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1998-1999-2000
THE
PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF
REPRESENTATIVES
AVIATION LEGISLATION
AMENDMENT BILL (No.2)
2000
EXPLANATORY
MEMORANDUM
(Circulated
by authority of the Minister for Transport and Regional
Services,
the Honourable John Anderson,
MP)
ISBN: 0642 434506
The primary purpose of the Aviation Legislation Amendment
Bill (No.2) 2000 (the Bill) is to make amendments to the Civil Aviation
Act 1988 to facilitate the ongoing review of civil aviation
regulations.
The Civil Aviation Safety Authority
(CASA) is currently developing regulations under the Civil Aviation Act
which will put in place maintenance standards for aircraft and aircraft
components (so-called ‘aeronautical products’). Such standards
already exist (Part IVA of the Civil Aviation Regulations 1988), but are
being reviewed and amended as part of the Government’s commitment to
simplification and international harmonisation of Australia’s civil
aviation regulatory régime. The Bill will amend some provisions of the
Civil Aviation Act in order to:
• enable the alignment of Australian aircraft maintenance philosophies with those of other national airworthiness authorities and international (ICAO) standards;
• enable the regulation of not only the technical aspects of aircraft maintenance, but also the control and management of aircraft maintenance; and
• define certain terms for use in the Act and
regulations.
The Bill also makes two other
important amendments to the Civil Aviation
Act.
Firstly, the Bill gives CASA the function
of entering into so-called ‘Article 83bis agreements’ with
the national airworthiness authorities of other countries. Under the
Convention on International Civil Aviation, Chicago 1944 (the Chicago
Convention) a State party to the Convention is generally responsible for the
safety regulation of aircraft on that State’s register, irrespective of
where the aircraft is in the world. Some obvious difficulties in administering
safety regulations arise when an aircraft registered in one country is operated
in another. Article 83bis is a relatively recent addition to the
Chicago Convention, and enables the transfer of safety regulatory functions from
the State of registration of an aircraft to the State of operation of the
aircraft, on agreement of both States. The International Civil Aviation
Organisation (ICAO) considers that such agreements should be made between the
relevant national aeronautical authorities (NAAs), as they are administrative
instruments of less than treaty status.
Australia
ratified Article 83bis on 2 December 1994 after amending the Civil
Aviation Act by the Transport and Communications Legislation Amendment
Act (No. 2) 1993. Importantly a new section 4A was inserted which allows
provisions of the Civil Aviation Act implementing the functions under
Articles 12, 30, 31 and 32 of the Chicago Convention:
• to be applied to a foreign aircraft identified in an Article 83bis agreement which transfers those functions to Australia; and
• to be disapplied to an Australian aircraft identified
in an Article 83bis agreement which transfers those functions to another
state.
This Bill ensures that CASA will have the
function to enter into Article 83bis agreements on behalf of
Australia.
Secondly, the Bill adds to CASA’s
suite of enforcement tools, by giving it the power to accept written
undertakings from people in relation to compliance with civil aviation safety
legislation. Giving of such undertakings will be completely voluntary –
CASA will not have the power to compel the giving of undertakings. However,
once a person has given an undertaking, CASA will be able to seek an order from
the Federal Court requiring a person to abide by his or her undertaking. The
provision is modelled on section 87B of the Trade Practices Act
1974.
Finally, the Bill makes amendments to the
Civil Aviation (Carriers’ Liability) Act 1959 to correct an
inadvertent error which imposed a liability on foreign charter operators which
is inconsistent with Australia’s international obligations under the
Convention for the Unification of Certain Rules relating to International
Carriage by Air, Warsaw 1929 (the Warsaw Convention).
The Bill is largely of a machinery nature, and aside from some
savings which may flow from improved administration of civil aviation
legislation, will have no financial impact on the Commonwealth.
In June 1996, the Regulatory Framework Program (RFP) office of
CASA commenced a Government endorsed review and revision of the Australian
aviation safety requirements currently contained in the Civil Aviation
Regulations (CARs) and the Civil Aviation Orders (CAOs). The proposed new
legislation is to be called the Civil Aviation Safety Regulations
(CASRs).
Arising from the review, a need to amend
the Civil Aviation Act 1988 was identified to give effect to a proposed
CASR Part 43 — Maintenance Rules, and Part 145 –
Maintenance Organisations, to address the proposed policy
changes.
The proposed changes to the Civil
Aviation Act are to support future CASR Parts and will have no effect on the
current requirements prescribed in the CARs. They will, however, ensure
Australian regulations harmonise with international standards and
practices.
The problem is that the current legislation is ambiguous,
disjointed, difficult to comply with and enforce, and does not support future
changes to maintenance
requirements.
Australia’s aviation safety
requirements are currently contained in the Civil Aviation Act 1988,
Civil Aviation Regulations (CARs) 1988 and 1998 and Civil Aviation Orders
(CAOs). With the proposed changes to future legislation, seeking comparative
advantage with respect to international aviation trading agreements, there is a
recognised need that the Act must be changed to incorporate the new definitions
and interpretation necessary to implement new maintenance requirements. Such
changes involve the use of the terms “aeronautical product”,
“maintenance” and “servicing”. These terms replace
existing terminology and reflect the requirements necessary for the enabling
legislation dealing with aircraft maintenance. The proposed legislative changes
to the Act seek to achieve compliance with ICAO Standards and Recommended
Practices and to harmonise with the requirements of other NAAs by removing,
wherever practicable, maintenance requirements and terminology currently unique
to Australia.
CASA seeks the introduction of a number of amendments to the
Act and the Civil Aviation Regulations (CARs) to enable the use of terminology
and philosophies which are necessary to enable harmonisation of aircraft
maintenance requirements with other NAAs.
The
objective is to:
• amend the Civil Aviation Act 1988 to facilitate the use of new terminology in future CASRs Part 43 and Part 145 dealing with maintenance of aircraft and aeronautical products;
• enable the alignment of Australian maintenance philosophies with that of other national airworthiness authorities and international standards;
• define and introduce the terms aeronautical product, maintenance, and servicing; and
• emphasise the maintenance control arrangements for aircraft.
The options considered were limited to
two:
Option 1. Do nothing. In this case the
proposed regulations would potentially be inconsistent with the Act, leading to
confusion, and potentially, invalidity;
or
Option 2. Develop draft legislation
appropriate to the specific task.
No other options
were considered viable or appropriate.
The persons, groups or organisations which could be affected by the problem and proposed changes are those involved with carrying out any general or specific maintenance function(s) on an aircraft or aeronautical product. This includes:
• Registered operators* (referred to in the current CARs as Certificate of Registration holders);
• CAR 30 (proposed CASR Part 145) “approved maintenance organisations”;
• Air Operator Certificate (AOC) holders;
• Licensed aircraft maintenance engineers;
• Holders of maintenance authorisations; and
• Flight
crew.
*Note: Under the terms
of the new CASRs relating to aircraft maintenance, including the CASR Part 47
dealing with aircraft registration, it is proposed to use the term
“registered operator” to replace the term “Certificate of
Registration holder”.
There will be no anticipated added cost to the public purse
due to the amendments of the Act.
There will however, be long term cost benefits to those
aviation industries involved in international trade which will flow from the
legislative changes. Although it is difficult to specify projected cost
benefits, it is a clearly recognised fact that in order to contribute and be a
partner in the aviation world market with respect to the manufacture of
aeronautical products, e.g parts for Boeing aircraft and the overhaul of
aircraft engines, it is necessary to use the same terminology and airworthiness
documentation to gain access to those markets.
There are no environmental issues involved in this change.
A Notice of Proposed Rule Making - NPRM 9901: Proposed
amendments to the Civil Aviation Act 1988 — Relating to Civil
Aviation Safety Regulations, was published for aviation community and public
comments on 14 May 1999. The period for public comment on the proposals
contained in the NPRM closed on 23 July
1999.
In addition to CASA internal discussion
within the Regulatory Framework Program office, District Airworthiness Managers
(DAM’s) and consultation with CASA’s Office of Legal Counsel (OLC)
and the Department of Transport and Regional Services (the Department), the NPRM
was advertised in the national and capital city press.
The NPRM was distributed to members of the CASA
review program’s Technical Committees TC6 (Sport Aviation) and TC7
(Aircraft Maintenance), CASA District Offices and placed on the CASA Internet
web site.
A total of fifty one (51) responses to
the NPRM were received, including seven responses from CASA specialists
responsible for the administration of the maintenance aspects, and forty four
(44) from the aviation industry.
The responses
received related to the NPRM proper and the proposed draft legislation (changes
to ‘the Act’).
Comments of a
general nature were also received covering editorial and typographical errors,
administrative and procedural matters which were taken into account and
incorporated as necessary.
All comments received
were evaluated and, where appropriate, suggestions and recommendations were
incorporated. All comments, including those of a general nature were addressed
collectively in the Summary of Responses to NPRM 9901RP which was published by
CASA on 22 October 1999.
CASA decided to apply Option 2 and have, in conjunction
with OLC and the Department developed draft legislation appropriate to the
specific task.
The drafting of any proposed amendments to the Civil Aviation
Act is carried out by the Office of Parliamentary Counsel (OPC) in accordance
with drafting instructions issued by the
Department.
There is no proposed implementation
date for the changes to the Civil Aviation Act. Implementation is
expected to take place as expeditiously as possible following Parliamentary
debate and approval. This is necessary to enable the enactment of those
proposed changes to the CASR’s which have already been subject to NPRM
review.
CASA will monitor the effects the changes
to the Civil Aviation Act will have on the existing and future CASR parts
as they are promulgated. A review of the changes will be conducted on
completion of the regulatory reform program (post 2003).
There are many instances where CASA detects regulatory
inadequacies in the manner in which an operator conducts its operations or a
licence holder exercises the privileges of his or her
licence.
In some instances, the inadequacies are
such that prosecution or licence action would be disproportionate and
unwarranted - either by reference to the nature of the inadequacy itself,
because of the diversion of resources that would be involved in the conduct of
the prosecution or licence cancellation, or in terms of net benefit to aviation
safety.
Detected inadequacies may not always
constitute clear breaches of the law. Nevertheless, CASA sometimes considers
that changes of practice are necessary or desirable in the interests of aviation
safety.
Some detected inadequacies create a serious
and immediate threat to aviation safety. Other inadequacies do not create a
serious and immediate threat (because they are unlikely to be the direct cause
of an accident) but nevertheless they cause an unacceptable increase in the
safety risk. CASA’s regulatory response to a detected inadequacy varies
according to whether the inadequacy creates a serious and immediate safety
threat or whether merely it increases the overall safety risk in a less direct
and immediate way. CASA’s primary focus is on the safety of fare paying
passengers. In almost all cases, CASA considers that the appropriate response
to inadequacies that create a serious and immediate threat to fare paying
passengers must be immediate licence or certificate cancellation or suspension
action. In other cases, other regulatory responses may be more appropriate.
CASA considers, however, that it is important that any detected
inadequacy that unacceptably increases the safety risk must be addressed in some
way and must not be permitted to continue.
CASA
does not consider the range of regulatory responses presently available to it to
be adequate in circumstances where:
(a) CASA becomes aware of facts or circumstances that suggest to it that an individual or organisation has breached the law; and
(b) no serious and immediate safety risks to fare paying passengers arise from the breach; and
(c) the breach does not justify CASA taking administrative action (such as suspension or cancellation) against the individual’s or organisation’s licences, certificates or approvals; and
(d) it is important to deter a recurrence or continuation of the breach; and
(e) one or more of the following applies:
• it is difficult for CASA to prove the breach of the law due to lack of evidence;
• the law is open to interpretation, for example, because it is drafted in a non-prescriptive, outcome-based style;
• the breach is relatively minor or technical in nature;
• the time and resources required to fully investigate the matter and prepare a brief for the DPP is disproportionate to the fine likely to be imposed by a court if the breach were to be proved;
• in CASA’s judgment, the imposition of an
administrative fine is in all the circumstances unlikely to deter the individual
or organisation from breaching the law in a similar way in the future.
In this statement, breaches
falling within the above category are referred to as “relevant
breaches”.
Given that:
(a) CASA has limited resources to apply to compliance and enforcement activities; and
(b) the DPP has limited resources to apply to running prosecutions; and
(c) aviation law is complex and technical; and
(d) investigating matters, obtaining admissible evidence to prove breaches of aviation law and running prosecutions normally involves the application of considerable CASA and DPP resources, even for relatively minor offences; and
(e) the time between a breach of law coming to CASA’s attention and the conclusion of a prosecution is often in excess of one year, and can be in excess of 2 years; and
(f) a decision by CASA to investigate a minor or technical breach of the law negatively impacts upon CASA’s ability to apply resources to detecting other breaches of the law that may be significant from a safety perspective; and
(g) because they are normally conducted before Magistrates who
have no particular expertise in aviation law, prosecution actions seldom serve
to clarify provisions of the law that lack
certainty,
CASA considers that, in many cases,
prosecution may not necessarily be the best regulatory response to a relevant
breach.
Presently, if CASA does not consider
prosecution to be the best regulatory response to a relevant breach ,
CASA’s options for responding are to:
(a) do nothing; or
(b) counsel or warn the individual or organisation involved; or
(c) impose an administrative fine; or
(d) accept an informal, unenforceable
undertaking.
Each of these options may be
appropriate in certain situations. However, in a significant number of
situations none of these options is appropriate. With some individuals and
organisations, CASA lacks the necessary degree of confidence that counselling, a
warning or even an administrative fine will bring about the necessary change of
attitude and/or systems to ensure that there is no repetition of the breach.
The acceptance of informal, unenforceable
undertakings by individuals or organisations who are found to have committed a
relevant breach is sometimes appropriate if:
(a) CASA has a high level of confidence that the undertaking will be honoured; and
(b) the relevant breach does not involve a law that is open to interpretation, for example, because it is drafted in a non-prescriptive, outcome-based style; and
(c) there is clear, reliable evidence of the
breach.
If CASA does not have a high level of
confidence that the undertaking will be honoured, CASA does not consider that it
is properly undertaking its regulatory responsibilities by accepting the
undertaking instead of pursuing other options.
If
the applicable law is open to interpretation, for example, because it drafted in
a non-prescriptive outcome-based style, or if there is not clear, reliable
evidence of the breach, CASA is placed in a difficult position if it accepts an
informal, unenforceable undertaking. If the undertaking is not honoured, CASA
normally considers that it must respond by prosecuting the individual or
organisation for the relevant breach (it is not appropriate for an individual or
organisation to breach an undertaking to a Government regulator without
justification and without consequence).
However, in
the circumstances contemplated, running a prosecution action would not be
without difficulties. Further, the delay involved between the undertaking being
proposed and the undertaking being breached may be significant. In some
circumstances this delay may lower the prospects of a successful prosecution.
Thus, an individual or organisation who breaches an informal, unenforceable
undertaking to CASA may in some circumstances be better off than they would have
been if they had not offered the undertaking. This is
anomalous.
CASA’s new enforcement policy is
an enforcement pyramid, and undertakings play an important part of its overall
enforcement strategy. However, the difficulties with informal, unenforceable
undertakings have, in recent times, resulted in CASA accepting less
undertakings.
Additionally, CASA considers the
range of regulatory responses presently available to it to be inadequate
where:
(a) CASA becomes aware that an individual involved in the aviation industry does not have, or may not have, the appropriate level of skill or training; and
(b) the lack of skill or training does not create any serious
and immediate safety risks to fare paying
passengers.
In this statement, matters falling
within the above category are referred to as “skill
deficiencies”.
CASA’s goal in
many skill deficiency situations is to ensure that the individual does
not engage in certain activities (for example, pilot a certain type of aircraft
or perform certain maintenance) until they pass an appropriate examination or
undertake appropriate training. CASA presently has the power to suspend
licences, certificates and approvals, but this is a heavy handed regulatory
response that can unnecessarily taint an individual’s reputation or
employment prospects.
CASA can also accept an
informal, unenforceable undertaking in these situations, but it is normally
reluctant to do so. Where CASA has information that suggests that an individual
should not be engaging in a particular activity because doubt exists as to
whether they possess the appropriate skills, in many cases in would not be
appropriate for CASA to simply rely upon an informal, unenforceable undertaking
from the individual that they will not engage in the activity until CASA
considers the issue is resolved. If the individual “breaks their
word”, in many cases no criminal or administrative penalties will be
available (no breach of the law may be involved) and, if an incident or accident
results from the breach of undertaking, CASA could well be subjected to
justifiable criticism from the public and industry for relying upon “the
word” of an individual in relation to important matters involving aviation
safety.
CASA considers that it needs to have one or more additional
light handed regulatory responses available to it to respond to relevant
breaches.
Together, the additional regulatory
responses in relation to relevant breaches need to:
(a) effectively and efficiently utilise CASA and industry resources; and
(b) deter recurrences or continuations of breaches; and
(c) assist industry to comply with, and CASA to enforce, laws that are open to interpretation, for example, because they are drafted in a non-prescriptive, outcome-based style; and
(d) consistently with CASA’s approach to enforcement, deal appropriately and not overly severely with individuals or organisations who commit a minor or technical breach of the law and who demonstrate a willingness to take steps to prevent further similar breaches in the future; and
(e) be capable of operating flexibly in a range of situations; and
(f) be able to be implemented by CASA in particular situations
without significant delay.
CASA notes that the
Civil Aviation Regulations 1988 are gradually being replaced over the
next 3 to 4 years by the Civil Aviation Regulations 1998 and, as this
process continues, a number of ambiguities in aviation rules are being
addressed. In some circumstances, however, it is not appropriate for the law to
be excessively prescriptive and there still will be some circumstances where the
law will be drafted in a non-prescriptive, outcome-based
style.
CASA also considers that it needs to have
one or more light handed regulatory responses available to it to respond to
skill deficiencies.
Together, the additional
regulatory responses in relation skill deficiencies need to:
(a) effectively and efficiently utilise CASA and industry resources; and
(b) provide a strong incentive to the relevant individuals to undertake training or desist from certain activities, as the case requires; and
(c) consistently with CASA’s approach to enforcement, be an alternative, less severe, response to the cancellation or suspension of an individual’s licences, certificates or approvals; and
(d) be capable of operating flexibly in a range of situations; and
(e) be able to be implemented by CASA in particular situations
without significant delay.
The following options have been considered in relation to relevant breaches:
(a) additional education and training, together with a system of public rulings about ambiguous areas of the law;
(b) increased levels of administrative penalties;
(c) voluntary, enforceable,
undertakings.
Under option (a), CASA could provide
additional education and training to industry to explain and stress the
importance of complying with safety rules. It could also issue public rulings
giving CASA’s interpretation of provisions that are unclear or difficult.
These measures would tend to prevent some relevant breaches, but
may be of limited use in situations where CASA is responding to a breach that
has already been detected. In many cases, CASA would not be satisfied that an
individual or organisation would not commit further breaches merely because CASA
educated them about the law. Subject to resource constraints, this option
appears to be a useful tool to adopt in conjunction with one of the other
options.
Presently, the level of administrative
penalties is relatively low and the imposition of such penalties would have
little deterrent value to commercial businesses. Under option (b), CASA could
propose that the existing levels of administrative penalties be significantly
increased to increase their deterrent effect. However, any increase in the
level of administrative penalties would need to be accompanied by corresponding
increases in the applicable criminal penalties for breach of the Civil
Aviation Regulations 1988 and the Civil Aviation Regulations 1998, or
else the incentive to pay an administrative penalty would be reduced. A general
significant increase in the level of penalties may be considered by the industry
to be an excessive response the issues identified, but selective increases in
some penalties may be more acceptable.
Increasing
the level of administrative penalties would not assist CASA to enforce laws that
are open to interpretation, for example, because they are drafted in a
non-prescriptive, outcome-based style. Increasing such penalties would also be
of little assistance in situations where there is not clear, reliable evidence
of the breach or in situations involving undesirable safety practices which may
not necessarily involve a clear breach of a regulatory requirement.
Nevertheless, such increases would be of assistance in relation to certain types
of relevant breaches. CASA expects to gain significant experience with
the present administrative penalty system over the next 12 months (to date the
administrative penalty system has not been part of CASA’s compliance and
enforcement strategy). CASA considers that any increases in administrative
penalties should be considered as part of a more comprehensive review of the
administrative penalty system in due course.
Option (c) would entail to introduction of new
provisions into the Civil Aviation Act 1988 to empower CASA to accept
binding undertakings from individuals and organisations. While individuals and
organisations would not be forced to provide undertakings, if undertakings were
offered and accepted, they would be capable of being enforced through the
courts. Courts would be empowered to make a range of orders against individuals
and organisations who were in breach of undertakings, including orders that the
individual or organisation comply with the undertaking and orders that the
individual or organisation pay an amount of money to the Commonwealth. Failure
to comply with a Court order would amount to a contempt of court.
This option meets all of the desired objectives in
relation to relevant breaches. In most cases, the formulation and
consideration of an appropriate undertaking would be able to be completed
quickly, with a relatively low commitment of resources (compared with most
alternatives) by both CASA and the individual or organisation
concerned.
Voluntary enforceable undertakings can
be individually shaped to fit the individual circumstances of each matter and
they are, therefore, very flexible. In circumstances where the law is open to
interpretation, for example, because it drafted in a non-prescriptive
outcome-based style, undertakings can detail exactly what an individual or
operator must or must not do in the particular circumstances. This greatly
assists CASA to monitor whether the individual or organisation is complying with
their legal obligations and, if necessary, to prove in court that the individual
or organisation is not complying. It also assists the individual or
organisation to comply.
It seems likely that
individuals or organisations who give enforceable undertakings will very often
comply with the undertakings. Given that it would normally be very
straightforward to prove that an undertaking has been breached, most individuals
or organisations are likely to consider that it is in their interests to make
every effort to comply. If there was a breach of an undertaking, CASA would ask
the court to make orders against the individual or organisation in breach, on
the basis of the breach of the undertaking. There should not normally be
any need for CASA to prove that the individual or organisation has otherwise had
committed an offence against the Civil Aviation Act or Regulations. All
that CASA would need to prove was that a person had entered into an undertaking
and had failed to comply with the undertaking. The Court would then be empowered
to issue an order requiring the person to comply with the undertaking and/or to
order the person to pay an amount of money to the Commonwealth. The Court would
also be empowered to make any other order that the court believed was
appropriate in the circumstances.
Experience in the
ACCC and ASIC with enforceable voluntary undertakings is that they provide an
extremely effective means of changing an organisation’s culture and that
the compliance rate is extremely high.
Enforceable
voluntary undertakings would also meet the desired objectives in relation to
skill deficiencies. As noted above, enforceable voluntary undertakings are
likely to utilise relatively few CASA or industry resources and they create
legal obligations on the individuals concerned to undertake training and/or to
desist from certain activities. They are also less severe (and less damaging
from a reputation perspective) to the individuals involved than administrative
action and are flexible enough to deal with the specific circumstances of each
case and are able to be put in place
quickly.
Voluntary enforceable undertakings are not
without some disadvantages. Clearly, it is a response that is only available in
situations where the relevant individual or organisation involved in prepared to
cooperate with CASA. Further, it is possible (although, in practice, unlikely)
that a decision by CASA not to accept or vary an undertaking could be subjected
to court challenge on administrative law grounds. Any such administrative law
challenge would involve the commitment of appropriate human and financial
resources by CASA, and would involve delay. Enforcing voluntary undertakings
would also involve delay and the commitment of appropriate resources by
CASA.
CASA believes that the costs involved in an enforceable
voluntary undertaking scheme to both itself and industry would be less than the
costs involved under current arrangements.
While
CASA may, from time to time, become involved in legal proceedings to enforce
undertakings or in administrative law challenges to its decisions in relation to
undertakings, CASA would expect to be involved in less legal proceedings than it
is now, as undertaking enforcement proceedings are expected to be quite rare.
Proceedings relating to the enforcement of undertakings should be shorter and
more straightforward, because in the normal case it would be much easier to
prove a breach of a specific undertaking than the breach of a complex aviation
law. The number of prosecutions (in relation to relevant breaches) and AAT
proceedings (in relation to skill deficiencies) should reduce, as there will be
less need to prosecute and to suspend or cancel licences, certificates and
approvals.
The actual resources involved in
negotiating and reviewing undertakings are expected to be minimal (CASA
estimates that, on average, only about 6 officer hours would be required).
When a person or organisation involved in
commercial aviation is discussing a relevant breach (or, in the case of
an individual, a skill deficiency) with CASA, one of their main
priorities is to resolve the matter quickly, without resort to courts and
tribunals. A delay in resolving matters almost always negatively affects
income, and court and tribunal proceedings normally involve the incurring of
large legal expenses. Enforceable undertakings allow the individual or
organisation to continue to earn income without the incurring of significant
expenses. Individuals and organisations are likely to obtain some legal advice
before entering into undertakings, and this will involve some expense. However,
in simple cases the cost of this advice should be minimal, especially as CASA
will normally prepare the first draft of undertakings. In the more serious or
complex cases, the individuals or organisations involved would normally engage
lawyers no matter what regulatory response CASA chose to make, so the proposed
undertaking scheme would not add to costs. Overall, the enforceable undertaking
scheme is likely to reduce industry costs.
CASA
notes that the undertaking scheme is purely voluntary. An individual or
operator can decide not to enter an undertaking if, in their assessment of the
particular circumstances, it is not in their interests to do so. In these
circumstances, so far as the individual or operator is concerned, there is in
practice no change in the existing law at all.
In March 1998, CASA issued a discussion paper entitled
“A New Approach to Enforcement”. That discussion paper was
distributed widely within CASA and the aviation
industry.
The paper set out a number of initiatives
in relation to CASA’s enforcement policy and
procedures.
The discussion paper foreshadowed the
introduction of an enforceable voluntary undertaking
system.
There was a high response to the discussion
paper (31 external responses and 20 internal responses). The responses included
responses from individuals and major aviation organisations and operators such
as QANTAS, Airline Passenger Safety Association, Flight West Airlines, the
Director of Public Prosecutions.
There were no
objections raised by any respondents to the introduction of an enforceable
voluntary undertaking scheme. A number of respondents expressed the view that
an enforceable, voluntary undertakings scheme was a positive
step.
CASA’s enforcement policy determines the way CASA uses
its powers to regulate the industry. With limited resources, CASA must ensure
that it gives proper focus to the exercise of the powers in order to discharge
the trust given to it by the Australian public through the Commonwealth
Parliament. It must ensure that it uses its powers in a way that inspires the
confidence of the travelling public. It must also use its powers in a way that
is, and is seen to be, fair, firm and
consistent.
CASA believes that the vast majority of
the industry is committed to working within the safety rules. The introduction
of an enforceable voluntary undertaking system will provide CASA with an
important new regulatory response to enable it to better deal with relevant
breaches and skill deficiencies.
Thus, the
recommended option is to amend the Civil Aviation Act 1988 to provide for
a system of enforceable voluntary undertakings.
The recommendation will be implemented by an amendment of the
Civil Aviation Act 1988. The scheme will be reviewed after twelve months
to gauge whether it has achieved its desired objectives.
The Act, once enacted, may be cited as the Aviation
Legislation Amendment Act (No.2) 2000.
The bulk of the Act, comprising amendments to the Civil
Aviation Act 1988, commence on Royal Assent. However, the amendments to the
Civil Aviation (Carriers’ Liability) Act 1959 (Carriers’
Liability Act) commence retrospectively, with effect from 23 July 1998 (the
date Schedule 4 of the Aviation Legislation Amendment Act 1998
commenced). As Schedule 2 of the Bill corrects errors in Schedule 4 of the
Aviation Legislation Amendment Act 1998, it is necessary to have
retrospective commencement. The error and the way in which Schedule 2 of the
Bill addresses it are explained in the notes to Schedule 2 below.
The Civil Aviation Act is amended as set out in
Schedule 1 to the Bill, the Carriers’ Liability Act is amended as set out
in Schedule 2 to the Bill.
These items insert definitions of aeronautical product,
maintenance and servicing into the Interpretation
provision of the Civil Aviation Act. The definitions are consistent with
definitions used by ICAO and by major NAAs. e.g. the US Federal Aviation
Administration and the European Joint Aviation Authority.
Item 4 provides a new function for CASA – to enter into
Article 83bis agreements on behalf of Australia.
Items 5 to 9 inclusive amend sections 20AA, 20AB and 24 of the
Civil Aviation Act to incorporate the new terms defined in items 1, 2 and
3. The opportunity has also been taken to improve the language of the sections,
in order to make them more comprehensible and consistent with current
Commonwealth drafting styles and criminal law policy. There is no change to the
intent or effect of the sections.
Item 12 amends the definition of inspection or
test in subsection 27AC(3) of the Civil Aviation Act by
incorporating the term aeronautical product into a new paragraph
(b). The new paragraph (b) no longer depends upon the definitions of
aircraft component and aircraft material, so items
10 and 11 repeal these superfluous definitions.
This item changes the definition of key
personnel in subsection 28(3) of the Civil Aviation Act to
replace “the head of the aircraft maintenance part... of the
organisation” with “the head of the aircraft maintenance
control part... of the organisation”. Many aircraft operators do
not have aircraft maintenance done “in house”, and therefore they
may be no person who could be regarded as “the head of the aircraft
maintenance part” of the operator. The addition of the word
“control” is designed to ensure that even when aircraft maintenance
is not done by the aircraft operator itself, if a particular person is
responsible for making arrangements for aircraft maintenance, then that person
will be part of the operator’s “key personnel” for the
purposes of section 28 of the Act.
Paragraph 28(1)(d) of the Civil Aviation Act requires
that applicants for AOCs provide certain information to CASA, including
information relating to the country or countries in which maintenance has been
carried out on the aircraft to which the application relates. However, minor
maintenance is carried out regularly on aircraft during short stops, and for an
aircraft flying international routes there could be dozens of countries in which
it has maintenance done. CASA is not concerned to gather information on
countries in which this minor maintenance is done, and has to date excluded this
information by excluding the requirement to provide a list of countries in which
“daily maintenance” is carried
out.
However, the concept of “daily
maintenance” is peculiar to Australia, and is not well understood in the
international aviation industry. The equivalent term used internationally is
“line maintenance”. Item 14 amends paragraph 28(1)(d) so that it
requires information on countries in which maintenance is carried out, other
than those activities encompassed in the ICAO definition of “line
maintenance”. Item 16 repeals the superfluous definition of daily
maintenance.
Paragraph 28(1)(g) of the Civil Aviation Act requires
that applicants for AOCs provide to CASA information on the person responsible
for the operational control of aircraft subject to leases. Item 15 extends this
information by requiring information on the person responsible for the
maintenance control of aircraft subject to leases.
Item 17 adds a new section 31A to the Civil Aviation
Act. Section 31A largely replicates section 87B of the Trade Practices
Act 1974. It will enable CASA to accept written undertakings from people
“in connection with a matter in relation to which CASA has a function or
power” under the Act or regulations. Where CASA is of the opinion that a
person who has given an undertaking has breached any of the terms of the
undertaking, it may apply to the Federal Court for an order enforcing the
undertaking.
Section 31A is an important component
of CASA’s published enforcement policy, which was subject to public
consultation and approved by the Board of CASA in early 1998. CASA officers
often detect regulatory inadequacies in the manner in which licence or
certificate holders operate. These inadequacies may involve a breach of the
Act, Civil Aviation Regulations or Civil Aviation Orders, but in many instances
proceedings to prosecute for that breach would be disproportionate and
unwarranted – either by reference to the nature of the breach itself,
because of the diversion of resources that would be involved in the conduct of
that prosecution, or in terms of net benefit to aviation safety. In those
circumstances CASA may seek to have a person provide a written undertaking as to
their behaviour in relation to aviation safety. This is seen as an efficient
and effective way in which aviation safety can be enhanced without the use of
unwieldy or inappropriate criminal or administrative sanctions.
The Civil Aviation (Carriers’ Liability) Act 1959
(Carriers’ Liability Act) enacts the Convention for the Unification of
Certain Rules relating to International Carriage by Air (‘Warsaw
Convention’) as a law of Australia. The Warsaw Convention essentially
imposes strict but limited liability on air carriers for the carriage of
passengers, baggage and cargo by air. In relation to death or personal injury
of a passenger, that liability is limited to the sum of 125,000 francs
Poincaré (Warsaw Convention – Schedule 1 of the Act) or 250,000
francs Poincaré (Warsaw Convention as amended by the Hague Protocol
– Schedule 2 of the Act). The value of a franc Poincaré is small
and dependent upon analysis of gold prices, and the amount of compensation
provided by the Warsaw Convention is widely regarded as
inadequate.
In 1995 the Australian Government
decided to unilaterally impose higher passenger liability limits on Australian
air carriers, both domestically and internationally. These limits were
increased to AU$500,000 for domestic air carriers and 260,000 Special Drawing
Rights (SDRs) for international carriers. The limits were introduced by
amendments to the Carriers’ Liability Act put in place by the Transport
Legislation Amendment Act 1995 (see Part E of Schedule 1 of that Act). In
particular, new sections 11A and 21A of the Carriers’ Liability Act
imposed a 260,000 SDR passenger liability limit on “Australian
international carriers” subject to the Warsaw-Hague and Warsaw Conventions
respectively.
Subsections 11A(2) and 21A(2) of the
Carriers’ Liability Act define “Australian international
carrier” for the purposes of the provisions. These definitions are meant
to encompass both operators of scheduled services (such as Qantas and Ansett)
and non-scheduled (charter) services, respectively paragraphs (a) and (b) of the
definitions. Paragraph (b), relating to charter operators, was cross-referenced
to a provision of the Air Navigation Act 1920, section 13A, which enabled
the Secretary of the Department to grant permission to operate non-scheduled
services to the operator of an Australian
aircraft.
In 1997 the provisions of the Air
Navigation Act relating to charters were recast, and the distinction between
permission for operators of Australian aircraft and other operators was removed.
Section 13A of the Air Navigation Act was repealed, and section 15D now
permits the Secretary to grant permission for international charter flights to
all operators, irrespective of their
nationality.
Following the repeal of section 13A,
the cross-references to that section in paragraphs 11A(2)(b) and 21A(2)(b) of
the Carriers’ Liability Act were replaced by cross-references to section
15D, by Item 2 of Schedule 4 of the Aviation Legislation Amendment Act (No.1)
1998.
Section 15D of the Air Navigation Act permits the
Secretary to grant permission for international charter flights to operators of
any nationality. The result of simply replacing “13A” (relating
solely to operators of Australian aircraft) with “15D” (relating to
all operators) in paragraphs 11A(2)(b) and 21A(2)(b) of the Carriers’
Liability Act is that, technically, all international charter operators
subject to the Warsaw or Warsaw-Hague Conventions are now “Australian
international carriers” for the purposes of sections 11A and 21A. Thus,
sections 11A and 21A impose a strict 260,000 SDR passenger liability limit on
all international charter operators, whether they are in fact Australian or not.
This is not the intention of the provisions and may place Australia in breach of
its international obligations under the Warsaw and Warsaw-Hague
Conventions.
(It should be noted that subsection
31(1A) of the Carriers’ Liability Act imposes a 260,000 SDR passenger
liability limit on international carriers (scheduled and charter) flying to or
from Australia, where those carriers are not subject to the Warsaw or
Warsaw-Hague Conventions. Because those carriers are not subject to an
international agreement on carrier liability, Australia is not in breach of any
international obligation by imposing such a requirement.)
Schedule 2 of the Bill corrects the inadvertent error noted
above. Items 3 and 4 of the Schedule modify the definition of “Australian
international carrier” in paragraphs 11A(2)(b) and 21A(2)(b) of the
Carriers’ Liability Act by specifying that charter operators are only
Australian international carriers if they are “Australian persons”.
Item 2 of the Bill then defines what is meant by the term “Australian
person” (which term includes “Australian citizens”, defined by
Item 1). This term is exactly the same as appears in the Qantas Sale
Act 1992, and which is proposed for the Air Navigation Act 1920 (see
Item 11, Schedule 1 of the Aviation Legislation Amendment Bill (No.1)
2000).