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CASA Annual Report 2003 04 From the Chief Executive Officer

From the Chief Executive Officer

I am pleased to present the Civil Aviation Safety Authority’s Annual Report for 2003–04.

This is the first Annual Report that I have presented as Chief Executive Officer and Director of Aviation Safety. The report covers the period of my appointment, the Board under the chairmanship of Mr Edward Anson AM, and the previous Director of Aviation Safety, Mr Mick Toller. I have passed my thanks to Mr Anson and Mr Toller for the work they and the members of the then CASA Board undertook in the interests of aviation safety, prior to my commencement.

In terms of CASA’s performance during 2003–04 I am pleased to report that this has been another year of solid achievement with a key focus on meeting the core goals that I have set as Chief Executive Officer and those set by the Minister for Transport and Regional Services in his Charter Letter of November 2003.

CASA began a new phase in October 2003 with the passage of legislation changing our corporate governance arrangements. Under previous governance arrangements, the Board set CASA’s strategic policies and directions and reported to the Minister for Transport and Regional Services. Under the revised arrangements I am accountable for determining CASA’s strategic policies and directions and I report directly to the Minister.

As part of these revised arrangements, Bruce Gemmell, the Deputy CEO, performs the role of Chief Operating Officer charged with the functional responsibility for managing CASA’s day-to-day business, and I have created the Office of the Chief Executive Officer to provide the necessary strategic support. The role of Chief Financial Controller has been separated from our operational areas and, as has been the case with the Risk Manager, now reports directly to me.

In addition to these structural changes, to ensure that resources across CASA are allocated and organised to effectively enable CASA to meet its obligations under the Act, and its current and future challenges, I commenced, upon my appointment, an establishment review. This review is aimed at gaining solid understanding of the complexity of CASA’s core business, what individuals and groups do and what drives work demands on them. I expect to complete this review and any structural changes that may flow from it, by the end of 2005.

Despite the breadth of change that CASA is facing, it has been a productive year as we have focused on CASA’s core safety responsibilities.

Safe skies for all says simply and powerfully what CASA is about, but there are different ways in which we can realise that vision. This year’s changes, including a new Charter Letter from the Minister, and my requirement to focus on our core safety functions, have prompted some modification of our approach to safety.

In his Charter Letter, the Minister asked that CASA strive to be a ‘world-class regulator’. In turn, CASA is setting out to achieve ‘the greatest possible safety outcomes while leaving the smallest possible regulatory footprint’.

We see the way ahead as a willing partnership in safety between CASA and members of the aviation industry who, at the end of the day, have the duty of care to deliver operational safety. However, we recognise that we have some work to do on managing our relationships to produce effective partnerships.

CASA has gone from criticisms of cronyism and institutional timidity in the mid-1990s to more recent criticisms of being over-zealous with the industry. Given my experiences since joining CASA as its inaugural Chief Executive Officer, I firmly believe this is not true. In some sectors of the industry, however, there are ingrained perceptions that affect our day-to-day relationships.

The proper distance that CASA has put between the regulator and the regulated may have become construed as remoteness. This behaviour is not something CASA can fix by announcement. And we have to find a sure footing for our relationship with industry that preserves the confidence of all CASA’s stakeholders. In my view that will be best done by ensuring that all our core activities ensure that industry assumes its safety responsibilities.

The Minister has clearly outlined his vision for how CASA should be perceived as the Australian aviation safety regulator. The Charter Letter summarises his view that:

A good regulator will exhibit specific behavioural attributes and these can best be summarised as follows. A good regulator will communicate and consult extensively with stakeholders. Its decisions will be consistent and predictable, based on transparent processes. A good regulator will demonstrate fairness, good judgement, and be flexible and responsive to the changing environment in which the aviation industry operates. It will be effective, efficient and timely in its operations and it will be accountable for its actions. In the provision of regulatory services CASA must provide a high level of client service and treat clients with consideration and courtesy. Finally, it will be independent, enforcing civil aviation regulations, as it deems appropriate, while bearing in mind these expected standards of behaviour.

Above all a good regulator should command the trust and respect of those it regulates. It should act as a facilitator for those who are genuinely trying to do the right thing while retaining the ability to act swiftly and decisively against those who deliberately flout aviation safety regulations.

This year, a number of important steps were taken to put CASA and the industry on a new path. Perhaps the most important was the introduction in February of new legislative provisions. These provisions give CASA a more balanced set of enforcement measures while opening up CASA’s decisions to closer scrutiny.

Enforceable voluntary undertakings have joined the administrative fines introduced in 2001 to complete the graduated suite of enforcement and administrative responses from counselling to prosecution. We are now able to match the sanction with the seriousness of the breach and with the attitude and history of the person or organisation. The new demerit points scheme also means that those who are unwilling or unable to respond to constructive enforcement are consistently and objectively dealt with. The aim of our new enforcement procedures is to provide a fairer and more transparent enforcement system in which the ‘punishment fits the crime’.

CASA is also focusing more on helping the industry comply with aviation safety requirements. CASA’s safety promotion program this year gave particular attention to the safety obligations of managers. As well as continuing the push for industry adoption of safety management systems, we directed more education and events to Chief Pilots and Chief Engineers.

The innovative ‘case management’ approach we have adopted for regulatory reform implementation is working well. I want to extend that mentoring role to CASA’s day-to-day compliance activities and this year have directed that resources be re-allocated so that from 2004–05 CASA inspectors will have more time in the field.

But a partnership in safety really begins with practicable rules that are demonstrably necessary for aviation safety and achieve the best possible safety outcomes. CASA has been under considerable pressure, including from members of the aviation industry, to finalise the Regulatory Reform Program. I firmly believe, however, that if we are to achieve CASA’s goal of ‘safety through clarity’, the objective must be to get the rules right rather than completed quickly. As the Minister urged in his Charter Letter, we must take care not to squander the unique opportunity we have to achieve a world’s best practice regulatory system.

In February, therefore, I put certain elements of the Regulatory Reform Program on hold and tasked the Standards Consultative Committee with reviewing them. This additional effort will ensure the standards are squarely based on safety risks and that, having heard industry’s concerns and openly considered industry’s suggestions, CASA’s proposed new rules are the optimum way to address those risks. I believe the result will be greater compliance without the need for CASA to invest in more surveillance and enforcement activities.

CASA is focused on putting both attention and resources where they will have the greatest impact on aviation safety without, of course, leaving a safety vacuum in any particular area. The starting points of this process are an analysis of the safety risk and the priority we must give to the safety of the travelling public.

2003–04 marked a new emphasis on systemic risk in CASA’s approach to risk management. In addition to revisiting proposed new regulations from a risk perspective, CASA began a special review of the aviation system to identify the major risks to air safety in each aviation sector. We have acted on the first findings that came through in March by working with flying training leaders to develop a proposal to improve the quality of flight instruction. Other systemic risk assessments done this year will underpin risk-based audits in the airline sector, beginning in 2004–05.

CASA also looked this year at how closely it needs to regulate different segments of the industry according to the safety risks involved. The result was a suggestion to the aerial agriculture industry in June that it consider self-administration. CASA proposes that, as with sports aviation, CASA would still set the safety rules and oversee the performance of the peak industry body. I am looking forward to progressing this matter in close consultation with the Aerial Agricultural Association.

The May 2004 Federal Budget saw the Government’s announcement that CASA was required to increase its fees and charges for regulatory services by $2 million for 2004–05 and undertake a review of its future cost structure. CASA’s subsequent fee changes were designed to align the fees with today’s prices and to position CASA and the aviation industry for the move to full cost recovery for those services in line with the Government’s policy on cost recovery.

CASA is currently undertaking a detailed activity-based costing review to accurately cost the much broader services that CASA provides to the aviation industry with the aim of phasing in full cost recovery arrangements from 1 July 2005. I have given my firm undertaking that CASA will conduct industry consultation as part of this process and have already tasked the Aviation Safety Forum with providing strategic guidance through the review process.

Throughout 2003 and 2004, CASA has maintained its association with the airspace reform initiatives introduced by the Minister during 2002. CASA’s specific activities have been the continued review of safety cases and training and educational material, which form part of the proposed airspace structure, in addition to the roles carried out by Bruce Gemmell and myself in advising on airspace changes through the National Airspace System Project Advisory Group and National Airspace System Implementation Group. While airspace change has always been an historically difficult task to complete, CASA will continue to offer its strong support to this initiative and fulfil its role with probity and propriety.

Recognising that it is essential that CASA maintain an ethical and professional environment, which supports our core values, a protected disclosure policy was developed and implemented in 2004. I am a staunch proponent of the belief that a ‘whistleblower’ policy is an important element in preventing and detecting corrupt, illegal or otherwise improper conduct within CASA. Such a policy is a necessary ingredient in achieving good corporate governance and an effective protected disclosure policy will result in a healthier and safer work environment, more effective management, improved morale and enhanced fiscal management of CASA.

In response to the Minister’s request that I implement a transparent complaints management policy for CASA, I am pleased to report that the CASA Service Charter has been reviewed and re-issued, and that the management and reporting of complaints and compliments is now undertaken at an Executive level. To ensure transparency, how CASA is responding to complaints and compliments is reviewed within the Office of the Chief Executive Officer and I am informed if matters require my, or the Chief Operating Officer’s, immediate attention.

Finally, I would like to acknowledge the most important resource that CASA employs to meet its goal of Safe skies for all – CASA’s people. Our staff are critical to the ongoing development of a highly professional organisation that is ready to face the challenges of the future.

Bruce Byron AM signature

Bruce Byron, AM
Director of Aviation Safety
and Chief Executive Officer

 

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