Bills Digest No. 50, 2013–14              18 March 2014

Civil Aviation Amendment (CASA Board) Bill 2014

Moira Coombs
Law and Bills Digest Section 

Date introduced: 6 March 2014

House:  House of Representatives

Portfolio: Infrastructure and Regional Development

Commencement: On Royal Assent

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose of the Bill

The purpose of the Civil Aviation Amendment (CASA Board) Bill 2014 is to amend the Civil Aviation Act 1988 to increase the number of members that can be appointed to the CASA Board and to make consequential amendments.[1]

Background

Civil Aviation and Safety Authority (CASA)

The regulation of civil aviation has a long history in Australia with control being the responsibility of a number of bodies over the years. The Civil Aviation and Safety Authority (CASA) was established as a statutory authority on 6 July 1995 and given the role of safety regulation and standard setting. When CASA was created, it resulted in the establishment of a tripartite structure controlling aviation in Australia at that time. The new structure involved CASA as the aviation safety regulator, with Airservices Australia as the service provider and a strengthened Bureau of Air Safety Investigation as the safety investigator. CASA was given the following responsibilities:

To enhance and promote the safety of civil aviation in the interests of the Australian public. CASA’s focus is to work with industry to reduce aviation safety risks, with the priority being protection of fare paying passengers. This is achieved through effective safety regulation and by encouraging a greater acceptance by industry of its obligation to maintain high safety standards.[2]

CASA Board

The Board of CASA is appointed by the Minister by written instrument.[3] Currently the Board consists of the Director of Aviation Safety (who is also the Chief Executive Officer of CASA) as an ex officio member and up to four Board members including the Chair and the Deputy Chair.[4]

The functions of the Board[5] are to:

•       decide the objectives, strategies and policies to be followed by CASA

•       ensure that CASA performs its functions in a proper, efficient and effective manner and

•       ensure that CASA complies with directions given by the Minister under section 12B of the Civil Aviation Act.[6]

Originally CASA was set up with a Board but in 2002 it was decided to abolish the Board as part of a suite of reforms. On 18 November 2002, the Minister for Transport and Regional Services stated:

Far reaching reforms to Civil Aviation Safety Authority (CASA) announced today will strengthen its accountability, improve consultation with industry and temper its ability to act as “judge, jury and executioner”, while maintaining its powers to take appropriate safety action.[7]

The Minister further noted:

The review of the structure and reporting arrangements for CASA was a key element of the aviation reform agenda that we announced in February this year…

I am pleased the Government has agreed to a series of bold measures ensuring CASA remains a robust, independent safety regulator but at the same time sees its accountability to Government and standing with industry strengthened.[8]

Civil Aviation Amendment Act 2003

The passing of the Civil Aviation Amendment Act 2003 saw the abolition of the CASA Board and the designation of the Director of Aviation Safety as the Chief Executive Officer of CASA.[9] The Minister was given powers to set policy and performance standards for CASA but remain at ‘arm’s length’ as far as day to day safety regulatory decisions were concerned. The Minister was also given powers to establish consultative mechanisms for industry and stakeholders.[10]

Civil Aviation Amendment Act 2009

The Civil Aviation Amendment Act 2009 restored the Board to CASA and implemented plans for the improvement of CASA’s governance arrangements generally, as recommended by the National Aviation Policy Green paper in 2008.[11] In respect of the CASA Board, the Policy proposed the following initiatives:

To strengthen the Civil Aviation Safety Authority (CASA) by:

·          retaining CASA as an independent statutory agency with responsibility for aviation safety regulation;

·          reinforcing CASA’s governance arrangements, including:

-         establishing a small expert CASA Board to guide the organisation and to recommend enhancements to CASA’s approach to regulation and surveillance of airlines;

-         boosting CASA’s capacity to plan and act strategically in response to growth and change in the global aviation industry, which will continue to carry risks for air safety and their management;

-         strengthening CASA’s capabilities in technical standards development and supporting an expanded surveillance program.[12]

The Explanatory Memorandum for the Civil Aviation Amendment Bill 2009 noted:

Since then, [that is 2003] a substantial amount of organisational reform has been undertaken within CASA, something acknowledged by the Senate Standing Committee on Rural and Regional Affairs and Transport in its 2008 report — Administration of the Civil Aviation Safety Authority (CASA) and related matters. The way CASA interacts with the aviation industry has also evolved. Importantly, this Bill implements one of the Senate Committee Report’s key recommendations— to introduce a small board of up to five members to provide enhanced oversight and strategic direction for CASA.

There is widespread support within industry for a new CASA Board that will assist the organisation to manage the implications of industry growth and other industry trends, such as low-cost carriers, and to facilitate effective interaction between the regulator and industry. There are technological and other changes taking place in the aviation sector that point to the need for governance arrangements that ensure that CASA is equipped to monitor and drive safety outcomes. The new Board is expected to facilitate better relations across agencies with safety responsibilities and also assist in the integration of industry and other related stakeholder inputs into strategy.[13]

The Explanatory Memorandum further notes that the Board was not intended to represent ‘sectional’ interests of the aviation industry but intended as a governance Board working for the overall safety benefit of the Australian community.[14] Reflecting this, subsection 54(3) of the Civil Aviation Act provides that when the Minister appoints persons to the Board, the Minister must ensure an appropriate balance of professional expertise but need not ensure that particular sectors of the civil aviation industry are represented.

Coalition’s Policy for Aviation 2013

In the Coalition’s policy document on aviation issued prior to the election in 2013, the Coalition foreshadowed it would seek to enhance the capability of Australia’s aviation safety regulator. The policy noted:

While boards in other agencies have been successful in setting and implementing the strategic direction of their agency, CASA’s board structure has been the subject of criticism.

The Coalition will maintain the CASA board structure, but will expand the board from four to six members, including some with aviation skills and experience. This expansion will increase the breadth of knowledge and experience on the CASA board and better equip it to set and implement the strategic direction of the organisation.[15]

CASA is governed by the Commonwealth Authorities and Companies Act 1997 (CAC Act).[16]

Commonwealth authorities are statutory corporations. They are established in legislation as bodies corporate. A Commonwealth authority must satisfy the three criteria set out in section 7 of the CAC Act, namely:

              (a) that it be established by legislation for a public purpose;

              (b) that it be a body corporate; and

              (c) that it hold money on its own account.

Commonwealth authorities are governed both by their separate enabling legislation and by the CAC Act. The CAC Act imposes a single set of core reporting and auditing requirements on directors of these entities and sets out standards of conduct for officers of Commonwealth authorities that are equivalent to those applied to officers of companies by the Corporations Act 2001.[17]

Committee consideration

Senate Standing Committee for the Scrutiny of Bills

At the time of writing this Digest, the Senate Scrutiny of Bills Committee had not commented on the Bill.

Parliamentary Joint Committee on Human Rights

At the time of writing this Digest, the Parliamentary Joint Committee had not commented on the Bill.

Financial implications

The Explanatory Memorandum notes that there is a low financial impact associated with the Bill. ‘An additional two Board members will require CASA to absorb an additional expenditure of approximately $160,000 per annum in annual remuneration fees and travel provisions’.[18] The figure of $160,000 is based on proposed remuneration fees from 1 March 2014 outlined in the Remuneration Tribunal’s 2013 report Remuneration of Public Offices: Part-time Offices.[19]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[20] The Government considers that the Bill is compatible with human rights and freedoms as it only engages, and does not limit, human rights and freedoms.[21]

Key issues and provisions

Schedule 1 — Amendments to Civil Aviation Act 1988

Section 52 of the Civil Aviation Act 1988 (CAA) deals with the membership of the Board of CASA. Currently the Board consists of the Director of Aviation Safety and up to four Board members. Item 1 amends paragraph 52(1)(b) to omit the reference to four Board members and substitute six Board members.

Section 64 of the CAA relates to times and places of Board meetings. Subsection 64(4) currently provides that the Chair must call a meeting if requested to do so in writing by at least two other Board members. Item 2 proposes to amend subsection 64(4) by omitting the reference to ‘two other Board members’ and substituting ‘three other Board members’.

Currently subsection 66(1) provides that at a meeting of the Board, a quorum is constituted by three Board members. Item 3 proposes to amend subsection 66(1) to increase the number to four Board members as constituting a quorum.

Concluding comments

The Bill proposes increasing the number of appointed CASA Board members to six, which together with the Director of Aviation Safety, will make seven members on the Board in total. The Government states that these additional Board members will possess the relevant technical and/or operational aviation experience to increase the depth of knowledge and skills on the Board.[22] This is designed to enhance the capability of the Board to set the strategic direction for CASA and air safety generally.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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[1].              Civil Aviation Act 1988, accessed 17 March 2014.

[2].              Civil Aviation Safety Authority, Annual report 1995–96, CASA, 1996, p. 5.

[3].              Civil Aviation Act 1988, section 54.

[4].              Civil Aviation Act 1988, section 52.

[5].              Civil Aviation Act 1988, section 53.

[6].              Under section 12B, the Minister may direct CASA to give documents and information to a nominee. A ministerial nominee is defined in section 12B and means a person whose responsibilities or duties include advising the Minister about CASA’s performance and strategies.

[7].              J Anderson (Minister for Transport and Regional Services), CASA reform, media release, 18 November 2002, accessed 18 March 2014.

[8].              Ibid.

[9].              Civil Aviation Amendment Act 2003, accessed 18 March 2014. The Bills Digest for the Civil Aviation Amendment Bill 2003 provides a discussion of CASA governance and management issues that led to the 2003 reforms: A Martyn and M James, Civil Aviation Amendment Bill 2003, Bills digest, 148, 2002–03, Parliamentary Library, Canberra, 2003, accessed 18 March 2014.

[10].              CASA reform, op. cit.

[11].              Civil Aviation Amendment Act 2009, accessed 18 March 2014.

[12].              Australian Government, National Aviation Policy: flight path to the future, Green paper, December 2008, p. 24, accessed 17 March 2014.

[13].              Explanatory Memorandum, Civil Aviation Amendment Bill 2009, p. 2, accessed 17 March 2014.

[14].              Ibid. The Bills Digest for the Civil Aviation Amendment Bill 2009 also provides some useful background information on CASA governance and aviation safety issues: M James and A Martyn, Civil Aviation Amendment Bill 2009, Bills digest, 102, 2008–09, Parliamentary Library, Canberra, 2009, accessed 18 March 2014.

[15].              Liberal Party of Australia, Coalition’s policy for aviation 2013, Coalition policy document, Election 2013, accessed 17 March 2014.

[16].              Commonwealth Authorities and Companies Act 1997, accessed 18 March 2014. See section 8 of the Civil Aviation Act 1988.

[17].              Department of Finance and Deregulation, Guide to the chart of bodies under the Commonwealth Authorities and Companies Act 1997 (CAC Act) 1 July 2010, accessed 18 March 2014.

[18].              Explanatory Memorandum, Civil Aviation Amendment (CASA Board) Bill 2014, p. 1, accessed 18 March 2014.

[19].              Remuneration Tribunal, Remuneration of public offices: part-time offices, October 2013, accessed 17 March 2014.

[20].              The Statement of Compatibility with Human Rights can be found at page 2 of the Explanatory Memorandum to the Bill.

[21].              Explanatory Memorandum, Civil Aviation Amendment (CASA Board) Bill 2014, op. cit., p. 2.

[22].              Ibid.