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CIVIL AVIATION LEGISLATION AMENDMENT (MUTUAL RECOGNITION WITH NEW ZEALAND AND OTHER MATTERS) BILL 2003

2002-2003







THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA





HOUSE OF REPRESENTATIVES






CIVIL AVIATION LEGISLATION AMENDMENT (MUTUAL RECOGNITION WITH NEW ZEALAND AND OTHER MATTERS) BILL 2003






EXPLANATORY MEMORANDUM















(Circulated by authority of the Minister for Transport and Regional Services,
the Honourable John Anderson, MP)

TABLE OF CONTENTS

OUTLINE 2

Financial Impact Statement 2

REGULATION IMPACT STATEMENT – 3

Background 3
1. Problem 4
2. Objective 5
3. Options Considered 6
4. Impact Analysis 7
5. Consultation Process 10
6. Conclusions and recommended option 13
7. Implementation and review 13

NOTES ON CLAUSES 14

Schedule 1 – Amendments relating to mutual recognition with New Zealand 14

Civil Aviation Act 1988 16
Civil Aviation (Carriers’ Liability) Act 1959 30

Schedule 2 – Other Amendments 30

Part 1 – References to Foreign Aircraft 30
Civil Aviation Act 1988 30

Part 2 – Ongoing licence conditions 31
Civil Aviation Act 1988 31

Civil Aviation Legislation Amendment

(Mutual Recognition with New Zealand and Other Matters) Bill 2003

OUTLINE

This Bill amends the Civil Aviation Act 1988 (the Act) to permit the mutual recognition of certain aviation-related safety certification between Australia and New Zealand. Initially, this will be restricted to Air Operator’s Certificates (AOCs) for operation of aircraft of more than 30 seats or 15,000 kgs, as issued by the Civil Aviation Safety Authority (CASA) in Australia and the Civil Aviation Authority of New Zealand (CAANZ).

Mutual recognition is based on an acceptance by both countries that their safety regulations result in the safe operation of large capacity aircraft within their jurisdiction. Under current provisions of the Civil Aviation Act, aircraft operators need to hold and comply with two AOCs, from both Australia and New Zealand, if they wish to conduct operations in both countries. This results in duplication, complexity and added administrative and financial burdens on operators. The proposed amendments will mean that an operator holding an AOC issued by CAANZ will be able to conduct operations in Australia without having to obtain an equivalent AOC issued by CASA, and vice versa.

Mutual recognition was anticipated by the ‘Open Skies’ Air Services Agreement^[1] between Australia and New Zealand, which is intended to promote competition among Australian and New Zealand operators, including on domestic routes. The Agreement builds upon the 1996 Australia-New Zealand Single Aviation Market (SAM) Arrangements. The principle underlying mutual recognition is the same as that for the Trans-Tasman Mutual Recognition Act 1997 and the Mutual Recognition Act 1992.

The Bill also makes several minor amendments to:
§ ensure consistency of terminology of aircraft registered overseas; and
§ provide for certain conditions for grant of AOCs to also have effect as ongoing conditions on the AOCs.

Financial Impact Statement

It is not anticipated that budget allocations will be affected by this Bill.

CASA may incur additional costs in oversighting operations in New Zealand, however these should be offset by a reduction in costs of oversight of New Zealand operators in Australia.

REGULATION IMPACT STATEMENT

MUTUAL RECOGNITION OF AVIATION-RELATED CERTIFICATION BETWEEN AUSTRALIA AND NEW ZEALAND

Introduction

This is a Regulation Impact Statement (RIS) for the proposed amendment of the Civil Aviation Act 1988 to provide for the mutual recognition of aviation-related (safety) certification between Australia and New Zealand (mutual recognition). The amendments form the bulk of the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand and Other Matters) Bill 2003.

Mutual recognition will permit an eligible aircraft operator to carry out an aviation activity in either Australia or New Zealand, whether international or domestic, passenger or cargo, based on an Air Operator’s Certificate (AOC) issued by the regulator of their home country. This follows from an acceptance that, while some systems and processes may vary, Australia and New Zealand have safety standards that produce equivalent safety outcomes in high capacity airline operations. The relevant aviation safety regulatory authorities for mutual recognition are the Civil Aviation Authority of New Zealand (CAANZ) and, in Australia, the Civil Aviation Safety Authority (CASA).

Background

The principle underlying mutual recognition is the same as the principle behind the Trans-Tasman Mutual Recognition Act 1997 and the Mutual Recognition Act 1992. The Australian and New Zealand Governments reaffirmed their commitment to adopt mutual recognition of aviation-related certification in a Memorandum of Understanding dated 20 November 2000 made in conjunction with the new ‘open skies’ Air Services Agreement between our two countries. The target date for achieving mutual recognition in this context is December 2003.

The Australian Minister for Transport and Regional Services and the New Zealand Minister of Transport signed the Air Services Agreement^[2] on 8 August 2002. The Agreement is intended to promote competition and closer economic relations between the two countries and to build upon the principles contained in the 1996 Australia-New Zealand Single Aviation Market (SAM) Arrangements, while ensuring the highest degree of safety and security in air transport.

In March 2002, Australian and New Zealand Ministers for Transport agreed to implement the ‘highest form’ of mutual recognition, namely that an operator that is the holder of an air operator certificate (AOC), and other associated certificates and permissions, issued in one country will not be required to hold an AOC, or other certificate or permission, to conduct air transport operations in that country.

In addition, a new, overarching, inter-governmental agreement on aviation mutual recognition is under development which, when completed, will set out the principles, objectives and joint understandings between Australia and New Zealand in relation to the mutual recognition of aviation-related safety certification. An annex to the new agreement will be an operational agreement between the two aviation safety regulators, CASA and CAANZ, which will establish working arrangements between the two.

Only those Australian and New Zealand operators covered by the Air Services Agreement will be eligible for mutual recognition.

Mutual recognition will be introduced in a phased approach. AOCs held by eligible operators will be the first aviation-related safety certificates to be mutually recognised. Consideration will then be given to including other certificates not already covered by other recognition arrangements. Ministers have also agreed that the first priority should be acceptance of AOCs for operations involving aircraft with more than 30 seats or equivalent (15,000 kg maximum take-off weight).

Notwithstanding mutual recognition, aircraft operators will still have to comply with rules of the air and certain laws of the country they are operating in, unless otherwise provided. Examples include laws relating to aviation security, curfew, air traffic control, airport slot management, noise and the environment, occupational health and safety and anti-discrimination legislation and all related business laws.

The issue/problem

The principle of mutual recognition plays an important role in the operation of single markets by allowing the free movement of goods and services. This has been recognised by the European Union, where the principle of mutual recognition has become the cornerstone of its single market. Mutual recognition relies, however, on both parties having full confidence that the certification process of the other party can wholly satisfy its requirements.

In line with this, mutual recognition of aviation-related safety certification is an important element of the SAM Arrangement between Australia and New Zealand and is possible because each country enjoys aviation safety regulatory regimes that result in a safe aviation environment for aircraft of greater than 30 seats or equivalent. On that basis, and in the light of joint Government policy, an AOC issued by one safety regulatory authority (eg CASA) should be capable of being accepted by the other (eg. CAANZ).

Under current legislation this isn’t possible, which means that aircraft operators wishing to operate in both countries need to hold two AOCs, one issued by each authority, and need to comply with both. This results in duplication, complexity and added administrative and financial burdens on operators which may in turn deter operators from establishing air services in the other country. This is inconsistent with the intention of the ‘open skies’ Air Services Agreement to promote competition among Australian and New Zealand operators, including on domestic routes. Mutual recognition is therefore designed to decrease the amount of regulation placed on eligible aircraft operators in this respect.

Stakeholders generally acknowledged mutual recognition as beneficial, however suggested that the financial benefit to them will be administrative rather than operational. This said, mutual recognition arrangements have been shown to bring other benefits, both immediate and long term, tangible and intangible, including promoting efficient transportation and compatible regulatory systems^[3]. In this context, mutual recognition will permit greater flexibility in airline operations, thereby improving aircraft utilisation and return on assets. This is important in an industry where the capital outlay is very high.

The consequence of taking no action would not be immediately felt by the aviation industry, however it would forestall the mutual recognition of aviation-related certificates as a whole, not just AOCs, which is important for maximising benefits from the SAM Arrangement. The benefits of mutual recognition, as described overpage, would also be lost.

The desired objective

The key objective is the full recognition of one country’s operational certification system by the other country. The amendments are designed to promote aviation and competition in Australia and New Zealand by reducing the regulatory burden on aviation operators from having to hold dual AOCs.

In legislative terms, the mutual recognition obligation requires Australia to enact provisions that achieve two distinct purposes:
• to provide for recognition by Australia of an ANZA AOC issued by CAANZ for the purpose of authorising operations in Australia by the holders of those documents; and
• to provide for CASA to authorise an eligible Australian AOC holder to conduct operations in New Zealand in accordance with an Australian ANZA AOC that will be recognised by the CAANZ.

Current regulation/ policy

Under the Civil Aviation Act an aircraft must not, except in certain circumstances, fly into, out of or within, Australian territory unless it is authorised by an AOC. For a foreign registered aircraft to be operated on a flight within Australia as part of an international flight, a “foreign aircraft AOC” would be required. An Australian aircraft must not operate outside Australian territory unless it is authorised by an Australian AOC.

An AOC is a document provided to an organisation that defines its approval to operate aircraft. As such it is a document that requires aviation regulatory authorities (such as CASA and CAANZ) to consider a number of factors in assessing an operator’s ability to conduct its operations safely. These factors include its facilities and operational bases, management structure, communication networks, financial viability, training procedures, operational manuals and maintenance procedures. It also covers the qualifications of its key personnel, the types of aircraft it operates and the routes on which it operates those aircraft. When an operator wishes to change key personnel, aircraft or routes, for example because it wishes to add additional routes and/or aircraft types to its operations, it needs to apply to its home authority to have its AOC amended or reissued.

Identification of options

In 2002, Ministers considered four basic options for the implementation of mutual recognition, as described below.

• Option 1: An operator that is the holder of an Air Operator’s Certificate (AOC) issued in one country will not be required to hold an AOC in the second country in order to conduct air transport operations in that country.

• Option 2: A variation of Option 1. This option would involve the issue of a recognition or registration certificate that enabled airlines to operate within the second country on the basis of certification issued in the home country.

• Option 3: An AOC issued in one country would be accepted by the second country as evidence of acceptable standards, and a local AOC would subsequently be issued.

• Option 4: An AOC issued in one country would be accepted by the second country, only if certain preconditions were satisfied.

Ministers chose Option 1 as their preferred approach on the basis that this was the purest and highest form of mutual recognition. (The only other possibility would be to retain the status quo, in which case mutual recognition could not be implemented and expected benefits would not be achieved.)

Impact analysis

Who is affected by the problem and who is likely to be affected by its proposed solutions?

The liberalisation of air services arrangements is part of the Government’s wider micro-economic reforms of the transport sector. The benefits of liberalising air services arrangements was noted by the Minister for Transport and Regional Services, the Hon John Anderson MP, in his policy statement of June 2000, International Air Services.

When the ‘open skies’ Air Services Agreement with New Zealand was negotiated in November 2000, the overall value of the Australia-New Zealand Single Aviation Market was estimated at $6.8 billion (NZ$8.7 billion). Mutual recognition will help to ensure that the benefits of integration continue, making it easier for Australian and New Zealand airlines to operate services in both countries, to integrate their fleets and achieve operating efficiencies. Efficiency, in turn, contributes to economic growth and rising incomes. For example, in 1999 the OECD^[4] estimated that, in the case of Australia, unilateral trade liberalisation has, in effect, put A$1,000 per year in the hands of the average Australian family.

Mutual recognition may, however, result in a period of structural adjustment in the industry in the medium term. This is because variations in some operational requirements between Australia and New Zealand may be perceived as conferring commercial advantages on operators from one or other of the countries. By way of example, as noted by one stakeholder, there is the potential for considerable disparity between the salaries of Australian and New Zealand pilots operating the same type of aircraft but under different AOCs. This, in turn, may have implications for industrial relations even though there is no intention for mutual recognition to impact on the existing employment arrangements of operations on either side of the Tasman.

Structural pressures are often accepted as being in the long-term national interest in order to ensure that Australian operators remain competitive internationally. However, with regard to mutual recognition, no commercial consideration will be permitted to override safety standards. For example, mutual recognition will not provide an opportunity for aircraft operators to ‘shop around’ for the safety regulator they regard as the most commercially advantageous if, by doing so, effective safety oversight could not be maintained.

For purely safety reasons, the amendments will therefore ensure that the safety regulatory authority best placed to provide effective safety oversight of an operator will be the one to issue that operator’s AOC. This will be effected by a range of criteria to be considered by CASA before issuing an ANZA AOC such as where the company’s safety management systems are based. Minimal administrative costs are expected from this process.

It is important to recognise that savings obtained by aircraft operators may, to some extent, be offset by any future CASA charge to cover the cost of safety surveillance inspections and other regulatory activity associated with Australian AOC holders operating in New Zealand. Currently, CASA does not recover the cost of undertaking overseas audits.

How will each proposed option affect existing regulations and the roles of existing regulatory authorities?

Provision for mutual recognition requires amendment of the Civil Aviation Act 1988. Australian rules of the air (contained in a number of regulations made under the Civil Aviation Act) will continue to apply to New Zealand operators in Australian airspace.

It is possible that consequential amendment of other legislation may be necessary as a result of mutual recognition to ensure operators are not double charged; this is currently being assessed. By way of background, under the new arrangements a New Zealand operator scheduling domestic services in Australia would, appropriately, have to pay customs duties and GST. They would, however, also pay the aviation fuels levy that includes a component to fund CASA, even though CASA will not be the agency actually regulating the New Zealand operator. Additionally, the operator will also be liable to pay fees and charges imposed by its own regulator, CAANZ, resulting in a double charge for safety regulation services. If CASA imposes charges for its overseas audits in the future, Australian operators in New Zealand are likely to be in a similar position in terms of the New Zealand passenger levy unless a solution can be found that is acceptable to both countries.

In deciding upon a solution to this problem, it will be important to ensure that both regulators do not inadvertently lose revenue. Possible changes to the funding arrangements will be explored with the Departments of Treasury, Finance and Administration, the Australian Taxation Office and, possibly, the Australian Customs Service, given that any change will be likely to require amendment of their portfolio legislation.

Identify and categorise the expected impacts of the proposed options as likely benefits or likely costs

For more information on some of these issues, please see information given above.

Possible benefits from mutual recognition

Possible costs from mutual recognition

Possible Benefits from retaining the status quo

Possible Costs from retaining the status quo

Distributional effects

From a safety perspective, mutual recognition will have no adverse impact. This is because, ultimately, it rests on the acceptance by both Governments that the safety regulatory regimes in place in Australia and New Zealand produce skies that are equally safe for most operations. Although there may be different means of achieving safety standards, these are accepted as providing equivalent safety outcomes.

Eligible aircraft operators will be the first to realise savings. Consumers will benefit to the extent that airlines pass on savings through reduced fares, and to the extent that they benefit from increased competition in the industry. Savings made by consumers may in turn confer benefits on the domestic tourism industry.

As noted above, New Zealand AOC holders operating in Australia may benefit from commercial advantage in some areas due to different operational requirements and, possibly, employment conditions. Where this occurs, there could be flow on effects to the Australian economy generally arising from structural adjustment in the industry and, as noted by some stakeholders, the impact on industrial relations.

Consultation

Invitations to comment on mutual recognition were made through the media and direct invitation to representatives of business (and their umbrella groups), unions, consumer and Commonwealth and State Government agencies. Of individual aircraft operators, only those identified as operating aircraft of greater than 30 seats or equivalent were directly invited to participate, since these will be the parties most affected. A list of stakeholders consulted by mail is attached. A call for submissions was also placed in the Weekend Australian of 15-16 February 2003. Invitations to a “roundtable” with the Department of Transport and Regional Services (DOTARS) were extended to 12 key stakeholders; the roundtable was held on 25 February 2003. Two airlines attended, Qantas and Virgin Blue.

Other than the Department of Transport and Urban Planning of South Australia, and the New South Wales Air Transport Council, nil comment was received from Commonwealth or State agencies.

Stakeholder views

Over half of the stakeholders who responded openly supported the initiative. The following points were made:
• savings would mainly be administrative but greater advantages will be realised when mutual recognition also encompasses airworthiness and maintenance systems approvals;
• the economics of mutual recognition could facilitate the ability of freight operators to extend the current Australian domestic express freight network to New Zealand;
• mutual recognition is welcome, mainly for the benefits in reduction of administration of two AOC's held by the company;
• for operators not already holding dual AOC's, benefits will be even greater; and
• mutual recognition is necessary to give effect to aviation policies already in place.

Queries and concerns raised by stakeholders are given below, with DOTARS’ responses.

Conclusion and recommended option

The Government is committed to mutual recognition, which requires legislative amendment to be implemented. This is therefore the preferred option.

Retaining the status quo would not be consistent with Government policy and its obligations arising from the bilateral Air Services Agreement between Australia and New Zealand.

Implementation and review

Legislative change will be effected primarily through amendment of the Civil Aviation Act 1988. The effectiveness of the amendments will be constantly tested as the safety regulatory authorities in both countries apply the legislation. There is no sunset clause built into the amendments, therefore termination of mutual recognition will need to be by legislative amendment.

CIVIL AVIATION LEGISLATION AMENDMENT (MUTUAL RECOGNITION WITH NEW ZEALAND AND OTHER MATTERS) BILL 2003

NOTES ON CLAUSES

Clause 1: Short title

This clause provides that the bill will be called the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand and Other Matters) Act 2003 once enacted.

Clause 2: Commencement

This clause provides that provisions relating to mutual recognition will commence on a day to be fixed by proclamation. This is to enable the finalisation of the inter governmental agreement/arrangement on mutual recognition by the Governments of Australia and New Zealand and completion of the operational arrangements between regulating agencies. Amongst other things these agreements will set the scope of the mutual recognition commitment.

The minor amendments to the Act to ensure consistency of terminology will commence on Royal Assent.

Clause 3: Schedule(s)

This provision provides that the amendments to the Acts (Civil Aviation Act 1988 and the Civil Aviation (Carriers’ Liability) Act 1959) set out in the Schedule will be made by the Bill.

For the remainder of this Explanatory Memorandum the term ‘the Act’ will be sued to refer to the Civil Aviation Act 1988.

Schedule 1 – Mutual Recognition with New Zealand

This Schedule contains the new provisions that will implement the mutual recognition arrangements with New Zealand.

These provisions will give effect to the Australia New Zealand Aviation Mutual Recognition Principle, namely:

An entity that is authorised in its Home country to carry out an aviation activity in that country through an aviation safety certificate is entitled to carry out that aviation activity in the Host country without an equivalent certificate from the Host country, provided the following conditions are met:

(a) the Home Authority permits that aviation activity to be carried out in the other (Host) country under this principle; and

(b) that person meets the regulatory requirements of the Home Jurisdiction at all times while the person is carrying out that aviation activity; and

(c) the person has notified the Host Authority.

This principle will not apply to occupational certificates such as pilot licences, which are eligible to be recognised under the Trans-Tasman Mutual Recognition Act 1997.

Subject to the conditions of this Bill, mutual recognition of aviation-related safety certification will permit an eligible aircraft operator to conduct aviation activities in both Australia and New Zealand using an Air Operator’s Certificate (AOC) issued by the safety regulator of their home country. This is because the AOC will be recognised as valid by the safety regulator in the host country. AOCs mutually recognised in this way will be called Australian or New Zealand AOCs with ANZA privileges, depending on which country is the country of issue.

At this stage only AOCs will be mutually recognised, however the provisions of the Act do permit more certificates to be mutually recognised in the future, if considered appropriate by the Australian and New Zealand Governments. In Australia this would be by amendment of the Regulations to this Act.

International, domestic, passenger and cargo services will all be covered by mutual recognition however it will be restricted to larger aircraft of more than 30 seats or greater than 15,000 kilograms in weight (maximum take off weight) at this stage. This more or less limits the scheme to airlines for now.

Mutual recognition is based on an acceptance that, while some systems and processes may vary, Australia and New Zealand have safety standards that produce equivalent safety outcomes. This said, there is still a need for the safety regulators to consult and cooperate together, and this is prescribed throughout the Act with regard to a number of matters, including the issue of AOCs and the variation of conditions under which they are issued.

CASA’s function is to implement mutual recognition, as prescribed in the Act, the Regulations, and other documents agreed between the Government’s of Australia and New Zealand from time to time. Its counterpart in New Zealand is the Civil Aviation Safety Authority of New Zealand (CAANZ).

There will be occasions when it will be practical for CASA to delegate its powers to CAANZ (and vice versa). A good example of this is in relation to surveillance, investigations, and enforcement powers. However the power to issue a temporary stop notice will not be delegated since it makes no sense to do so given that a home authority already has to power to take immediate action against one of its own operators. Delegation of powers will be a matter of discretion between the two regulators, subject to the provisions of our respective legislation.

It is important that, when using delegated powers, material and information collected by the host regulator on behalf of the home regulator be available for evidentiary use under the laws of the home country. The power to do so is provided under this Act. Similarly, the Act provides that the two regulators may exchange information in order to carry out their statutory powers and functions.

On rare occasions it may be necessary for the safety regulator in the host country to act swiftly because of a serious safety concern posed by an operator holding an AOC with ANZA privileges issued by the other country. In these rare circumstances the host regulator has the power to issue a temporary stop notice that prevents the operator from carrying out the aviation activity until the home authority can take any appropriate action to address the safety concern. Such notices can only last for a maximum of seven days. The intention behind this provision is to maintain safety at all times but to take only such action as is considered necessary for that purpose.

Strong communication and cooperation between CASA and the CAANZ will underpin mutual recognition and are given the force of law by the provisions of this Act. Indeed mutual recognition has only been possible because of the joint understanding and commitment of the two regulatory agencies to continued safe practice.

The objective of the mutual recognition provisions is to promote and foster aviation activity between Australia and New Zealand but with no diminution of safety.

Amendments to the Civil Aviation Act 1988

Items 1 to 15

These clauses insert new definitions for certain terms used in the Bill into section 3(1) of the principal Act. In particular:

ANZA stands for Australia and New Zealand Aviation. This is the name or term used for the aviation mutual recognition scheme and has been used to distinguish this scheme from other Australia-New Zealand mutual recognition schemes, such as that established under the Trans-Tasman Mutual Recognition Act 1997.

ANZA activities in Australian territory are those aviation activities undertaken in Australia by operators holding a valid New Zealand AOC with ANZA privileges issued by the Civil Aviation Authority of New Zealand (CAANZ). Paragraph (b) of this definition allows mutually recognised ANZA activities to extend to other certificates in the future, subject to agreement between Australia and New Zealand and the required changes to respective regulations and rules.

ANZA activities in New Zealand are those aviation activities undertaken in New Zealand by operators holding a valid Australian AOC with ANZA privileges issued by the Civil Aviation Safety Authority (CASA). Paragraph (b) of this definition allows mutually recognised ANZA activities to extend to other certificates in the future, subject to agreement between Australia and New Zealand and the required changes to respective regulations and rules.

ANZA mutual recognition agreements will be defined in Regulations. The agreement or arrangement will set out joint understandings on the application of mutual recognition between the respective Governments. It will cover such key issues as the key mutual recognition principle; set out the scope of the mutual recognition commitment; identify procedures to be followed in relation to temporary stop notices; provide for delegation of powers; allow for mutual assistance with enforcement; and cover future extension of mutual recognition arrangements. At this stage the Governments have agreed that ANZA mutual recognition should only apply to aircraft with greater than 30 seats or more than 15,000kgs.

It will also provide for an operational agreement between CASA and CAANZ which will outline procedures for the implementation of mutual recognition between the two regulatory authorities.

The content of these agreements is currently being finalised. It should be noted that under Clause 2, the mutual recognition amendments in this Schedule will not commence until these agreements or arrangements have been concluded.

The note at the end of the definition of AOCs, simply states that some AOCs issued by CASA will have ANZA privileges, that is they will authorise operations in New Zealand under the mutual recognition provisions.

Australian ANZA safety certification includes both AOCs as well as other certificates that may be covered by the mutual recognition provisions in the future, subject to agreement between Australia and New Zealand and amendment of respective regulations and rules.

Australian AOC with ANZA privileges is an AOC issued by CASA to an operator pursuant to the mutual recognition provisions of the Civil Aviation Act 1988. Such an AOC authorises the holder to carry out the aviation activities specified in the document for both New Zealand and Australia and will be recognised as valid by CAANZ if the requirements of New Zealand’s Civil Aviation Act 1990 are met. Under subsections 27(2AA) to (2AC), the document must specify aviation activities in relation to both countries, though they need not be the same activities. That is, an Australian AOC with ANZA privileges cannot specify aviation activities for New Zealand alone.

Australian temporary stop notice refers to the notice given by CASA to a holder of a New Zealand AOC with ANZA privileges requiring the holder to cease operations, in whole or part, due to a serious concern regarding aviation safety. Temporary stop notices can only be issued for a maximum of seven days, allowing time for the matter to be considered by CAANZ. See the notes to Item 31 for more information on the temporary stop notice.

CAA New Zealand (Civil Aviation Authority of New Zealand) is the name of the current aviation safety regulator in New Zealand. CAANZ is CASA’s New Zealand counterpart.

Director of CAA New Zealand is a statutory office holder under the Civil Aviation Act 1990 of New Zealand. As CEO of CAANZ, he/she is the counterpart to Australia’s Director of Aviation Safety, CASA’s CEO.

In force for Australia – this is defined in a new section 3AA – see Item 16.

New Zealand includes New Zealand and all its territories. It has the same meaning as in the Interpretation Act 1999 of New Zealand.

New Zealand ANZA safety certification covers both AOCs as well as other certificates that may be covered by the mutual recognition provisions in the future, subject to agreement between Australia and New Zealand and amendment of respective regulations and rules.

New Zealand AOC with ANZA privileges means the same as the definition in Civil Aviation Act 1990 New Zealand. It is an AOC granted to an operator by CAANZ pursuant to the mutual recognition provisions of that Act. This AOC authorises the holder to carry out the aviation activities specified in the document for both New Zealand and Australia and will be recognised as valid by CASA if the requirements of Australia’s Civil Aviation Act 1988 are met. The document must specify aviation activities in relation to both countries, though they need not be the same activities. That is, a New Zealand AOC with ANZA privileges cannot specify aviation activities for Australia alone.

New Zealand temporary stop notice means the same as the definition in Civil Aviation Act 1990 New Zealand. It refers to the notice given by CAANZ to the holder of an Australian AOC with ANZA privileges requiring the holder to cease operations, in whole or part, due to a serious concern regarding aviation safety. It will work in a similar way to that of an Australian temporary stop notice (see the notes to Item 31 for more information on the temporary stop notice).

Item 16

This item inserts a new section 3AA into the principal Act, which clarifies when a New Zealand AOC with ANZA privileges is in force for Australia. Subsection 1 gives effect to the jointly agreed principle that a New Zealand issued AOC which has been issued for the purposes of mutual recognition (ie with ANZA privileges) may be used in Australia once the Civil Aviation Safety Authority (CASA) has been notified under subsection 28C(1) (see Item 31). Subsection 2 provides that a New Zealand issued AOC with ANZA privileges will cease to have effect when a temporary stop notice is in force under section 28D (Item 31). In this case an operator would be committing an offence under section 29 of the Act if they continued to operate in contravention of the stop notice. If the stop notice is lifted under section 28E (Item 31), then the affected New Zealand issued AOC (with ANZA privileges) would come back into force.

Item 17

The Act has limited extra-territorial operation. In accordance with Australia’s international obligations, it does not, for example, extend to operation of foreign registered aircraft operating outside Australian territory. However, under mutual recognition, it will be possible for the holder of an Australian AOC with ANZA privileges to operate a New Zealand registered aircraft in New Zealand. The amendment to section 7 of the Act in Item 17 ensures that the Act has sufficient extra-territorial effect to regulate such activities.

Item 18

CASA has a list of defined functions, which are set out in section 9 of the Act. In particular section 9(1)(a) and (b) provide that:

“CASA has the function of conducting the safety regulation of the following, in accordance with this Act and the regulations:

(a) civil air operations in Australian territory;

(b) the operation of Australian aircraft outside Australian territory;...”

To permit the free deployment of aircraft in the Australia New Zealand single aviation market (SAM), operators using ANZA privileges will be able to use both Australian and New Zealand registered aircraft in both countries. This item inserts a new function into that list to permit CASA to regulate ANZA activities in New Zealand that have been authorised under Australian issued safety certifications. It clarifies that CASA can regulate any aircraft (including those on the New Zealand register) used by an Australian AOC holder (with ANZA privileges) when they are being used in New Zealand.

Item 19

In addition to its main function under subsection 9(1), CASA also has some subsidiary functions set out in subsection 9(3) of the principal Act. This item inserts the function of implementing the ANZA mutual recognition agreements. This provision is not intended to give CASA the responsibility for mutual recognition matters generally. The responsibility for the mutual recognition agreements will remain with the Minister and his or her Department. The function has been assigned to ensure that CASA has authority to carry out the terms of the agreements using its resources and thus does not exceed its statutory mandate.

Item 20

Section 26 provides that aircraft on international flights to and from Australia must have permission from CASA. Item 20 inserts a new form of permission to the existing list in subsection 26(2) that contemplates that aircraft will arrive in, and depart from, Australia as part of ANZA activities. It provides for a new paragraph (e) that grants permission as authorised by a New Zealand issued AOC with ANZA privileges that is in force for Australia. It only does so to the extent to which it authorises ANZA activities in Australia, as opposed to other international activities.

Item 21

Section 26A inserts an overview of mutual recognition to assist readers of the legislation.

Section 26B permits CASA to disclose information to CAANZ for purposes relating to the ANZA mutual recognition agreements. Such information may include personal information such as pilots personal details, qualifications etc., and may be disclosed to CAANZ, for example, for purposes of CAANZ’s routine surveillance to ensure compliance with relevant New Zealand civil aviation legislative provisions by operators conducting ANZA activities in Australia. This section expressly authorises CASA to disclose personal information for the purpose specified in the provision and ensures CASA would not be in breach of the Privacy Act 1988.

Section 26C requires CASA to consult with the Director of CAA NZ before taking any action which would or might affect an operator’s right to conduct ANZA activities in New Zealand under an Australian ANZA safety certification, such as an Australian AOC with ANZA privileges. Such action could, for example, be the revocation or variation of the AOC or safety certification to remove or vary the ANZA privileges. However, the obligation to consult would only arise in circumstances specified in the ANZA mutual recognition agreements (see paragraph 26C(a)). Any consultation required under this section must follow the procedures provided in the agreements (see paragraph 26C(b)).

Section 26D permits the Director of CASA, if necessary, to delegate any of CASA’s powers, other than those in Part IIIA (the investigation powers), to CAANZ to enable CAANZ to perform certain functions in New Zealand on behalf of CASA for purposes of the ANZA mutual recognition agreements. Consistent with Commonwealth legal policy, and to provide appropriate checks and balances in relation to any exercise of power conferred under Commonwealth law, employees of CAA NZ, in their exercise of CASA’s powers, will be subject to the directions of the Director of CASA.

Section 26E makes it clear that CASA officers may exercise powers or perform functions delegated by the Director of CAA under section 23B(2A) of the Civil Aviation Act 1990 of New Zealand (‘the NZ Act’). These powers may only be exercised only in relation to ANZA safety certifications. For example, under the NZ Act, the Director of CAANZ may impose conditions on an aviation document. Such power may be delegated to CASA if CAANZ requires CASA’s assistance with its routine surveillance within Australian territory in respect of holders of NZ AOCs with ANZA privileges. CASA officers will not be able to be delegated powers or functions under section 15 (which covers safety & security inspections and monitoring), section 21 (power to detain aircraft, seize products and impose conditions and prohibitions) or section 24 (general power of entry to place) of the NZ Act.

The ‘cross-delegation’ of powers in the new Sections 26D and 26E will only be used for the exercise of domestic administrative powers under the law of the country whose authority delegated the power. Where, for example, the CAANZ wishes to exercise enforcement powers, it would need to ask an authorised CASA investigator to exercise his or her powers under Part IIIA (see Items 32-34). Alternatively for investigations into possible offences, CAANZ would need to make a request through the Mutual Assistance in Criminal Matters Act 1987. CASA would be in a similar position in relation to their monitoring and investigations in New Zealand.

Item 22

Item 22 inserts a reference to ‘New Zealand AOC with ANZA privileges that is current in Australia’, so that the operation of any aircraft within, into or out of Australia, or the operation of any Australian aircraft outside Australia, would also be permitted as long as such operation is authorised under a current New Zealand AOC with ANZA privileges. It only does so to the extent to which it authorises ANZA activities in Australia, as opposed to other aviation activities. This is one of the key provisions that give effect to mutual recognition so that those AOCs issued by CAA NZ within the mutual recognition scheme would be treated as if they were AOCs issued by CASA.

Item 23

Item 23 inserts a note to draw attention to the fact that the phrase ‘New Zealand AOC with ANZA privileges that is current in Australia’ has a specific meaning for purposes of the Act.

Item 24

Item 24 sets out the threshold conditions under which CASA may issue an Australian AOC with ANZA privileges.

As a matter of basic requirement under the new subsection (2AA), CASA may issue an AOC to authorise operations within, into or out of New Zealand (‘New Zealand operations’) only if the same AOC also authorises operations within, into or out of Australia (‘Australian operations’). This provision prevents CASA from issuing an AOC which authorises only New Zealand operations. However, the type of New Zealand operations authorised under the AOC do not need to be the same as the Australian operations authorised under that AOC. For example, CASA may issue an Australian AOC with ANZA privileges to authorise only regular public transport passenger operations in Australia but only charter freight operations in New Zealand.

Subsection (2AB) clarifies that CASA may continue to issue AOCs that authorise operations into or out of New Zealand, separate from the mutual recognition system. Such AOCs will not be subject to the provisions that apply solely in relation to AOCs with ANZA privileges.

Subsection (2AC) requires that every Australian AOC with ANZA privileges must indicate that it is such an AOC. This is to ensure that AOCs issued by CASA to authorise operations into or out of New Zealand but which were issued outside the mutual recognition scheme would not be confused with Australian AOCs with ANZA privileges.

Item 25

Subsection 27(2A) of the Act requires that foreign registered aircraft being used on regulated domestic flights must be specified individually on an AOC. Under the amendment to the Act in item 25 New Zealand registered aircraft being used on regulated domestic flights are able to be specified on an Australian AOC with ANZA privileges by reference to a class of aircraft, i.e. as if they were Australian aircraft.

Item 26

Item 26 amends the definition of ‘foreign aircraft AOC’ so that New Zealand aircraft operating under AOCs with ANZA privileges would not be treated as foreign aircraft for purposes of section 27AE. Aircraft registered in countries other than Australia and New Zealand, eg. the UK, (‘non-ANZA aircraft’) would continue to require a foreign aircraft AOC before they may be operated on flights that are not regulated domestic flights. Note that an Australian AOC with ANZA privileges may be partly ‘foreign AOC’ for purposes of section 27AE to the extent that the AOC authorises operation of non-ANZA aircraft on flights that are not regulated domestic flights. In other words, section 27AE applies to any AOC application in respect of operations on flights that are not regulated domestic flights using non-ANZA aircraft, notwithstanding that the same application also seeks authorisation to carry out ANZA activities in New Zealand. To the extent that the application is seeking authorisation to carry out ANZA activities in New Zealand, the additional conditions under section 28B would apply.

Item 27

Paragraph 28(1)(c) of the Act requires that an applicant for an AOC authorising the operation of foreign registered aircraft on regulated domestic flights must satisfy CASA of the matters set out in section 28A. However, under the mutual recognition scheme CASA will not be required to be satisfied of the matters set out in section 28A in relation to New Zealand registered aircraft engaged in regulated domestic flights.

Item 27 amends Paragraph 28(1)(c) so that the entry conditions generally applicable to certain AOCs do not apply to Australian AOCs with ANZA privileges. Those certain AOCs are:
§ Australian AOCs without ANZA privileges; and
§ Australian AOCs with ANZA privileges that cover aircraft not registered in either Australia or New Zealand.

Item 28

Item 28 introduces two new criteria that must be satisfied before CASA is obliged to issue an AOC.

The new paragraph 28(1)(d) is intended to prevent any operator from holding two separate AOCs that authorise the same air operations. In other words, an operator who already holds a New Zealand AOC with ANZA privileges cannot obtain an Australian AOC which permits the same operations as those permitted under their New Zealand AOC. Where an operator holds a NZ AOC, CASA would need to be satisfied that this AOC is surrendered before issuing an Australian AOC with ANZA privileges.

The new paragraph 28(1)(e) provides that where the AOC sought is an Australian AOC with ANZA privileges, then the additional conditions set out in section 28B must also be met.

Item 29

Item 29 inserts the new section 28B, which provides a list of the additional conditions that must be met before CASA is obliged to issue an Australian AOC with ANZA privileges.

Paragraph (1)(a) prevents any operator from holding two separate AOCs that authorise the same air operations. More precisely, an operator who holds a New Zealand AOC cannot obtain an Australian AOC with ANZA privileges which permits the same operations as those already permitted under their New Zealand AOC.

Paragraph (1)(b) is about the eligibility criteria that must be satisfied before an operator may enjoy ANZA privileges. Such criteria are set out in the ANZA mutual recognition agreement/s negotiated between the Australian and New Zealand governments, having regard to a range of economic as well as safety considerations. CASA is not able to issue an Australian AOC with ANZA privileges unless and until it has been advised by the Secretary to the Department of Transport and Regional Services that the operator meets the eligibility criteria provided in the mutual recognition agreement/s.

Paragraph (1)(c) provides another entry condition concerning the compliance with New Zealand civil aviation safety laws. Before CASA is obliged to issue an Australian AOC with ANZA privileges, it must be satisfied that the applicant is capable of complying with New Zealand safety rules that are applicable to the operator in relation to their ANZA activities in New Zealand. Note that this entry condition, like most other entry conditions on AOCs, are also on-going conditions by virtue of the new section 28BAA (Item 10 Schedule 2). In other words, paragraph (1)(c) operates in two ways: (1) it requires CASA to be satisfied that the applicant is capable of complying with the relevant New Zealand laws, before CASA is obliged to issue an Australian AOC with ANZA privileges; and (2) once the AOC with ANZA privileges has been issued, the fact that the holder has not actually complied with the relevant New Zealand laws would allow CASA to remove the ANZA privileges from the AOC.

Paragraph (1)(d) is to ensure that CASA would only issue an Australian AOC with ANZA privileges when it is satisfied that it has the ability to adequately oversee the operations of the holder of the AOC. Sub-paragraphs (i) to (iv) provide the relevant considerations that must be taken into account by CASA in determining whether it would have the ability to provide sufficient safety oversight in respect of a particular operator. Note that the conditions set out in sub-paragraphs (d)(i) to (iv) are cumulative, which means all those conditions must be met before CASA may come to the conclusion that it is capable of effectively regulating all the operations covered by the application. Since this entry condition will be an on going condition, the mutual recognition agreements will provide for transfer of country of certification to New Zealand where an AOC holder can no longer be overseen by CASA.

Paragraph (1)(e) allows further conditions on AOCs to be provided in the regulations.

CASA is obliged to consult the Director of CAA New Zealand in relation to the matters set out in paragraphs (1)(a), (c), (d), and (e).

Item 30

Item 30 inserts a new subsection 28BD(2) to impose an on-going obligation on the holder of an Australian AOC with ANZA privileges to comply with applicable New Zealand civil aviation safety laws. Generally speaking holders of Australian AOCs with ANZA privileges will only have to comply with the New Zealand rules of the air applicable to flight and operation of the aircraft. This requirement is effectively the same as the condition imposed by the proposed paragraph 28B(1)(c) to comply with relevant New Zealand law, which will also be an on-going requirement by virtue of the proposed section 28BAA (Item 10 Schedule 2). Subsection 28BD(2) is inserted merely because there is already an existing requirement under section 28BD to comply with the Australian Civil Aviation Act, Regulations and Orders. For completeness, it is appropriate to also have a subsection referring to the applicable provisions in the New Zealand Civil Aviation Act, Regulations and Rules, as far as the holders of Australian AOCs with ANZA privileges are concerned.

Item 31

Item 31 inserts a number of sections generally relating to Australian and New Zealand AOCs with ANZA privileges.

28C certain documents and information to be given to CASA by holder of New Zealand AOC with ANZA privileges

Subsection 28C(1) explains that a New Zealand AOC with ANZA privileges comes into force for purposes of mutual recognition upon the provision of certain information, including a copy of the AOC, to CASA by the holder of the New Zealand AOC with ANZA privileges. Note that operations into, out of or within Australia pursuant to a New Zealand AOC with ANZA privileges are only allowed under subsection 27(2) if the New Zealand AOC concerned is in force (see items 22 and 23). Also note that a New Zealand AOC with ANZA privileges is not considered in force when it is subject to a temporary stop notice issued by CASA under section 28D.

Subsection 28C(2) requires the holder of the New Zealand AOC with ANZA privileges to notify CASA of any changes to the AOC within the specified timeframe of 7 days.

Under subsection 28C(3), the holder is also required to notify CASA of any changes to its ANZA activities in Australia or any information previously provided to CASA under section 28C.

Subsection 28C(4) provides that failure to comply with subsection (2) or (3) would be an offence of strict liability. This means that there is no need to prove intention, knowledge, recklessness or negligence in order to establish that an offence under either of those subsections has been committed. However, the alleged offender may still rely on a variety of defences available under the Criminal Code Act 1995, eg. mistake of fact under section 9.2 of the Criminal Code provided in that Act.

28D: Temporary Stop Notices

A new section 28D will governing CASA’s power to issue a temporary stop notice to a holder of a New Zealand AOC with ANZA privileges. A similar provision has been made in the corresponding New Zealand legislation permitting the CAANZ to issue such notices in respect of holders of Australian AOCs with ANZA privileges. A chart explaining the application of Temporary Stop Notices is on page 26.

Subsection 28D(1) provides the Director of CASA with a non-delegable power to issue such a notice. This power is necessary because, from time to time, CASA may become aware of a serious risk to aviation safety in relation to a particular operator flying in its territory using a New Zealand AOC with ANZA privileges issued by the CAANZ. At such times, the Director of CASA must be able to act swiftly in the interests of safety, even though it is not the regulator responsible for overseeing the operator and did not issue the operator’s AOC.

Such a notice takes effect immediately and can require the operator to cease conducting all or any of the ANZA activities that the AOC authorises in Australian territory. Failure to comply with the notice is an offence under section 29 of the Australian Act. It is important to note, however, that the operator can keep operating in New Zealand if CAANZ permit it to – it is only its Australian operations that are affected by the temporary stop notice. In a similar way, if the CAANZ issues a temporary stop notice to the holder of an Australian AOC with ANZA privileges and the holder fails to comply with it, then the holder commits an offence under New Zealand law.

In reality it is expected that the temporary stop notice would be used only rarely, for example if CASA received information about an operator that had to be acted upon swiftly to prevent aviation safety being compromised. Under normal conditions, CASA would be expected to become aware of safety concerns in enough time to discuss the matter with the CAANZ with effect that any action to resolve the matter would usually be taken by CAANZ. Even when a temporary stop notice is used, it is likely that there will be discussion between the two regulators at the time it is issued.

A temporary stop notice expires at the end of the period with or without action having been taken by CAANZ. It is anticipated a temporary stop notice will be issued only once in relation to the same circumstances. The provision was deliberately drafted in this way as both safety regulators are capable of deciding quickly what is the appropriate action to take to preserve safety without unnecessary hardship to the operator concerned. The intention behind this provision is therefore to maintain safety at all times but to take only such action as is considered necessary for that purpose.

Subsection 28D(1) also stipulates that a temporary stop notice must state the length of time the notice is in force; this cannot be longer than seven calendar days (as opposed to seven working days). Seven days is considered sufficient time for the matter to be referred to the CAANZ for action and for that organisation to decide what action, if any, it should take. This does not mean that the CAANZ has to have the safety concern resolved within the seven-day period (or less, depending on the time of the notice), only that it must take a decision on what should be done immediately, that is before the

Definitions:
The home regulator is the aviation safety regulator that issued/ granted the ANZA AOC and is responsible for regulating the operator.
The host regulator is the aviation safety regulator of the host country, that is the one that did not issue the ANZA AOC and is not responsible for regulating the operator.

Chart Showing the Application of Temporary Stop Notices under the
Mutual Recognition of Aviation-related Safety Certification Provisions of the Australian and New Zealand Civil Aviation Legislation.

Host regulator can revoke the temporary stop notice at any time

Host regulator becomes aware of a serious risk to aviation safety posed by an operator that requires immediate action

Operator can seek merits review of the home regulator’s decision. Operator can also seek a statement of reasons under the ADJR Act (or NZ equivalent) in relation to the home regulator’s decision on what action to take and the host regulator’s decision to issue the notice in the first instance

If consultations fail to produce agreement on a safety concern, matter can move to dispute resolution.

If the host regulator is not satisfied with the decision, further consultations ensue however the decision of the home operator is applied and remains in force during consultations

Home regulator advises the operator of what action, if any, it proposes to take in relation to the matter. If no decision advised within the time period on the notice, operator may recommence activities by default

Home regulator advises host operator, within the period of the notice, regarding what action it proposes to take

Host regulator revokes the temporary stop notice immediately on receiving the decision of the home regulator

On receipt of a copy of the notice, the home regulator immediately considers what action, if any, should be taken as a result of the notice being given and consults the host regulator if the actions proposed will affect the operator’s ANZA activities in the host country

Host regulator gives a copy of the notice to the home regulator as soon as practicable after giving it to the operator and provides all other appropriate information it can.

Host regulator gives a temporary stop notice to the operator concerned, requiring them to cease operations for the period specified on the notice (not more than 7 days)

notice expires. This may include suspending the operator while further investigations are undertaken. Or the matter may be one that can be easily settled so that CASA feels confident in the operator recommencing its activities.

It is open to the Director of CASA to give a period of less than seven days on the notice, if it feels a lesser time is sufficient. This is in recognition that the operator should not be disadvantaged beyond that necessary to maintain safety. On the other hand, in setting a period of less than seven days, the Director will need to be confident that it will be enough time for CAANZ to consider the problem and come to a decision, particularly given that an operator automatically has the right to recommence operations at the end of the period.

Subsection 28D(2) restricts the Director’s power to issue a temporary stop notice, stipulating that there must be a serious risk to aviation safety, in its opinion, in order to exercise that power. The nature of what constitutes a serious risk must remain within the discretion of the Director. However it is expected that the matter would be regarded to be important enough, and of enough concern, in terms of aviation safety to warrant immediate action to ensure that the operations are halted without delay.

Subsection 28D(3) provides that the temporary stop notice comes into effect at the time it is given to the operator in question and remains in force for the period determined on the notice. This reflects the gravity of the situation that required a temporary stop notice to be issued. Nonetheless, the Director may revoke the temporary stop notice under section 28E.

Subsection 28D(4) requires the Director to state the facts and circumstances, which, in his/her opinion, give rise to the serious risk to civil aviation safety in Australian territory. This provision recognises that in issuing a temporary stop notice, the safety authority has a responsibility to the operator, by way of natural justice, to advise of the reasons for it. The reasons for the notice also become available to the CAANZ when the Director gives them a copy of the notice. Additionally, CASA is expected to provide any further information to the CAANZ that it is appropriately able to provide in relation to the matter, to assist CAANZ in deciding what action it should take.

Subsection 28D(5) requires the Director of CASA to provide the Director of CAANZ with a copy of the temporary stop notice as soon as practicable after it has been given to the operator. Given that the CAANZ only has seven days (or possibly less) to consider what action, if any, to take in relation to the safety concern, it is important for CASA to bring the matter to the CAANZ’s attention as soon as practicable.

As soon as CAANZ receives a copy of the Australian temporary stop notice, it must take certain actions under its own Act. It must immediately consider the circumstances that gave rise to the giving of the notice and decide whether to suspend, revoke, impose conditions on, or take any other action in relation to the AOC with ANZA privileges, whether in whole or part.

Subsection 28D(6) provides that the notice is not invalidated even if the Director of CASA fails to state the facts and circumstances in the notice, and/ or fails to provide a copy of the notice as soon as practicable to CAANZ.

The Bill does not provide the opportunity for merit review of the decision to issue a temporary stop notice. This is because such a notice will only be issued in extreme and urgent circumstances with the matter then being referred almost immediately to the home regulator. Further, since the maximum time that a notice will be in force, is or seven calender days, the opportunity for merits review would be pointless. Decisions of the home regulator will, however, be open to review. Another reason is that an appeal to the Administrative Appeals Tribunal can only be made under the Australian Civil Aviation Act in relation to AOCs issued under that Act. New Zealand AOC’s with ANZA privileges don’t fall into this category. New Zealand operators will, however, be able to make application to the Australian Federal Court for a statement of reasons under the Administrative Decisions (Judicial Review) Act 1977.

28E: Revocation of temporary stop notices

Even though a temporary stop notice is given for a set time period, the Act does provide that it can be revoked. The Director of CASA must revoke the notice upon receiving written advice from the home regulator that it has made a decision regarding the matter, whether or not the decision is to take action. The Director can, however, revoke the notice for any reason, for example if the safety concern was resolved or was found not to exist after all. These powers are also non-delegable.

28F: CASA’s obligation on receiving a copy of a New Zealand temporary stop notice

Subsection 28F(1) requires that, upon receiving a copy of a temporary stop notice issued by CAANZ to the holder of an Australian AOC with ANZA privileges, CASA consider it immediately and decide as soon as practicable what action it should take under the Act or Regulations. This provision reflects the fact that the notice is only issued for a maximum of seven calendar days, so it is important there be no delay in CASA’s consideration of the situation. The clause mirrors that found in corresponding New Zealand mutual recognition provisions. It has the secondary intention of ensuring that the seven day (or less) period not be allowed to lapse without the matter being considered such that an unsafe operator might, by default, be permitted to resume operations without the original concern of CAANZ being addressed.

Subsection 28F(2) provides that CASA must comply with the provisions of the ANZA mutual recognition agreements. It is anticipated that these agreements will set out agreed procedures to be followed when a temporary stop notice is received.

Subsection 28F(3): this provision provides that CASA must advise the Director of CAANZ of its decision in relation to the safety concern raised in the New Zealand temporary stop notice and advise what action it intends to take, if any. CASA is also obliged to consult the Director of CAANZ under the new section 26C (see Item 21), before formally notifying its decision, if the action would affect ANZA activities in New Zealand. Having considered there to have been a safety concern serious enough to issue a temporary stop notice, CAANZ will naturally wish to be advised of the decision and proposed action, particularly given that it may result in the operator recommencing its activities. This does not mean that CAANZ has a power of veto over the decision or action; mutual recognition is built on an acceptance of each other’s standards, and that includes decisions. This said, CAANZ must be consulted before the decision is made if the action affects ANZA activities in NZ in recognition of their knowledge of their jurisdiction.

Items 32 and 33

Item 32 amends section 32AC so that a CASA investigator may exercise monitoring powers (including inspection powers as defined under section 3) under this section at the request of CAANZ to help CAANZ ensure that the New Zealand Civil Aviation Act, Regulations or Rules are being complied with. Consequently, under section 32AK, a CASA investigator may stop or detain an aircraft or ensure the aircraft remain undisturbed for a reasonable period when conducting an investigation on behalf of CAANZ. The cooperative arrangements between CASA and CAANZ regarding mutual enforcement, including how a request may be made by the requesting authority, and how the request should be dealt with by the requested authority, will be provided in the ANZA mutual recognition agreements. Under section 32AM, anything done by a CASA investigator under section 32AC on behalf of CAANZ which constitutes acquisition of property from a person otherwise than on just terms would require CASA to pay reasonable compensation.

Item 34

Item 34 amends section 32AD so that a CASA investigator may apply for a monitoring warrant under this section at the request of CAANZ in respect of premises in Australia, to help CAANZ ensure that the New Zealand Civil Aviation Act, Regulations or Rules are being complied with. The cooperative arrangements between CASA and CAANZ regarding mutual enforcement, including how a request may be made by the requesting authority, and how the request should be dealt with by the requested authority, will be provided in the ANZA mutual recognition agreement. Once on the premises, the CASA investigator may require a person to answer questions or produce documents under section 32AJ for the purpose of an investigation conducted on behalf of CAANZ. In addition, under section 32AK, the CASA investigator may stop or detain an aircraft or ensure the aircraft remain undisturbed for a reasonable period when conducting an investigation on behalf of CAANZ. Under section 32AM, anything done by CASA investigators under section 32AD on behalf of CAANZ which constitutes acquisition of property from a person other than on just terms would require CASA to pay reasonable compensation.

Item 35

This item inserts another paragraph into the regulation making power in section 98 of the Act to allow regulations to be made for the mutual recognition of aviation safety certifications in accordance with the ANZA mutual recognition agreements.

While AOCs, as the most significant civil aviation approval, will be the first document to be recognised, the mutual recognition obligation can be extended to all aviation documents that are not covered by the Trans Tasman Mutual Recognition Act 1997 with the agreement of both Governments. Such documents could include certificates for aircraft maintenance organisations.

Amendments to the Civil Aviation (Carriers’ Liability) Act 1959

It is Australian government policy that all carriers that operate within Australia are subject to the Australian rules that govern carrier’s liability have mandatory non-voidable insurance to meet their obligations under the Civil Aviation (Carriers’ Liability) Act 1959 (the Liability Act). Carriage within Australia is governed by Part IV of the Liability Act. Sections 28 and 29 impose liability under this Part on holders of international licences and holders of AOCs issued by CASA. The following items amend the Liability Act to ensure that airlines operating under an New Zealand issued AOC with ANZA privileges are subject to this liability. The mandatory non-voidable insurance provisions of Part IVA of the Liability Act will then apply to these operations.

Item 36

This item inserts a new paragraph to the definition of airline licence in section 26 of the Liability Act. This means that any carrier operating with a New Zealand issued AOC with ANZA privileges has the same liability and requirement to carry insurance as a carrier operating under an AOC authorising airline operations issued under the Civil Aviation Act 1988.

Item 37

This item inserts a new paragraph to the definition of charter licence in section 26 of the Liability Act. This means that any carrier operating with a New Zealand issued AOC with ANZA privileges has the same liability and requirement to carry insurance as a carrier operating under an AOC for authorising charter operations issued under the Civil Aviation Act 1988.

Schedule 2 – Other amendments

Part 1 – References to foreign aircraft

Amendments to the Civil Aviation Act 1988

The opportunity has been taken to correct errors and standardise references in the Act to aircraft which are registered in countries other than Australia. Subsection 3 (1) of the Act defines such aircraft as “foreign registered aircraft”. However, in several provisions of the act, the term “foreign aircraft” is used. In each of these instances, the correct term should be “foreign registered aircraft”.

Schedule 3 amends sections 7, 9 and 25 of the Act, and the heading to Subdivision C of Division 2 of Part III of the Act to replace “foreign aircraft” with the defined term “foreign registered aircraft”.

Part 2 – Ongoing licence conditions

Amendments to the Civil Aviation Act 1988

Currently, it is a condition of all AOCs that holders of AOCs continue to satisfy CASA of the matters set out in section 28 of the Act. Section 28 of the Act provides for the matters which CASA must be satisfied for the issue of an AOC – it is only natural that the holder of an AOC continue throughout the life of the AOC to meet those requirements. This condition is currently imposed by paragraph 4.4 of section 82.0 of the Civil Aviation Orders.

The condition is a fundamental condition of all AOCs, akin to the conditions imposed by sections 28BD to 28BI of the Act. The opportunity has been taken to lift this fundamental condition from a relatively obscure piece of legislation – that is, paragraph 4.4 of Civil Aviation Order 82.0 – into the Act where it properly belongs.

Part 2 of Schedule 2 of the Bill has this effect. Item 8 inserts a new paragraph 28BA(1)(aa) which imposes the condition set out in new section 28BAA on all AOCs. Item 9 provides that, if the condition set out in the new section 28BAA is breached, the AOC continues to authorise operation of aircraft according to its terms. This reflects the situation for breaches of other conditions imposed the Act (under paragraph 28BA(1)(a)).

Item 10 then inserts a new section 28BAA which imposes the condition that CASA must remain satisfied of the matters set out in paragraphs 28(1)(a) and (b) of the Act. Further, Australian AOCs with ANZA privileges are subject to the condition that CASA remain satisfied of the matters set out in paragraphs 28B(1)(a), (c) and (d) of the Act, and that the Secretary of the Department has not advised CASA that the holder of the AOC is no longer eligible for ANZA privileges under the ANZA mutual recognition agreements.

^[1] Agreement between the Government of Australia and the Government of New Zealand Relating to Air Services done at Auckland, 8 August 2002
^[2] Agreement between the Government of Australia and the Government of New Zealand Relating to Air Services done at Auckland, 8 August 2002.
^[3] Community External Trade Policy in the Field of Standards and Conformity Assessment, Communication of the (European) Commission, 4 April 2003.
^[4] Open Markets Matter: The Benefits of Trade and Investment Liberalisation, OECD Policy Brief 8, October 1999.

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