Corporate governance is the way an organisation is controlled and managed to achieve its objectives. An effective governance environment ensures that CASA applies due diligence, is transparent and is fully accountable in achieving its objectives within an acceptable level of risk.
CASA has recently undertaken a number of reforms to strengthen its corporate governance, including the development of an overall governance manual, the clearer documentation of policies, processes and procedures, the closer alignment of CASA’s organisational structure with the requirements of the Civil Aviation Act 1988, targeted training to improve workforce capability, an enhanced accountability framework and the deployment of more resources to operations.
Under the Civil Aviation Act 1988, the Minister for Infrastructure and Transport may give the CASA Board written directions about the way CASA performs its functions and exercises its powers (section 12). The Minister may also give written notices to the Board about CASA’s strategic direction (section 12A), and directions to CASA to supply documents and information to a specified ministerial nominee (section 12B).
There were no statutory directions or notifications under sections 12A or 12B of the Civil Aviation Act in 2009-10.
Under section 16(1)(c) of the Commonwealth Authorities and Companies Act 1997 (CAC Act) CASA must give the Finance Minister reports, documents and information on its operations as required by the Finance Minister. CASA has complied with Finance Circular 2008/05 and provided to the Finance Minister CASA’s annual Compliance Report on its legislative compliance and financial sustainability.
CASA was established on 6 July 1995 as an independent statutory authority by an amendment to the Civil Aviation Act.
Under section 9 of the Civil Aviation Act, CASA’s primary function is to regulate the safety of civil air operations in Australia and the operation of Australian aircraft overseas. CASA’s other functions include providing comprehensive safety education and training programs, working with the Australian Transport Safety Bureau, and administering certain features of the Civil Aviation (Carriers’ Liability) Act 1959, in particular ensuring that operators hold insurance that complies with that Act.
CASA exercises its powers under the Civil Aviation Act, the Civil Aviation Regulations 1988 and the Civil Aviation Safety Regulations 1998, and through the Civil Aviation Orders and Manuals of Standards, which deal with more detailed and technical matters. CASA also publishes a variety of advisory and guidance materials related to air safety.
CASA has powers and functions under the Airspace Act 2007, and responsibilities related to the Air Navigation Act 1920, the Transport Safety Investigation Act 2003 and the Aviation Transport Security Act 2004. As a statutory authority, CASA’s activities are governed by the Commonwealth Authorities and Companies Act 1997 and other Commonwealth legislation pertaining to freedom of information, privacy, the review of decisions, the management of records and audit.
CASA is a statutory authority within the Department of Infrastructure and Transport portfolio.
The CASA Board is established under Part VII of the Civil Aviation Act. The Board consists of the Director of Aviation Safety (the Director) and up to four members, including the Chair and the Deputy Chair.
Board members are appointed on a part-time basis by the Minister for a maximum term of three years, subject to possible reappointment. In appointing Board members, the Minister must ensure that there is an appropriate balance of appropriate professional expertise, but need not ensure that particular sectors of the aviation industry are represented.
According to the Civil Aviation Act, the functions of the Board are to:
- decide CASA’s objectives, strategies and policies
- ensure that CASA performs its functions in a proper, efficient and effective manner
- ensure that CASA complies with ministerial directions given under section 12B.
After consulting with the Minister, the Board appoints the Director for a maximum period of five years, subject to possible reappointment. In accordance with the policies, and subject to the general directions of the Board, the Director is responsible for the day-to-day management of CASA and for ensuring that CASA performs its regulatory, safety-related and other functions in accordance with the Civil Aviation Act.
Eight Board meetings were held during the year: 24 July 2009, 24 August 2009, 1 October 2009, 7 December 2009, 10 February 2010, 12 March 2010, 17 May 2010 and 25 June 2010.
|Meetings eligible to attend||Meetings attended|
Dr Allan Hawke AC
Dr Allan Hawke has Bachelor of Science (Hons) and Doctor of Philosophy degrees. He joined the Commonwealth Public Service in 1974 and rose through the ranks to be Secretary of the departments of Veterans’ Affairs, Transport and Regional Services, and Defence.
Dr Hawke was appointed as High Commissioner to New Zealand in 2003, and in 2006 was installed as Chancellor of the Australian National University. In recognition of his outstanding contribution to public service, Dr Hawke was made a Fellow of the Australian Institute of Public Administration in 1998 and a Fellow of the Australian Institute of Management in 1999. In 2001 he became a Fellow of the Australian Institute of Company Directors. The Australian Financial Review’s ‘Boss’ Magazine named him as one of Australia’s top 30 true leaders in its inaugural list in 2001.
In June 2010, Dr Hawke was made a Companion (AC) in the General Division of the Order of Australia for eminent service to public administration, particularly through the formulation and implementation of policy in the areas of transport, defence and education, and to the strengthening of bilateral relations with New Zealand.
Mr David Gray
Mr David Gray has an honorary doctorate from the Queensland University of Technology and is a member of the Australian Institute of Company Directors and a Fellow of the Royal Aeronautical Society.
Mr Gray was managing director of Boeing Australia for 11 years until 2006. Prior to that appointment, he was managing director of GEC Marconi and a divisional chief executive of GEC (Australia) Heavy Engineering.
In 2003, Mr Gray was awarded a Centenary Medal for services to the aviation industry, business and commerce. He is currently Chairman of Queensland Motorways, Chairman of the Queensland Manufactured Water Authority (WaterSecure), Chairman of the Queensland Cyber Infrastructure Foundation, and Chairman of the Australian Research Council for Aviation Automation.
|Ms Helen Gillies||
Ms Helen Gillies has Bachelor of Commerce and Bachelor of Laws (Hons) degrees from the University of Queensland, a Master of Business Administration from the University of Sydney, and a Master of Construction Law from the University of Melbourne.
Ms Gillies has been practising law for 20 years and is currently Corporate Counsel and general manager of Risk and Compliance with Sinclair Knight Merz. She won the Australian Corporate Lawyers Association’s Australian Corporate Lawyer of the Year award in 2008 and has been admitted as a solicitor of the Supreme Courts of Queensland and New South Wales, and as a solicitor of the Supreme Court of England and Wales.
|Mr Trevor Danos||
Mr Trevor Danos has Bachelor of Economics and Bachelor of Laws degrees from the University of Sydney and is a member of the NSW Law Society, the Law Council of Australia and the NSW Society of Notaries.
Mr Danos has practised law for over 25 years and specialises in the areas of banking and finance as well as federal and state government procurement. He is currently a partner with Corrs Chambers Westgarth.
Among other current board memberships, Mr Danos is President of the Science Foundation for Physics and Deputy Chair of the Human Research Ethics Committee (University of Sydney). He is a trustee of the Cure for Life Foundation and the Adolph Basser Foundation. He is a member of the Cooperative Research Centres Committee.
Mr Danos was appointed as the Chair of CASA’s Board Audit Committee in February 2010.
Director of Aviation Safety
Mr John McCormick
Mr John McCormick is a highly experienced pilot and manager who joined CASA as Director of Aviation Safety in March 2009. He holds a Masters degree in Aviation Management.
Mr McCormick began his flying career in the Royal Australian Air Force in 1974. In 1984 he joined Qantas, where he flew B747s on international operations. He joined Cathay Pacific Airways in 1987 and from 1999 to 2002 was chief pilot of Cathay Pacific’s Boeing fleet. From 2002 to 2006 Mr McCormick was general manager operations, based in Hong Kong. That role included responsibility for Cathay Pacific’s air operators certificates and all applicable regulatory matters.
Mr McCormick has over 10,000 hours as pilot in command, and has been a type rating examiner on the L1011, B777, B747, A330 and A340 aircraft.
Board Audit Committee
Under a requirement of the Commonwealth Authorities and Companies Act 1997, the Board appoints and maintains an Audit Committee. The role of CASA’s Board Audit Committee is to provide independent assurance and assistance to the Board on CASA’s risk framework, control framework, compliance framework and external accountability responsibilities.
The Board has appointed a Board member to chair the Audit Committee and has also appointed three external Audit Committee members.
Board Audit Committee meetings
Five Board Audit Committee meetings were held during the year: 26 August 2009, 25 November 2009, 19 February 2010, 10 May 2010 and 21 June 2010. All members attended all meetings for which they were eligible.
|Meetings eligible to attend||Meetings attended|
Effective from 1 July 2009, in conjunction with the introduction of the CASA Board, the Director of Aviation Safety refined CASA’s structure to one that clearly aligns with the Civil Aviation Act. This ensures that resources are appropriately directed to core functions with optimal accountability and clear reporting lines.
There are six operational divisions in the revised structure:
- CASA Operations
- Standards Development and Future Technology
- Airspace and Aerodrome Regulation
- Safety Analysis, Education and Promotion
- Industry Permissions
- Legal Services.
A new Office of the Director of Aviation Safety was established, primarily to deliver a higher level of governance. Furthermore, the Corporate Services Division was established to support all operational divisions.
One of the key changes in the new arrangements is that CASA will have one Operations Division, eliminating the past distinction between general aviation operations and airline operations. This was an important move, as it optimises CASA’s use of its people and resources.
The organisation chart in Figure 3.1 outlines the realignment structure for 2009-10.
Board Audit Committee members
Mr Danos is the Board member appointed to chair the Board Audit Committee.
Ms Yeoh is a principal consultant in management and financial services. Prior to the establishment of the Board Audit Committee, she was Chair of CASA’s Audit and Risk Committee. Ms Yeoh is currently Chair of the Treasury Investment Advisory Board (ACT), Chair of Southern Health (Victoria), a Director of the State Emergency Service (Victoria), a member of the Lotteries and Gambling Licences Review Panel (Victoria), a member of the Commonwealth Statutory Fishing Rights Allocation Review Panel, and a Trustee of the Dame Nellie Melba Opera Trust.
Mr Rod Alfredson
Mr Alfredson has extensive public sector experience in evaluation and audit, major technology implementation, change management, and financial management. He has served in senior appointments in the Australian National Audit Office, the Department of Finance, and agencies in the Indigenous portfolios. He is a member of two professional accounting bodies and serves as an independent member on a number of audit committees.
Mr Michael Roche
Mr Roche has accounting and information technology qualifications. He is the director of two not-for-profit companies as well as a member of a number of audit committees and governance boards. Mr Roche has had broad public sector experience at an executive level and he currently chairs the Pharmaceutical Benefits Pricing Authority and the Air Warfare Destroyer Principals Council.
Mr Dale Boucher
Mr Boucher served on the Board Audit Committee until 11 November 2009, when he was appointed to a full-time position with a Commonwealth body.
Figure 3.1 Organisational structure as at 30 June 2010
a Acting positions.
Office of the Director of Aviation Safety
This Division incorporates CASA’s governance systems, risk management and quality assurance, strategic advice, foreign agency programs, international relations, the Industry Complaints Commissioner, corporate communications and ministerial and related support functions.
The former General Aviation Operations Group and Air Transport Operations Group were amalgamated into a single entity known as the CASA Operations Division. The Division conducts surveillance activities, including scheduled audits and unscheduled spot checks of Australian registered aircraft, nationally and internationally. Foreign registered aircraft operating into Australia are also subject to this surveillance activity. The Division is also responsible for conducting regulatory service tasks, oversighting approved testing officers, oversighting manufacturing organisations with production approvals, and conducting operational risk assessments.
Standards Development and Future Technology
This Division manages the development and implementation of new regulations and safety standards. The Division also manages certification, engineering and continuing airworthiness processes and the resolution of technical issues in relation to airframes, avionics, propulsion and mechanical systems. It also has a ‘future’ function to anticipate the impact of new technologies. The Sport Aviation Office oversees organisations which administer safety-related and other aspects of their members’ sport and recreational aviation activities (for example, skydiving, warbirds and hang gliding).
Airspace and Aerodrome Regulation
This Division includes the Office of Airspace Regulation, which is responsible for regulating airspace and managing airspace change proposals to ensure the safe, orderly and efficient flow of air traffic, taking into account national security, the protection of the environment, and the equitable use of Australian airspace. The Division is also responsible for certification and oversight of providers of communication, navigation, surveillance and air traffic management services, as well as instrument approach development, certification and aerodrome regulation.
Part 6, Table B.8 show aerodromes at 30 June, 2007-08 to 2009-10.
Safety Analysis, Education and Promotion
This Division is responsible for a range of safety initiatives aimed at improving aviation safety in Australia. The Safety Analysis Performance Branch is responsible for reviewing and analysing data and providing advice and recommendations in relation to the safety performance of the Australian aviation industry. The Safety Promotion Branch utilises a range of professional communications and marketing approaches to develop and deliver safety promotion campaigns. Safety Education is responsible for the provision of regulatory, technical and managerial learning and development for CASA staff, and of related activities designed to encourage a greater acceptance by industry of their safety-related obligations and to foster awareness in industry and the wider community of the importance of aviation safety and compliance with the civil aviation legislation.
This Division undertakes the issuance, management, tracking and monitoring of aviation certificates, personnel licences, aircraft registrations, approval and permits. Industry Permissions offers one entry point for regulatory services through the Permission Application Centre, which processes applications, monitors service delivery, provides information to applicants and receives payments.
Industry Permissions also coordinates CASA’s external delegates and authorised persons through the provision of entry control criteria, professional development programs, guidance material and oversight. The Aviation Medicine function is also part of Industry Permissions and includes the management of the Alcohol and Other Drugs Program that conducts random drug and alcohol testing across Australia, and includes the oversight of industry operators’ drug and alcohol management programs.
Part 6, Tables B.1 to B.3, B.5 to B.6 and Tables B.9 to B.14 show activities handled by this division.
This Division provides assistance and support to the Director and staff in relation to all legal issues affecting and involving CASA’s regulatory and corporate operations.
Legal Services is responsible for managing CASA’s enforcement strategies and practices, conducting CASA’s involvement in Administrative Appeals Tribunal appeals, Federal Court proceedings, coronial inquiries and other legal proceedings, as well as CASA’s obligations under the Freedom of Information and Privacy Acts. It also drafts Civil Aviation Orders and other legislative and legal instruments, ensuring that they comply with applicable requirements.
This Division undertakes the corporate support for the operational divisions to function efficiently and effectively. This includes finance, human resources and information technology.
The Finance Office is responsible for the full range of financial management and procurement services in CASA. The office is also responsible for property, security and asset management functions.
Human Resources facilitates CASA’s corporate and organisational development strategies. It develops and implements staff and industrial relations policies, including conditions of service, payroll, occupational health and safety, and equity and diversity.
Information Technology is responsible for providing appropriate information and communications technology solutions to CASA’s operational and support divisions.
Changes to structure and senior management
A number of changes were made to CASA’s structure and functions to better align with the ICAO safety annexes and the requirements of the Civil Aviation Act. They included the following:
- The Finance Office, Human Resources group and the Information Technology group were formed into a single Corporate Services Division.
- The former Air Transport Operations and General Aviation Operations groups became the new CASA Operations Division.
- The functions of the Planning and Governance Office, except regulatory development, were moved into the Office of the Director of Aviation Safety.
- The new Standards Development and Future Technologies Division was formed with the Regulatory Development Branch and took up a range of functions previously performed by the Airworthiness Engineering group.
- Safety promotion, human factors and safety analysis, and learning development were transferred to a new Safety Analysis, Education and Promotion Division.
- The functions of the Aviation Licensing group, the Aircraft Register and aviation medicine were located in the new Industry Permissions Division. The CASA Licensing and Registration Centre joined with the Brisbane-based Service Centre to form a new combined service centre known as the Permission Application Centre within the Industry Permissions Division.
Executives who left during the year
- Michael Quinn, Deputy Director of Aviation Safety
- Christopher Farrelley, Chief Information Officer
- Betty Edwards, Chief Finance Officer
- Michael Hart, Industry Complaints Commissioner
- Gregory Vaughan, Manager Standards Implementation.
Executive appointments during the year
- Greg Hood was appointed as Executive Manager CASA Operations
- Gary Harbor was appointed as Executive Manager Corporate Services
- Peter Fereday was appointed as Executive Manager Industry Permissions
- Fiona Johnstone was appointed as Chief Finance Officer
- Simon Denby was transferred to the role of Chief Information Officer from Executive Manager Industry Permissions.
Corporate planning and reporting
The Corporate Plan describes CASA’s strategic agenda and future direction. It is designed to ensure that CASA meets the government’s and the Australian public’s aviation safety expectations. The plan positions CASA to contribute more effectively and efficiently to the management of aviation safety risks and improving stakeholder relations within a strong governance framework. Figure 3.2 shows CASA’s planning cycle and how strategic direction is disseminated across the organisation.
The divisional business and risk management plans form a critical component of the planning process, assisting staff to enhance their understanding of CASA’s high-level direction and how it translates to specific responsibilities in the division within which they work.
Every staff member is responsible for the delivery of specific activities presented in their Business and Risk Management Plan. These specific activities are reflected in the individual performance management plans that form the third and final planning tier in CASA. These plans should be in place by 30 September each year. The plans are used as the basis for individual performance appraisal and determine incentives and the training needs of CASA staff.
CASA’s performance against the Corporate Plan and other business activities are reported to the Executive Managers meeting every month. Quarterly reports are provided to the Board and to the Minister.
The CASA Annual Report presents CASA’s performance to give a complete assessment in an open and transparent manner. Any performance gaps are noted, and corrective actions are included in the ensuing planning cycle. The financial statements are completed and approved by the Board in August each year and are incorporated in full within the annual report. In essence, the annual report is considered as the feedback loop that completes the planning cycle.
Risk management arrangements
As Australia’s aviation safety regulator, it is critical that CASA understands the nature and full dimension of the risks it oversees. CASA is systematically identifying and analysing a wide range of issues and risks to make informed decisions that contribute to its vision of Safe skies for all.
All aviation activity involves risks. CASA faces a variety of possible risks, including, but not limited to, the failure to detect breaches of safety and maintenance standards; incorrect or inconsistent application of regulatory standards; and failure to properly carry out statutory responsibilities. Risks can arise from a range of sources, such as the introduction of new and advanced technologies, the availability of a suitably skilled workforce, or natural events.
CASA manages its risks in accordance with best practice and adheres to the principles outlined in Australian and New Zealand International Standards Organisation Risk Management—Principles and guidelines (AS/NZ ISO31000:2009).
During 2009-10, CASA fully integrated its business and risk management planning processes to enhance the effectiveness of existing practices and to ensure a consistent and comprehensive enterprise-wide approach to risk management. A training and awareness program on risk management principles and practices was also developed and delivered across all CASA offices throughout the year.
The extensive delivery of risk management training and the integration of business and risk management planning has further enhanced CASA-wide approach to risk management. The increased application of risk management practices has enabled:
- more effective strategic and business planning
- better cost control with fewer costly surprises
- more systematic and thorough decision making
- greater transparency in decision making
- better identification of opportunities
- increased knowledge and understanding of risk exposures
- prevention rather than reaction to risk
- compliance with relevant legislation.
The success of the implementation was reflected in the outcome of CASA’s participation in Comcover’s annual risk management benchmarking survey. A score of 8.4 out of 10 was achieved, which resulted in an 8.4 per cent discount in CASA’s insurance premiums for 2010-11. This was an improvement on the 2008-09 result and established CASA as the top-performing agency within its peer group. The outcome reaffirms our approach to risk management and the continual improvement being achieved in this area.
Internal audit arrangements
CASA continued its arrangement of outsourcing internal audit service provision to external professional organisations, with a senior CASA manager providing coordination. The 2009-10 financial year was the final year of a three-year contract for the provision of internal audit services with two external audit organisations. The audit function has benefited from the expertise and independence of auditors external to CASA. A full tender process was undertaken prior to 30 June 2010 for the provision of internal audit services and was finalised with the appointment of a panel of three providers for the next three years.
The main emphasis of the internal audit function in 2009-10 was to focus on CASA’s key operational and business risk exposures. Individual business and risk management plans from CASA’s divisions, strategic risk workshops and individual interviews with senior executives and internal and external auditors were used to develop priorities for the ongoing CASA-wide internal audit program.
The internal audit manual was revised and reissued to ensure that it reflected best practice and to emphasise the focus on a risk-based approach to the audit function. A program to monitor the implementation of audit recommendations continued to work well, backed by the maintenance of a comprehensive database of audit information.
Many of the audits completed during 2009-10 focused on CASA’s core operational and business functions, processes and systems. Sixteen audits were completed during the year:
- Entry control procedures for licensing
- Service difficulty reporting (see Part 6, Table B.4)
- Risk-based methodology in surveillance
- Technical assessment—compliance with procedures
- Aviation safety information
- Estimates process for regulatory service provision
- IT security and access control
- Independent review of internal audit
- Review of post-audit implementation
- Environmental management
- Protective security
- Safety promotion and education
- Leave management
- Review of the Indonesian Transport Safety Assistance Package
- Compliance with statutory obligations.
CASA has internal and external protected disclosure arrangements (whistleblower arrangements) to enable confidential reporting of fraud and matters related to organisational corruption. During 2009-10, CASA received no protected disclosure reports through its confidential reporting service, ‘Your-call’.
Code of conduct
All CASA staff must comply with a comprehensive code of conduct as a condition of their employment or engagement. The CASA Code of Conduct reflects the values and behaviours expected of CASA employees at any time when they are at work or otherwise representing CASA.
CASA has continued the implementation of its Fraud Control Framework both to support effective governance and to reduce the risk of exposure to the potential for fraudulent activities.
There were no fraud matters during 2009-10.
Conflict of interest
To assist employees to better understand their interactions with industry, a definitive conflict of interest policy is available to guide all employees and contractors. This policy recognises that, while many CASA professionals have longstanding personal links within the industry, it is important that those interactions be managed to reduce the risk that CASA’s activities could be compromised by allegations of bias.
No matters involving conflicts of interest were raised in 2009-10.
Figure 3.2 Planning cycle