Administration of the Civil Aviation Safety Authority and Related Matters
Civil Aviation Authority
The Civil Aviation Authority (CASA) is a statutory authority established
in 1995 under the Civil Aviation Act 1988 and given the responsibility
of regulating Australian aviation safety and Australian aircraft operating
overseas. CASA is also required to provide comprehensive safety education and
training programs, cooperate with the Australian Transport Safety Bureau and administer
certain features of Part IVA of the Civil Aviation (Carriers' Liability) Act
In 2003 CASA embarked upon an extensive program of reform involving all
elements of its organisational and regulatory structure. The committee has
followed this program of reform closely through successive Senate Estimates
processes and has become increasingly concerned at the slow pace of change
within the organisation and the extent to which this appears to have had an
impact on CASA's ability to meet its regulatory responsibilities. At the same
time, committee members have become aware of growing frustration within some
sectors of the aviation industry at the slow pace of regulatory reform within CASA.
There has also been a growing perception that the structural changes within CASA
have been protracted, piecemeal and chaotic.
Background to the inquiry
The Standing Committee on Rural Regional Affairs and Transport is
charged, among other things, with inquiring into and reporting on the
performance of departments and agencies allocated to it.
The primary avenues through which the committee discharges this task are its
examination of the annual and additional estimates and through its
consideration of the annual reports of departments and agencies.
While both avenues have an important role to play in the Senate's examination
of the performance of departments and agencies, both have certain limitations
which can serve to constrain a committee's ability to gain a clear
understanding of the issues before it. In particular, the inability to hear witnesses
in-camera during estimates hearings and the limited time available for each
agency can limit the scope of a committee's inquiry. A reference inquiry offers
a committee the ability to invite public submissions and the opportunity to
hear witnesses in-camera where appropriate.
During the 2008-09 Budget Estimates hearings, the committee noted the
limited availability of CASA's Chief Executive, Mr Bruce Byron, and indicated
that it would explore options for further examining CASA's administration at a
time when Mr Byron was available. On 29 May 2008, the committee resolved to
adopt an inquiry into the administration of CASA and related matters under
Standing Order 25(2)(b).
In adopting this inquiry, the committee is mindful that CASA has
recently been the subject of extensive scrutiny in other fora. In particular,
the committee notes the reports of the Queensland Coroner in relation to the
Lockhart River Aircrash, the ATSB/CASA Review 2007, conducted by Mr Russell Miller
AM, and the Aviation Regulation Review Taskforce chaired by Dr Allan Hawke. The
committee also notes Minister Albanese's announcement on 10 April 2008 of the Australian Government's commitment to the development of a National Aviation
Policy Statement. That policy development process will consider some of the issues
identified as part of this inquiry. In particular, it will canvass:
- making the safety of all planes and airports the highest priority
for operators and ensuring safety regulations are both robust and efficient;
- improving the governance arrangements for CASA and AirServices Australia
to improve their relationships with industry and the community.
The committee notes that the Government expects to finalise the National
Aviation Policy Statement by mid 2009.
During this inquiry senior staff within CASA questioned the
appropriateness of conducting this inquiry at this time. The view was expressed
to the committee that CASA resources would be better directed to matters of
safety than to preparation for this inquiry.
The committee acknowledges that appearing before a Senate committee
requires a significant commitment on the part of all witnesses. The committee
has not called this inquiry lightly. The committee welcomes Mr Byron's
assurance that CASA does not question the legitimacy of this exercise. Mr Byron
assured the committee:
We would not, under any circumstances, question the right of the
Senate to ask us to attend whenever they want.
Effectiveness of administrative reforms since 2003
The committee's first term of reference in this inquiry was to assess
the effectiveness of administrative reforms undertaken by CASA's management
During this inquiry CASA's Chief Executive Officer, Mr Bruce Byron, told
the committee that he believed CASA is now a vastly different organisation to
that which existed at the time of his appointment in 2003. Mr Byron told the
The nature and extent of the changes in CASA’s structure,
organisation, operational and corporate processes and general way of doing
business have been substantial.
There is still a considerable way to go; I acknowledge that—in
fact, I consider that improving CASA’s capacity to contribute to the overall
enhancement of aviation safety is, of course, an ongoing task.
Mr Byron emphasised the planned and structured nature of the changes which
had been implemented since 2003. He told the committee that he considers the
changes have been:
... well thought through and painstakingly implemented. The result
is an improved organisation structure, processes and responsiveness to
Mr Byron told the committee that an important part of the administrative
reform of CASA had been the redefinition of CASA's goals to provide direction
and certainty. This process of redefinition had involved clarifying the roles
of both the safety regulator and industry to encourage industry to take
appropriate responsibility for safety outcomes that they deliver. Mr Byron said
that as part of its systemic approach to managing safety, CASA continues to
actively encourage industry to develop safety management systems to address the
risks of their own operations.
The new goals for CASA are:
- being an effective safety regulator;
- being efficient;
- having good relations with industry; and
- being accountable. 
In its submission to the inquiry CASA provided an overview of the change
program which has been implemented since 2003. The key elements in the program
- Management and staffing measures;
- implementation of a new industry facing organisational structure;
- appointment of a new senior management team;
- improved workforce capability based on a Workforce Capability
Framework and an Internal Capability Analysis;
- implementation of staff education and training initiatives,
including enhancements to CASA's administrative induction program, the introduction
of a specialised operational induction training program and a Diploma in
Aviation Safety Regulation; and
- improved responsiveness to organisational health, safety and
- Regulatory Reform
- greater industry involvement in policy development through the
introduction of joint CASA-industry project teams;
- focus on ensuring regulations address known or likely safety
- provision of additional funding to the Attorney-General's
Department to secure drafting resources dedicated to CASA regulations; and
- review of unique Australian Airworthiness Directives for
- Operational measures:
- establishment of an operational headquarters at Brisbane Airport;
- creation of more operational inspector positions under the Air
Transport Safety Risk Mitigation New Project Proposal;
- adoption of a risk based approach to oversight surveillance and
- greater focus on passenger carrying operations; and
- an increased focus on the operation of foreign carriers under the
Foreign Aircraft Air Operator's Certificate regime.
- Industry safety education and training
- introduction of Aviation Safety Advisors to provide information
and advice to industry;
- introduction of the AvSafety Seminar series targeted at aero
clubs and flying schools; and
- establishment of an industry consultation committee and a
national Flight Training and Testing Office to assist in improvement of flying
training and testing standards.
After five years of extensive change management, the committee was
interested to understand the extent to which industry shared CASA's confidence
that the structural changes within CASA 'have better aligned the regulator with
the industry it regulates, and facilitated better and more efficient management
The committee notes that a number of submitters agree that there have
been significant improvements within CASA. The committee also notes the
observation by some submitters that CASA needs an opportunity to consolidate
the changes made to date and the concerns they raised in relation to the impact
successive public scrutiny might have on the organisation.
Despite this level of support, the majority of submissions identified areas of
concern and these are discussed below.
Management and staffing measures
As noted earlier, since 2003 CASA has made a series of changes to its
organisational structure in the interests of creating what CASA describes as a
more industry facing organisation. Prior to 2003, CASA's organisational
structure was based on three largely functional groupings: Aviation Safety
Compliance, Aviation Safety Standards and Aviation Regulatory Services.
In its submission CASA told the committee that:
This was remodelled to align CASA more closely with the way
industry operates via operationally focused groups: Air Transport Operations,
General Aviation Operations, Manufacturing, Certification and New Technologies
(now Airworthiness Engineering) and Personnel Licensing, Education and
CASA stated that this structure ensures that people and resources are
used most effectively by bringing together technical experts. CASA’s submission
also outlined a range of other initiatives which it believes have improved its
CASA has relocated operational staff closer to key passenger operations,
through its establishment of an operational hub at Brisbane Airport. In
addition, CASA has increased the number of operational inspector positions and
has created and filled 18 system safety specialist positions located in Brisbane,
Sydney and Melbourne. CASA has also adopted a risk based approach to oversight
surveillance and entry control which it believes enables it ‘to target high
areas of risk, and assess each surveillance and entry control process
specifically for each operator rather than taking a ‘one size fits all’
More recently, CASA has completed a workforce capability exercise to
‘identify the right mix of skills and training required to enable optimal job
A number of submitters commended CASA on this reorganisation. In its
submission, Virgin Blue told the committee that as a result of the administrative
reforms undertaken since 2003, CASA has become more responsive to the
Australian aviation industry and its processes and procedures are more
transparent to the industry.
However, the committee notes from some submissions that not all sectors
of the industry appear satisfied that the changes have achieved the desired
effect. In particular, the committee notes criticisms that the changes lack
planning and direction, have been poorly implemented and have had some
unintended consequences. For example, Qantas expressed concern that the current
governance structure has implemented three additional layers of management
between field office managers and the CEO. Qantas stated that, in its
experience, this provides greater potential for inconsistency in the
application of CASA policy and legislation.
Qantas also expressed concern about the relocation of operational staff
from Canberra to Brisbane. Qantas notes that this is part of an overall
strategy to base staff closer to where aviation activity is located. However,
Qantas told the committee that:
... since the Air Transport Operations Group relocated to
Brisbane, there has been a growing perception in industry that senior CASA
executives have undertaken little direct consultation with industry.
Virgin Blue also considers that management reforms have not filtered
down to frontline staff and argued that further work is required to ‘ensure the
industry interface is consistent with management’s intent'.
The committee received evidence that suggested that the structural
changes in CASA have led to significant delays in processes and projects. Representatives
from the Australian Licensed Engineers Association (ALEA) told the committee that
in its opinion, the centralisation of the issue of licences has led to delays
in the licensing process.
The Association of Professional Engineers, Scientists and Managers Australia (APESMA)
also told the committee that it was concerned about the timeliness of decision
making within the new structure. APESMA submitted that 'one of the concerning
trends accompanying the relocation of staff over the last few years has been
the dislocation of senior management from the work groups they manage.'
Other submitters expressed concern at apparent delays in receiving
responses from CASA staff. For example, Mr Greg Norris stated that delays in
processing routine applications and requests for minor variations to Air
Operators Certificates have imposed additional costs on his operations. At the
same time, Mr Norris makes special mention of the commitment shown by CASA
Flight Operations Inspectors who, in his opinion, are overworked and underpaid.
The Aircraft Owners and Pilots Association of Australia (AOPAA) also criticised
response times and lack of assistance from CASA senior management.
At the same time, AOPAA emphasised that there are many knowledgeable and
helpful CASA staff. AOPAA told the Committee:
... it takes an inordinate length of time to get a response from CASA
senior management and sometimes the responses we get are, shall we say, less
than helpful. Whereas, when we deal with staff who are at the coalface, we find
them to be very helpful. We get on and we get results.
Virgin Blue, while generally satisfied with the changes to date, stated
that the management restructure of CASA has had a detrimental effect on the
pace of regulatory reform within the organisation. Further industry concerns raised
in relation to CASA's progress on this project are discussed below.
The Australian Maintenance Repair and Overhaul Business Association
(AMROBA) was less confident that the structural changes within CASA had been
effective. AMROBA appears to characterise the changes to date as superficial
and costly and stated that the aviation industry is still waiting for proper
In AMROBA’s view, the relocation of Operations Management to Brisbane is merely
a reversal of an earlier decision to relocate operational staff from Melbourne
The ALEA also considers that the reform process has not delivered in a
number of areas, including necessary improvements in oversight of maintenance
organisations and measurable safety improvements. ALEA also considers that CASA’s
current governance structure has prevented the administrative reforms from
making a difference to air safety.
APESMA, which represents technical professional employees within CASA,
stated in its submission that the general view amongst experienced staff is
that the changes have been poorly thought out in concept, poorly planned and
characterised by a lack of consultation with staff and the organisations that
represent them. As a result, APESMA is of the view that the process has
required decisions to be made on the run and that overall the process of change
within the organisation has been implemented with little guidance for staff or
industry about the intended changes and the process for their implementation.
The committee also received evidence regarding some of the operational
changes within CASA. In particular, the committee received evidence regarding CASA's
change in its regulatory approach to the management of operational safety. As
noted earlier, CASA has implemented a safety management systems approach (SMS)
to the management of safety risks. This approach involves a risk-based approach
to determining the priorities to which CASA allocates industry surveillance
resources. CASA has emphasised that responsibility for management of safety
risks is fundamentally an operator's responsibility. The committee notes the
following explanation of CASA's SMS approach on the CASA website:
What CASA does is to make sure the airlines and other air
operators have the right systems and procedures in place to manage safety and
risks, to achieve the best possible levels of safety. If an airline has the
right training and checking systems for their pilots, the flight crew can be
expected to perform to the required standards. If an airline has robust systems
to control maintenance, work on their aircraft can be expected to meet the
correct standards. CASA makes it clear to the aviation industry that safety is
not just complying with the rules - it is a commitment individuals and
organisations must make to achieving practical outcomes in every-day
The website goes on to provide further explanation of CASA's
CASA conducts surveillance activities to make sure
organisations and people are meeting the required safety standards and are
operating within the rules. Checks are made on organisations – such as airlines
and charter operators – as well as individuals, such as pilots. For airlines
there are programs of formal and informal safety checks, which include audits,
spot checks and operational observations. Regular audits of airlines involve CASA
teams looking in-depth at various aspects of organisations, such as pilot
training, aircraft maintenance and flying operations. A major part of this
activity is assessing an airline’s own safety systems and their approach to
risk management. Spot checks are also carried out on aircraft and crews from
time-to-time during normal daily operations. CASA inspectors spend considerable
‘time on the tarmac’ working with operators and observing operations.
In its submission CASA told the committee that it is providing support
for industry management of safety risks through its new Safety Systems
Specialists, whose role is to ensure that operators' SMS are effective and
through industry education and training and a range of publications. CASA has also
identified emerging strategic risks for the aviation industry through a
comprehensive industry survey and has issued a publication: An assessment of
trends and risk factors in passenger air transport.
CASA told the committee that five working groups are being formed to examine
each major risk category identified in the survey and to determine future
Both the Australian General Aviation Administration (AGAA) and the
Australian Sport Aviation Confederation (ASAC) expressed support for CASA's
decision to focus its resources more on the fare-paying passenger industry. The
AGAA also supports moves toward delegation of regulation of operations other
than passenger and freight operations to accountable, self-administering bodies
where feasible. In its submission AGAA stated that it believes:
... that these principles are a sound basis for achieving superior
safety outcomes while allowing the aviation industry to innovate and develop
both domestically and in global markets. In particular, the practical outcome
of these principles is that CASA shall no longer tell a participant how to run
his business, but shall provide safety information and shall closely monitor
results and require successful outcomes.
ASAC expressed support for the introduction of a risk based approach to CASA
audit activities which it says allows CASA to distinguish between those
activities which require close attention and those which require a lower level
of audit. ASAC welcomes the less onerous requirement for documentation and
external audit for Air Transport and General Aviation without compromising
AGAA expressed concern at opposition to this approach from what it
described as sections of the industry that are finding it hard to adapt to a
non-prescriptive regulatory system and from CASA staff who 'can think only in
terms of the old prescriptive methods.'
The committee received a number of submissions from former CASA
employees which were critical of CASA's approach to regulation. In the view of
one of these individuals, CASA's current enforcement strategies are negligent.
Mr Peter Ilyk, former General Counsel within CASA, also expressed concern at
the devolution of regulatory responsibility to sectors of the industry in the
form of self-regulation.
The committee was also told that that there was a lack of executive management
support for staff who advocate a more hands-on regulatory approach.
AIPA also told the committee that its confidence in CASA's safety
compliance enforcement system has been significantly undermined by CASA's
failure to enforce industry compliance with safety regulations. AIPA said that
it has been requesting CASA to enforce compliance in relation to the Flight
Deck Duty Time Fatigue Provisions of Civil Aviation Order 48 General Exemption
for more than three years without success.
The committee also heard concerns about CASA's audit program. Mr David Klein,
a retired CASA airworthiness inspector, expressed concerns about the frequency
of CASA’s audit program for Qantas. Mr Klein told the committee that he did not
think that the audit regime in place for Qantas was realistic, given the size
of the organisation. Mr Klein told the committee that the CASA surveillance
procedures manual provided for only one audit for Qantas per year.
It has as many technical staff as the rest of the certificate
holders combined. It probably has about a third of the LAMEs and it is in the
same bracket as an organisation with over 50 staff.
Mr Klein also expressed concerns about CASA’s decision to focus mainly
on systems based rather than product based audits. Mr Klein told the committee
the previous audit regime had used a mix of once a year systems based audit and
a cyclic, product based audit. Mr Klein explained the distinction between a systems
audit and a product audit:
It is saying ‘Look at their documentation, make sure that
procedures and processes are in order and focus on that side of it,’ and the
product basically became a secondary consideration.
Mr Klein's evidence has become even more relevant in the context of
recent incidents affecting Qantas flights. The recent release of the interim
Australian Transport Safety Bureau report on an electrical system failure
involving a Boeing 747-400 near Bangkok on 7 January 2008, together with other reported incidents and maintenance issues with the Qantas fleet, prompts
the committee to question whether the change to CASA's audit procedure has been
a wise change.
In this context, the committee also notes the concerns raised by ALEA
regarding CASA’s oversight of overseas maintenance facilities. ALEA expressed
concern about the process by which overseas facilities are approved to carry
out work on Australian aircraft and the ongoing audit of such facilities.
CASA told the committee that it is CASA policy to audit all of the CAR
30 organisations annually and that the organisations that are currently being
utilised by Qantas have all been audited in the last six months.
Mr Quinn explained that the purpose of the audit is a systems audit. He said:
We audit their process, we audit their procedures and we audit
the organisation’s structure and capability. We do not audit the particular
work of, say Qantas. I should add that we are actually doing that with one
Australian operator who has a 737 going into maintenance in an overseas CAR 30
organisation at the moment. We planned to do it while that Australian
registered aircraft was there.
We do the systems audit but occasionally we do operational
specific surveillances of regulations, and there are some going on at the
moment. It is not just a tick box exercise.
Mr Quinn also clarified CASA’s systems based approach to compliance with
If you were to take the purely technical view that compliance
with regulation equals safety then you could be missing out on some of the
important information ... that could cause a catastrophic accident or some sort
of failure in the system. ... We are transitioning to, and trying to implement a
more systems based approach, complemented by the technical based approach, so
we get a feel for the organisation as to where it is moving, we get a feel for
the culture of the organisation ... and we have a vision of the capability of the
organisation in all aspects, not just its technical ability and whether it is
licensed and legal.
The committee notes that Transport Canada's implementation of SMS has
also been the subject of some criticism within the Canadian aviation industry
and has recently been examined by the Canadian Office of the Auditor General
(OAG).  The audit report identified
a number of shortcomings in Transport Canada's implementation of SMS, including
a lack of planning; poor risk management, limited mechanisms for monitoring
consistency in oversight activities and weaknesses in human resource planning
and training. The report also expressed concern that Transport Canada has moved
resources from traditional oversight activities to SMS activities but has not
measured the impact of this on the frequency of traditional oversight
activities during the transition period.
The committee also notes that the recent review of the United States
Federal Aviation Administration's risk-based oversight system (Air
Transportation Oversight System) identified a number of system-wide problems
and has recommended that the FAA strengthen its national oversight and
Given that there are some similarities between CASA's regulatory
approach and that of its North American counterparts, the committee was
interested to understand what lessons CASA has drawn from each of these
CASA officers told the committee that they had been monitoring each of
the reviews and had been in contact with both Transport Canada and the FAA. Mr Quinn
told the committee:
I am familiar with the Auditor-General’s report. CASA has had
dialogue with Transport Canada about the report. One of the key points that I
would like to make about that particular report is that I do not think it is
that critical of the system, or regime, or the manner in which it may work. It
is more critical about the way in which it was implemented in that particular
case. There were issues of planning, training, transitioning the regulations
and how it was done—largely, the regulator walked away for a while.
In terms of the United States approach to this, with the Federal
Aviation Administration, in recent discussions that I have had with the FAA, I
believe that they are planning on filing a difference and deferring this until
they can get their heads around it. There are some examples out there, and from
a CASA perspective—as I said, I use the term ‘free safety lesson’—we are going
to make the most of that to ensure that we do not make the same mistakes.
Staff turn over and training and
The committee notes that as part of this sustained change management
program, CASA has experienced a significant turnover in staff. Mr Carmody told
the committee that there had been almost a 50% turnover in CASA staff and that
of these, 134 staff had been offered a redundancy.
In answers to questions on notice, CASA confirmed that 128 staff had been
affected by the CASA restructure and other efficiencies during the period 16 November 2005 to 30 June 2008. Of these, 82 staff had accepted a voluntary redundancy,
16 had separated through resignation and 28 had been successful in winning a
position in the new structure. The committee notes that 53 of the officers who
had accepted voluntary redundancies were Canberra based staff. 
The committee also notes that CASA’s current senior management team,
comprising Group General Managers and Deputy Chief Executive Officers have all
been appointed since 2003. In its submission CASA told the committee that these
appointments had enhanced the organisation’s breadth of management skills,
experience and industry knowledge.
The committee was concerned to understand what impact such a significant
turnover in staff has had on CASA's ability to maintain the technical
competence of its staff.
The committee received a number of submissions which expressed concern
at the extent to which CASA currently has access to sufficient, adequately
trained technical staff to meet its regulatory responsibilities. Some
submitters argued that safety standards could be compromised as a result.
Mr Bencke, a former CASA employee, told the committee that CASA has few
technical staff still in its employ and that most of the new recruits who are technically
competent are often not adequately trained for their regulatory role. He also
identified the need for regulator specific training. 
AMROBA also made the point that new staff drawn from the aviation
industry need training to assist them in making the transition from regulatory
compliance to safety compliance.
This view was also expressed by Mr Peter Ilyk, former General Counsel within CASA,
who told the Committee:
What experience do these new specialists have in regulatory
matters? What experience have they in compliance and enforcement or in
interpreting and applying the aviation safety legislation? They are provided no
training in these fundamental regulatory activities and we are expected to
believe that somehow they will acquire this experience through osmosis. The
problem of course is that those who had this background in the agency have been
removed so there is nowhere to get that understanding.
AMROBA also submitted that perpetual organisational change over the past
two decades has decimated the skills and experience in CASA to the point where
it is questionable whether CASA can meet its responsibilities consistent with
ICAO standards. AMROBA stated that this has had a demoralising effect on CASA
staff, and expressed concern about current CASA field officers who do not
appear to have a comparable level of experience or training to their
counterparts in other jurisdictions.
APESMA told the committee that the restructure had led to a decrease in
staff numbers in key areas. For example, APESMA stated that despite increases
in aviation traffic, there has been a decrease in the number of qualified
airworthiness inspectors, flight operation inspectors and engineers in CASA.
APESMA is concerned that this has put pressure on remaining staff and has been
compounded by the lack of an implemented technical training program.
In this context, the committee also notes that the International Civil
Aviation Organisation (ICAO) commenced an audit of Australia's overall aviation
safety oversight capabilities in February 2008. The audit was conducted under
ICAO's Universal Safety Oversight Audit Program. The committee questioned CASA
about a press report which suggested that deficiencies in air safety had been
uncovered in the audit. Mr Carmody told the committee that CASA had reviewed
its score against critical elements in the ICAO standard and considered that it
had performed well in all areas except in the area of technical personnel
qualification and training. Mr Carmody said:
What we needed to be able to demonstrate more clearly was a
linkage between our human resources systems and the training that is undertaken
in our field offices, and be able to indicate more clearly than we could to
ICAO the qualifications of personnel and some of those things.
The committee was concerned to understand whether this audit result was
the product of CASA's major turnover in staff. Mr Quinn explained to the
committee that, at the time of the audit, CASA had not been able to demonstrate
what technical training programs and plans it had in place. He said that the
development and implementation of CASA's human resources management system
would assist in that. Mr Quinn told the committee:
... purely from a technical perspective, I am satisfied at the
moment with the skill set that we have, largely from an operations point of
view, which is the coalface out there in the field. Once we have these programs
developed, I will be much more comfortable with our ability to provide much
more consistency in delivering a consistent product, and I will also be much
more comfortable once I have a program and system in place to be able to ensure
that I am able to monitor that and provide the confidence that the government
needs to ensure compliance with ICAO and with our own standards.
Mr Byron also clarified the focus of the ICAO audit by explaining that
what ICAO are looking at is CASA's ability to maintain the technical competence
of its staff in the longer term. Mr Byron told the committee that:
... this is an issue that I want resolved over the next six
months, but it is not an immediately critical issue because a lot of people
have actually come from the industry with current technical qualifications
which are not necessarily picked up by ICAO in looking at their ongoing
Mr Carmody told the committee that since the audit, CASA has completed a
number of initiatives which would address the shortcoming identified. He told
the committee that:
We have completed CASA’s workforce capability and behavioural
framework which we started last year. We have done data collection and analysis
of all of the capability gaps. We are now recording all of the training records
through the human resources system. We developed a technical training matrix to
provide guidance in initial skills and upgrades of skills for CASA inspectors.
We have commenced the Diploma of Aviation Safety Regulation through Swinburne.
Even though it has been three years in development and all the documentation
could be seen it was not acceptable because it had not started. That has now
commenced. We have developed a training calendar as well. So we have done a lot
of things. As Mr Quinn said, we expect that when those things are delivered,
and are shown to have been delivered, that will acquit those findings. They saw
them in draft but would not accept them until they were final.
While the committee notes the progress CASA has made to address
technical training needs within the organisation, the committee is concerned
that the combination of high staff turnover and an apparently slow response to
the development of training initiatives may have left the organisation
vulnerable in this regard. Mr Byron assured the committee that:
... the issue of training is something that we are aware of. It is
probably the last major part of the change program to really nail down. I
reiterate the point that we do have a lot of new people who have current
The committee received a number of submissions which were supportive of CASA's
change management program to date. The submissions received during this inquiry
suggest that cultural change remains a high priority for this organisation and
that there are ongoing issues which require attention.
The committee was concerned to hear that at this advanced stage in the
change management process there continues to be a significant difference of
opinion between some CASA staff and senior management regarding the appropriate
direction of the organisation and the interpretation of policy and regulations.
In particular, the committee is concerned at the potential this has to
undermine safety objectives.
The committee was told of an apparent disconnect between CASA senior
management and CASA field staff and that this had resulted in a level of
inconsistency in how CASA staff operate. Some submitters perceived this as
resistance to change from 'old school' CASA staff.
The Australian Airports Association stated in its submission that:
Although CASA management has addressed this issue with vigour
over recent years, there is still a high degree of inconsistency in the way in
which field operatives interpret the rules and regulations. It would appear
there are still a lot of 'oldtime' field staff unable to embrace change.
The Aerial Agricultural Association of Australia (AAAA) also raised
concerns about the lack of consistency in the interpretation and application of
CASA policy. The committee was told that:
One of the real problems with CASA is that policy is often
dictated by the least qualified in the organisation and often without the
knowledge of CASA senior management.
For example, the role of FOIs and AWI's varies enormously
between individuals and offices, apparently without any coordination from a
central manager. Similarly, the outlook of senior management is not shared by
many others in the organization, and the perspective of central office to the
regions appears worlds apart.
The AAAA told the committee that it works positively with a range of
competent managers within CASA and is heartened by what appears to be a newly
emerging culture of cooperation and a focus on real-world positive outcomes for
aviation safety. However, this culture is not shared by many at the operational
level and the timescale for sweeping aside the 'old' CASA simply does not have
the urgency that is essential for the aviation industry to prosper and do so
Mr Peter Lloyd, Executive Chairman of the 2007 Safeskies International
Safety Conference and World President of the Federation of Aeronautique
Internationale, told the committee that:
... CASA's present strategy is correct. The steps being taken
towards its implementation are effective, and progress is only limited by the
skills and degrees of commitment at the lower levels of CASA's management and
The Australian General Aviation Administration also noted that 'certain CASA
officials, usually lower in the ranks, [who] can think only in terms of the old
prescriptive methods ... tend to block the transformation of CASA.'
The AGAA expressed concern that opposition of this kind has slowed the pace of
cultural change in CASA and recommended that more resources be applied to
In his submission to the inquiry Mr W Hamilton, an aviation management
consultant, stated that:
Even though (in it's present form CEO Directive 01/07) present
senior management of CASA have sought to enforce a modern risk management
approach to any recommendations for regulatory change, and the general
management of CASA, the 'core culture' has been remarkably effective in
waylaying such an approach.
Mr Hamilton also observed that the 'core culture' of CASA does not
understand the role of the organisation as a regulator and that this 'core
culture' views itself as the manager of the Australian aviation industry,
rather than as 'the air safety regulator, the auditor of compliance with
appropriate air safety (not commercial) legislation.'
In his submission Mr Hamilton cited examples of regulatory interpretations
which, in his opinion, have had little to do with air safety and which have
resulted in costs and delays to the industry. Mr Hamilton expressed the concern
that some regulatory decisions by CASA do not appear to derive from a clear
legal head of power and that some appear to be at the personal whim of
Mr Byron has provided evidence to the committee over successive
estimates hearings regarding his efforts to change the culture of CASA. During
this inquiry Mr Byron told the committee:
Certainly there have been a number of drivers for the changes
that we have been effecting. But, underneath that, I have always been aware, as
an industry person, that—and when I took this job everybody came at me from all
angles with this—‘You’ve got to change the culture in the organisation.’
Mr Byron described for the committee the initial resistance he had
experienced in introducing organisational change and the extent to which this
had impeded the reform program. Mr Byron told the committee:
I issued a number of directives in my first few months about
changes that I wanted—things like risk-based auditing and that sort of
stuff—and I struck an enormous amount of resistance to some of those changes.
It took a little while to get things moving.
Mr Byron explained that in his view culture is behaviours. He told the
If people have a particular behaviour of doing things in a
certain way—like not following policy, for example, and we have had a few of
them, or doing things without consulting management or stakeholders—those are
behaviours. Sometimes it was a criticism of the organisation that there were
individuals at all levels who had these behaviours that were adversely
affecting the culture of the organisation. Certainly in my time here I have
come across a number of people who I think have had the wrong attitude, the
wrong behaviour. By changing those people, through whatever mechanism, at the
time—some have left voluntarily; some have happened to go because we have
changed the structure of the organisation—that, hopefully, changes
progressively the culture of the organisation. My view is that culture relates
to behaviours; the issue of behaviours is a people based issue. If you follow
that logic, if you accept that logic, then, through the processes of the
organisation changing, if you end up with a larger turnover of people—and we
have brought a lot of people in from the aviation industry with technical
skills—it is my hope and my desire that we will change the culture of the
organisation. But I guess time will tell.
The committee also received evidence that suggested there is an element
of defensiveness in CASA's culture and some submitters provided largely anecdotal
evidence to support the contention that on occasion CASA has sought to cover up
The committee notes the observations of some submitters that CASA does not
respond well to investigations and is slow to respond to requests for
information from the general public in the context of such investigations. The
committee heard that CASA needs to learn to take criticism, learn from its
mistakes and live up to its responsibilities.
One of the more extreme characterisations of CASA's culture was made by
the Aerial Agricultural Association in its submission to the inquiry. The AAAA
Trying to work with CASA is akin to prolonged guerrilla warfare,
where success goes to the industry person or organisation that can build an
alliance with competent staff within CASA and assist them to defeat the other
retrograde forces at work within CASA to protect turf, retain power, resist
change and to stifle industry.
The committee was concerned to hear evidence from a number of operators
expressing concern about CASA staff forging unduly close relationships with
some members of the industry and pursuing personal agendas against others.
In particular, the committee received evidence which was openly critical of CASA's
North Queensland office. Witnesses before the committee told the committee of
the North Queensland office's reputation for 'turning a blind eye to ... the
cowboys who operate up there and also some pretty ordinary behaviour of the
offices themselves.' 
While the committee received very little first hand evidence regarding
the North Queensland office, the committee was concerned that there appears to
be a widely held perception that staff in CASA's North Queensland office do not
deal with all members of the industry fairly and do not apply regulations
The committee was keen to discuss this perception with CASA and
understand the steps being taken to address it. Mr Byron told the committee
that there have been a number of reviews and investigations of the North
Queensland office. He said:
... there had been—certainly when I arrived—a number of informal
comments and complaints made to me about behaviours in the North Queensland
office. The first activity that I formally undertook was a response to a
complaint by a number of staff about other staff in the office. That was
contracted out to a person in our legal panel, and that was done in 2004. None
of the allegations were upheld at the time—which, I must admit, surprised me a
bit given the noise and the anecdotal stuff that I was getting. But, interestingly,
the individuals concerned, about whom the complaints were made, have left the
organisation, and with two of those involved we actually precipitated their
departure a couple of years ago. I have since had another formal complaint—I
think it was in 2006—from an individual who believes that he was poorly handled
by officers in the North Queensland office, so I initiated, again, an external
review on the basis of that.
The committee was told that this second review had been undertaken with
the intention of investigating allegations made by an individual pilot who
believed he had been unfairly handled by CASA staff. Mr Byron explained that
the completion of that investigation coincided with the appointment of a new,
permanent Industry Complaints Commissioner and that Mr Byron had decided to
refer the matter to the ICC, Mr Michael Hart. Mr Byron said:
It took a while for the investigation report to come through,
and by the time it came through I was nearly at the stage of appointing a new
and permanent industry complaints commissioner, Mr Hart. There were, I think,
some differences of opinion on what was in the report, related not to the
particular complaint but to some peripheral issues, from some of our
management, who were equally concerned with the issues in the North Queensland
office. So I gave it all to Mr Hart for him to work through.
Given that the individuals who had been cited in the 2004
complaint and the 2006 complaint had already left, I wanted to make sure that
we took a systematic approach to looking at it. Mr Hart has combined that with
a review of the original report, done by the legal person, and also some other
information that he received unsolicited—I believe from some journalists. He
has given me preliminary views that there were some behavioural problems
there—and we knew that, because we had dismissed a couple of staff—but he has
yet to complete a full review of all the information that he has. I can ask Mr Hart
to give you a bit more information if you wish, but that is the extent of the
checks that I have done on the North Queensland office.
The ICC, Mr Hart told the committee that he had obtained the reports
undertaken to date and had also considered a substantial amount of additional
material provided to him by other people in the industry. He said that the
issues in the North Queensland office had caused him serious concern and that
he had recommended to the CEO that:
... there needs to be a proper, rigorous look at what went on
there, particularly in respect of a proper, public account of what occurred up
there and what CASA did or did not do, so that if the issues arose in the
future they could be responded to. Just to give you a quick update of where
that stands, CASA took certain actions against certain individuals. I also
understand that CASA did or did not do things. My preliminary view is very
simple: I believe CASA officers were at the time suffering from a degree of
industry capture. I am also of the view that most of the CASA officers involved
in the incidences and actions of those areas are no longer employed with CASA.
In evidence, Mr Hart also stated that a number of people had made
allegations of criminal conduct by CASA officers to him. He told the committee
If I am of the view that that is the case, I will refer that to
the appropriate authorities, along with my recommendations to the CEO, in due
course. However, they will be thoroughly considered by me. I do have to say in
defence of part of the process up there that CASA did have reasonable concerns
about some of these operators. Some of the people who have complained—and quite
publicly—about their treatment are less than, shall we say, blameless in the
activity that occurred.
Regulatory Reform Program
An issue of particular concern to the committee, and a number of submitters
to this inquiry, is CASA's limited progress to date in implementing its
Regulatory Reform Program. The program originated in 1996 as the Regulatory
Framework Programme. At the committee's Additional Estimates hearing on 14 February 2005, the committee was advised that since joining CASA, Mr Byron had
refocussed the Regulatory Reform Program on producing a quality response rather
than a timely completion. The committee was advised at that time that while the
review was nearing completion, the Department had decided there was a need to
have additional consultation to ensure a careful analysis of all risks and
getting the rules right. At that time, Mr Byron expressed his expectation that
most of the draft rules would be delivered to the Minister for Transport and
Regional Services by early 2006.
The committee notes that CASA's progress with its Regulatory Reform
Program has recently been examined by the Aviation Regulation Review Taskforce.
The Taskforce was established in April 2007 by the then Minister for Transport
and Regional Services, Mr Mark Vaile, in response to concerns from within
industry that the Regulatory Reform Program was 'not achieving its desired
outcomes in a reasonable timeframe'.
The Taskforce was chaired by Dr Allan Hawke and comprised Mr Bruce Byron, Mr Rob
Graham (aviation industry consultant), Mr Jeff Boyd (CEO Brindabella
Airlines), Mr Dick Smith and Mr David Cox (Qantas Executive General Manager,
CASA reported to the Taskforce that as at 30 November 2007, of the 60 Regulatory Parts currently being reviewed, 32 had been implemented, 12 were with
the Office of Legislative Drafting and Publishing (OLDP – in the Attorney-General’s
Department) and 16 were under further development or assessment within CASA. Attachment
A details the program’s status.CASA
provided an identical status report to the committee for the period to 30 June 2008.
Submitters to the inquiry expressed concern at the lack of progress of the
Regulatory Reform Program and suggested that the aviation industry had begun to
lose patience with what one submitter described as the glacial pace of reform.
A number of submitters to the inquiry expressed frustration that the RRP had
not yet been completed and called for CASA to prioritise the remaining parts
and set firm deadlines for their completion.
Submitters also expressed concern at the cost of the RRP to date. The ALAEA
argued that resources have been devoted to the regulatory review at the expense
of the effectiveness of CASA's other responsibilities in inspection, audit,
compliance and enforcement.
The committee notes calls from the industry for the simplification of
the current rules into practical legislation, with a focus on real and urgent
aviation safety needs.
The committee also notes concerns within the industry that there continues to
be 'costly duplication of requirements' placed on industry. The AAAA cited the
example of the requirement in Part 137 for appointment of a Head of Aircraft
Airworthiness and Maintenance Control. In AAAA's view this requirement was
poorly thought through, imposes a significant additional cost on the industry,
with no safety benefit.
CASA told the committee that $144 million had been spent on the RRP
project to date:
My estimate is about $144 million. Our estimate for 2007-08 is
$24 million; the costs for 2006-07 were $23 million. That equals $47 million
out to the end of the financial year. 
Mr Byron also confirmed that most of the progress in the RRP has been
made in the last two years. He said 'there has been more progress in the last
two years than there was in the two years prior to that'.
Mr Peter Ilyk told the committee, however, that:
In the past five years CASA has managed to achieve basically
nothing in regulatory development. I urge all members of the committee to
carefully read attachment 4 to my submission, which provides a documented
history of failure.
Just as an example, take the new maintenance suite of
regulations. In February 2006 these regulations were promised to be finalised
during 2006. This date came and went. In February 2007 a CASA media release
announced that the new regulations would be completed by the end of 2007. This
was confirmed by the CEO in May 2007. Then in November 2007 the project manager
announced that the complete package ‘may’ be available around March 2008. It is
now July 2008 and nothing has been released. 
The committee was concerned to note that of the 32 parts completed to
date, the majority of this work appears to have been completed prior to 2005
and the RRP appears to have effectively been stalled for the past three years.
The committee endeavoured to clarify the reasons for this.
The committee heard that the limited recent progress on the RRP was
largely because of delays in the legal drafting process due to the limited
availability of drafters with the Office of Legislative Drafting and Publishing
(OLDP). CASA has been working with OLDP to solve the difficulty and has agreed
to fund two additional drafters to assist with the task.
The Taskforce report notes several other factors that would make it
difficult for CASA to complete the programme by the end of 2008. These include the
need for further industry consultation on some parts and the extensive
implementation activities required to transition operators to the new
regulations. At the request of the Taskforce, CASA has developed a timeframe
for completion of the regulatory program based on 'more efficient industry
consultation processes and increased drafting resources in OLDP'. That timeframe
is reprinted at Appendix 4 to this report.
The committee notes from the Taskforce report that CASA's expectation is
that all policy and regulatory development work will be completed in 2008,
implementation of outstanding Parts will commence in mid-2008 and the program will
be fully implemented by 2011, subject to OLDP finalising drafting.
Effectiveness of CASA's governance structure
The committee’s second term of reference relates to the effectiveness of
CASA’s governance structure. While most of the evidence received focused on
the desirability of reintroducing a board structure within CASA, the committee
also noted that many of the issues discussed above reflect on the extent to
which CASA is able to exercise effective leadership within its current
With the abolition of the CASA Board in 2003, sole final decision-making
responsibility with CASA now rests with the CEO.
Mr Byron explained how CASA's governance structure currently operates:
The functions of a board are now performed in other ways. As
sole director, I receive a monthly report on CASA activities. I also submit a
monthly report and have regular meetings with the minister regarding key issues
for CASA and our strategic direction. All high-level policies are located in
core documents such as CEO directives and policy notices to ensure that they
are applied throughout the organisation. Day-to-day running of the organisation
is the responsibility of the deputy chief executive officers and their group
senior managers, and the deputy chief executive officer’s report to me each
month. CASA also continues to maintain an independently chaired audit and risk
In its submission CASA stated that under the current governance
structure, each senior manager is personally responsible and accountable to the
Executive for decisions made and for conducting appropriate consultations in
relation to such decisions.
However, the committee received submissions questioning the level and
range of responsibilities that currently rests with the CEO. For example, Qantas
submitted that the current governance structures are not delivering consistent
policy direction and that the current responsibilities of the CEO are too broad.
In its submission Qantas noted:
... prior to 1997, CASA field office management, ie Regional Directors,
reported directly to the CEO (then Director, Aviation Safety) and were better
positioned to identify issues at the coalface, thus providing more effective
interaction and outcome between the regulator and industry.
Today there are three additional layers of management between
field office managers and the CEO, resulting in greater potential for
inconsistency in the application of CASA policy and legislation, which has in
our experience been borne out in practice. This is exacerbated by the requirement
for the CEO to additionally undertake executive corporate governance and
Qantas recommended to the committee that a restructure of the current
governance arrangements and a review of the role of the CEO should be early priorities:
A review of the current governance structure should desirably be
undertaken to determine the effectiveness and ability of this structure to
deliver outcomes to both the Minister and industry. This would enable a
comparison with the previous governance structure that included a Board.
Options might include devolution of the Minister's broader portfolio governance
to a Board of suitable experts, and/or appointment of a junior Minister or
Parliamentary Secretary to assist in this area of portfolio responsibility.
The committee heard evidence from a number of witnesses suggesting the re-establishment
of the CASA board would have benefits for the governance of the organisation. AOPA
told the committee that it considered the reintroduction of a board would
provide a level of accountability for the CASA CEO and senior management. AOPA
stated that in its experience CASA is not even handed in its treatment of the
industry. In its submission AOPA argued:
[CASA] has formal tools and procedures to assess risk and change
but is flexible in their use when local airlines seek dispensation. Issues
affecting the National Airspace System (NAS), which is a ministerial dictate in
the Australian Airspace Policy, are proposed for alteration at airline behest
on grounds that are disclosed by analysis to relate to airline economics
altering the safety baseline, not safety itself.
AOPA also suggested that the reintroduction of a board would assist in
ensuring adherence by CASA to Government and ICAO policies and conformance with
'genuine safety case and "as low as reasonably practicable" (ALARP)
Captain Ian Woods from AIPA told the committee that, in his opinion, the
re-establishment of a board would give CASA the ability to operate
independently, with confidence, and in the public interest. Captain Woods said:
... when you are a single person charged with making some very
complex and difficult decisions and subject to very powerful persuasive forces
from both sides, the confidence to stand by a decision which is either tough
regulation-wise, such as grounding an airline, or tough commercially, such as
making them raise the price of their tickets, will benefit from the support
that a well-informed and well-intentioned board, properly grounded with the
necessary experience, will provide to the CEO. 
ASAC also supported the reintroduction of the CASA board and offered
suggestions on the desirable composition of the board. In ASAC's view '[b]oard
members need previous experience as board members and need to both be, and be
seen to be, free of sectional interests'. ASAC also suggested that a CASA board
and the Director of Aviation Safety would benefit from access to 'current, high
level, expert industry input to decision-making.' ASAC believes that it is
important that such a panel of experts should not have any decision-making
power. ASAC also argued that the CASA board needs to be supported by a body
similar to the current Aviation Safety Forum.
In his submission, Mr Peter Lloyd told the committee that he does not
consider that CASA's governance structure has functioned as well as might have
been hoped since the abolition of the board. Mr Lloyd noted that:
There is always a potential difficulty where a CEO has to wear
two hats, one with responsibility for Board-type strategic decision making, and
the other the implementation of those strategies and the day-to-day
decision-making that senior management is required to do.
Mr Lloyd went on to say that in his opinion:
There are good reasons now for the re-introduction of a Board of
Directors. But CASA will fail if such a Board is not constituted with the right
people who understand how a Board should work.
Mr Lloyd considers that any government appointed board should have at
least two people with public company board experience. Mr Lloyd also stressed
that the board Chairman should not have executive responsibilities. In his
opinion the role of the Chairman is to run the board and for the board to guide
and support the CEO. Mr Lloyd does not consider that it is desirable for the
Chairman or the board to involve themselves in the day to day management of the
Virgin Blue Airlines Pty Ltd indicated in its submission that it
considers the current governance structure under which CASA and its CEO operate
is effective. Virgin Blue believes that the management restructure undertaken
by Bruce Byron was necessary and that CASA is now in a period of consolidation.
Virgin Blue considers that there may be some merit in reintroducing a board
in so far as this may ensure that CASA remains focussed on implementing SMS and
delivering on RRP. However, Virgin Blue stressed that board members should
possess experience and have demonstrated expertise relevant to the stewardship
of CASA. Virgin Blue also considers that the Government should ensure that the
board is committed to maintaining CASA as an industry facing organisation.Virgin
Blue submitted that any change in the governance arrangements of CASA should
not be to the detriment of the RRP or unnecessarily affect the organisational
structure of CASA.
While support for the reintroduction of a board was widespread, the
committee notes that not all submitters consider this desirable. The Australian
Federation of Air Pilots is not in favour of the reintroduction of a board. In
its submission AFAP stated:
When the Board did exist it was problematic as it became
political and susceptible to nepotism. It is our position that the current
structure whilst imperfect is better than the alternative.
Strengthening CASA's relations with industry
The committee received a range of suggestions regarding avenues for
strengthening CASA's relationship with the aviation industry. Principal among
these was the need for more effective use of consultative mechanisms. Even
submitters who felt that the changes to date have been largely positive,
identified a need for improvement in the way CASA interacts with stakeholders
and the industry. For example, AIPA submitted that:
... while CASA's structure is now more streamlined and there have
been significant changes both in corporate attitudes and personnel, the lack of
balance in the way CASA relates to stakeholders lead AIPA to conclude that the administrative
reforms undertaken by CASA management since 2003 have not been effective.
It is a statutory requirement that CASA must publicly consult on all
proposed legislative changes which will affect business or restrict
competition. CASA uses a number of processes to gather opinions during the
development of new regulations. These include the Standards Consultative Committee,
Regulatory Advisory Panels and the Aviation Safety Forum.
CASA consults with industry on proposed regulatory changes via the
Standards Consultative Committee (SCC). The SCC consists of 200 CASA and
industry participants and includes representation for 39 organisations from a
range of industry groups. The membership of the SCC are available on the CASA
The SCC operates through six sub-committees which CASA stated are broadly
representative of the various functional sectors of the aviation industry. The
sub-committees are jointly chaired by CASA and industry. The SCC also
establishes working groups to consider issues in detail and report back to
CASA consults with the SCC on the development of a regulation,
Airworthiness Directive, Civil Aviation Order or standards amendment using a
The Committee notes that, flowing from the Taskforce review, CASA has reviewed,
simplified and republished this consultation process. The revised process
comprises 10 Steps compared to the previous 15 and has been endorsed by the
Taskforce and SCC Members. The committee also notes the Taskforce's
CASA monitor the regulation development process using joint CASA/industry
project teams and continue to review the role of the SCC in this process, in
order to achieve further effectiveness and efficiency gains.
CASA also uses Regulatory Advisory Panels. CASA revised its RAP process
in November 2006 and CEO Directive – 003/2006 requires that RAPs are
established for each CASR Part under development. Membership of a RAP includes
the Chair of the SCC, an SCC Sub-committee industry co-chair, a member of the ASF,
and independent member of the aviation industry (nominated by the CEO), a
relevant CASA Project Sponsor, Project manager and Manager, a member of the CASA
Legal Services Group, a representative of the Department of Transport, Regional
Services and Infrastructure and an adviser from the office of the CEO.
The role of a RAP is to ensure that 'due process' has been followed when
developing a CASR Part and that the aviation community's views have been fully
The work of a RAP is separate from, and additional to, the existing
consultative arrangements, including through the SCC.
A RAP will convene and report to the CEO prior to submission of a CASR Part to
the Minister and publication of the Notice of Final Rule Making in relation to
that Part. The committee notes that there are no current RAPs.
In its submission, CASA told the committee that it has introduced a new
approach to engaging industry and other stakeholders in the development of
regulatory policy and new regulations. CASA argued that this new approach means
that most regulatory project work is undertaken by joint CASA–industry project
teams. CASA stated that this approach ensures that issues of concern to the
industry are identified early in the policy development process.
Mr Byron clarified CASA's formal consultation processes:
We have a consultative process, called the Standards
Consultative Committee, with about 50 participants from representative
organisations and staff associations who form part of that committee and part
of the subgroups. From my point of view, as long as we maintain that process, I
believe we are genuinely consulting with the key players in the industry.
In addition to that, people who actually hold certificates that
we regulate always put themselves forward as people who want to have a say in
various things. I try to make sure that, through our processes—particularly the
SCC and industry briefings that we conduct—the major aviation organisations
and associations representing those organisations have an opportunity to have a
Some submitters noted improvements in CASA's relationship with industry.
The Australian Federation of Air Pilots (AFAP) considers that CASA's
consultative and communication processes have improved. AFAP makes particular
note of CASA's effective use of the internet to signal rule changes, exemptions
and safety notices and of CASA's active approach to education programs and
However, AFAP also highlighted a need for improvement in CASA's less
formal, day-to-day communication with industry, and told the committee that:
At a more basic (day to day) level however, we have had cause to
question CASA's commitment to communicate with its 'customers'. As an example,
we have been trying to get a response to an important technical submission we
made over twelve months ago – a state of affairs that continues to be
unresolved despite repeated attempts to get the problem acknowledged, let alone
Virgin Blue also considers that since the changes in the governance
arrangements of the organisation, CASA has progressively improved its
relationship with industry. However, Virgin Blue also suggested that CASA could
further improve its relations with industry by holding 'regular briefing
sessions between industry executives and CASA executives', 
and observed that:
... ultimately the interaction between CASA and industry is primarily
based around the regulatory and subsequently operational issues. Therefore
Virgin Blue believes that the relationship between CASA and industry will be
further significantly enhanced once the RRP is finally completed.
Qantas also suggested the desirability of greater industry access to the
CEO and senior CASA executives. As noted earlier, in Qantas' view, the
relocation of operational staff from Canberra to CASA's newly established
headquarters in Brisbane has led to a perception within the industry that
senior CASA executives have undertaken little direct consultation with
industry. 'Qantas believes CASA needs to address this, and that the CEO and
senior CASA executives should be more visible to the industry'.
Qantas went on to note that:
Previous 'heavy industry' meetings were seen as successful but
in our view require the presence of the CASA CEO. Meaningful and regular forums
to allow dialogue between CASA and the major passenger carrying operators (ie.
The six largest airlines which account for 93% of all passengers) should be
Not all submitters, however, expressed satisfaction with the current
relationship between CASA and the industry. For example, in its submission,
AIPA made note of a widening gap developing between airline transport pilots
and CASA. AIPA stated that CASA has failed to display integrity and
transparency in its handling of the legislative development of the Multi Crew
Pilot Licence (MPL). AIPA also suggests that CASA has failed to act in regard
to regulatory breaches in relation to Flight deck Duty time fatigue provisions
of Civil Aviation Order 48 General Exemption.
AIPA told the committee that it found the consultation and the
associated regulatory development activities associated with the development of
the MPL to be unnecessarily frustrating and difficult due to inefficiencies,
obfuscation and poor project management standards.
In its submission, AIPA listed a number of shortcomings that it perceived in
the consultation process for the development of the MPL. These included:
- key support documents and documents of a significant technical
complexity either not provided or not provided in a timely manner;
- the exclusion of prominent subject matter experts who had
previously been accepted as members of the MPL Industry Panel;
- late circulation of Terms of Reference for the Project Team;
- a poor standard of minute taking and failure of documents to
reflect agreed meeting outcomes; and
- changes or additions made to documents without reference to the
AIPA argued that such poor project management had the capacity to
undermine confidence in the consultation process. In its submission, AIPA told
This poor level of propriety and project management undermined
faith in CASA's integrity, reduced the efficiency (and subsequently the
effectiveness) of regulatory development activities and made it necessary for
AIPA to struggle with CASA at every step of the process. It would be fair to
say that this experience negatively coloured the view of pilots across a range
of consultative matters with CASA.
Given the particular concerns raised by AIPA, the ALAEA and AOPA with
regard to consultation, the committee explored the extent of CASA's
consultation with these organisations further during this inquiry. CASA told
the committee that it considered that it has consulted extensively with such
organisations, and that they are involved in the deliberations of the SCC and
its working groups:
I think that, with these organisations and with others that I
will go through, there is genuine consultation. I will make the point that they
are not certificate holders. They are interest groups and representative
groups, but we do not have a regulatory relationship with any of these groups.
We have regulatory relationships with approximately 2,000 certificate holders
in the country. That does not include, for example, AIPA, the ALAEA and it does
not include AOPA. So we are consulting.
AFAP considers that improving CASA's relations with industry and meeting
community expectations are conflicting concepts. AFAP considers that industry's
interests are better served by CASA maximising self regulation, whereas the
community expects CASA to be alert and active in the interests of safety.
Some submitters considered the extent to which CASA officers may have
developed too close a relationship with industry. Mr Peter Lloyd expressed
confidence that CASA is currently addressing cases involving individual
officers and particular operators within the industry.
However, Mr Peter Ilyk questioned CASA's efforts to work in partnership with
the industry and argued that such an approach leads to a loss of regulatory
independence and ultimately industry capture on a broader scale.
On a more positive note, some submitters suggested that there were
benefits in CASA officers developing a good understanding of the needs of
specific industry sectors. AAAA stated that CASA appears not to have a
standardised process for handling industry interaction. AAAA told the committee
that CASA tends to treat its interactions with the industry 'as individual
problems left to individual officers to develop an individual answer for each
AAAA suggested that CASA would significantly reduce costs to industry if it
were to develop systems that simplify and standardise frequent industry
interactions. AAAA sees value in the establishment of liaison officers or units
to manage CASA's interaction with individual industry sectors.
AOPA has also suggested that the introduction of industry relationship
managers, as employed by Airservices Australia, may assist in more focussed
consultation processes and more productive relationships with industry.
CASA as a partner with industry
The committee also received a range of submissions in relation to CASA's
move to become a partner with industry rather than continuing with a more
traditional regulatory approach. The committee notes that this shift in
emphasis and priority has led to strong differences of opinion within CASA and
similarly polarised views within the wider aviation industry.
The committee is familiar with CASA's decision to redefine its
relationship with industry by encouraging industry to share the responsibility
for safety outcomes. In introducing the changes, Mr Byron said that:
... in the past there has been a mindset, both within CASA and
some people in the industry, that safety was primarily the concern of the
regulator and the regulations. For some years safety and operational
professionals have recognised that this mindset is flawed and naive.
This blinkered view grew up in the early days of aviation when
the regulator did indeed hold-the-hand of industry whenever safety issues had
to be addressed.
The committee notes that CASA believes that this is no longer a viable
approach to safety and that the risks faced by the aviation industry must be
managed through a focus on safety outcomes not safety processes. During this
inquiry Mr Byron told the committee:
As part of our systemic approach to managing safety, CASA
continues to actively encourage industry to develop safety management systems
that help address the risks of their own operations, as the aviation industry
must take responsibility for day-to-day safety risks.
The committee notes the concerns raised by some witnesses that CASA's
'partnership' approach is based on models in other jurisdictions which have
been found to be flawed.
In particular, the committee was referred to a review undertaken earlier this
year by the US Department of Transportation. In its report, the Department
found that an FAA office had developed an overly collaborative relationship
with an air carrier. The Department concluded that the overly collaborative
relationship had occurred because of shortcomings in FAA management controls
over its partnership program.
The committee's attention was also drawn to press reports that the
Chairman of the House Transportation and Infrastructure Committee observed that
the flurry of maintenance problems in the United States was partially a result
of 'a cozy relationship between the FAA and airlines and a lack of an
enforcement mind-set' by regulators.
The seriousness of concerns regarding the FAA's partnership program is
reflected in legislation currently before the US Senate. The Aviation Safety
Enhancement Act of 2008 which was unanimously passed by the United States House
of Representatives in July, makes it clear that air carriers are not the FAA's
customers. Further, the legislation makes it abundantly clear that the FAA
'shall ensure that safety is given a higher priority than preventing the
dissatisfaction of an air carrier or other entity regulated by the [FAA] ...'.
The committee considers that these findings are particularly relevant
given Mr Byron's frequent reference to this concept of partnership with the
industry in his staff communications and public statements in the first three
and a half years following his appointment as CASA's Chief Executive Officer.
Given many comparisons made between the Australian and US airspace and
regulatory models by Mr Byron and other CASA officers in that time and
previously, the committee has little doubt that the FAA 'partnership' model has
had some influence on Mr Byron views on CASA's role.
However, it is clear that operators would like to see greater devolution
of responsibility to industry. Qantas told the committee that it believes CASA's
role should be to tell industry what to do, but not how to actually do it.
Qantas believes it is important to leave the 'how' to industry to allow for
business flexibility and adaptability and that the role of the regulator should
be to provide guidance material to assist in this, particularly for those
operators with limited resources.
AMROBA (Aviation Maintenance Repair and Overhaul Business Association
Inc) would also like to see greater deregulation, particularly in the
non-airline aviation segment. AMROBA argued that the current regulatory regime is
not cost effective and recommended that CASA follow the lead of its overseas
counterparts in applying minimum safety standards on this sector.
The committee notes the observation of Aviation Safety Foundation
Australasia that the regulator has to balance competing priorities in the
aviation industry. ASFA stated that:
In particular, the General Aviation (GA) sector at times
struggles for commercial viability and regulation can be seen as an additional
and unnecessary burden. On the other hand the Australian public, media and
Parliament have shown a very low tolerance to aviation accidents involving
multiple facilities, i.e. Monarch Airlines, Seaview Air and Transair (Lockhart River)
The committee notes that the expectations of private individuals who
made submissions to the inquiry is that CASA should adopt a stronger regulatory
stance, particularly in relation to the enforcement of safety and maintenance
Industry Complaints Commissioner
Mr Byron told the committee of the contribution that the Industry
Complaints Commissioner (ICC) was making to improving CASA's relationship with
industry. He said that he considered having a trustworthy complaints process,
that people can have confidence in as a vital step in identifying residual
problems in CASA's culture.
The role of the ICC is:
- To be the central co-ordinating point for all complaints, and to
ensure that they are examined and responded to expeditiously by the most
- To offer people in the aviation industry and the public an easily
accessible, timely, and effective means of having actions reviewed and to make
recommendations on the findings.
- Where necessary or appropriate recommend to the CEO corrections
to CASA's processes and procedures to prevent recurrence of problems of the
kind that gave rise to one or more complaints.
Mr Byron told the committee that the establishment of the ICC has
contributed to greater transparency and accountability within CASA. He said
that since the establishment of the ICC, there has been a downward trend in the
number of complaints received and that this was evidence of CASA's improved
relationship with industry.
The current Industry Complaints Commissioner, Mr Michael Hart, told the
What we are seeing is that complaints from industry are on the
decline and complaints from the public are slightly on the decline. In
contrast, and I think this speaks very highly of the work that is being done to
be responsive to stakeholder interests and stakeholder views about aviation
safety, my office deals more and more with contact by members of the public who
feel confident about bringing matters to my attention—a complaint about CASA or
In this context, the committee notes that a number of submitters
advocated the establishment of a more independent complaints mechanism. AIPA
has suggested that the establishment of the ICC as a separate statutory office
with powers to investigate and report to the CASA board and to the Minister
would be an important confidence-building measure.
The Aircraft Owners and Pilots Association of Australia also suggested that
industry may have more confidence in the ICC if it were oversighted by a CASA
Other submitters advocated the establishment of a transport or aviation
ombudsman, independent of CASA and responsible to the Parliament.
Given recent legislation passed in the United States in response to
concern over similar problems in the FAA, which some witnesses have compared to
the performance of CASA, the committee is of the view that the suggestion that
Australia create such a statutorily independent office has some merit.
Effectiveness of administrative reforms
The committee recognises that in 2003 CASA embarked on comprehensive
organisational and regulatory change. This has involved all aspects of CASA’s
operations. While the committee does not doubt the commitment of senior
management within CASA to refocus the organisation, the committee notes from
the evidence it has received in this inquiry that implementation of many
aspects of this process of organisational change has been poorly perceived
within the industry and the community. While there are many who welcome the
changes to date, most submitters expressed some level of frustration with the
pace and direction in which key changes have progressed. The committee notes
that despite assurances from CASA management that the reforms have been carefully
planned and implemented, the perception more widely is that the changes have
been piecemeal and have had unintended consequences in a number of key areas.
In particular, the committee notes the concerns raised during this
inquiry with regard to staff turnover, redeployment of staff and the
availability of adequate and appropriately trained technical staff. The
committee notes that CASA has recently moved to address staffing issues through
the completion of a workforce capability and behavioural framework and the
development of technical training initiatives. However, the committee is
concerned that CASA appears to have embarked on such a widespread cultural,
organisational and staff change without a plan for managing the training needs
occasioned by such change.
The committee has some concerns about how effectively CASA senior
management has communicated with CASA staff and the industry during this
sustained period of change. The committee considers that many of the complaints
levelled at CASA throughout the course of this inquiry can be attributed, in
part at least, to poor communication about the change process. The committee
notes that implementing a different regulatory philosophy, and achieving the
necessary cultural change within the organisation and the industry to support
it, is a long term undertaking. However, the committee is concerned at the
apparent extent of resistance that remains within the organisation after five
years of change management and such a significant turnover of staff.
The committee also notes the evidence it received which suggests that
this has translated into a level of confusion and uncertainty within CASA and
the industry. The committee believes that CASA must carefully examine its
internal and external communications in the interests of providing clearer
direction and leadership to both its staff and the industry it regulates.
The committee notes that this latter point was considered by the
Aviation Regulation Review Taskforce and concurs with the Taskforce
recommendation that 'accessible progress reports are provided to industry' in
relation to regulatory changes.The
committee is also aware that submitters to this inquiry would like to see a
greater degree of communication from CASA about the implementation of
organisational and operational changes and would prefer a more active
engagement of stakeholders as part of this process.
The committee notes the frustration among submitters in relation to the
very slow progress with the Regulatory Review Program (RRP) to date. The
committee also notes the criticism of many submitters that there has been only limited
progress in this key area in recent years. The committee understands that more
recently the limited availability of drafting resources has compounded the
problem, but also acknowledges the view put by some submitters that the
execution of large scale organisational change within CASA has had the
unintended consequence of compromising progress on key projects like the RRP.
The committee notes that most of the work completed to date on RRP has been undertaken
prior to 2005.
The committee concurs with the findings of the Aviation Regulation
Review Taskforce and concurs with its recommendation that the Minister and CASA
commit to achieving completion of the development of the priority Regulatory
Parts by submitting all drafting instructions to OLDP by the end of 2008 and work
toward full implementation of these Parts by 2011.
Effectiveness of CASA's governance
Evidence presented to the committee suggests that there is some concern
within CASA regarding the current management of CASA. Certainly the committee
received submissions from former staff critical of the current management and
direction of the organisation. This is perhaps not entirely unexpected for an
organisation that has undergone such a significant change management exercise
as is the case with CASA.
The committee accepts that on occasion criticisms from former staff
members, particularly in the context of sometimes acrimonious departures by
those staff members, are tinged with bitterness and may not be safely relied
upon. However, when a former high level member of the executive team presents
compelling evidence to the committee, the committee must consider that evidence
carefully. Mr Peter Ilyk was such a witness.
The committee has had the opportunity of observing Mr Ilyk's performance
before Senate Estimates and other Senate inquiries. The committee is also aware
that, in February 2006, Mr Byron described Mr Ilyk in the following terms in
support of his nomination as the Australian Representative on the Council of
I regard Peter as an astute and experienced senior executive who
exhibits high standards of integrity and professionalism. He is a clear thinker
with a rational and reasoned approach to complex issues.....
He has consistently shown himself to be fully committed to the
interests of CASA.....
He is an active contributor to internal corporate planning
strategic sessions and I have come to respect his judgement on matters of
strategy and issue analysis.....
My confidence in Peter's integrity and understanding of
corporate governance principles is perhaps best illustrated by the fact that in
addition to his line management responsibilities in Legal Services. He has been
my senior adviser on matters of governance......
Peter's long experience at senior levels in CASA and its
predecessor have given him a comprehensive understanding of the issues,
politics and complexities of the Australian aviation industry.
The committee has also had the opportunity of observing Mr Ilyk's
performance before Senate Estimates and other Senate inquiries. The committee
finds his criticisms of CASA under Mr Byron's leadership quite disturbing. The
committee concludes that his concerns cannot be dismissed. The committee notes that
Mr Ilyk did seek to point out shortcomings in the reform of CASA under Mr Byron
and that Mr Byron appears to have declined to seriously consider those
concerns. The committee concludes that, despite warnings that the reform
program was ignoring the lessons of the findings of the Coronial Inquiry into
the crash of Monarch Airlines VH-NDU, the Seaview Air Royal Commission and the
findings of this Senate committee in its inquiry into the administration of CASA
and matters related to ARCAS Airways inquiry,
the reform program continued regardless. The committee is not satisfied that CASA
has properly considered all the possible consequences of its current reform
program. In this context, the committee notes submissions during this inquiry
that the establishment of a board within CASA would strengthen CASA's strategic
direction and decision making and would ensure that future reforms are
accompanied by rigorous evaluation of the risks and benefits.
The committee considers that many of the complaints levelled at CASA
throughout the course of this inquiry suggest that it is timely for the
government to be considering avenues for improving CASA’s governance
structures. The committee makes particular note of calls for the reintroduction
of a board structure within CASA and concurs with suggestions that a board
would enhance CASA's governance and accountability. The board should reflect a
diverse range of experience and knowledge relevant to the management of Australia's
aviation safety regulator.
Strengthening CASA's relations with
The committee acknowledges the steps CASA has taken to date to enhance
its consultation processes and considers that CASA should continue to strive
for more effective engagement with all sectors of the industry, not just those
who represent certificate holders. In particular, the committee notes the
recommendations of the Aviation Regulation Review Taskforce that:
- the government's aviation agencies review and enhance existing
consultation arrangements and implement new procedures where warranted to
ensure transparency and adequate industry awareness of new initiatives; and
- CASA should monitor the regulation development process using
joint CASA/industry teams and continue to review the role of the Standards
Consultative Committee in the process, in order to achiever further
effectiveness and efficiency gains.
The committee notes CASA has taken steps to investigate serious
allegations relating to its North Queensland office. The committee hopes that,
in the interests of achieving regulatory consistency, CASA will extend this
investigation to other offices that have been the subject of complaints
regarding uneven and inappropriate dealings with industry.
The committee has noted the concerns raised in relation to CASA's
implementation of its safety management systems approach and its use of risk
management in the deployment of resources. The committee also notes the
concerns raised in relation to CASA's decision to operate as a partner with the
aviation industry. The committee considers that the recent reviews of CASA's
North American counterparts should sound a timely note of caution in this
While the committee notes CASA's assurances regarding its approach to
the implementation of SMS and risk based regulation, the committee remains
concerned that CASA appears to be falling short of achieving an appropriate
balance between systems audit and specific operational surveillance. In
particular, CASA's recent response to the increased incidence of maintenance
issues at Qantas causes the committee some concern. The committee considers
that recent statements by CASA executives are indicative of a somewhat blasé
approach to this spate of maintenance issues. Mr Quinn, Deputy Chief Executive
Officer of Operations at CASA said at a recent press conference:
An engine shutdown on a four engine
aircraft is not a really significant safety event. Qantas have a safety
management system that is able to manage these sort of things. The pilots are
trained, of course, primarily in handling these sort of emergencies such as
Manilla, a very normal situation there. So I'm not overly concerned about these
sort of things.
The committee notes that while CASA's audit of Qantas' operations did
not find any evidence that this recent spate of incidents are the result of
systemic failure, CASA does not appear satisfied with its current surveillance
of Qantas. CASA now proposes to undertake a health check of the airline. The
committee notes that this health check will '... go from the documentation, as to
how the maintenance program works on these aircraft, how its being implemented
and how the documentation process exists in the organisation to the nuts and
bolts type aspect of actually reviewing the aircraft and going through the
process of confirming that the programs that are directed in the documents are
actually in place on the aircraft.' 
CASA states that this 'health check' will guarantee CASA's confidence
and the confidence of the travelling public. The committee considers this
approach as a reactive rather than a proactive approach to the discharge of the
regulator's responsibility. The committee would have greater confidence if the
regulator were more in touch with the maintenance processes of major airlines
than it clearly is. The committee notes CASA's concession that the industry is
under enormous strain due to the increased fuel prices, and recent industrial
The committee also notes that CASA believes that Qantas may need to address
questions of accountability and responsibility in relation to its maintenance
program. The committee considers that a more prudent regulator would satisfy
itself that clear lines of accountability and responsibility exist prior to the
delegation of responsibility rather than wait for obvious evidence of failure of
self regulation before embarking on a more hands on regulatory role.
Finally, the committee notes that one of the recurring themes in the
evidence received during this inquiry is that CASA is aware of the problems
raised and has initiated steps to address them. Without wanting to appear
unduly cynical, this is a response that this committee is all too familiar
with, particularly through its Senate estimates hearings. However, against the
back drop of the Government's Aviation White Paper, the committee has every
expectation that key changes will be addressed in the short to medium term and
to the benefit of the Australian flying public. The committee will continue to
monitor CASA's progress in each of these areas in forthcoming estimates
The committee recommends the Australian Government strengthen CASA's
governance framework and administrative capability by:
- introducing a small board of up to five members to provide
enhanced oversight and strategic direction for CASA; and
- undertaking a review of CASA's funding arrangements to ensure CASA
is equipped to deal with new regulatory challenges.
The committee recommends, in accordance with the findings of the
Hawke Taskforce, that CASA's Regulatory Reform Program be brought to a
conclusion as quickly as possible to provide certainty to industry and to
ensure CASA and industry are ready to address future safety challenges.
The committee recommends that the Australian National Audit Office audit
CASA's implementation and administration of its Safety Management Systems
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