The Parliament of the Commonwealth of Australia

Report on the Provisions of the

Aviation Legislation Amendment Bill (No. 1) 2001

(formerly Aviation Legislation
Amendment Bill (No. 2) 2000)

Senate Rural and Regional Affairs
and Transport Legislation Committee

April 2001

ISSN 1038 - 2755

This document was produced from camera-ready copy prepared by the Senate Rural and Regional Affairs and Transport Legislation Committee, and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

MEMBERS OF THE COMMITTEE

Members

Senator Winston Crane	LIB, Western Australia	Chairman
Senator Michael Forshaw *	ALP, New South Wales	Deputy Chairman
Senator Jeannie Ferris	LIB, South Australia
Senator Sue Mackay	ALP, Tasmania
Senator Julian McGauran	NP, Victoria
Senator John Woodley	AD, Queensland

* Senator O’Brian to substitute for Senator Forshaw for all inquiries relating to transport issues, including in respect of budget 2000-01 estimates.

Participating Members

Senator Abetz

Senator Bartlett

Senator Boswell

Senator Brown

Senator Buckland

Senator Calvert

Senator Chapman

Senator Coonan

Senator Crossin

Senator Eggleston

Senator Faulkner

Senator Ferguson

Senator Gibson

Senator Harradine

Senator Harris

Senator Hutchins

Senator Knowles

Senator Lightfoot

Senator Mason

Senator McKiernan

Senator McLucas

Senator S Macdonald

Senator Murphy

Senator O’Brien

Senator Payne

Senator Schacht

Senator Tchen

Senator Tierney

Senator Watson

Committee Secretariat

Mr Andrew Snedden (Secretary to the Committee)

Mr Stephen Frappell (Principal Research Officer)

Mr John O'Keefe (Senior Research Officer)

Ms Trish Carling (Senior Research Officer)

Ms Lyn Fairweather (Estimates Officer)

Ms Ruth Clark (Executive Assistant)

Telephone (02) 6277 3510

Facsimile (02) 6277 5811

Internet www.aph.gov.au/senate_rrat

Email rrat.sen@aph.gov.au

TABLE OF CONTENTS

MEMBERSHIP................................................................................................................. iii

Table of contents.................................................................................................. v

ABBREVIATIONS.......................................................................................................... vii

chapter one............................................................................................................... 1

THE BILL.......................................................................................................................................................................... 1

Introduction................................................................................................................................................................. 1

Amendments to the Civil Aviation Act 1988......................................................................................................... 2

Article 83bis agreements....................................................................................................................................... 2

Advantages of Article 83bis agreements...................................................................................................... 4

Safeguards operating with the agreements.................................................................................................. 5

Amendments to Civil Aviation (Carriers’ Liability) Act 1959.......................................................................... 6

Consistent aviation related terminology.................................................................................................................. 6

Notification of the proposed amendments......................................................................................................... 7

Justification for the amendments......................................................................................................................... 7

Benefits of the amendments................................................................................................................................. 7

chapter two............................................................................................................... 9

ENFORCEABLE VOLUNTARY UNDERTAKINGS.................................................................................................. 9

Voluntary undertakings, an alternative tool............................................................................................................ 9

The need for enforceable voluntary undertakings......................................................................................... 10

What enforceable voluntary undertakings will do, how they will operate and legal aspects of the scheme 11

Advantages provided by the establishment of enforceable voluntary undertakings.............................. 13

Support for enforceable voluntary undertakings...................................................................................... 15

Disadvantages associated with the operation of enforceable voluntary undertakings........................... 15

General criticisms of the agreements................................................................................................................. 16

Response from CASA.................................................................................................................................... 18

Concern with the voluntary aspect of the agreements.................................................................................. 18

View of the Department of Transport and Regional Services and CASA............................................. 20

Issue of consultation and the provision of information................................................................................ 21

Question of applicability of the scheme........................................................................................................... 24

Review of the scheme.......................................................................................................................................... 24

Postponement of the scheme’s introduction and training for CASA staff................................................. 24

The issue of consistency of offences with the Criminal Code........................................................................... 25

Criminal responsibility.............................................................................................................................................. 26

The issue of mental state.................................................................................................................................... 26

Arguments against custodial sentences.......................................................................................................... 27

CASA’s response........................................................................................................................................... 27

chapter three........................................................................................................ 29

POSSIBLE AMENDMENTS....................................................................................................................................... 29

Limiting the scope of Enforceable Voluntary Undertakings (EVUs)................................................................. 29

A publicly available register of a enforceable voluntary undertakings............................................................ 29

Limitation on the duration of enforceable voluntary undertakings................................................................... 30

Penalties imposed by a court................................................................................................................................... 30

Other matters – compulsory third party insurance for pilots............................................................................. 31

DISSENTING REPORT FROM

SENATOR KERRY O’BRIEN AND SENATOR SUE MACKAY
on behalf of the australian labor party
and from Senator John Woodley and Senator Brian Greig
on behalf of the DEMOCRATS........................................................................ 33

CONSULTATION WITH THE INDUSTRY PRIOR TO THE INTRODUCTION

OF ENFORCEABLE VOLUNTARY UNDERTAKINGS........................................................................................ 33

APPENDIX ONE............................................................................................................ 35

SUBMISSIONS............................................................................................................................................................. 35

APPENDIX TWO............................................................................................................ 37

WITNESSES.................................................................................................................................................................. 37

chapter one

THE BILL

Introduction

1.1 The Aviation Legislation Amendment Bill (No. 2) 2000 passed the House of Representatives on 8 February 2001 after arriving in the Senate the Bill was referred to this Committee for examination and report on 7 February 2001 under the amended title, the Aviation Legislation Amendment Bill (No. 1) 2001. Despite this recent name change, documentation, such as the Bills Digest, Explanatory Memorandum, Second Reading Speech and debates concerning the Bill in the House of Representatives referred to in this report still carry the original Bill’s title Aviation Legislation Amendment Bill (No. 2) 2000.

1.2 The Aviation Legislation Amendment Bill (No. 1) 2001 is part of an extensive review of civil aviation legislation begun by the Civil Aviation Safety Authority (CASA) This review was started by CASA in July 1996.[1]

1.3 During the Bill’ second reading speech in the House of Representatives on 12 April 2000 the Commonwealth Minister for Agriculture, Fisheries and Forestry, Mr Warren Truss, stated: “In July 1996 the government announced that the Civil Aviation Safety Authority, CASA, would conduct a complete review of the civil aviation legislation in Australia, with the objectives of harmonising it with international standards of safety regulation and making it shorter, simpler and easier to use and understand.”[2]

1.4 According to the second reading speech: “The primary purpose of this bill is to make a series of small but significant changes to terminology in the Civil Aviation Act 1988, which will assist in the development of regulations dealing with aircraft maintenance and maintenance engineer licensing.”[3]

1.5 The Bill’s Explanatory Memorandum stated that: “The primary purpose of the Aviation Legislation Amendment Bill (No.2) 2000 (the Bill) is to make amendments to the Civil Aviation Act 1988 to facilitate the ongoing review of civil aviation regulations.”[4]

1.6 During debate in the House of Representatives it was claimed that the Bill contains three elements: “Firstly, it gives CASA the power to take enforceable written undertakings from people in relation to air safety compliance; secondly, it allows CASA to enter into article 83bis agreements with other national aviation regulatory bodies; and, thirdly, it brings the terminology used in the current act into line with that used by ICAO.”[5]

Amendments to the Civil Aviation Act 1988

1.7 The Bills Digest stated that the Bill:

… contains a number of amendments to the Civil Aviation Act 1988 which have the following purposes:

. to introduce terminology which is consistent with the terminology used by the International Civil Aviation Organisation and other national airworthiness authorities, and to harmonise some offences with current Commonwealth criminal drafting policy

. to enable CASA to enter into Article 83bis agreements with other national airworthiness authorities, and

. to give CASA the power to accept written undertakings from people in relation to compliance with civil aviation safety legislation.[6]

Article 83bis agreements

1.8 The Bill gives CASA the ability to enter into what is known as ‘Article 83bis agreements’ with aviation authorities in other countries. Under the Convention on International Civil Aviation, Chicago 1944, referred to as the Chicago convention, a country which is party to this convention is generally responsible for the safety regulation of aircraft placed on that country’s register, irrespective of where in the world the particular aircraft is operating.

1.9 The joint submission to the inquiry from the Department of Transport and Regional Services and CASA stated that the provisions set out in the Bill:

… means that an aircraft does not have to be taken off the register of the State in which it is registered, when an operator leases, charters or interchanges the aircraft to an operator in another country. Article 83bis allows the responsible State through its aeronautical authority to transfer its regulatory responsibility to the regulatory authority of the State where the aircraft is operated. In order to transfer safety regulatory responsibilities for an aircraft, the two States concerned must enter into an agreement in respect of the aircraft and notify other States that may be affected by the agreement, either directly or through ICAO. It is also up to the two States concerned to determine the extent of the regulatory powers that are transferred.[7]

1.10 As pointed out in the Bill’s second reading speech:

Some obvious difficulties in administering safety regulations arise when an aircraft registered in one country is operated in another. Article 83bis is a relatively recent addition to the Chicago convention, and enables the transfer of safety regulatory functions from the state of registration of an aircraft to the state of operation of the aircraft, on agreement of both states. [8]

1.11 After the Civil Aviation Act was amended by the Transport and Communications Legislation Amendment Act (No. 2) 1993 Australia ratified Article 83bis on 2 December 1994.

1.12 The inquiry was told that:

Subsequent advice from the Attorney-General’s Department indicated that these amendments gave either the Minister or a delegate from his Department the power to enter into Article 83bis agreements on Australia’s behalf. However, further amendment would be required to permit CASA to enter into Article 83bis agreements on Australia’s behalf.[9]

1.13 The amendment proposed in this Bill will provide CASA with this capability.

1.14 It is considered appropriate for CASA to be allowed to enter into Article 83bis agreements. It is the view of the International Civil Aviation Organisation (ICAO) that such agreements should be made between the relevant national aeronautical authorities, as they are administrative instruments and do not have the status of treaties. [10]

1.15 The House of Representatives was told on 12 April 2000 that the Bill would enable CASA to enter into Article 83bis agreements with overseas aviation authorities on behalf of Australia. Administrative and technical provisions concerning the implementation of these agreements were to be covered in regulations to be developed by CASA and the Department of Transport and Regional Services “in consultation with industry”. [11]

1.16 Mr Peter Ilyk, General Counsel with the Civil Aviation Safety Authority, told the inquiry on 2 March 2001:

… There will be a list of countries whereby CASA will only be able to enter into 83bis agreements with First World countries, and they will be listed in the regulations. The matters that can be included in the 83bis agreements will be included in the regulations. That is there to ensure protection if CASA wants to enter into an 83bis agreement with some Third World country.[12]

1.17 The Assistant Secretary, Aviation Industry with the Department of Transport and Regional Services, Mrs Robyn Beetham, advised the inquiry that; “… the safety of civil aviation must and always will be the prime concern when entering into article 83bis agreements.”[13]

Advantages of Article 83bis agreements

1.18 Among the advantages claimed to flow on from the ability of CASA to enter into 83bis agreements are:

· Increased economic opportunities and reduced costs for the Australian aviation industry;

· Increased ability of Australian aircraft owners to lease their aircraft to overseas operators when they are under utilised in Australia during periods of low demand; and

· Australian maintenance organisations would possibly have increased opportunities to carry out work on foreign aircraft that would otherwise have been carried out overseas.[14]

1.19 It was argued in the House of Representatives that the Bill allows CASA to enter into 83bis agreements which has two significant advantages:

Firstly, it sidesteps the basic administrative problems that arise when an aircraft is registered in one country but is largely being operated in another country. Secondly, it makes easier [sic] in quieter periods for Australian aircraft operators to lease their aircraft to operators overseas, and we have seen that increasingly take place when aircraft might be redundant for one reason or another. This provision will obviously be welcomed by those Australian aircraft operators whose work is largely seasonal, such as charter aircraft, crop-dusters, et cetera, as part of the business opportunities that they can take advantage of. Securing overseas leases has previously been more difficult for Australian operators, as their aircraft were subject to Australian rules, regulations, safety inspections and so on, even if the plane was mostly being operated overseas.[15]

1.20 The Department of Transport and Regional Services and CASA are of the view that:

From an overall aviation regulatory perspective, the establishment of Article 83bis agreements with other national airworthiness authorities allow countries to address the difficulties involved in applying safety regulations to an aircraft registered in one country but operated by another party in a different country. Savings in administration costs may also accrue from a simplification in arrangements. The selective use of this tool is seen globally to provide an increase in safety oversight.

In short, Article 83bis agreements promote safety by ensuring aircraft are kept close to their regulatory authority. [16]

1.21 The Department and CASA went on in their submission to list additional benefits resulting from 83bis agreements:

There can be a considerable reduction in regulatory workload and associated costs for the State in which the aircraft is actually registered, as the State in which the aircraft is actually operated can more easily discharge regulatory responsibilities over the aircraft.

- when an aircraft is operated in another State, it can be difficult and costly for the State in which the aircraft is registered to satisfy its regulatory responsibilities under the Chicago Convention.

- CASA, for example, is required to send personnel overseas to monitor maintenance on leased Australian aircraft that are operated overseas.

In addition, the operator would gain administrative cost advantages in dealing directly with the safety regulator of the State in which the aircraft is operated.[17]

1.22 According to the Department and CASA:

… Article 83bis agreements should also benefit the Australian aviation industry and the consumer in terms of increased economic opportunities and reduced costs.

By way of example, domestic operators would potentially have greater flexibility and more cost-effective options in operating their aircraft fleets. If these aircraft are subject to an Article 83bis agreement, the operators will not have to return them to Australia to have them serviced in CASA approved facilities. This increased flexibility will make its easier for Domestic operators to lease surplus aircraft to overseas operators during periods of low demand in Australia.

CASA approved Australian maintenance organisations could also have increased opportunities to carry out work on foreign aircraft that would otherwise have been carried out by overseas organisations approved by their State of Registry. [18]

1.23 At a public hearing held on 2 March 2001 the Department of Transport and Regional Services stated that the ICAO; “… believes that article 83bis will ensure better regulation and oversight of aviation safety. Such agreements can result in a considerable reduction in regulatory workload and associated costs for the state in which the aircraft is registered as the state in which the aircraft is actually operated can more easily discharge regulatory responsibilities over the aircraft.”[19]