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Question

Just on the issue of Ansett and the maintenance problems that arose late last year and early this year, with the audit coming up next month, has CASA uncovered any more problems since those detailed in late January and could you just, sort of, lead us through how thorough the audit is going to be on Ansett and what will actually take place?

Mick Toller

The - it's probably not appropriate for me to talk in detail of what we're finding out in investigation at this stage. As you go through investigation, you think you are discovering facts and you discover later that there are mitigating circumstances, or that they were incorrect, and lots of things like this. So I'm always very reluctant to jump to conclusions mid-way through any investigation. The audit that we're conducting in early March will be focusing on the issues that have been identified to date in our investigation of Ansett. They will be looking at a number of issues including the management systems of Ansett, and I don't need to tell you from the news that has been coming out over the last few days that the system is changing in terms of their whole management structure. So Ansett is, at this stage, in a period of change. There is always risk during a period of change. We'll be looking very closely at how they are managing that risk. We'll be looking at the systems that they've put in place to manage that risk. We'll be looking at the weak spots that have become evident - and clearly document control is one of those: how can you let this document that comes into the airline on a number of occasions in a number of forums, that doesn't get acted on - and we'll put all of those together, plus as we do with any audit, because this is an extension of a scheduled audit but it's obviously been in much greater depth anything else that we might find at the time.

Question

Your three-year term is up in June. I understand you're seeking a renewal of that contract. You, yourself, have personally copped a bit of flack for various things that have gone on in the media. Do you think you deserve another term and, more importantly, do you think John Anderson is going to let you have one?

Mick Toller

I'm not sure whether it is appropriate for me to answer that one. I noticed in the Canberra Times on Tuesday that some comments that I made and estimates in response to a question there about the process of my position were, sort of, put in a way that suggested I actually didn't know what was going on. The first thing you have to ask yourself is: am I the right person for the job? The second thing you have to ask yourself is: do I want the job? And the third thing you have to ask is: will somebody allow you to have the job? I think it is - it's not inappropriate for me to say that despite, as you say, the personal flack that one does tend to get, I believe that the progress we've made in the two and a half, 2.2 years and eight months that I've been in the job has been very significant; that I have always said that a major cultural change in an organization such as the one that CASA is undertaking is a five to seven year job and, therefore, if I'm going to vote with my mouth again I would be saying 'Yes, please, I would like to continue in the job'. I think it's probably also not inappropriate to say that I enjoy the very firm strong support of the board; and, to the best of my knowledge, because he has never told me anything differently, of the Minister; and - but the final decision is a board decision. The board has made a recommendation to the minister. The Minister then is the person who appoints the Director of Aviation Safety and a letter will be going across to his office very shortly with a recommendation

Question

Do you know what that recommendation is? Is it you?

Mick Toller

Can you read between the lines?

Question

There was some reference in the Senate estimates yesterday to up to $60 million possibly being spent on a makeover of your business practices. Would you like to talk a bit about that and also explain where the $60 million is coming and were why you aren't spending it on things like surveillance officers, and so on.

Mick Toller

Thank you. That's a good question: it's not a Dorothy Dix but it's a great opportunity to talk to something that is very dear to my heart. As you probably all know, I come from 30-plus years in the private sector into the public sector. When you do that you come across things that you say: 'Why on earth do we do it that way?'. So it's a natural part of the process of a chief executive to turn around and say: 'How should we doing business? How are we going to best utilize the resources that we've got?'. On top of that we have a major program being undertaken at this stage to rewrite the regulations in this country, the aviation regulations. That's one task and it's a major task. But there's a second task that's generally, up until now, been overlooked, which is the cost of implementation of those regulations. What do you have to do to implement regulations successfully? The answer to that is very broad and goes right across the whole organisation. It's about - initially, shall we say, it's about providing all the support material for the regulations. It's about ensuring that your staff are trained. It's about ensuring that the industry are well trained. It's about, to a certain extent, education. It's also, to a certain extent, about marketing, about selling the concepts behind the regulations, and on top of all of that, and probably most important in all of that, is the issue of systems, of the computer tools that you have got to make that job an easy job. Now, CASA certainly inherited in 1995 from the CAA computer systems that, by today's standards, are pretty antiquated. We need to replace the whole of those computer systems. That is a vital part of what we're doing. If you go to replace all your computer systems, make sure that they line up with your business practices because otherwise you've got a load of computers which are useless and a load of business practices which are not supported. So what we've undertaken has been a total review of the authority. Up until now we've looked at the six major processes that we do. We're just about to embark on part 2 which was looking at the rest of the processes that we do. We're looking at quick fixes. We're looking at ways in which we can make life both easier for us and for the industry, and that's important. And we're looking at putting all of that together. That has been described as a $63 million project. It was described by that - as that by the consultants who were given a clean sheet of paper and effectively came up with their wish list. CASA does not have that sort of money and we recognize it. Equally, that money includes internal funding. That includes the cost of the people that work for the authority in going through the process of putting in place all of the new systems and the new processes. We have a surplus at the moment in the bank. That surplus has been deliberately set aside for new computer systems and that's a natural and sensible part of business planning; and on top of that we believe that we will require additional staff during the period of the implementation of the new regulations. It gets pretty frightening when you look at the numbers because there is one particular week within the consultant's plan which says that I need 126 additional people that week. But fortunately I don't have to rush out and find 126 people to work for me for one week: you can smooth these things over and we end up with a situation which is more much sensible. We've got contingency plans in terms of what happens if we're unable to fund it. But my view is that, certainly for the work that's done so far and the planning process which is the part that's now approved by the board, we can internally fund that without any problems at all; and the issue of future budget provision is something that we will be looking at in the future years when we discuss our budget for those years. It's certainly not a particularly difficult task but it's also, to me, an absolutely vital task for our future as an authority.

Question

Apart from the quite excellent competency based standards which CASA has developed in flight training, can you say what specific steps the organisation is taking to reverse the deterioration in the average output of the flying training industry by restoring its own ability to continually assess, monitor and quality control that output.

Mick Toller

Okay thanks, Paul: again, not a Dorothy Dix but recruitment ... is one of my hobby horses. For those of you who didn't quite understand where Paul is bringing his question from, there is certainly some evidence that standards have been going down within the industry at the training level. It is important that we do something to fix that. It is strongly on the agenda of, certainly the minister has been putting his focus and he is very supportive of what we're doing, it is very much in the board's focus and it's very much in the focus of the Aviation Safety Forum which is a body of industry people who are there as the strategic advisers, if you like, to the board. The reasons for it are many and I think it's not - probably best not to go into the history rather to work out what are we going to do about the future and the future is about improving standards. Now, as Paul said, we've introduced something called competency based standards. In the old days you did a certain number of flying hours, and then you went up for a test and as long as you passed that test you were okay. You might just have been good on the day. You might have picked a particular tester who happened to have something of a reputation as an easy touch, shall we say. So that suggests that one of the first places we have to look is at the quality of our testers, and we've done that through a working group which has put forward some recommendations which will lead to a situation whereby those delegates - we're back into this issue of delegating to industry again because I can't actually go out and test everybody - those delegates who do it for us will have to go through a specific course so that we can end up with a standardised quality of tester and that they will be given - their authority is for a period of time; they will be reviewed over that period of time; and they will have to have maintained a particular standard and equality of product from their tests over that period of time. I believe that means we will have less testing officers in Australia than we have at the moment but we'll certainly have a much higher quality. The other thing that we're looking at is the qualifications that are required to become a flying instructor and there's an interesting cascade that exists within the aviation industry which basically says that if Qantas sneezes, then the bottom end of the small charter market gets pneumonia. What that's about is that if Qantas are bringing in pilots, they bring them in from the regional airlines. The regional airlines now have to get more pilots; they bring them from the small, low capacity, regular public transport scheduled airlines. They get theirs from the charter airlines and they get theirs from somewhere else, and all that you end up with is the young people, who come into the industry at the bottom, are aspiring for one thing: they wanted to work for Qantas. They want to work for Ansett. We've got to get to a situation where being a flying instructor is a desired part of the industry for young people as they come in. We've also got to ensure that you don't end up with a situation where you can't get a job in - well, Kununurra is usually the first place they try, or Darwin or up the coast to Cairns - and if they can't get a job they go off and get a flying instructor's course and become flying instructors. So there's a situation that can exist where you get - each generation has its lowest experienced people teaching the next generation. Now, there are safeguards in that because there are three levels of instructors. The top levels are people who have been in the industry for a long time with much experience; but it's still a situation where we need to look and say 'What should be the requirements for instructors in the first place?' and my belief is that that's something that we've got to look at very closely. I also believe that we may be reaching a situation where we recognize that if you want to fly for Qantas or you want to fly for Ansett, that's a very different job from if you want to be a flying instructor or an RFDS pilot or something like this, and the training has to be different. I believe that Qantas and Ansett pilots need to be trained in flying very highly sophisticated, nowadays, very highly computerised two-crew two-pilot aircraft, and that's what they're going to be doing from the word go. But what they're taught to do at the moment is fly a small nine-seater aircraft as a single pilot and, therefore, they've been taught the wrong things for the job they're going to end up in. I think the focus from the big airlines should be on setting up schemes - and many other airlines throughout the world do it and British Airways has long been one of the biggest proponents of this - schemes whereby they train their own pilots to the standards they require in the skills that are needed for flying large airlines around as opposed to flying small aircraft around.

Question

You mentioned in your speech your strong individual critics and so I was wondering whether you could provide us with a frank assessment of whether Dick Smith is a help or a hindrance to the cause of aviation safety.

Mick Toller

I'm not sure I actually had Dick in mind when I said that, believe it or not. I work with Dick Smith. Dick Smith - I didn't know him before I came to CASA. Dick Smith is an absolutely charming man and a great Australian. Despite those who would claim otherwise, he is also very, very knowledgeable about aviation. And he has been described as a - as an enthusiastic amateur. I think that undersells him significantly. I think it 's probably safe to say that I agree with all a good 80% of the things that Dick Smith has said and wanted, and I think it is also true to say that probably the only way in which Dick differs from my approach is how you implement it. Dick is so enthusiastic. He wants to get things done yesterday and he can see the vision of how they're done and he goes so fast that the rest of us, unfortunately, tend to get left behind. I'm all for the sorts of changes that Dick has always been saying that aviation in Australia needs, but go back to what I said in my speech, I'm about doing it in a measured way. I think the end result in 10 to 20 years will not be any different. I think it's just a question of how you do it, and how you bring along the industry with you to support those changes.

Question

My question alludes to the bit in speech where you mentioned the ability of CASA to cancel a certificate or, for that matter, a licence or an engineer's or pilot's licence would have a dramatic effect upon its business or career. Can I put this to you: supposing you receive a letter in the mail from the ACT Police saying that they had reason - reason to believe that you had been speeding at something - some unreasonable speed down Parkes Way and that unless you could show cause why not, your licence would be summarily cancelled - no court appearance, no evidence, no accuser, no chance of cross-examination. You might regard that, as many people here might, as being unreasonable. Nevertheless, that's exactly the situation that exists under CAR - Civil Aviation Regulation No.269 where exactly this can happen: something can appear in the mail, show cause why your licence shouldn't be cancelled or whatever and, if you don't, it will be cancelled. The only appeal you've got is to go to the Administrative Appeals Tribunal, some months later probably, and be confronted by QCs hired by CASA at thousands of dollars of taxpayers' expense, and be expected to try and fight for your licence back. Do you believe that this is at least an abuse of administrative process, if not a denial of the basic tenets of natural justice and administrative law? If you do, what steps will you take to repeal this - this regulation? If, on the other hand, you believe that it's reasonable, why do you think it's reasonable and do you - do you believe that this is the reasonable why comment in the press, for instance, in a respected magazine this month, in the editorial comment, that a state of war exists between the industry and your organization. And that wasn't a Dorothy Dixer.

Mick Toller

No, it wasn't a Dorothy - it didn't feel like a Dorothy Dix, either I have to tell you. For a start, you have to accept that we are, as an authority, working within the act and the regulations which parliament has given us. We are a servant of the government. We have a responsibility towards the travelling public and we take that responsibility very seriously indeed. We do not go around pulling people's certificates for the fun of it. We don't do it very often. As I say, if we do it twice or three times a year, I would be surprised. I would only condone the removal of a certificate when we have strong evidence that there is an immediate threat to safety. Now, that's a very strong statement. If not, I go back to what we were talking earlier about, you know, what I describe as the bottom figures. We have an element of the industry out there who do not have - and to use a famous Dick Smith expression, but it is a good one - do not have the right safety ethos. They're just not keen on doing it: they want to cut corners. Now, those people we have to deal with. If we were to go through, as some people have suggested, the sorts of processes that you have discussed whereby we investigate, find the evidence, give the evidence to the Director of Public Prosecutions and wait for a decision from the Director of Public Prosecutions, who may or may not then take the matter to court, we're talking about a period of time that is often unacceptable in safety terms: one or two years in many cases. You may also then get an outcome that is not appropriate. And there was one particular airline which had a crash in the last decade where the owner eventually got taken to court and, effectively, he was told not to be a naughty boy and fined a very small amount of money. So it's a question of what is the appropriateness of the tools you have got. We give a 28 day show cause if we believe that action should be taken. Now, that gives people plenty of time - 28 days - to come back and tell us why we're wrong. Very rarely do they approach it in that way because very rarely are we wrong. We tell them why they're wrong in the 28 day show cause. Now, if I go back to another part of my speech, I talked in that about the voluntary undertakings which would be enforceable. Now, I see that as being the sort of tool that we can use in exactly the sort of circumstances that you are talking about because I need something in there which is between taking somebody on one side and really, you know, giving them the strong lecture and writing down, which is a form of counselling, and the 28 day notice which says 'In 28 days you may well be out of business unless you can prove to us that our facts are wrong'. There are so many - there is so much flexibility within that voluntary enforcement undertaking scheme which will allow - (a) it is voluntary; (b) once you've agreed to it, you've got to stick with it; but it allows us all sorts of measures from something just a little bit more serious than the form of counselling like, you know, go and train these, these people and do this and this by such and such a time, right up to a situation where we may be saying 'You, as the owner of this organization or you, as the chief pilot, are clearly dragging this organization down. We want an undertaking from you, if this business is to continue, that you go hands off because you are the reason why this organization is not working'. It is a tool which requires significant control. It's one that needs to be well documented in process so that it cannot be misused. It needs to be one that is used effectively centrally by only very senior people. But when I said earlier that I believe that it is one that industry will welcome, I mean that because it does give them the ability not to get zapped by this horrible 28 day letter or, even worse, if there is a serious safety issue, by that you are out of business.

Question

Obviously CASA needs to compare itself with other aviation watchdogs around the world. In your speech you've also compared the aviation safety record in Australia with the number people killed each year in small boat accidents. If I can be blunt: so what? Some people would say: well, what's small boats got to do with aviation? It is a totally different industry. It is not comparing apples with apples. What I really wanted to ask is: does CASA run the risk of comparing itself with other aviation authorities, is the wrong way to do it because they may actually be getting worse and worse and worse, which makes CASA look like it's getting relatively better and better and better. How do you avoid that happening?

Mick Toller

Well, I think the important thing there is that we're always looking for what's is always known as world's best practice. So we talk to our other regulatory authorities. We have particularly close contacts with the New Zealand CAA because we have certain agreements on a single aviation market and they also have a very similar environment. We have very close contacts too with the Canadians, with the FAA in the United States, and with individual authorities in Europe and, in particular, with the UK CAA. In doing that, we're always asking them what they're doing; they're always asking us what we're doing. There'll be times when we're setting off on a project which they see as being world leading and they keep a very close eye on. Similarly, there are occasions when the reverse is true and we see that something is happening, say in New Zealand, and we think it's a good way to go and that we'll work together with the New Zealanders. It's a strong camaraderie of people who have got basically the same problems and generally tend to approach those problems in the same way and, if they don't, you want to know why they are doing it differently. Is it better than what we're doing it or is it worse than what we're doing it? And that's a very vital part of being part of the international aviation scene. Aviation is probably the world's most global industry, almost by definition' by definition of the fact that, you know, Qantas will be, as we speak now, sort of , I'm trying to work out what time of the day it is - but they'll be approaching about five different ports in Europe and about, Los Angeles and they're all over the place. It's totally global. Into Australia we get a magnitude of international airlines. We all have to work together to maintain a safe global aviation industry as well as a safe Australian aviation industry.

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