting a lot of feedback from industry that where there used to be delegated responsibility to engineers outside of CASA to sign off on designs, but now that function has been taken back within CASA and the turnaround time can be anything up to two years to have APMA approval signed off. Clearly, from a commercial perspective, the time to market to make use of an opportunity is measured in weeks, let alone months, and certainly not years. Could you comment from CASA's perspective on whether you are aware of the time frame that industry is suffering under, and why you have chosen to bring that back directly under the regulator, as opposed to allowing appropriately qualified engineers outside to provide those clearances, as they have in the past, and as I believe the FAA are again looking at allowing in the states.

Mr McCormick : I will ask Mr Peter Boyd, our executive manager of standards to talk about that. As you quite rightly pointed out, on the issue of allowing the APMA approvals—the FAA has only recently revisited this—I think time to market is one of those things where most probably things do not get to market in a couple of weeks anywhere in the world, but I do take your point. I will ask Mr Boyd to give you an update of where we are with that.

Mr Boyd : I am not certain where your question is coming from. We are going through a change in the regulations to change from a delegation model for our design organisations, or our design people, to one based on a design organisation certificate, which will be coming in next March. In terms of the APMA issuing of a certificate, CASA always issues the APMA certificate. When you say we are taking back the approval from the industry delegates to CASA, I am not certain—

Senator FAWCETT: A couple of firms I have been speaking to have cited cases where they used to be able to get a turnaround to produce a certain part for a market, and it took a matter of weeks to actually get that approval, whereas they have had one in the system for nearly two years now for approval within CASA. I am not going to try to double-guess you on the technicalities of where you are going with the legislation, but clearly from the industry's perspective there has been a step change that has meant this process is taking two years. Is CASA happy with that, or do you have plans afoot to try to expedite the approval such that people can produce a part. We keep on saying to industry that they need to export, but if they cannot get an approval that will be recognised by airworthiness authorities overseas, in a reasonable time frame, they cannot even get into the market, let alone export. Are you happy with two years? Are you aware of the problem? Do you have plans to improve it?

Mr McCormick : As Mr Boyd has pointed out, we have always issued these approvals. We are not taking anything back from the industry, to my knowledge. But if you can give us specifics I can give you a specific answer to that set of circumstances. We have had recent discussions with some other people on the manufacturing side, particularly an organisation trying to export some aircraft into the United States for surveillance activities. There were some delays with that, but they generally revolved around the fact that the organisation exporting these aeroplanes—and I fully hope they are able to export them—had not actually managed to maintain a high level of configuration control, so we had issues of traceability et cetera around some of the amendments they wanted to do to the TCDS. But Mr Boyd has outlined our position. I am unaware myself of what we are taking back from the industry, which is why I did not answer it. But if you can give us specifics we will certainly get you a specific answer.

Senator FAWCETT: I will check if that company is happy for me to pass on their details. I will have to come back to you offline. But regardless of the background, two years is an unreasonable time frame. So I guess my question stands. Are you aware of that time frame and do you have any plans to try to rectify it?

Mr McCormick : I am not aware of that time frame until now, but with more specifics we can give you a specific answer and see whether that is generic or specific to the circumstances.

Senator FAWCETT: On engineering services, part 145, I have had feedback from a number of companies that since we have gone down the CASA part 145 route a number of countries in the region, led by Singapore, but now I think it is extended to Thailand, the US and Tahiti, I believe, have decided not to recognise the maintenance that is done here, so the people who have overhauled engines or propellers for regional countries have not been able to continue that work, because there is not a bilateral relationship between Australia and these other countries that recognises our part 145. Can you comment on that?

Mr McCormick : We have actually in fact negotiated a bilateral with Singapore just recently—actual exporting into their maintenance markets of activities as covered by a few more areas than just ourselves. We have numerous bilateral agreements in some of the areas you have just mentioned, particularly the FAA and South Korea, and we have just signed one with Singapore.

Senator FAWCETT: How recent was the one with Singapore, because this meeting I had with industry was about two months ago.

Mr Boyd : This was back in April.

Senator FAWCETT: Well, I have had quite recent meeting where people are describing the fact that they are losing markets because of a lack of recognition. I am happy to go back to them and get the specific details, but there is an issue if we are not able to export services because of regulatory disconnects between CASA and other agencies.

Mr McCormick : I do not know whether Mr Boyd has anything to add to that, but we have been progressing bilaterals and personally this is the first I have heard of this.

Mr Boyd : Maintenance services comes under the ICAO Annex 6 and 8. ICAO has recognised that one of the problems we have across the world is that whilst we may recognise Air Operators Certificates, for example, on the flying operations side, on the maintenance side the way the annexes are set up that is not allowable at the moment, or not able to be done. The way the regulators are addressing it at the moment is with individual bilateral agreements between authorities or nations, as the director has said.

I know it is on the work program for the ICAO panel to look at how that can be expedited within the next couple of years, but it is not specifically an Australian problem. It applies across the world.

Senator FAWCETT: In terms of signing up bilaterals, is that something CASA initiates or is it something you action at the request of somebody else?

Mr McCormick : We are actively pursing these. We are pursuing some with other countries at the moment. Sometimes they approach us, but we are both at the same time wishing to progress something. Some of them are a little bit more complicated, because they get into geopolitics more than just aviation issues, particularly with Europe and to a lesser extent the United States. But in the region we have a number of others, including with Hong Kong, that we are progressing, and we are actively trying to engage with everyone we can to progress these. As I say, with the bigger market of Europe, we have had numerous meetings with the European Commission representatives and the ASA representatives about this, but the matters are at a higher level than the safety agencies can address.

Senator FAWCETT: Okay. Can we come back to the issue of part 145 of the Civil Aviation Safety Regulations and the approvals of the expositions that go along with that. Since our last meeting, I had a specific email from a company in Brisbane that talked about the fact that several airworthiness inspectors have come through and offered different opinions. So the first exposition that was put forward was not approved. Certain directions were given. The next inspector who came through gave a completely different slant on that. I know this gentleman has written to CASA. He wrote to a Mr Keith Thompson within CASA in November seeking some action on that. Given we had this discussion just a week ago and here is a very live example that CASA should be aware of internally—of industry complaining about this lack of standardisation—could you talk to me about this? If you do not have the specifics in hand, I am happy to come back to it in half an hour or so, when other people have had a chance to talk to you, but I would like to get on the record what CASA is doing to overcome these issues that industry are consistently highlighting with me about a lack of standardisation among people who are giving approvals.

Mr McCormick : As you say, we have discussed this numerous times in the past. Standardisation is a major issue that faces all regulatory agencies, and we certainly are facing it. On specific part 145 issues—and I am not personally aware of Mr Thompson's company—

Senator FAWCETT: No, no; Mr Thompson works for you. Keith Thompson works for CASA, and he is the point of contact that this company wrote to.

Mr McCormick : I see. As far as interpretation of part 145 goes, we have done a lot of work on standardising the airworthiness inspectors around this. There are still instances where some people do put their own spin, if that is the right word, on the interpretation of the regs, but we are trying our very best to stop that happening; and, when it is brought to our attention, certainly, Operations Division and our Airworthiness and Engineering Branch, or AEB, also take that seriously. With interpretation of standards, we do not necessarily have as much of a problem as we did, but some of the requirements about what a document or exposition should look like—whether it should look like this or that—or the nuances of it are still an issue which we are working on. I acknowledge that, but it is something which we can only get around by education and dealing with the issues as they are raised.

Senator FAWCETT: I accept that you have an education process going. But, for companies that are spending time and money trying to satisfy differing opinions across regulators, what is their recourse? Your process might take a week; it might take a year. What is their recourse to get a fair and just outcome, if CASA cannot actually align its own people so that industry are working with one set of goalposts as opposed to goalposts that keep moving, which costs them money?

Mr McCormick : I appreciate that. They can always come to me. We can always get this. As I said, I am not aware of this particular one. I am aware of standardisation issues. As I think we have discussed before, I have visited some 14 or 15 country towns through most of Queensland, New South Wales, South Australia and Victoria over recent times, talking to people actually in the industry about what their complaints are, and we do see this. We do not see it as much as we did. Certainly, with 730-plus maintenance organisations, we are not seeing a great many complain. However, I acknowledge there are issues. It is an education issue, from our point of view. They can always come to me. And, if they have got a decision which they do not like and the decision would mean that they have exhausted their internal processes, such as you are talking about bringing to our attention, then of course their recourse is the AAT. However, I am unaware of a decision being made that has then been overturned, if you will, within our airworthiness inspectors themselves. But we do have a standardisation issue; we continue to work at it.

Senator FAWCETT: What sort of time frame do you think is reasonable for industry to expect? As I say, this is probably about the fourth or fifth company just in the last couple of months that has come to me talking about the fact that they have had to spend a lot of time and money trying to satisfy different voices within CASA. You have identified you want to fix the problem. If this individual, for example, came to you and said, 'Here is the issue,' within what time frame do you think it would be reasonable for you to get back to them and say, 'Of the three opinions you've been given by CASA staff, here is the one I want you to meet,' so they actually have clarity around where they need to go and where they should invest their money so that they can get on with actually running their business?

Mr McCormick : The first part of that is that we have to make sure that the complaint we get—and I do see this quite often—is not just a misinterpretation of the regulations, in that someone points out one part of the regulations and someone points out another part of the regulations, and the industry may see that those parts of the regulations are in conflict, when in fact they are not. We see quite a bit of that. By the time someone comes to me and says, 'I have been told A and I have been told B and I have been told C,' provided the staff who said A, B and C are available—let's assume they are—we should be able to turn that around in a couple of weeks. I am assuming, first off, that the industry has understood what is required and that we do not have what looks like a different interpretation but in fact is not—it is an interpretation of different areas. If it comes down to a pure flavour, shall we say, that somebody has versus somebody else's flavour, we can resolve that quickly once we have the information. But, as I have said before, if any organisation feels that this is happening, they can bring it to my attention, they can bring it to the Industry Complaints Commissioner—they can bring it to anybody in CASA as far as that goes—and it will be resolved by both standards and our operations divisions. The issues around inspectors—yes, we are taking action in some areas on that. As I said, that is an education issue and a control issue for us.

Senator FAWCETT: Mr McCormick, can I take you back to a discussion we had a couple of estimates ago regarding Bankstown and the move of your staff from Bankstown into Sydney CBD. Can you update me on where that process is at?

Mr McCormick : That process is complete.

Senator FAWCETT: When you say 'complete' does that include disposal of the offices at Bankstown?

Mr McCormick : I will ask our chief financial officer. We have disposed of the buildings at Mascot, but I will ask him to update you on where we are at with the Bankstown offices, which to my knowledge have also been disposed of.

Mr Jordan : We are still in negotiations with the Bankstown Airport. The current airport owner is Bankstown Airport Ltd, and we do have an interested party who we are helping to negotiate with BAL.

Senator FAWCETT: So essentially you took the decision to relocate people to your CBD office—or to establish an office there and to relocate them—but you had not actually worked through the break contract or the novation of that lease at the other end. Do you know how much it has cost you to maintain those offices?

Mr Jordan : If you bear with me, I can look that information up. In reference to your first question, yes, we did consider that. That was part of a process about relocating or combining the offices, and all those considerations were undertaken—a review was undertaken—about the associated costs.

CHAIR: Was there a cost-benefit in the analysis or was it just a better harbour view?

Mr Jordan : We did an appropriate financial analysis of relocating—

CHAIR: And you were in front financially?

Mr Jordan : It is just not financial; there are other benefits around—

CHAIR: That is just one aspect. Were you in front or behind financially?

Mr Jordan : There are costs we are incurring today. For example, we had anticipated to have this lease done approximately six months ago.

CHAIR: Yes or no: are you or will you be in front financially?

Mr Jordan : No, we are not.

Senator FAWCETT: Thank you, Chair.

Senator XENOPHON: Mr McCormick, today marks four years to the day since the ditching of the VH-NGA off Norfolk Island and nearly seven months since the references committee issued its report on aviation accident investigations. Has CASA formulated a response to the recommendations in the report?

Mr McCormick : The part that we had to do has been completed. The documents are no longer with CASA.

Senator XENOPHON: But there were various recommendations and you have given your views as to those recommendations to the department?

Mr McCormick : Yes, we have.

Senator XENOPHON: When did you do that?

Mr McCormick : I would have to take the exact date on notice. It was before the election.

Senator XENOPHON: It seems so long ago, Mr McCormick. I take it that it was at least 2½ months ago.

Mr McCormick : Certainly we formulated our inputs—of course, they are the minister's responses when the report is tabled—for the previous government and we have prepared our inputs for this government.

Senator XENOPHON: Are you able to tell us which of the recommendations of the committee CASA thought ought to be implemented?

Mr McCormick : I would prefer to leave that to the minister to reply.

Senator XENOPHON: But you do have a role to provide advice independently to government about aviation safety. Is that correct?

Mr McCormick : That is correct. We have provided our input to the present government on 26 September.

Senator XENOPHON: Just after the election? But do you have a view about some of the recommendations made by the Senate committee in relation to the ditching of the VH-NGA?

Mr McCormick : As I think I have said before, CASA is a learning organisation. We take on board any input that is given to us. We are certainly not the same organisation that we were leading up to that particular ditching in 2009. We considered in particular the Chambers report recommendations that we have implemented and, as I said, I had best wait for the minister to reply to the formal tabling of the report.

Senator XENOPHON: I am not asking the minister. I am hopeful that I will get an opportunity to speak to the minister later this week in person. Do you concede that the Senate report was useful in highlighting aspects of the investigation that could have been done much better?

Mr McCormick : I think any report is useful, Senator.

Senator XENOPHON: For what?

Mr McCormick : Useful as an informative document for a learning organisation.

Senator XENOPHON: You do not concede that CASA could have done things a lot better in relation to the Pel Air ditching?

Mr McCormick : You are talking about what we might have done better outside of the report. We can always do better, as I said right at the start and during the Pel Air hearings themselves.

Senator XENOPHON: So, I have to wait to see what the minister says. Will you at least acknowledge that you actively advised the minister not to support some of the recommendations of the committee?

Mr McCormick : We do not formulate the recommendations to the minister, Senator.

Senator XENOPHON: So, what did you do?

Mr McCormick : We provided technical input to the department which formulated the responses to the minister.

Senator XENOPHON: Did that technical input lead to a particular conclusion about the Senate's recommendations?

Mr McCormick : There were 22 recommendations from memory and then there were some additional comments from yourself.

Senator XENOPHON: Twenty-six.

Mr McCormick : As I say we do not formulate those recommendations.

Senator XENOPHON: But did CASA have a view as to whether it thought any of the recommendations were worth implementing or not? Did you have a view that, say, this recommendation is nonsense or this recommendation is worthy of further consideration by the department?

Mr McCormick : From our point of view we were not dismissing anything out of hand. All we can give is our opinion of what we think of the recommendations.

Senator XENOPHON: So, please answer my question. Did you make specific recommendations or give advice to the department about whether any of the 26 recommendations ought to be supported or rejected by the department?

Mr McCormick : I am trying to answer your question, but I personally do not know what we said as far as the answers go, compared to what answers came out there. I am not comparing both. Our concern was what the recommendation meant to us. We did not form a view for the government or whether the government would accept or reject it. That was not our role.

Senator XENOPHON: Let's go back a step. I do not want to labour this. If you did provide a response—saying this is a recommendation of the Senate committee; this is what the recommendation would mean to us—presumably some of those responses would have been 'This is unworkable' or 'This is something that could be implemented'. Presumably, by framing your answer in terms of what it would mean to CASA would be a de facto acceptance or rejection of the committee's recommendation. Is that a fair summary?

Mr McCormick : I do not know if anyone was more actively involved in this than myself, but we would say what that recommendation meant as to where we are today and its effect on us. But whether it is accepted or rejected is not something we recommend.

CHAIR: It is most unlike you, Mr McCormick, that you did not have a strong view. You are the brains trust and if you wanted to tell them to tell the committee to go to hell, I would not be offended.

Mr McCormick : I would not dream of it, Senator.

Senator XENOPHON: Dream of what?

Mr McCormick : Making a recommendation to accept or reject a recommendation.

Senator XENOPHON: Perhaps I should ask the minister or the secretary this. What difficulty would there be in CASA providing material to the department about the Senate inquiry on Pel Air.

Mr McCormick : Again, Senator, I will have to take that on notice. I am not sure what the protocols are around that.

Senator XENOPHON: Perhaps I will ask the secretary. Given the communication that was sent from CASA to the department what difficulty would there be for the department and CASA to provide us with a copy of CASA's response?

Mr Mrdak : The minister is currently finalising his consideration of a response to the Senate inquiry. I will take that on notice. I do not think there is an issue in principle but I would need to take that on notice and come back to you.

Senator XENOPHON: For instance—I am not saying this would be the case—if the majority of this committee was minded to ask for that response at some stage, whether it waits for the minister's response to the Senate inquiry with recommendations, you do not see any particular difficulty with that as a matter of principle?

Mr Mrdak : Without pre-empting the minister's consideration of the matter, we have put an extensive amount of material and a draft response to successive ministers. Without prejudicing that process I will take that on notice.

Senator XENOPHON: Let us not talk at cross purposes here. I am saying that CASA gave a considered response presumably to the Senate inquiry, to the minister, to consider. That itself would not be a draft, it would be a document from CASA to the department. What harm would there be for that document eventually seeing the light of day?

Mr Mrdak : Again, without recalling the exact details of the document, I do not have an issue in principle, but I need to take it on notice.

Senator XENOPHON: At the end of the day you would not have an issue in principle with that being released, would you, Mr McCormick?

Mr McCormick : Again, I will take it on notice. I personally do not, but I am not sure what the protocols are. Perhaps Dr Aleck might have something to say.

Dr Aleck : I will concur with what has gone before and to add that CASA made a number of submissions to that inquiry. To the extent that the recommendations dealt with the same issues that were covered by the submissions I suspect there would be some alignment with our submissions.

Senator XENOPHON: That is why I am hoping to see that document sooner rather than later. Can I just move to the new fatigue rules. Will each FRMS approval be available for public scrutiny to ensure that CASA is not creating a commercial advantage for some operators over others, because that is one of the concerns. This is an issue that has been ventilated with you, both in this forum and in other forums, Mr McCormick.

Mr McCormick : Publishing of the FRMSs on a public site?

Senator XENOPHON: Yes.

Mr McCormick : Again, I do not think we have formed an opinion. We will take that on notice.

Senator XENOPHON: It is a pretty important issue, and I might be guided by Senator Fawcett given his expertise in this. For an FRMS approval, again, what harm would there be for that approval to be available for public scrutiny?

Mr McCormick : Again, there are safety issues. We have not turned our mind to this. I will take it on notice. Is it your view that they should be published?

Senator XENOPHON: No, I am asking you: do you consider that each FRMS approval be available for public scrutiny? Surely there is nothing there that would be commercially in confidence.

Mr McCormick : The commercial aspect is what I am thinking of. As far as the content, if someone was wanting to see what FRMSs we have approved to make sure we have used the same methodology or imposed the same standards, in other words we have not allowed someone more leniency than we have allowed to somebody else, then I can understand that, if that is what you mean by commercial. Of course, the FRMS is available to all the pilot unions and everybody within the organisation that is using it. I do not think there is any way that we could attempt to keep it quiet.

Senator XENOPHON: Is that the case though?

CHAIR: I am advised that there is no procedural reason, in reference to your earlier questions, for the advice that CASA gave the department to be not tabled. It is something where there is no procedural blockage.

Senator XENOPHON: If we can go back to that, Mr McCormick, to the department and to the minister, I formally request that you table a copy of CASA's response to the department in respect of the Senate report of the inquiry into aviation accident investigations handed in May 2013.

Mr McCormick : I acknowledge your request, Senator, and we will take it on notice and check the legal advice. If it concurs with what we have heard today then we certainly will provide it.

Senator XENOPHON: What has legal advice got to do with it?

Mr McCormick : We are merely checking to make sure that that is the case.

Senator XENOPHON: Are you suggesting that a request from a committee of the Senate for a document is something that could be fettered by legal advice?

Mr McCormick : No, Senator, I will not go there. What I am saying is that I will take it on notice and I acknowledge your request.

Senator XENOPHON: But you are going there, because you are saying that you are going to take legal advice before you consider it.

CHAIR: I think it is fair to say that what is in Mr McCormick's mind is how he is positioning the request.

Senator XENOPHON: I will not take it any further. I am grateful for Mr McCormick's response and we will go from there. On the FRMSs, does CASA consider that the prescriptive limits in relation to FRMSs, when used to the maximum allowed, may constitute an unacceptable risk in some cases?

Mr McCormick : The idea of limit on any fatigue whether it be prescriptive or the FRMS is so because it is the limit. Operation at the limit is not unsafe, otherwise there would not be a limit or the limit would be something other than what it is. Continuing operations close to the limit can induce fatigue and, of course, knowing the state of fatigue at which the person commences influences whether they can operate to the limit.

Senator XENOPHON: Sorry, Mr McCormick, I just want to pick up on what you said earlier. You said that continuing operations close to the limit can obviously be more problematic than having the occasional 'going to the limit' occasionally. That is pretty axiomatic, isn't it? If you are working to the limit once every week or so, or if you are working to the limit six days in a row, or whatever the maximum allowed is, then that is obviously more of a risk factor than an occasional going to the limit, is that right?

Mr McCormick : It is factored into the rest periods that are required if you do operate to the limit. The point that I am trying to make is that operating at the limit is not illegal. Operating at the limit is still safe and provides the protections that are in there. If you operate continually at the limit that is reflected in the rest periods that are required. The difficulty is, of course, that with any of these, whether it be the FRMS or proscriptive limits, is the fatigue level of the individual before they commence those periods of duty.

Senator XENOPHON: In terms of setting these limits have you identified areas that are particularly problematic? Another way of putting it is: how will your inspectors ensure that risks are managed appropriately, because you are aware that the pilots—and there are some people from APA here today—have been quite vocal in their concerns about these limits. They believe that people in the cockpits that fly our commercial aircraft around the country are concerned that there are risks involved and they consider them to be unacceptable with the current FRMSs that have been approved. How do you manage those risks? How do you monitor those concerns, in a sense, through your inspectors to ensure that risks are managed appropriately?

Mr McCormick : The FRMS and the reporting does have reporting requirements. Of course, we do continually look at those reporting requirements. As we discussed at a briefing with you, Senator, on 24 and 25 June, there is science behind that. We can show where these numbers have come from. We are certainly not out of step with anybody else. We are far more lenient than many other countries. We believe by education of our inspectors and by the reporting and self-monitoring of the FRMS system we will have the safeguards in place.

Senator XENOPHON: You have inspectors on the ground continually assessing this?

Mr McCormick : Assessing FRMS, yes.

Senator XENOPHON: The ATSB recently completed a review of loss of separation incidents in Australia—and I know that these are questions I can ask the ATSB—and concluded that issues with military ATS were primarily to blame. How does this compare with the CASA review of Airservices Australia which found serious regulatory breaches and resulted in CASA, as I understand it, revoking or considering revoking ASA's ongoing approval? You may be aware that the 7:30 program or the ABC ran a story on documents that they had obtained of CASA's review into Airservices Australia. I think, having read that review, CASA was quite critical of the way that Airservices Australia was operating. The ATSB, as I understand it, is taking a view and saying that these loss of separations had more to do with military ATS, which does not seem to sit comfortably with your quite comprehensive review of Airservices Australia, which I think goes to issues of loss of separation.

Mr McCormick : The major point of the 172 report, which is the Airservices report you alluded to, was around manning levels of air traffic controllers in particular and whether there were enough to prevent proclamations of temporary inflight broadcast areas, TIBA as we call them. Loss of separation assurance et cetera we did address, but Airservices, of course, has a task force in place which is addressing that, and I think it is chaired by their CEO, from memory. As far as military operations go, and we acknowledge that Darwin is most probably an issue of where these events seem to be occurring, we do not have a head of power to control military air traffic control services.

Senator XENOPHON: But there are civilian aircraft operating in that space.

Mr McCormick : I have used the very same argument myself. The same manual of air traffic services is being used by civilian and military air traffic controllers, so technically those standards of separation et cetera are the same. There should be no difference.

Senator XENOPHON: And this is something you raised with the department?

Mr McCormick : We have had numerous, but not in depth, discussions around issues of military air traffic control. However, if I could—

Senator XENOPHON: Sorry, while you are getting some information, I will ask another question. Mr Mrdak, I think Mr McCormick makes a very valid point. You have two reports. CASA's review of Airservices Australia, which I think many would regard as quite a robust and comprehensive report, seems to be inconsistent with the view of the ATSB, which is to simply blame military airspace or military air traffic control. Mr McCormick has alluded to that as a problem, because we are talking about a lot of civilian aircraft operating in that space. They do not have jurisdiction. Is this something that the department is looking at?

Mr Mrdak : Firstly, you would probably need to discuss with the ATSB that comment on the extent to which this is an issue for military ATS. I think the reason—

Senator XENOPHON: Hang on; Mr McCormick has raised it as an issue, saying that they do not have jurisdiction.

Mr Mrdak : Coming back to your earlier point about the ATSB's finding on loss of separation, that is a discussion you may wish to have with the ATSB in terms of clarifying what their report said. I do not think it is as easily broken down as in the way you have expressed it. I think it much more complex than that. It is not simply a case of—

Senator XENOPHON: But it is not an oversimplification to make the assertion that CASA, in a report that saw the light of day through an FOI process, made a number of findings about Airservices Australia—and I think we are all grateful for CASA's review—but the report seems to be at odds with the ATSB's approach, which, if anything, seems to oversimplify it in looking at military control of airspace and not the broader issues that CASA referred to.

Mr Mrdak : As I say, I do not think the way you have expressed the ATSB report necessarily reflects their view. I think that is a discussion you should have with Mr Dolan and the ATSB. Coming to the second point, in relation to the interaction between military and civil air traffic controlled airspace, you are absolutely right. That is an issue that we have been for some time discussing. The work that is now going on between Airservices and the Air Force in relation to the single ATS system is now coming to fruition, and a lot of the procedural alignment is also taking place. There is a lot of work inside Air Force taking place in relation to aligning that and dealing with some of the risk issues. So it is an area where there has been a lot of work. I, Mr McCormick, Chief of Air Force and the head of Airservices discuss these issues, and there is a work program in place at Airservices Australia to deal with a number of the issues being raised.

Mr McCormick : That is quite true, Senator. In actual fact, we are working with Defence in particular to do a joint study of Williamtown. I might ask the executive manager of air space to—

Senator XENOPHON: But you can understand why some people would be quite nervous about the fact that it is not as synchronised as it could be.

Mr McCormick : Yes. As I said, we have been discussing this for some time, but I do not have a head of power to talk to Defence about such operations.

Senator XENOPHON: But, as the head of the peak organisation in this nation for air safety, do you have any reservations or any sense of nervousness that there is not that level of synchronisation and that there seems to be a slightly different approach in terms of air traffic control under military airspace and under civilian airspace, given that civilian aircraft are in that military airspace?

Mr McCormick : I do not have a sense of nervousness as such, but I do recognise that issues need to be addressed. If I could, I will ask my executive manager of airspace and aerodromes to comment.

Ms Allman : Senator, to try and address some of the issues you have raised, the part 172 review of Airservices Australia was a comprehensive review to determine their compliance with CASA regulations. As the director has mentioned, we do not have a similar head of power to allow us to do the same thing for Defence air traffic services. We recognise the recommendations—

Senator XENOPHON: It is a safety issue, isn't it?

Ms Allman : Recognising the recommendations from the ATSB report, there are two recommendations against CASA. The first one, as you have mentioned, regards regulating Defence air traffic services. We do not have a head of power that allows us to do that; however, we have had a long history of engagement with Defence, where CASA has participated in the surveillance of air traffic control facilities over many years, to determine that the appropriate standards are being implemented.

They have most recently invited us to assist them to provide advice regarding some matters around the operations of West Sale and East Sale aerodrome, and that advice was provided earlier in the year. We have future activity planned with respect to a joint study of the airspace in and around Williamtown, recognising there are challenges with efficiency of the use of the airspace; particularly there has been approximately 16 or 17 per cent growth in traffic in that airspace over recent years. That work is planned for next year. That will review the airspace arrangements as well as the service delivery that is provided.

Senator XENOPHON: But the bottom line is, as your director has quite rightly pointed out, you just do not have a head of power over military airspace.

Ms Allman : That is correct. Sorry—over airspace, we do. It is the provision of services within the airspace, we do not.

Senator XENOPHON: I apologise. It is the provision of services. So there is that.

Mr McCormick : As we go forward—and following on from what Mr Mrdak said about the APG where we meet regularly as the heads of the departments and Defence—with the new air traffic system we are the designated lead regulator for that, so we will have a better opportunity perhaps to address some of these issues in that process.

Senator XENOPHON: I want to ask some questions on Sky Sentinel—

CHAIR: How many more minutes do you need?

Senator XENOPHON: Three or four. I think there is a technical aspect. I just want to refer to some correspondence—whether questions need to be formally tabled. I will just get some advice from the secretary in relation to that. The secretary says it should be fine to refer to them. Thank you.

Mr McCormick, I will go to issues of Sky Sentinel. The deputy chair, Senator Sterle, asked a series of very comprehensive questions. And I am very grateful to Senator Sterle. There has clearly been a cost blow-out: $255,750 was originally allocated to the Sky Sentinel project. Now the total funding of the Sky Sentinel project has blown out to $1,570,396. How much has Sky Sentinel cost so far?

Mr McCormick : I will get that number for you—

Senator XENOPHON: It has blown out a lot though, hasn't it?

Mr McCormick : No, in actual fact it came in under the budget. The amount you are referring to—the large amount is for the training, the writing of the manuals, the introduction of the standards and the whole thing. The actual costs of Sky Sentinel, to purchase it, I think were in the order of—it is in that answer; I will find it in a minute.

Senator XENOPHON: So when it says the amount 'originally allocated' and the 'total funding', you are saying that the original allocation was always within budget?

Mr McCormick : The original allocation to purchase it was only about $35,000—from memory. The cost to make it into code, into SQL, from what it was written in, to provide the security that the government requires around it, then to do the training, the rollout to all the offices, et cetera—that entire program allocation was $2,840,438, which included the platform costs, which were $255,700. The development and implementation of the surveillance approach, which involved the rewriting of the surveillance manual, training people et cetera, was originally $1,415,000 cost. That might be the one you are looking at. In actual fact that was $1,182,000. The actual project business implementation costs were $236,000 versus $367,000. So, to get to the bottom line, we thought it would cost $2,840,438; it actually came in at $2,447,184.

Senator XENOPHON: And you are satisfied that it is working as it was meant to?

Mr McCormick : It has certainly revolutionised the approach that we have. We have had numerous approaches from people overseas wishing to use the same system and take it on board.

Senator XENOPHON: This issue that was raised about the contract of sale included 'confirmation from the CASA employee that the source code used to develop AWS was created by him and did not reproduce proprietary source code from any other software program'. You can assure us there are no issues about the proprietary nature of that code?

Mr McCormick : We have researched that extensively through legal; the answer was that there are no issues involved.

Senator XENOPHON: There are no claims or litigation involving that. That is good.

Mr McCormick : There never has been.

Senator XENOPHON: I am very pleased to hear that.

Senator FAWCETT: In question 3 of those notices, you were asked whether the advice of the chief information officer sought prior to the decision being taken. The answer was yes. Perhaps the question was not well framed; what was the advice of the chief information officer? Did he indicated that he thought that Pentana may in fact have a case to claim for breach of IP?

Mr McCormick : I will just ask the deputy director, who was more involved, to answer that.

Mr Farquharson : The CIO raised questions about IT security, in terms of the language in which the platform was originally written in. The first amount of money went to rewriting the code into a SQL database. The advice that we received from trying to do our due diligence was that in any case the code was not even remotely like Pentana's code itself and was written in quite a different code and manner.

Senator FAWCETT: That does not specifically answer my question. When the CIO was asked for his opinion, did he express an opinion that CASA could be exposed to a claim of a breach of IP by Pentana?

Mr Farquharson : Yes, I think he may well have.

Mr McCormick : That was always part of the due diligence process—that we would review that.

Senator FAWCETT: On what basis was his opinion as your chief information officer overridden?

Mr McCormick : No, he raised it as a point, from my memory. In actual fact, when we explored the IP and—through legal—we took outside legal advice on it, he was satisfied that there were no IP issues. That is my recollection.

Senator FAWCETT: Could you clarify that for us and come back with a trail?

Mr McCormick : We certainly will give you a time trail in our responses. I have got them here now for those questions. We have tried to outline them as clearly as we could regarding how it has gone forward.

Senator FAWCETT: I am asking on that particular point, if you have received advice that his concerns were not valid, could you present the committee with a document to demonstrate that?

Mr McCormick : Yes, we can take that on notice.

Senator XENOPHON: I omitted to ask a question in relation to the whole issue of Airservices. CASA did conduct that top-down investigation into Airservices Australia, which I think is fair to say was quite critical.

Mr McCormick : The 172 report?

Senator XENOPHON: Yes, the 172 report was quite critical. It was quite significant that you renewed ASA's license on a conditional basis. That is right, isn't it?

Mr McCormick : Yes.

Senator XENOPHON: During this investigation, were you sharing information with the ATSB about your investigation into Airservices Australia?

Mr McCormick : The review that we were doing with Airservices was looking at the fact that we also have difficulty in regulating the government entity, as Airservices, in that there is not too much we could do.

Senator XENOPHON: Because of a head of power?

Mr McCormick : That is a legal issue as well, which I could ask to give you some more information on if you would like.

Senator XENOPHON: Maybe, because of time constraints, if we could get that on notice from you about issues of heads of power with respect to your ability to regulate or to give directives to Airservices Australia.

Mr McCormick : What I would say is that Airservices worked very closely with us in what we were looking at. I think I had actually alluded to this report coming for a number of years. This review was not to try to go in there and say, 'Where is an issue which you may have already reported to the ATSB, if there is an issue we are looking at.' It was to look holistically at where the whole thing was going. Any information that is in there that Airservices was required to share with the ATSB would have been shared with the ATSB—to my knowledge. But that is a question for Airservices.

Senator XENOPHON: Yes, but there is that little issue of a MOU that came up during the Pel-Air inquiry—about the importance of the memorandum of understanding. I do not want to have to refer to the specific clauses, but that was quite clear in terms of its requirements for information relating to the air-safety issues to be shared between the two organisations. In the course of your investigation—your overview, your review—of Airservices Australia, were you keeping the ATSB updated in respect of that?

Mr McCormick : In terms of the internal process I will have to take that on notice. I was not involved closely enough to be able to tell you that.

Senator XENOPHON: Again, that raises the vexed issue as to whether the memorandum of understanding was being complied with.

Mr McCormick : The memorandum of understanding, although it deals with an exchange of information, has, up until recent times, been viewed to be about incidents and accidents or other matters that we have information about. A lot of the 172 report does not refer to any particular incident.

Senator XENOPHON: The MOU is broader than that, though. It is not about specific incidents.

Mr McCormick : It is, but I think it generally has a germination point—something to start it or kick it off. The 172 process—I am taking on notice what we did with the report—was about what we thought of Airservices Australia outside of the specific information we received on audits.

Senator XENOPHON: Sure. I will not take it any further than this but please take those issues on notice. If, in the course of your investigation or your review of Airservices Australia, you uncovered issues of concern to CASA—and the report did disclose issues of concern; I thought it was quite damning of Airservices Australia—then surely, insofar as the report related to aviation safety, which I think is axiomatic, given the damning nature of that report, isn't that something that the ATSB should have been kept apprised of on a very regular basis?

Mr McCormick : What was given to ATSB I will have to take on notice. I understand the thrust of your comments; I do not disagree.

Senator XENOPHON: The MOU may not have been complied with. I am not sure whether it was or not; I just want to know whether the spirit and the letter of the MOU has been complied with in relation to this investigation.

Mr McCormick : If parts of that report were started as a result of electronic incidents—from memory, I think a few of them are referenced in there—that information came from the ATSB to start with. So all we were doing was looking at how those issues hung together or created a bigger picture. Individual issues should be known. As I said, we will take it on notice and I will find out what was said.

Senator XENOPHON: Insofar as you pieced these pieces together to make a bigger picture—maybe the ATSB did not; I do not know whether they did or did not—I think it would have been important for them to know about that.

Senator FAWCETT: I would like to come back to a few more questions about Barrier Aviation. I am still trying to understand exactly the process that has gone on here.

Mr McCormick, you had a company that you obviously had grave concerns about in terms of its safety. You obviously did audits of that company. What kind of resource would normally be allocated to an audit of a company, as you have described it—a family run company? How many people and for how long—what sort of resources—would normally be thrown at that?

Mr McCormick : I will ask our Executive Manager of Operations to give you a better idea about that. The ownership structure does not drive the number of inspectors; it is the size of the operation that drives that, as you would appreciate.

Senator FAWCETT: Sure.

Mr McCormick : As a background to Barrier Aviation, when the documentation was first brought to me suggesting that there was a 'serious and imminent risk' issue I was not satisfied that there was sufficient information given. By the time we did issue that order I was more than satisfied that the information was sufficient, as was confirmed. I think we have taken a couple of questions on notice about our way through our discussion with Barrier Aviation. The option has been open to Barrier Aviation for some time—all of this year—to take some action.

Senator FAWCETT: One of the problems we have is that we hear complaints from industry. Without an AAT process having occurred we do not get to see the objective facts of a matter. One of the few vehicles we have to try and get the other side of the story is this process of Senate estimates, which is why I am trying to get the balance of the facts to understand what has eventuated in this process. I want to see whether, in fact, we have a problem with our system or whether appropriate process was gone through.

Mr Campbell : I think your question was about how many resources would be put into an audit of an organisation of that size. The audits we have done recently would have been done within our certificate management team structure. So, in an audit like this we would expect to involve flight operations inspectors, air worthiness inspectors and safety systems inspectors. Within the certificate management team, the CMT will decide how many people are appropriate for the audit and how long the audit will take. Audits, as you would realise, are sometimes like following a trail. You cannot always be sure how long it is going to go. Sometimes when you do an audit you find that everything is great; it does not lead to anything else. Other times things move on because the guys gather evidence which says that we need to go an look at this or that, and that sometimes leads to other things. I would expect three or four people to be involved in an audit like that and for it to take place over several days on site. Then, of course, often they will take away photocopies of material or logbooks and do a whole lot of work off site as well.

Senator FAWCETT: So three to four people over several days is what you think would be normal?

Mr Campbell : Depending on where it led and the size of the organisation, and Barrier have several locations, so we would have had to move people around to those various locations.

Senator FAWCETT: So you think four people for two weeks twice is an excessive amount at just their Cairns headquarters?

Mr Campbell : Like I said, it depends where it leads—and where it was leading was not that fantastic. I have to say that before we even had the information from Horn Island we were looking seriously at show cause action at that time. There had been a couple of audits done that year. There was one done—if I recall, it was a special audit—which resulted in quite a large number of non-compliance notices and, if I recall, the issue of about 12 ASRs against aircraft, four of which were code A ASRs and required maintenance on the aircraft before further flight. There was a lot of concern about that organisation and about the things that were going on there.

Senator FAWCETT: What kind of concerns would normally be conveyed in the verbal outbrief at the end of an audit? Would they normally give the AOC holder a broad understanding of the nature and seriousness of a concern?

Mr Campbell : Yes, I believe so.

Senator FAWCETT: Do CASA hold any records of what the content of those verbal outbriefs are?

Mr Campbell : I think you are talking about an exit meeting. I believe that we still have an exit meeting under our current processes and our current surveillance manual, and I believe there would be records of that meeting.

Senator FAWCETT: Are you able to provide those to the committee? Again, I am only getting one side of the story at the moment, and my understanding is that the exit meeting did not indicate any serious problems that would indicate a show cause notice forthcoming.

Mr Campbell : I would not expect our inspectors to be talking about show cause at an exit meeting, quite frankly. I think that is a decision that we make as part of our coordinated enforcement process, and it requires input from more people than just the inspectors to start talking about things like a show cause notice. I would expect them to say, 'We found this and this and this,' and we will be in touch with them.

Senator FAWCETT: I believe Horn Island was the area where the most concern was. I think there was an audit done—I think Twin Otter was the aircraft that was of concern. Can you tell me how many defects were found on that aircraft when you did the audit?

Mr Campbell : I do not recall the Twin Otter. I will have to take that one on notice.

Senator FAWCETT: My understanding is that it was less than a handful of things like landing lights. Again, there is no AAT process we can look at to understand the balance of this argument. Are you able to provide me—even if it is in confidence—with a record of what the deficiencies were that caused the concern in CASA, because I am certainly not seeing the same story from the other side that would lend weight to a grounding situation, which is essentially what has occurred?

Mr McCormick : Yes, we will take that on notice and provide you with all the documentation we can. I am cognizant that the committee had a discussion earlier today with Mr Mrdak about FOI versus committee requests, and we acknowledge that anything we give to you will be in confidence. We will do our utmost to give you anything we have available on that, and we will certainly find the reports you refer to and the recommendation paperwork that came to me which led to the serious and imminent risk decision. Is it satisfactory that we go up to that decision point?

Senator FAWCETT: Yes, that would be good.

Mr McCormick : We will do that. We will take that on notice.

CHAIR: I regret to inform the committee that that is the end of CASA. Questions, that is—I was just corrected by the secretary. It is not the end of CASA, just the end of them being here.