Civil Aviation Order 48.1 Instrument 2013 : Disallowance Regulations and Determinations

I rise to speak on Senator Xenophon’s disallowance motion against the Civil Aviation Order 48.1 Instrument 2013. I will first correct the record. There was dialogue in the previous government, and I commend Minister Albanese, as he was then, for his willingness to engage. In fact, I remember attending a meeting with Senator Xenophon, with then Minister Albanese’s staff, with Minister Truss’s staff, with representatives of the Australian International Pilots Association and with CASA where we talked through this issue at length. At the end of that meeting, the position that was adopted—certainly by me—was that the disallowance should not be supported. Minister Truss’s position was the same. So the comment by the opposition that we have now changed our position is not correct, and I make that point before addressing the issue at hand in any more substance.

I commend Senator Xenophon for his interest in and commitment to the aviation industry in Australia. We have worked very collaboratively on a number of aspects around regulation and other things that affect the viability and safety of aviation. I again put on record my appreciation for the engagement of both the then minister and the current minister around this issue. I have not personally changed my position from when we were dealing with this in opposition for the reason that where this brings us to is safer then where we were. I acknowledge that there are still outstanding issues, as Senator Xenophon has highlighted. But, as he has also highlighted, some of those issues leave us in much the same position as we were in previously. The previous position may not have been ideal, but we are in no worse a position now. Given that in net terms there is an improvement, I think it is appropriate to adopt those changes. I will go through why I take that position in a little more detail.

I will talk firstly about the broad context of regulatory reform and then come in a little more detail to 48.1. The regulatory reform process, as anyone engaged with the aviation industry in Australia knows, has been long and drawn out to the point of being dysfunctional because of the length of time and the different strategic approaches that CASA has taken to the reform process, particularly when it comes to the engagement of industry. I have long been an advocate of the approach taken by the former director, Mr Byron. He argued that industry, as the current subject matter experts in a particular area of operation, are probably best placed to know what will work for them and their sector.

Despite the fact that there are some rogue operators in the aviation industry, whether they be people in workshops or people operating airlines or charter companies, the vast majority of operators have invested hugely, in personal terms and in terms of their shareholders. They have a huge incentive to make sure their operations are safe because, if they have an accident, gaining insurance or contracts—particularly if they are operating in a contract environment within the resources sector—becomes almost impossible. Once an airline has an accident, re-attracting customers is difficult. So people have a huge incentive to get it right. I am a great believer that industry should be leading in the development of both regulations and standards, in conjunction with the regulator, and that only if there is a safety case that the regulator can prove should the regulator discard the industry’s position.

I am aware that CASA’s point of view is that the drafting of 48.1 involved working groups with industry and scientific experts, but I would have to say that CASA’s track record of engagement with industry has not been wholesome. On many occasions it appears to have been a one-way process where they might have listened but did not take due regard or, in some cases, they just transmitted what they were planning to do and called it consultation. There are examples where it has worked well, but there are many where it has not. This is one area where we need to fundamentally reform the process, not only at the drafting stage but also, importantly—as Senator Xenophon has highlighted—once a regulation comes into force, because there is often very little appetite to revisit it for an extended period.

As we look at our regulatory reform process we see that not only does industry need to have a stronger voice up front in setting the regulations and the manual of standards that goes with them but also there needs to be a review mechanism where, if there are outstanding issues, there is an opportunity—a framework—for industry to have quick and effective remedy to them. Senator Xenophon mentioned the expert panel that was discussed at the meetings we had last year with then Minister Albanese’s staff, Minister Truss’s staff, CASA and the industry body. This concept, situated in a more structured framework, is something that I am very much pushing for as part of the review of aviation safety and regulation. I am also in discussions with the current minister’s office about this concept in regard to CAO 48.1. I think the review that is being conducted by David Forsyth has terrific potential to reform how industry and the regulator engage. A key part of that—and we have seen that legislation has just been introduced in the parliament by the government—is reforming the role of the board so that we have people on the board with aviation experience.

That board’s role really needs to be one of governance, as opposed to hands-off oversight, so that they are setting the strategic direction for the regulator. That strategy would go to the culture of the regulator, whether it is a big ‘r’ regulator—a policeman with a big stick—or further along the spectrum towards an educator and supporter. That balance in the middle needs to come through a strategic decision. So, regardless of who is the director of the regulator, we should see a consistent approach that industry can plan for and engage with—an approach that will keep the industry not only safe but viable in terms of the cost bases they have to meet. And there are many costs associated with changing or rejecting regulation.

That brings me to CAO 48.1 and this disallowance motion. As I have stated, overall it is safer, and in the areas where there are points of contention we are no worse off than we were. If we were worse off in significant areas then clearly there would be a case to reject the regulation. But, if we are no worse off and in other areas we are better off, then the travelling public and the industry are better served in finding a way to effectively and quickly review the regulation and modify those areas of concern.

Senator Xenophon mentioned the window of circadian low. Whilst I have never been a long-haul pilot, I have had many years of flying what we call reverse-cycle operations, where we fly by night—in the military’s case, often using night-vision equipment, which brings fatigue issues of its own—so I am well aware of, and I am concerned by, the fact that we have had a grandfathering of that 5 am start point in these regulations. But if we are no worse off than we were before we should review that, as opposed to rejecting the whole package out of hand.

The position that I am taking on this—it is the government’s position—is not to support the disallowance, but I am working with the minister’s office. That is partly because many industry players, since the order was introduced in April 2013—with a transitional window to 2016—have already invested in changing how they work to meet the new regulations. And, as I have said, change does not come cheaply to industry players. Not only are we going a step backwards in safety if we adopt this disallowance but we are disadvantaging those industry players who have invested in adopting the new regulations. I am seeking to make sure that we have, in a very timely manner, the opportunity for the concerned parties in the industry—I know the Virgin Independent Pilots Association and the Qantas group have raised the concerns of, predominantly, long-haul pilots—to help select subject-matter experts who can form this independent panel to review the specific areas of concern. We would then have an independent umpire to bring a recommendation back to the minister so that he can work with the regulator to address those concerns in a timely manner.

Obviously, I cannot speak for the review being led by David Forsyth, nor the recommendations that they will bring forward, but, having met with many players from the maintenance, manufacturing, engineering and operations areas of the industry, I am aware that one of the critical things that we need is a system whereby industry can have a timely remedy to decisions of the regulator that have a material impact on their business and where the safety case is disputed by industry. Whilst, hopefully, the remedy for this will not necessarily be part of the broader regulatory reform and a change of structure, it may well be a test case of how that could work. That may then lead to ideas around how we adopt the broader regulatory system and provide an opportunity for industry to have that timely remedy.

The government will not be supporting the disallowance. I maintain the same position I have had since I was in opposition: in net terms we would do better to adopt the new 48.1. But there is a need to have that independent panel to work with industry and the regulator to review the points of concern and come up with an agreed position so that we can quickly amend that part of the regulation that needs changing.