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2010-2011 THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA HOUSE OF REPRESENTATIVES AVIATION TRANSPORT SECURITY AMENDMENT (AIR CARGO) BILL 2011 EXPLANATORY MEMORANDUM (Circulated by authority of the Minister for Infrastructure and Transport the Honourable Anthony Albanese, MP) AVIATION TRANSPORT SECURITY AMENDMENT (AIR CARGO) BILL 2011 OUTLINE The Aviation Transport Security Amendment (Air Cargo) Bill 2011 will amend the Aviation Transport Security Act 2004 (the ATSA). The Bill: . amends the definition of aviation industry participant (AIP) to include Accredited Air Cargo Agents (AACA). . extends the validity of Regulated Air Cargo Agent (RACA) Transport Security Programs to minimise the administrative burden on industry during the transition to the new air cargo security framework which includes the introduction of the Regulated Shipper Scheme. This will enable the air cargo industry to determine the most appropriate regulatory scheme for their business and streamline transition requirements where necessary. . allows for a Legislative Instrument to prescribe security training requirements for RACAs and AACAs. This will ensure consistency in training outcomes and increase the security of air cargo across the supply chain. . includes minor technical amendments which will simplify the air cargo clearance process by removing certification provisions and removing all references to the term 'freight' and replacing them with the term 'cargo' which is more relevant terminology for industry. The Bill also amends two strict liability offences. The penalty for an AACA in Subsection 73(1) and Subsection 102(1) of the Bill is 50 penalty units. An AACA is considered 'any other person with incident reporting responsibilities' for the purpose of Subsection 102(1). The Bill prescribes penalties which are less than the 60 penalty units the Senate Scrutiny of Bills Committee says appears to be a reasonable maximum. Financial impact statement The amendments would have no significant financial impact on Government expenditure, therefore, a Financial Impact Statement is not required. NOTES ON CLAUSES Clause 1: Short Title Clause 1 is a formal provision specifying the short title of the Act which may be cited as the Aviation Transport Security Amendment (Air Cargo) Act 2011. Clause 2: Commencement The Bill contains one schedule of amendments to the ATSA. This clause specifies when the various provisions of the Bill commence. The time of the commencement of the provisions in Schedule 1 is upon Royal Assent. Clause 3: Schedule(s) This clause provides that each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned. Any other item in a Schedule to this Act has effect according to its terms. SCHEDULE 1 - Amendments Schedule 1 amends the ATSA. The amendments set out in Schedule 1 are divided into five parts: 1. Accredited air cargo agents. 2. Extension of Transport Security Programs. 3. Certification of cargo. 4. Training of employees of certain aviation industry participants. 5. References to freight. Part 1 - Accredited air cargo agents Item 1 - Section 9 (after paragraph (c) of the definition of aviation industry participant) This item expands the definition of 'aviation industry participant' to include an AACA. AIP was previously defined to include types of businesses and individuals involved in aviation and airport services. This definition did not include AACAs. Following recent security incidents it has been identified that provisions for AIPs that currently do not apply to AACAs such as Special Security Directions and Incident Reporting should also apply to AACAs. The revised definition will provide for flexibility to respond to future security incidents and information gathering in relation to a security incident across all AIPs. The revised definition of AIP will mean: a) an airport operator; or b) an aircraft operator; or c) a RACA; or ca) an AACA; or d) a person who occupies or controls an area of an airport (whether under a lease, sublease or other arrangement); or e) a person (other than an aviation security inspector) appointed by the Secretary under this Act to perform a security function; or ea) Airservices Australia; or f) a contractor who provides services to a person mentioned in paragraphs (a) to (ea). Item 2 - Section 9 (definition of employee) Item 2 amends the definition of 'employee'. This amendment reflects the revised definition of AIP in item 1. The previous definition of 'employee' differentiated between employees of an AACA and employees of an AIP. The revised definition of AIP means that this distinction is no longer required. Item 3 - Paragraph 35(3)(b) to Item 27 - Paragraph 73(1) (penalty) Items 3 to 27 provide for penalties relating to AACAs as an AIP. These items maintain penalties for AACAs at 50 penalty units. Under the existing provisions penalties AACAs would have been subject to 50 penalty units as they were included in the definition of 'any other person'. Item 28 - Subsection 79(2) Item 28 amends the inspection powers for aviation security inspectors. This item amends these provisions to reflect the revised definition of AIP outlined in item 1. The current provisions in Paragraph 79(2)(b) and Paragraph 79(2)(c) differentiate between AIP and AACAs. With AACAs now being included in the AIP definition this distinction is no longer required. Item 29 - Paragraph 79(3)(b) Item 29 amends the inspection powers for aviation security inspectors. This item amends these provisions to reflect the revised definition of AIP outlined in item 1. The current provisions in Paragraph 79(3)(b) differentiate between AIP and an AACA. With AACAs now being included in the AIP definition this distinction is no longer required. Item 30 - Subsection 79(3A) Item 30 amends subsection 79(3A) to reflect the renumbering of subparagraphs in item 28 that has resulted from the revised definition of AIP outlined in item 1. Item 30 amends references to these subparagraphs to reflect the amendments made in item 28. Item 31 - Subsection 102(1) (penalty) Item 31 provides for a penalty relating to AACAs as an AIP with incident reporting requirements. This item maintains the penalty for AACAs at 50 penalty units as currently established under the Aviation Transport Security Regulations 2005. This item provides for a penalty of commensurate value for AACAs as 'any other person with incident reporting responsibilities'. Part 2 - Extension of Transport Security Programs Item 32 - At the end of section 20 Item 32 allows Transport Security Programs (TSPs) for certain aviation industry participants to be extended. This will apply to RACAs whose TSP will expire before 31 December 2012. The TSP will be taken to be in force until 31 December 2012 unless the TSP is either revised under s22(4) or 23(4) or the TSP is cancelled under Division 5 at an earlier date. This item will allow for AIPs to adjust to new measures to help secure Australia's air cargo supply chain that were announced on 9 February 2010. This included the establishment of a new air cargo security framework. The new framework will see the introduction of a Regulated Shipper Scheme and assistance to industry to procure appropriate technology such as X-ray and explosive trace detection equipment in order to provide an enhanced air cargo examination capability. Item 32 includes transitional provisions to allow the air cargo industry to determine the most appropriate regulatory scheme for their business and reduce unnecessary compliance costs. Item 33 - Application of amendment Item 33 provides that the extension of TSPs in item 32 applies to TSPs that are in force at the time that item commences irrespective of when the TSP was approved. This amendment allows the air cargo industry to determine the most appropriate regulatory scheme for their business and reduces unnecessary compliance costs. Part 3 - Certification of cargo Item 34 - Section 4 (paragraph relating to Part 4) to Item 43 (Paragraph 44C(2)(g)) Items 34 to 43 remove the term 'certification' and all references to the process of certification from the ATSA. Certification is an additional and unnecessary step in the cargo clearance process. Cargo should instead receive clearance if it has been prepared for clearance in accordance with the Regulations. This item simplifies the cargo clearance process and more accurately reflects the operational procedures applied by industry whilst maintaining the same integrity of cargo security measures. Part 4 - Training of employees of certain aviation industry participants Item 44 - At the end of subsection 44C(1) Item 44 introduces a provision for prescribing training requirements for employees of certain AIPs. These requirements will apply to all RACAs or AACAs or selected RACAs or AACAs. This will ensure consistency in training outcomes and increase the security of air cargo across the industry. Item 45 - After subsection 44C(1) Item 45 introduces a provision for the training requirements established in item 44 to be made by a legislative instrument. This will establish clear and consistent training requirements for AACAs and RACAs. Prescribing these requirements by legislative instrument, rather than by notice, will provide greater consistency and transparency of the security training requirements. Item 46 - Subsection 44C(4) This item allows for penalties to apply to regulations or other legislative instruments made for the purpose of Section 44C. This will extend the penalties to apply to 'other legislative instruments' as a result of the amendment outlined in item 45. Part 5 - References to freight Item 47 - Subsection 134(2) (definition of Australian international carriage) and Item 48 - Subsection 134(2) (definition of bilateral arrangement) Items 47 to 48 remove any reference to the term 'freight' and replaces it with the term 'cargo' which is more relevant terminology for industry. The term cargo is used consistently elsewhere in the Act.