Paul Phelan, Dec 16, 2016
Highlighting the fracture of industry/regulator relations clearly and repeatedly, the government-commissioned Aviation Safety Regulation Review (ASRR) Panel used the word “trust” or one of its derivatives no fewer than 26 times throughout its discussion, analysis and recommendations.
The Panel’s findings and its 37 recommendations were based on the group’s cogent engagement with industry-wide stakeholders and were discussed in its commentary throughout the 170-page report that went straight to the heart of most of the industry’s identified concerns – in particular the breakdown of trust between the industry and its regulators.
But sixteen months after the release of the ASRR in May 2014, the issues around mutual trust still hadn’t been acknowledged in any public statements from CASA or the Department. Industry watched cynically as hopes for any appreciable change appeared to be fading in the way that had dogged so many earlier attempts at reform. Exasperation was heightened by (then) CASA director John McCormick’s public statements blaming industry’s alleged unpreparedness for endless delays in implementation. More than a year after those insulting and misleading assertions were first made, adoption of the “Part 61” licensing regulations was still delayed by CASA’s failure to complete and publish the micromanagement-laden regulatory guidance material with which industry was expected to comply fully by the end of August 2017.
The ASRR review accurately identified the core of that problem as political inertia:
While CASA appears to be trusted by many in government, the industry’s trust in CASA is failing, compromising CASA’s Stewardship, and industry perceives CASA’s Accountability as being compromised. (The Panel’s highlighting.)
Elsewhere in the report the Panel also observed:
CASA and industry need to build an effective collaborative relationship on a foundation of mutual trust and respect. Therefore, CASA needs to set a new strategic direction.
To aid in that process the reviewers also indentified industry’s concerns and priorities, recording that the three most nagging matters raised across all submissions were:
- The regulatory reform program (136 submissions considered this to be their top priority);
- CASA’s “inflexible regulatory approach” (120 submissions); and
- The need for more promotion of aviation (90 submissions.)
The Panel had thus prioritised most of the industry concerns as to why industry/regulator trust had all but disappeared while most (but not all) parliamentarians were still accepting the fable that all was well in that critical area.
The RRP has now been irreparably damaged by failure to meet its goals and obligations in respect of clarity, conciseness, cost/benefit justification, inter-operability with other national aviation authorities, crippling inertia in dealing with ongoing disputes arising from such deficiencies, and the need to patch up whole blocks of flawed regulation by negotiating and issuing “exemptions” which have continued to add inequity and confusion to the program’s processes.
Complaints over regulatory inflexibility spring largely from the criminal-law language and framing of offences and penalties that come with the new regulatory structure, and partly by built-in policy framing that empowers administrative decisions that can result in arbitrary cancellation of licences, ratings, delegations and approvals without any evidence of the due process promised by published guidelines.
While “the need for more promotion of aviation” is rated as the third concern in the ASRR assessment, we can report that most businesses believe the optimal avenue for the “promotion” of aviation would result from the removal of unnecessary and expensive obstructions to its progress. Some are optimistic at Mr. Carmody’s recent assertion that what is needed is “A system that only interferes with the legitimate day-to-day activities of the aviation community when necessary in the interests of safety.”
Implementation of that goal can’t come too soon because Industry/CASA distrust is now potentially impacting all regulated Australian aviation businesses, suppliers, customers, and most maintenance engineers, pilots and other workers across the industry. Alarming drops in the recruitment and training of licensed engineers and pilots are expected to add further to the challenges facing Australian commercial aviation.
The first serious attempt to re-shape the intended progress of CASA’s regulatory review program (RRP) from concept to completion had been set out in two directives issued by (then) CEO Bruce Byron’s Directives 16 and 17 in November 2004.
#16 set out the guiding principles for the program, while #17 specified the structure of the regulatory advisory panels which were intended be part of the consultation process.
In January 2007 Mr Byron updated the two directives, replacing them with Directive 01/2007, which is reproduced below.
Addendum 1 – CEO DIRECTIVE 001/2007
Development of Regulations and the Regulatory Framework
Date of Directive: 18 June 2007
To: Shane Carmody
Action Officer: Not Applicable
Title of Addressee: Not Applicable
Directive No: 001/2007
Response Required: Immediate Effect
This Directive replaces CEO Directive 016/2004, which is hereby repealed. It updates CASA’s Guiding Principles for the development of the regulatory framework and proposed aviation safety regulations.
- The aviation safety regulations must take into account CASA’s Classification of Civil Aviation Activities policy and the priority given under the policy to passenger-carrying activities.
- Aviation safety regulations must be shown to be necessary. They are to be developed on the basis of addressing known or likely safety risks that cannot be addressed adequately by non-regulatory means. Each proposed regulation must be assessed against the contribution it will make to aviation safety.
- If a regulation can be justified on safety risk grounds, it must be made in a form that provides for the most efficient allocation of industry and CASA resources. The regulations must not impose unnecessary costs or unnecessarily hinder high levels of participation in aviation and its capacity for growth.
- Where appropriate, the aviation safety regulations are to be aligned with the standards and practices of leading aviation countries, unless differences are required to address the Australian aviation environment and these differences can be justified on safety risk grounds. Where the standards and practices of the leading aviation countries vary, CASA will align its regulations with those that effectively address the safety risks in the most cost-effective manner.
- Wherever possible, the aviation safety regulations must be drafted to specify the safety outcome required, unless, in the interests of safety, and to address known or likely aviation safety risks, more prescriptive requirements need to be specified.
- The aviation safety regulations must be drafted to be as clear and concise as possible.
- Wherever possible, the aviation safety regulations are to be developed within a two-tier regulatory framework comprising the Civil Aviation Act and the Civil Aviation Safety Regulations (CASRs), supported by advisory material that details acceptable means of compliance with the CASRs, this together with appropriate guidance material.
- Manuals of Standards (MOSs) are to be developed only where there is a clear requirement, on the basis of safety, to specify standards that for the purpose of clarity and effective administration should not be contained in the regulations.
- The content of proposed MOSs must also be assessed against the contribution it makes to aviation safety.
- A MOS must only contain such standards as are clearly authorised by a particular regulation and must not be used as a vehicle for promulgating advisory material and other information.
- All CASR Parts and MOSs are to be developed and maintained using the Guiding Principles stated above.
Chief Executive Officer
That directive clearly lost its thrust when Bruce Byron left the scene. Directive 01/2007 became unavailable on the CASA website, and we were told that it had been removed because it was no longer necessary, its contents now being “incorporated in CASA policy.” Asked for directions to the new policy document, CASA was “unable to assist.”
It is notable that Mr Byron’s original Directive 01/2007 was specifically addressed to Mr Shane Carmody, who at that time was his deputy CEO and would obviously have embraced its principles. Mr Carmody was appointed on April 1 of this year as Deputy Secretary of the Department of Infrastructure and Regional Development, with what the Department described as “broad over-arching responsibilities in aviation.” And he has since been confirmed as CASA’s acting CEO, leaving open the option of confirming him over to the permanent position.
Encouragingly Mr Carmody has bluntly clarified his situation at an industry forum meeting:
“In the meantime, don’t be fooled by the Acting CEO/DAS title. I don’t work in caretaker mode and my appointment has been agreed by Cabinet and as far as I’m concerned I’ve got full authority, which I will use, and I have got full accountability, which I will wear for the decisions that I make and the decisions that go with the position.”
We read that as an assurance that Mr. Carmody intends to ‘grasp the nettle’ while acting within the full authority of his appointment, and the quiet reorganisation that the shutdown of CASA’s embarrassing “Ethics and Conduct Committee” last September affirms his capacity for identifying and prioritising trust issues that need to be fixed.
For the next challenge, he shouldn’t have far to look. Apart from the bizarre situation in which a program of regulatory reform has run for more than a generation without attaining its stated goals, industry concerns mainly centre on three areas as the uncontrolled costs of implementation expand in parallel with the volume of paperwork.
|Industry concern No 1: The regulatory reform program.
In 2014 the Department of the Prime Minister and Cabinet as part of its “Cutting Red Tape” program published The Australian Government Guide to Regulation for the guidance of those responsible for implementing such processes as the RRP.
That expert advice came from a government-tasked agency which is supposed to provide a guideline to the development of quality regulation and proclaimed it is “intended to be read by every member of the Australian Public Service involved in policy making – from the most junior member of the policy team to the departmental secretary.”
It is the most intelligent, rational, readable and convincing government document ProAviation has ever read, and if you’re too busy to read it all just absorb an extract titled Ten principles for Australian Government policy makers and you’ll be encouraged to read more, especially if you’re interested in understanding how the intelligent rule-maker manages procedures around regulatory impact statements (RIS.)
Or the consequences of ignoring them.
Then ponder how the RRP program could possibly have managed to transform itself from the status of an administrative “project” into something better described as a self-perpetuating sheltered workshop in its own right.
And next there is the question of whose decision it was to ignore the advice of the Australian Law Reform Commission’s philosophies as contained in Principled Regulation: Federal Civil and Administrative Penalties in Australia  ALRC 95”
Statement of Principle
The distinction between criminal and non-criminal (civil) penalty law and procedure is significant and adds to the subtlety of regulatory law. This distinction should be maintained and, where necessary, reinforced. Parliament should exercise caution about extending the criminal law into regulatory areas unless the conduct being proscribed clearly merits the moral and social censure and stigma that attaches to conduct regarded as criminal.
The ALARC Report additionally explains, for those who find that hard to understand:
The main purposes of criminal law are traditionally considered to be deterrence and punishment. Central to the concept of criminality are the notion of individual culpability and the criminal intention for one’s action.
Another government publication goes into more detail. The Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers, published under the auspices of the Minister for Home Affairs and Justice and supported by the Criminal Justice Division of the Attorney-General’s Department, has a role in advising on the framing of offences and other enforcement powers. The purpose of the guide is to assist agencies to frame these types of provisions.
That guide further explains the concept of criminality in this context:
………..A key characteristic of a crime, as opposed to other forms of prohibited behaviour, is the repugnance attached to the act, which invokes social censure and shame.
Certain conduct should be almost invariably classified as criminal due to the degree of malfeasance or the nature of the wrongdoing involved. Examples include conduct that results in physical or psychological harm to other people (murder, rape, terrorist acts) or conduct involving dishonest or fraudulent conduct (false and misleading statements, bribery, forgery). In addition, criminal offences should be used where the relevant conduct involves considerable harm to society, the environment or Australia’s national interests, including security interests.
Since murder, rape, terrorist acts, false and misleading statements, bribery, forgery and similar offences are relatively rare events in maintenance hangars, critics of the proposed aircraft maintenance regulations are at a loss to understand why, despite all the published instructions and advice to the contrary, the regulations should be thus framed, or for that matter who authorised these deviations from recommended practice, under what authority, and with what motive?
For any drafter who still doesn’t understand their obligations, the Guide offers further assistance to the decision-making process:
“In many cases it will be difficult to determine when a given provision should be criminal or civil in character. Factors that should be considered in this context include the following.
· What is the nature of the conduct sought to be deterred? What are the circumstances surrounding the proposed provision?
· Where does the proposed provision fit in the overall legislative scheme?
· Does the conduct seriously harm other people?
· Does the conduct in some way so seriously contravene our fundamental values as to be harmful to society?
· Is it appropriate to use criminal enforcement powers in investigating the conduct?
· Is the criminal law appropriate for dealing with the undesirable conduct in question?
· How is similar conduct regulated in the proposed legislative scheme and other Commonwealth legislation?
· If the conduct has been regulated for some time, how effective have existing provisions been in deterring the undesired behaviour?
· What level and type of penalties will provide appropriate deterrence?”
Yet the whole process has been beset by the “criminal code” mind-set for almost as long as anybody can remember, with repeated unwelcome drive to return the rules to the disastrous state that made reform necessary in the first place. And all along the way it has been resistance from the varying policies and practices of successive CEOs – not the requirement to consult with industry – that has been at the heart of the endless delays.
We asked the Attorney-General’s Department what systems are in place to ensure compliance if differences have not been proposed and approved. The A-G Department would only say:
The Minister for Home Affairs and Justice, supported by the Criminal Justice Division of the Attorney-General’s Department, has a role in advising on the framing of offences and certain other enforcement powers. To assist agencies to frame these types of provisions the Department, with the authority of the Minister, publishes the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers.
The Guide consolidates a range of principles and precedents relevant to the framing of offences and enforcement provisions to assist agencies to draft provisions.
Departures from the principles contained in the Guide may be necessary or justified in the context of a particular legislative framework.
The Senate Standing Committee for the Scrutiny of Bills and the Senate Standing Committee on Regulations and Ordinances regularly refer to the principles contained in the Guide when considering proposed legislation, and may draw Senators’ attention to provisions that depart from those principles.
This advice appears to say that regardless of all the guidelines, parliamentary explanatory memoranda, charter letters, ministerial and CASA executive directions, political statements about the program’s aims and something like 25 years of nonstop industry protest, the Attorney-General’s Department has handed back legal drafting to CASA officials who are acting in apparently reckless defiance of all of those definitions and prescriptions, leaving the industry with no other apparent redress than to complain to a Senate committee after the damage is done.
We have been unable to identify any evidence that the current “strict liability” format was forced upon CASA by any external agency, and the ASRR Panel was able to confirm with involved agencies that the decision came solely from within CASA. A source close to the ASRR process says, “The only explanation for the size and shape of the criminal law format is the amount of total bullshit they contain. We proved that by doing a dummy run in the regulatory review. We sat down for three hours with the Office of Parliamentary Counsel people who actually write the regulations. They took a sample section of CASR 42 to re-write it in the way it should have been written in the first place, and in a three hour session they managed to reduce that block of regulations to about a quarter of its original size and to make it intelligible as well.”
A mountain of micro-management
Apart from its task of assembling and establishing botched regulations, CASA had also embarked on the preparation of a small mountain of “policy and procedure manuals.” A tally last December counted 35 separate volumes dealing with aircraft registration, airspace & aerodromes, airworthiness, AME licensing, aviation medicine, flight crew licensing, flight test examiners, flight operations, legal, regulatory processes and surveillance. It’s difficult to say how long the program has existed, but a 315 page volume entitled CASA Maintenance Regulations Part 145, Assessor Handbook provides us with a few clues. This gripping volume, a guidebook for CASA staff processing applications for Part 145 certificate approvals, was already keeping the bookshelves warm in the form of “Version 4” when we first encountered it in June 2012.
However an entire new manuals restructure now appears to be in progress, with CASA announcing on December 6 a “revision and updating of key manuals and forms to ensure both the aviation community and the CASA inspectors have access to standardised, current information on rules, processes and how assessments are undertaken.” These are:
· Aerodrome Certification, Registration and Approved Persons Procedures Manual
· Aerodrome Rescue and Fire Fighting Service Procedures Manual
· Air Operators Certificate (AOC) Manual Suite
· Airspace Risk and Safety Management Manual
· Certificate of Approval Process Manual
· Certificate of Approval Handbook
· Certificates of Airworthiness Manual.
The CASA advice adds that while the documents have been updated, “existing rules and processes remain unchanged. No action is required from industry.”
On the contrary, we suggest that Industry would be well advised to exercise its alertness to any news that is circulated at or near the beginning of CASA’s holiday season. It remains to be seen whether the ongoing “updates” are rewritten to correct the identified vague and subjective decision-making processes that have until now worsened its reputation and further eroded industry “trust.” The best news to hope for would be that the entire process be wound back to Byron’s “Directive 1/2007, amended as necessary in the light of experience, and adopted as the tasking of a new RRP.
Perhaps Mr Carmody has a copy handy.
Industry concern No 2: CASA’s “inflexible regulatory approach”
A more appropriate heading might be something that acknowledges the flexibility that enables apparent code-of-conduct infractions by CASA operatives, whilst maintaining the inflexibility and the mindset that allows such decisions as the complete and immediate grounding of Barrier Aviation, a large remote area operator, on Christmas Eve – December 24, 2012.
Such events highlight the booby traps lurking within CASA’s existing rules and guidelines, as Barrier’s (then) solicitor Spencer Ferrier explained to Senator David Fawcett of the Senate Rural and Regional Affairs and Transport Legislation Committee:
“The difficulty and harm to Barrier when confronted by the CASA arose from the laws that permit CASA to intervene into Barrier’s affairs. Barrier’s harm arose from legal procedures that CASA lawfully can and did adopt as much as the issues themselves……………These laws were applied, in our view, in a heavy handed, aggressive and disbelieving manner with no apparent regard to Barrier’s overall performance as an air operator. The laws permit a range of behaviours by the CASA but it chose this major step of shutting the organisation down.”
Such complaints have been all too often repeated, revealing actions and attitudes that represent scorn for CASA’s published guidelines and the ease with which they can be ignored.
ProAviation’s submission to ASRR and other previously published material are packed with events that record similar events attributable to such “permissible ranges of behaviour,” and the ASRR Panel commented on the significant number of respondents who requested anonymity simply because they distrust anything that’s CASA-related.
Our submission was drawn from research and analysis of processes and events over about the past 20 years. It contains ten case studies that illustrate patterns of conduct that are similar to one another, and it also details numerous events that warrant closer examination as to whether or not CASA and/or individuals have strayed outside their own published legal, moral or ethical obligations.
Alarmingly, many of our analyses record patterns of conduct that are similar between various events, and which illustrate attitudes which are the complete reverse of published “codes of conduct” and other prescriptions. This paints an overall picture of a regulator whose working environment is framed to enable facilitate unchecked flexibility in its behaviour, whilst wielding the ability to implement the almost instant destruction of a business or an individual without anything that could be described as “due process.”
Industry concern #3: The need for more promotion of aviation.
90 years ago the USA’s Air Commerce Act charged the Secretary for Commerce with “fostering air commerce.” In 1958 when the USA’s Federal Aviation Act established the FAA, that obligation was reflected in the new Act’s purpose as “to create a Federal Aviation Agency, to provide for the regulation and promotion of civil aviation in such manner as to best foster its development and safety, and to provide for the safe and efficient use of the airspace by both civil and military aircraft, and for other purposes.
The Americans make things sound easier, don’t they?
Most of our industry contacts believe that similar wording in the Civil Aviation Act should be expressed to define better the regulator’s functions. They also believe that if the staggering handicaps thrust upon them by CASA’s RRP were resolved, they would be perfectly capable of promoting their own industry; more economically and safely.
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