Chapter 2 - The Legislation
Background
2.1
The Airspace Bill 2006 and the Airspace (Consequentials and Other
Measures) Bill 2006 have been introduced as part of the Government's proposed reforms
to Australian airspace. These reforms were announced by the then Minister for
Transport and Regional Services, the Hon. Warren Truss, in a Ministerial
Statement released on 14 September 2006.
2.2
The Statement provided an outline of the Commonwealth Government's (the
Government) strategy in relation to airspace reform and confirmed its
commitment to completing the implementation of the National Airspace System
(NAS) and the NAS reform program. The Government has decided that each further
step of the NAS reform program will be reviewed and implemented through a
process that includes a safety risk assessment, a cost-benefit analysis and
further detailed consultation with the Australian aviation industry.[1]
2.3
Under current arrangements, Airservices Australia (Airservices) is the
agency responsible for air navigation services provided to aircraft in
Australian-administered airspace. In particular volumes of that airspace,
Airservices is also responsible for controlling the movement of aircraft to
reconcile safety, efficiency, national security, environmental protection and
equity of access for all airspace users.[2]
In certain circumstances, this task can also be performed by the Department of
Defence (Defence).[3]
2.4
Airservices also performs the function of airspace regulator and
currently makes decisions regarding the type and level of service to be
provided in particular levels of airspace and, as necessary, the appropriate
level of control it should exercise over the operation of aircraft in that
airspace.[4]
2.5
As part of its reform program, the Government has determined that it is
not appropriate for Airservices to continue to perform the service provision
role in addition to its regulatory role, particularly when decisions about the
designation of air routes and the classification of airspace could have a
profound impact on the costs borne by users.[5]
2.6
As a consequence, part of the broader strategy outlined in the Ministerial
Statement includes changes to the governance arrangements in relation to
airspace regulation, with the function of airspace regulation to be transferred
from Airservices to the Civil Aviation Safety Authority (CASA). The Government's
strategy also includes the establishment of the Office of Airspace Regulation
(OAR) as a separate unit within CASA which will administer Australian airspace.
The strategy also involves the employment of Defence personnel within the OAR in
an attempt to ensure that civil and defence administration of airspace is streamlined.
2.7
The Ministerial Statement identified three key legislative changes
required to bring the Government's airspace strategy into effect:
- the creation of the basis for CASA to become the airspace
regulator through legislation;
- the transfer of the regulation function from Airservices; and
- bringing CASA under the umbrella of the Public Service Act
1999 and the Financial Management and Accountability Act 1997.[6]
2.8
The first two of these legislative changes are covered by the Airspace
Bill 2006 and the Airspace (Consequentials and Other Measures) Bill 2006, with
the transfer of the existing airspace regulations from Airservices to CASA intended
to be completed by 1 July 2007.
2.9
The Government also proposes to introduce legislation to bring CASA
under the umbrella of the Public Service Act 1999 and the Financial
Management and Accountability Act 1997 later in 2007.
2.10
The legislation to establish CASA as the airspace administrator is
intended to provide mechanisms to manage the following key drivers of airspace
change:
- shifts in airspace usage;
- consultation with key stakeholders regarding future
implementation of the NAS;
- new developments in technology and their effect on airspace
efficiency and safety;
- global system requirements; and
- shifts in relations between civil and military use and
administration of airspace.[7]
Key issues
2.11
Evidence provided to the committee indicated a significant level of support
for the Government's proposed new regulatory structure. There appears to be
considerable support for the transfer of powers and responsibility for the
administration and regulation of Australian-administered airspace from
Airservices to CASA.[8]
Some organisations however expressed concerns about specific issues, and sought
clarification regarding some sections of the legislation.
Establishment of the Office of
Airspace Regulation within CASA
2.12
The Regional Aviation Association of Australia (RAAA) indicated support
for the transfer of responsibility for airspace regulation from Airservices to
CASA – describing the move as 'logical and appropriate'.[9]
At the same time, however, the RAAA voiced some concern about CASA's capacity
to fulfil its new role:
...in view of CASA's current resource management difficulties, the
RAAA is not entirely convinced of CASA's ability to perform its new regulatory
functions to the standard required.[10]
2.13
The Australian Sport Aviation Confederation (ASAC) also supported the
proposed regulatory structure, but expressed the concern that matters 'of
equity and efficiency did not lie easily with CASA as a regulator',[11]
and that:
Many in the industry believe that CASA should remain the safety
regulator, bound by the requirement to act on safety grounds only and not
become involved in the essentially commercial issues of efficiency and access.
This approach has been successful especially, but not limited to, such matters
as the classification of operations and the applications of AOCs [air operator's
certificate]. This concern, which limits CASA to consideration of safety
matters only, should not be changed where it applies to the current safety
regulatory functions carried out by CASA.[12]
2.14
Qantas Airways Ltd (Qantas) also welcomed the transfer of responsibility
from Airservices to CASA, and argued that the bill and its associated
instruments and processes 'present a unique opportunity to lay a strong
foundation for the future policy, regulation and administration of Australian
airspace',[13]
and would have a number of positive results including:
- streamlining of processes which currently involve regulation by
three bodies (CASA, Airservices and DOTARS);
- consistency of regulation; and
- separation of policy making, commercial service and regulatory
functions.[14]
2.15
The Australian Airports Association Limited (AAA) told the committee
that they saw benefits in the separation of tasks, with Airservices providing
the service rather than being both regulator and operator. The AAA argued that
the establishment of the OAR, operating under the oversight of the Chief
Executive Officer (CEO) of CASA would:
... strengthen Australia's planning and administration of airspace
and negate any perceptions of a conflict of interest between Airservices in its
role as both a commercial air navigation service provider and regulator at that
level.[15]
2.16
During the public hearing, the committee questioned the AAA on the emphasis
being placed on independence. Mr Ken Keech, CEO of the AAA, told the committee that:
You do not want too many fingers in the pie. CASA is a large
organisation and if it can operate within the confines of CASA independently,
so that there is no day-to-day, if you like, intrusion from other CASA people
or CASA activities, it ought to get on with the job of regulating airspace.[16]
2.17
The committee sought an understanding of how CASA's new responsibilities
in relation to the management of airspace would sit with its existing
responsibilities in relation to air safety.
2.18
Departmental officers explained that CASA's overriding obligation to
safety is set out in section 9A of the Civil Aviation Act 1988. In
particular, subsection 9A(1) requires that, in exercising its powers and
performing its functions, CASA must regard the safety of air navigation as the
most important consideration.[17]
2.19
The amendment proposed in Item 2 of the Airspace (Consequentials and
Other Measures) Bill 2006 requires that, subject to subsection 9A(1), CASA is
to perform its functions in a manner consistent with the AAPS.
2.20
Mr Mrdak told the Committee that:
... this legislation now makes airspace regulation one of CASA's
functions, which it previously was not. But there is no change to section
9A(1). That has been in the CASA legislation and has always been CASA's
overriding requirement.[18]
Airspace Regulations
2.21
Qantas qualified its support for the establishment of the OAR by adding
that in order for the 'framework to function effectively, a number of aspects
will require further clarification and attention'.[19]
The committee notes in this context that the regulations provided for in clause
11 of the Airspace bill, which will provide for and confer CASA's functions and
powers in relation to the administration and regulation of airspace, are yet to
be made. The EM to the Airspace bill states, at paragraph 16, that 'it is
likely that the majority of these regulations will be in similar terms to the
regulations currently contained in Air Services Regulations Part 2'[20].
2.22
The committee notes that subclause 11(8) provides that:
Regulations made for the purposes of subsection (1) may make
provision for and in relation to CASA delegating functions or powers to another
person.[21]
2.23
The committee expressed concern at the apparently wide delegation power
conferred under subclause 11(8) and sought clarification regarding the possible
interpretation of this provision. Mr Mrdak, Deputy Secretary, DOTARS, referred
the committee to paragraph 26 of the explanatory memorandum which states:
This delegation is most likely when decisions are required in
the management of Australian-administered airspace. For example, this could
occur with respect to the designation and conditions of use of an air route or
airway, and the giving of directions in connection with the use or operation of
designated routes and airways.[22]
2.24
While the committee appreciated the intention of subclause 11(8), it remained
concerned that the subclause conferred the power to delegate a very wide range
of powers to anyone who fits the all-embracing description of 'a person'. The
committee asked the Department to ascertain whether it would be possible to be
more specific with regard to the range of powers which could be delegated and
to whom they might be delegated.[23]
2.25
The Department responded in writing following the hearing that:
Subsection 11(1) specifies that regulations may be made that
make provision for and in relation to conferring powers and functions on CASA
that are in connection with the administration and regulation of
Australian-administered airspace. Any powers or functions that may become
delegable under the Airspace Regulations will therefore be specific to the
administration and regulation of Australian-administered airspace.
As examples, the Explanatory Memorandum notes that powers will
need to be delegated by regulation from CASA in relation to the designation of
air routes and airways, the conditions of use of a designated air route or
airway, and the giving of directions in connection with the use or operation of
a designated air route, airway. In practice, it is likely that regulations will
be made which delegate these functions to Air Services Australia.[24]
2.26
The Department's response also stated that 'if particular regulations in
the Airspace Regulations make provision for a power to delegate a specific
regulatory function, they will be subject to Parliamentary scrutiny and potentially
disallowance'.[25]
Australian Airspace Policy
Statement
2.27
The requirement for the Minister to make an AAPS was seen as a positive
development by submitters.[26]
In particular, the Australian and International Pilots Association (AIPA) stated
that:
... the requirement for an Australian Airspace Policy Statement
under section 8 of the Airspace Bill 2006 will provide much needed
vision for airspace administration and regulation. This is in stark contrast to
the previous two imposed iterations of airspace reform, in which a vacuum
created by the lack of such strategic direction from Government was exploited
in order to push personal, non-consensus agendas.[27]
2.28
However, the committee noted that the legislation does not set a
deadline for the completion of the AAPS and questioned Departmental officers
about the absence of a finite time frame for the AAPS.
2.29
Departmental representatives acknowledged the AAPS as being a critical
document and indicated that an interim AAPS was currently being developed by
the Department, in consultation with Airservices, CASA and Defence. The
committee was told that the draft Statement would be subject to industry
consultation as an interim and would be available for the Minister to consider
issuing before 1 July 2007.
2.30
The committee was particularly concerned regarding the impact on CASA's
ability to take on its new regulatory responsibilities in the event that the
AAPS was not issued prior to the commencement of the Airspace bill.
Senator O'Brien – So, despite any
implementation date of the legislation, CASA cannot take on that responsibility
until the minister makes that statement. Is that what you are saying?
Mr Mrdak – It can certainly take on
the responsibility because it has the statutory responsibility for airspace
from that point, but the airspace policy statement is one of the key factors
which CASA must have regard to in its decisions and its operations on airspace.
Senator O'Brien – So, if the Minister does
not meet that time line, what happens?
Mr Mrdak – CASA would still assume
the role of airspace regulator under the legislation without the guidance of
the policy statement. But our intention is that there will be a policy
statement by 1 July, although effectively it will be an interim one, pending a
more detailed policy statement being developed in consultation with the
industry.
Senator O'Brien – I am just curious that
there is no time line in the legislation. It just says the Minister must make a
statement, the Australian airspace policy statement. I am not sure how you
enforce a requirement that does not have a time line.
Mr Mrdak – I think much of the
effectiveness of the regime we are putting in place is around the guidance
provided by the policy statement. So we have always worked on the assumption
that there will be a policy statement in effective by the time the legislation
takes effect.
Senator O'Brien – ... But, if for some reason
that did not happen, I just want to understand what the meaning of the
legislation is. I think you are telling us that CASA would assume that responsibility
without the ministerial guidance.
Mr Mrdak – That is right.[28]
2.31
The committee also noted that the timely completion of the AAPS is
critical to CASA's ability to establish and staff the OAR. The central
importance of the AAPS was highlighted during questioning regarding budget
considerations and resource allocated for the OAR. In response to a question
regarding proposed resources for the OAR, Mr Bruce Byron, CEO of CASA, told the
committee that while CASA had a 'rough understanding of the number of people we
need, ... we need to see the government's airspace plan to get a full
understanding of what we need to do to start with.'[29]
Consultation
2.32
The committee received evidence about the need for the Minister to
consult widely with the aviation industry on the development of the AAPS and
prior to any further implementation of the NAS.
2.33
The RAAA stressed the importance of the requirement for the Minister to
consult with both Airservices and CASA prior to making the AAPS and added that
it 'would like to think that those bodies would also consult with Industry
prior to giving advice to the Minister'.[30]
2.34
The Royal Federation of Aero Clubs of Australia (RFACA) also raised the
issue of consultation with industry, and argued that clause 9:
... needs to be amended to require the Minister to consult with
the Aviation Industry before formulating the Airspace policy Statement [sic].
As the industry is the sector that will have to work in the airspace, its views
must be ascertained and taken into account. Lack of consultation, or
consultation with noisy but unrepresentative sections of the industry lead only
to bad policy that will not be accepted and will not work.[31]
2.35
Qantas noted that any 'consultation involving parties other than CASA
and Airservices is at the Minister's discretion'[32]
and stressed the need to develop a formal framework for interaction between
stakeholders and argued that:
Such a framework, which we assume would be led by CASA, would
serve as the basis for a balanced decision-making process. Provision for a
dispute resolution or arbitration mechanism, possibly with the services of an
independent expert, may also be appropriate.[33]
...
While there is no existing group under current arrangements that
could fulfil this role, the current Standards Consultative Committee (SCC) appears
to provide a successful model in terms of industry participation, extensive
consultation and producing relevant outcomes.[34]
Dispute resolution
2.36
Several submitters argued that in addition to the need for a formal
consultation process, there is also a need for the legislation to include a
mechanism for dispute resolution.
2.37
The AIPA stated that:
AIPA's preference for resolving disputes on airspace
classification involves having a default or benchmark airspace classification
with the least regulation and procedural requirements (i.e. Class G) and then
adjusting this minimum classification when risk levels and operational
priorities have been demonstrated to require it. AIPA highlights however, that
the change management process determining risk and prioritising operations must
be clearly defined within the proposed Airspace Policy Statement.[35]
2.38
The RAAA also argued that the Airspace bill lacks a formal procedure for
resolving any conflict which may arise between the Minister's view and the
views of the major stakeholders – including CASA, Airservices and industry –
particularly in relation to matters of safety. The RAAA suggested that:
Such a procedure must be formalised, inexpensive and transparent
if we are to prevent the possibility of a repetition of the National Airspace
System debacle of recent years.[36]
Cost recovery
2.39
The committee received evidence which raised concerns about the issue of
cost recovery and the potential impact on industry.[37]
2.40
The Aviation Safety Foundation Australasia (ASFA) asked the committee to
accept that 'airspace regulation will, once the Bill becomes law, be managed by
CASA, in conjunction with the Department of Defence, in the national interest'[38],
and that:
As such, the proposed recovery costs of CASA performing the
airspace regulation and administration should only be partially recovered from
the civil aviation industry. As the proposed Airspace Bill 2006 is predicated
on safety of air navigation being the most important consideration, then a risk
assessment on the impost of any charges on industry should become an integral
part of the decision making process.[39]
2.41
Recreational Aviation Australia (RAA) also supported the partial
recovery of the costs of airspace regulation and administration from the civil
aviation industry. However, RAA argue 'that for VFR [visual flight rules]
operations outside controlled airspace the status quo should remain with no
cost impost on those operations'.[40]
2.42
The RFACA also expressed concern that the changes to airspace
administration may result in extra charges going through to Airservices, an
increase in air navigation charges and higher costs to the industry.[41]
2.43
In evidence, Mr Mike Mrdak, Deputy Secretary of DOTARS gave the
committee an overview of the budget arrangements being put in place for the
establishment of the OAR. Mr Mrdak indicated that:
- the government has made $2 million available to CASA this
financial year for the establishment of the OAR;
- the $2 million is being budget funded and will not be a direct
cost to the industry and will allow the OAR to be established and staff trained
by 1 July 2007;
- funding of the OAR beyond 1 July 2007 will be done through a
resourcing agreement between CASA and Airservices for at least the first three
years (subject to a review);
- it is intended that CASA's costs in operating the OAR will be
recovered from Airservices ; and
- the Government has allocated $4.2 million to DOTARS in the
forward estimates for 2007-08 (for the development of the Airspace Policy
Statement and for its ongoing policy role in relation to airspace).[42]
Committee comment
2.44
The committee has considered the provisions of the Airspace Bill 2006
and the Airspace (Consequentials and Other Measures) Bill 2006 and acknowledges
that these bills have been introduced as part of the Government's ongoing reforms
to the regulation of Australian airspace.
2.45
The committee's inquiry has highlighted the significance of the
Minister's Australian Airspace Policy Statement (AAPS) in providing policy
guidance to CASA in the exercise of its functions and powers in relation to
airspace regulation. The committee notes that processes are in train to develop
an interim AAPS and that there is an expectation that the Minister will make
this interim AAPS by 1 July 2007. The committee also notes that there is an
expectation that this interim statement will be reviewed and replaced by a more
detailed AAPS after 1 July 2007.
2.46
The Committee is of the opinion that the timely release of the AAPS is
central to the smooth transfer of the function of airspace regulation from
Airservices Australia to the Civil Aviation Safety Authority. While noting the
expectation that an interim statement will be in place at the point that the
responsibility for management of Australian airspace is transferred from
Airservices to CASA, the committee also believes it is desirable that the
Parliament and the Australian aviation industry have some confidence that this
will be the case. The committee therefore recommends that the Airspace bill be
amended to provide that the Minister must make the AAPS within a specified
timeframe. The committee notes that subclause 8(5) of the bill provides that
the AAPS will be a legislative instrument and must be tabled as required by the
Legislative Instruments Act 2003, but it is not disallowable and is not
sun-settable. In addition to this tabling requirement, the committee considers
it highly desirable that the statement be published in a readily accessible
form.
2.47
The committee's inquiry has also highlighted the importance of consultation
with key stakeholders in the development of the AAPS. The Committee notes that
in announcing these reforms, Minister Truss acknowledged that regardless of
individual views regarding the NAS reforms, industry was keen to be involved in
the policy development process and that this would require 'more genuine
consultation on future reforms'.[43]
2.48
The Minister also stated that
future reforms will be subject to the results of closer consultation with
stakeholders and take account of the impact of upcoming technological
developments, adding that:
The application of better analysis and consultation should
reduce unproductive controversy. Better analysis and consultation on reforms
may ultimately see future reforms put in place sooner than otherwise.[44]
2.49
The committee considers that this commitment to industry consultation
would be given more effective legislative expression if the Airspace bill were amended
to require the Minister to consult with the Australian aviation industry,
rather than to leave this to Ministerial discretion.
2.50
The committee remains concerned at the apparent breadth of the
delegation power conferred under subclause 11(8) of the Airspace bill and
recommends that limits be set in relation to the types of powers that may be
delegated and the categories of people to whom these powers may be delegated.
Recommendation 1
2.51
The Committee recommends that clause 8 of the Airspace Bill 2006 be
amended to require that a statement made under subclause 8(1) must be made not
later than 1 July 2007 and that such a statement must be published in a readily
accessible form in addition to the tabling requirements which apply pursuant to
subclause 8(5) of the bill.
Recommendation 2
2.52
The Committee recommends that subclause 9(1) of the Airspace Bill 2006
be amended to require the Minister to consult with key representatives of the
Australian aviation industry, as selected by the Minister, before making the
Australian Airspace Policy Statement.
Recommendation 3
2.53
The Committee recommends that subclause 11(8) of the Airspace Bill 2006
be amended to either specify the range of powers and functions which can be
delegated or the category of person to whom such powers and functions can be
delegated.
Recommendation 4
2.54
The committee recommends that, subject to the preceding recommendations,
the Senate pass the Airspace Bill 2006 and the Airspace (Consequentials and
Other Measures) Bill 2006.
Senator the Hon.
Bill Heffernan
Chair
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