Senator O'BRIEN --What medical and other checks are required before CASA can suspend a chief pilot's medical certificate?

Mr Toller --I will ask one of our technical experts to answer that question.

Mr McIntyre --It might be better if I explain the processes that we go through for the suspension of any medical certificate, because there is no difference between the process for chief pilots or any other pilots. Essentially CASA has two processes. One is under 6.18 of the regulations, and that is where we would suspend, pending an examination. That would have to be done in the interests of safety. If CASA were aware that there was something about a particular pilot which might affect aviation safety, we could under 6.18 suspend that pilot and ask that pilot to submit to an examination. The other way that CASA can suspend is after a show cause, under 6.20 of our regulations. We would issue a show cause as to why we should not suspend and, after that process, we could suspend the licence pending a medical certificate.

Senator O'BRIEN --So there can be a show cause process where effectively the pilot is put on notice that they have to satisfy you of certain things, although their licence will be suspended? There is a suspension followed by a process where the medical can take place to allow the pilot the opportunity to have it medically proven that he is medical competent?

Mr McIntyre --Essentially, yes. The latter would only be done in the situation where there was a significant aviation safety risk.

Senator O'BRIEN --What rights of appeal are available to the chief pilot or other pilots in either of the circumstances?

Mr McIntyre --It does not matter whether or not it is the chief pilot. The chief pilot's medical arrangements are exactly the same as for any other pilot. The right of appeal for that pilot is the Administrative Appeals Tribunal.

Senator O'BRIEN --Mr Elder, why is it controversial to supply that information that you would not supply to question on notice No. 849?

Mr Elder --At the time we looked at the questions, they were framed in the context, we believed, of a certain accident; and on the basis of legal advice we took the view that we should not be addressing questions that were to be raised during the coronial inquiry.

Senator O'BRIEN --Yet these questions, as you have just heard, are general and they have just been answered. The minister's answer, and I presume it was drafted by CASA, suggests that it would have been inappropriate and prejudicial to the conduct of inquiry to respond to those questions.

Mr Elder --May I invite my colleague Mr Ilyk, General Counsel to CASA, to respond to that?

Senator O'BRIEN --I am happy for Mr Ilyk to respond to it if he can.

Mr Ilyk --When we received the questions--and there would have been 10 or 12 of them--most of them were in relation to a particular individual and a coronial inquiry, which was commencing this week and which has in fact commenced this week. That individual was one of the witnesses who was going to give evidence at the coronial inquiry. In light of that we considered that, given the context in which the questions were asked, it may very well have been inappropriate to answer general questions that may have touched upon the coronial inquiry. I accept in relation to the general questions that we could have given those answers, as we have done today, but it was really in the context of the whole of the questions that were put on notice.

Senator O'BRIEN --Had you answered them on notice but decided not to answer the others, the fact that they were put at the same time as other questions, in my view, does not justify the refusal to answer questions which do not go to particular circumstances of a case. These are general questions, which we just heard. They could have applied to any matter.

Mr Ilyk --They could, except that they were in the context of a particular individual and in relation to a particular inquiry.

Senator O'BRIEN --No, the questions do not mention the individual, the state or the authority. They ask about the process.

Mr Ilyk --Absolutely. But the question immediately before that, in relation to suspensions and cancellations, was in relation to that particular individual and in relation to the particular coronial that is being held at the moment.

Senator O'BRIEN --Yes. But, Mr Ilyk, I am not responsible for the numbering by the Table Office of questions. The fact that they are numbered in series does not necessarily make them related.

Senator Boswell --You have got your answer now, though.

Senator O'BRIEN --That is right. And, Senator, what I am effectively complaining about is that I asked very general questions which could have been answered generally but were not on the basis that they were said to be prejudicial. Questions on notice Nos 845 to 856 were said to relate to a certain matter which is now the subject of a coronial inquiry. But these questions do not mention the subject matter of the coronial inquiry as such.

Senator Boswell --Your complaint is registered and you have your answer now. I do not know that it serves much purpose in going back over it.

Senator O'BRIEN --I think the purpose is to make a point.

Senator Boswell --You have made your point.

Senator O'BRIEN --I take it that it is accepted that I have. Senator Knowles has got some matters relating to questions on notice too, so we might get them out of the way.

CHAIR --We will take them at this stage, Senator Knowles.

Senator KNOWLES --Mr Toller, you were here when I raised the issue of BAe146 cabin air contamination before. What is your response to these inane answers to questions that have been provided to me?

Mr Toller --If you believe that the answers are inane then I apologise; they are certainly not meant to be. All the answers to the questions were given in good faith. They were given with the best technical expertise that we could provide, and we believe that they are honest answers to the questions that we were given.

Senator KNOWLES --Mr Toller, if I may be so bold as to suggest that if you say that they were given with the best technical expertise that is available then I have even greater cause to worry. When the questions are so straightforward and one gets an answer--for example, to the question I referred to earlier of whether there is a causal link between sickness and cabin contamination--of `no', even when there is so much evidence to suggest otherwise, how can you, Mr Toller, possibly sit there and say, `That is the best technical evidence I can give you'?

Mr Toller --I do not believe that the response to that particular question came from CASA.

Senator KNOWLES --That, in fact, might be so. But there are plenty of others that did. Tell me if this one about the complete safety of crew and passengers came from CASA. It says, `CASA believes that these inspection requirements are adequate.' If CASA believes that the inspection requirements are adequate, why is there an ongoing problem, why are people being sacked and why are crew and passengers continually getting ill?

Mr Toller --I am not sure that there is an answer to that which would satisfy you. There is no ability to ensure that any aircraft is not subject to some form of cabin fumes at some time, other than grounding all aircraft.

Senator KNOWLES --I realise that, but there is a major problem with the BAe146, isn't there?

Mr Toller --There appears to be a problem with the BAe146.

Senator KNOWLES --There appears to be?

Mr Toller --Over a number of years, there appear to have been a number of problems with the BAe146.

Senator KNOWLES --I am sorry to interrupt, but would it not be fair to say that there is a problem, not that there appears to be a problem? When you have received 51 reports in the last 12 months, you cannot honestly say to me that there `appears to be a bit of a problem'.

Mr Toller --Okay, I will rephrase that: there is a known problem with the BAe146. There are also known problems with other types of aircraft--most of which are not flying in Australia. We have a relatively small percentage of the total BAe146 fleet in the world. Therefore, for many of the issues, we rely on the expertise of the certificating authority--which in this particular case is the UK Civil Aviation Authority--and on the manufacturer, which is British Aerospace. We do not have in CASA the sort of expertise that is needed to work on issues to do with the technicality of cabin fumes; we are dependent on advice that we are given from outside.

Senator KNOWLES --But CASA have previously issued ADs in regard to the BAe146. Is that correct?

Mr Toller --That is right. These are in response to ADs that have been provided by the certificating authority, by the UK CAA.

Senator KNOWLES --And British Aerospace.

Mr Toller --The airworthiness directives--

Senator KNOWLES --And the recommendation of British Aerospace.

Mr Toller --may be at the recommendation of British Aerospace, but the actual mandation of them comes from the certificating authority worldwide, which is the UK Civil Aviation Authority.

Senator KNOWLES --But what is wrong with the system? There is a detected problem, the plane returns to port with a detected problem--because the crew are sick--they have a look at the plane but they do not do anything to it, it flies the next day with a different crew and that next crew are sick. How on earth can a system in a country like Australia not only allow that plane to have the problem in the first place but also, when the problem is detected, allow it not to be fixed and to take off again the very next day, affecting another crew and, presumably, another set of passengers?

Mr Toller --I admit that I am not aware of the exact maintenance that was done on that aircraft after the first flight. I have no doubt though that every endeavour was made to try to trace the fault and can only assume, therefore, that it was not correctly diagnosed at the time.

Senator KNOWLES --I believe there is a problem in diagnosis, purely and simply because the greatest pressure is put on this problem on ascent and descent. Surely, when we have 51 reported cases relating to 16 different aircraft over approximately a year, this is not just some problem about which we say, `Oh dear. This is a bit of a shame, isn't it.'

Mr Toller --No, it is not. It is a problem that, I believe, always has been taken seriously, but I think it is one of those extremely difficult ones where there is no simple answer--mainly because most of the time it has been difficult to pinpoint the exact cause. As you are aware, a lot of work has been done that has improved the situation. In the perfect world, we would have found a way to get rid of the situation completely and prevent it from happening again. As I said earlier, all aircraft are, at times, subject to issues to do with cabin fumes. That is just a part and parcel of the design features of the jet engine and the way that air ventilation is put into the cabin. I do not think there is any way of total prevention other than, as I say, grounding all aircraft. I do not think we have reached the stage where we could even say that there was sufficient evidence to ground the BAe146 fleet.

Senator KNOWLES --What would we need as sufficient evidence to do so?

Mr Toller --I think we would have to have evidence that there was a high rate of occurrence with no possible fix.

Senator KNOWLES --No possible fix?

Mr Toller --Yes.

Senator KNOWLES --There is a high rate of occurrence, though. I am reliably informed, as recently again as this morning, that not only are there these 51 reports reported but there are well over 100 that just a few individuals can provide that have never got anywhere. They are logged in their diaries but they have never got anywhere. The reason they have never got anywhere is that those people are worried about losing their jobs. You have probably seen the letter of dismissal that one particular pilot received on 30 October. Did you see that, Mr Toller?

Mr Toller --No, I did not.

Senator KNOWLES --May I ask the secretariat to provide Mr Toller with a copy of that. I would like your comment on that letter of dismissal. It is a very important issue. This person is not the one and only person who has been dismissed because of being affected by fumes; there are a number. There was a flight attendant who was given a payout earlier this year because of being affected. There are many of them who have been permanently affected. Where are we at when we get a situation like that and CASA says, `We do not have any problem with these aircraft'?

Mr Toller --There are several threads to what you have just said. For a start, clearly we can only act on information that is reported to us. There is a legal requirement on the commander of a aircraft to report an incident of the nature of a cabin fume. If they are not reporting these incidents, then they are actually breaking the law.

Senator KNOWLES --They know that, but they want to keep their jobs because they have bills to pay. This pilot whose letter of dismissal you have just had put in front of you suffered that consequence.

Mr Toller --There is also available to people a confidential incident reporting system, so they are able to report via the ATSB confidentially.

Senator KNOWLES --That is terrific, but they do not have any faith in that because once they report the incident, the date, the call sign of the aircraft, then bingo! You do not need to be a rocket scientist to figure out who was in charge.

Mr Toller --They do not have to give that full detail, obviously. Senator, I do believe that the avenues are there for people to report and for this matter to be investigated. As I say, we can only act on the information that we receive. It would be highly disturbing if there were other incidents which have not been reported which would significantly change the total picture. I will certainly give some thought to any way in which we could encourage, if you like, any reporting of this nature without any threat, certainly from us, of legal action. I recognise that we also have issues here to do with the relationship between the employer and the employee over which clearly I do not have control, and that is a much more difficult situation. I can certainly look at ways in which CASA can encourage, shall we say, a more open reporting system. But I cannot cover off, I do not believe, a situation which just relates to the relationship between the employer and the employee.

Senator KNOWLES --Let us come back to the confidential reporting between an officer and the ATSB. As I mentioned before, there is little confidence in the confidentiality of that. You said they do not have to provide the information of the call sign and the date and so forth. If they do not have to provide the call sign of the aircraft and the date of the event, what is the point in reporting it in the first instance?

Mr Toller --The point, Senator, is that if reports--without the details that you just described which would allow specific investigation of a particular incident--were to come to the ATSB in sufficient numbers, it would then become a systemic investigation: they would just have to investigate the general problem. They have done investigations on 146 and 146 cabin fumes issues before, as you well know. I have no doubt they will continue to keep a watching brief, but I cannot actually answer for the ATSB and what their reaction would be.

Senator KNOWLES --I realise that. I know that CASA also has a responsibility to these pilots who want to report things--but they do not have any confidence in CASA. They do not have the confidence in CASA acting, and, as has been seen by this whole maze of paper before us, when they look at the government response--that is, CASA's response--to the committee inquiry, they just think it is a joke. It is an absolute joke that CASA thinks we can hand over an inquiry to somebody else. Let everything happen overseas, and we will just filter in the information when we want. Australia is at the leading edge of so many aviation breakthroughs and yet, on something that is as critical as this, we sit back and wait for everyone else to do it.

Mr Toller --I do not think it is fair to say that we sit back. We put all our information to the UK CAA and to the manufacturer. We actively participate in that. We do not sit on the information and do nothing about it; we give it to those who can use it and who will understand the issues better than us.

Mr Matthews --If I could just add a point myself, the situation that CASA is in, in relation to the certificating authority in the UK, is no different from the situation which many other safety authorities are in around the world. It is not that Australia is adopting a short and expedient process. That is the normal relationship--a common relationship.

Senator KNOWLES --Yes, I am prepared to concede that. However, I look at the move to establish the reference group. The reference group has not got anyone on it who has the technical scientific expertise that one would have thought would have been an essential element in ensuring that something actually comes of the reference group, and comes of it sooner rather than later. I notice that the reference group meets once every six months. Wacky doo! That is really going to solve the problem in a hurry, isn't it? How many incidents are we going to have between every meeting of this reference group, a group that does not have any technical or scientific expertise on it? What do they do--do they just meet every six months, examine their navel and say, `It's nice to have seen you, ta da'?

Mr Toller --I think that all the interested parties are represented on the reference group, from memory.

Senator KNOWLES --I am sure that they are all interested parties, and I am not for one moment suggesting that any one of those parties should be excluded. What I am saying is that what has not been included is the technical scientific expertise that one would suspect would be an essential requirement in assessing the nature of this problem.

Mr Toller --I am speaking only as the head of one of the agencies that is on that reference group, and I recognise what you are saying. I have no doubt that, if the reference group felt that it needed that sort of technical expertise, then it would call for it. But that is for the reference group to decide.

Senator KNOWLES --Senator Boswell, who established the reference group? Who decided on the personnel for the reference group?

Senator Boswell --I will ask Mr Mathews to answer that question.

Mr Matthews --I have been advised that a series of names was initially put forward by CASA. People in my department saw that list and made suggestions about it. The initial membership was settled on that basis and the first meeting has been held. At the first meeting, the reference group asked for some additional participation, including, I am pleased to say, some additional technical expertise. This includes representatives of a body called the American Society of Heating, Refrigerating and Airconditioning Engineers, the FAA, a representative of the aircraft manufacturer and a representative of Honeywell. It looks to me, on the strength of that advice, that technical issues are now being swept up in the membership of the group, but we will go back to the reference group as well and satisfy ourselves that they are satisfied that they have sufficient representation.

Senator KNOWLES --Do those additional people come to the group as quite independent people, as opposed to people who have some form of vested interest?

Mr Matthews --The way that a reference group like this would work is that of course the representative of the aircraft manufacturer might be seen to have an interest. Technical advice is sought from technical experts, including the FAA, and by their nature some of those groups clearly do not have an apparent interest. The American Society of Heating, Refrigerating and Airconditioning Engineers and the FAA would be two examples.

Senator KNOWLES --I think that you will find, Mr Matthews and Mr Toller, that a number of the people who gave excellent evidence to the Senate inquiry could have been included in any reference group, but they seem to have been overlooked. I hope this was not because of the quality or type of evidence they gave, but I would encourage one to look at that type of expertise which clearly has done a lot of research on the oil and its components and on a whole range of other things.

Mr Matthews --I would be surprised if those names had not been considered at the time the original membership was taken into account, but I will ensure that they are drawn to the attention of the reference group.

Senator KNOWLES --If they were, Mr Matthews, I would love to know why they were excluded. The quality of their advice has been proven to be correct, and yet they seem to have been overlooked. In question 20, I asked:

(20)Why is the Government relying on the reference group to `consider whether a specific reporting mechanism needs to be introduced based on research currently under way,' instead of all the research that has repeatedly confirmed the problem.

I note that the response is fairly breathtaking. It reads:

(iv)A specific reporting mechanism for cabin air complaints is not considered necessary at this time. There are already several types of incident reporting systems in place, including the ATSB's ...

If that reporting system is not working--which is basically what you agreed to earlier, Mr Toller--because people are afraid of the confidential nature of it and of losing their jobs, then why is there not a need for some specific reporting mechanism for cabin air complaints at this time? If all the other systems are not working, why not try something else?

Mr Toller --I do not think we were necessarily aware that all the other systems were not working. I understand that the Flight Attendants Association also have an independent reporting system, so they encourage the reports as well, as do the airlines, obviously. I accept the fact that that seemed to be a threatening reporting mechanism. I do not count that as being necessarily total in its validity.

Mr Matthews --There is already, as the answer says, a variety of reporting mechanisms. I guess the issue that the reference group will need to tackle in considering the question that you are raising--and which should be considered by the reference group--about whether there should be an additional and special reporting arrangement is how that could be designed so that it does not have the same disadvantages, which you have been describing, as the present reporting arrangements. I should take this opportunity to say--repeating a point that Mr Toller made earlier--that there is an important obligation on pilots to report, and I would encourage pilots to observe that.

In relation to the confidential and anonymous opportunity that does exist through the ATSB, which is a part of my department, I am not aware of there ever having been a breach of confidence as a result of someone reporting through that mechanism--and, indeed, ATSB has found it very useful for gathering the sort of generalised information that we were referring to earlier. Although ATSB is at arm's length from me and is operationally independent of me, I think it is important that I state on its behalf that the confidential reporting arrangements that are in place do have integrity and I am not aware of there ever having been a breach.

Senator KNOWLES --I am not even questioning that, because I do not know whether there has been a breach or not, and I can only presume the integrity of the ATSB along the lines that you have just described. What I am talking about is human nature--when people experiencing the problem see their colleagues get sacked, disciplined, demoted or whatever and think: `No, I don't think I want to go down that path. I'll just put up with it. I'll zip the lip, and I'll go on.' They do not have confidence in a system in which possibly they should. But I am talking about human nature here, and that is the effect of it.

CHAIR --Senator Knowles, we have had just over half an hour on this topic. I am wondering whether it may be possible for you to have a meeting with Mr Toller, and perhaps some of Mr Matthews's team, leading perhaps to a meeting with that reference group. I am not sure that we are going to advance this issue any further now, and I am conscious that we are only here for a relatively short time today.

Senator KNOWLES --I appreciate that, and I am sorry if I have consumed too much of the committee's time, but I think this is a very important issue of safety not just for aircraft crew but for passengers who travel in these aircraft. If I may ask Mr Toller a couple more questions of clarification for my own purpose and the purpose of those who fly in these aircraft, that would be helpful. Mr Toller, in answer to my question 32, CASA made the comment at the end:

CASA also notes that very few events have affected both pilots. Finally, if a fume event occurs, both pilots can use their oxygen supply, which is provided for such purposes, and they are then completely isolated from the cabin air environment.

First of all, what a silly thing to say--`few events have affected both pilots'--as if there is always another one there! Isn't it law for the captain to be in control? Isn't there a practical difficulty in that, if the captain is incapacitated in his seat, the first officer cannot access a number of the controls required?

Mr Toller --Standard airline training, to my knowledge, for certainly the last 10 to 15 years has included an exercise where one or other of the pilots is incapacitated, usually at a very critical time of the flight, and the other pilot is trained to be able to land the aircraft safely. Incapacitation may be from things like convulsive fits, and the exercise may involve the assistance of cabin crew to move the pilot's seat. But it is something that is part of airline training, and it is perfectly reasonable to expect the remaining pilots to land the aircraft safely--albeit having declared an emergency--in the circumstance of one pilot being incapacitated.

Senator KNOWLES --Let me ask the obvious question: what happens when both are incapacitated, as happened on 1 November, on a Perth to Kalgoorlie flight?

Mr Toller --I was not aware of the 1 November incident--and, to my knowledge, neither was anybody else in CASA--until this morning when you raised it.

Senator KNOWLES --So it is not the first and only occasion?

Mr Toller --I would like to look at the facts of the 1 November incident. My understanding now is that the ATSB are investigating that incident. In terms of that particular incident, the best thing that we can do is wait until the actual facts are available and the ATSB have had a chance to analyse the situation and come up with a recommendation, if there is a need for one. In terms of both pilots being incapacitated, I am not aware of any instance where both pilots have been totally incapacitated. I am aware of a situation where one pilot is incapacitated and alerts the other to the fact that he may not be feeling 100 per cent, shall we say, and has taken the right action--which is, of course, to don the oxygen mask. Pilots are trained for that. They are trained very, very firmly, that, in the case of any fumes, the first action on the indication of fumes should be to don the oxygen mask.

Senator KNOWLES --I do not doubt that, but by this stage they have a belly full of toxic fumes--and a lot of them do not feel any better after donning the oxygen mask. Also, that answer totally and utterly disregards the wellbeing of the flight attendants and the passengers. The passengers might even have their oxygen masks drop down, but they only have a diluted type of oxygen, haven't they? They do not have the same concentration--I think that is probably the word--of oxygen that the pilots get?

CHAIR --Senator Knowles, can I suggest that some new information has come to light this morning as a result of your questioning which I think could productively be explored by you and Mr Toller, and perhaps Mr Matthews. I would remind you that we do have Senate estimates again, beginning 10 February, which is not too long away. It may be that, after you have explored this issue further with these officers, there may be some other public issues you want to raise at those additional estimates.

Senator KNOWLES --I hope there are not; I really do.

CHAIR --I agree with you.

Senator KNOWLES --I hope that some of these problems are resolved. I do not necessarily want to be here today even, but I am, because I think this is such an important issue. I do not think that it should get to the stage where someone has to raise these issues in estimates, let alone raise it a second time in estimates. I would hope that we will have some resolution to this issue and that people will not continue to lose their jobs because of someone's inactivity.

CHAIR --The committee hopes so too. Perhaps Mr Matthews would like to make a closing remark and then we will move back to Senator O'Brien.

Mr Matthews --I just wanted to make two points: firstly, I want to repeat Senator Boswell's assurance that the government is taking this very seriously and will continue to do so. Secondly, just for the sake of the record, there was at least an implication that the recently reported situation had two incapacitated pilots, and I do not think that is correct.

Senator KNOWLES --Two affected pilots, I should have said.

Mr Matthews --Two affected pilots.

Senator KNOWLES --I stand corrected.

Mr Matthews --I would hate there to be some misapprehension in the public domain.

Senator KNOWLES --I did ask Mr Toller for a comment on the letter of dismissal and I would still like his comment on the letter of dismissal.

Mr Toller --I have not had a chance to read it yet, because I have been, obviously, concentrating on your questions. From an aviation safety regulator's point of view, I am not sure that I would be able to comment on the reaction of an employer to his employee over a dispute procedure.

Senator KNOWLES --I am not necessarily asking you to comment on the employer's action, other than to say why, if there is not a problem, this person has been dismissed on the basis that the employer cannot guarantee there will be no exposure to fumes and that they admit there is continuing contamination.

CHAIR --Senator Knowles, I think we could continue to explore this issue. Can I say again, I think it would be very productive if there could be a private briefing arranged with Mr Matthews and Mr Toller at some time during the next sitting fortnight and then, if necessary, the issue can be further explored when we come back for additional estimates in February. I think now we will move back to Senator O'Brien to ensure that the officers have an opportunity to answer his questions. Thank you very much.

Senator O'BRIEN --I understand CASA has draft regulations for all our pilots, instead of licensed aircraft maintenance engineers, to conduct pre-flight checks. What was the genesis of this regulation?

Mr Toller --It is current practice by probably all airlines in Australia except Qantas.

Senator O'BRIEN --What do you mean by `all airlines in Australia'?

Mr Toller --All the major airlines in Australia except Qantas, I believe, already do this, and it is international practice as well.

Senator O'BRIEN --Was there an organisation or an industry proposal to implement this?

Mr Toller --It is current practice. It was not that there was a proposal; it is done at the moment by these airlines, legitimately. We are just putting into the new regulations what already happens today.

Senator O'BRIEN --What do the current regulations say?

Mr Toller --I might take that on notice.

Senator O'BRIEN --They do not say that, do they?

Mr Toller --Not specifically; but I am saying that the practice is permitted under the current regulations.

Senator O'BRIEN --So there is no issue about whether the pilots are willing and able to conduct these checks?

Mr Toller --No, Senator.

Senator O'BRIEN --Is there a shortage of licensed aircraft mechanical engineers in the industry at the moment?

Mr Toller --I will probably have to take that on notice. I know that training new ones is a major objective. Of the major airlines, Qantas probably do not have a shortage. Virgin Blue are having to work hard to keep their numbers up as they expand, and we are very much aware of that.

Senator O'BRIEN --Are you going to give me a fuller answer than that?

Mr Toller --Yes; we will take that on notice and give you some figures on that.

Senator O'BRIEN --What do ICAO standards say about this issue, if anything?

Mr McIntyre --I am not aware of any ICAO standard that prevents this from occurring.

Senator O'BRIEN --Presumably you have looked.

Mr McIntyre --Yes, we have.

Mr Toller --Not only is it common practice in Australia, it is common practice worldwide and has been for a very long period of time. We are talking about simple servicing matters; we are not talking about maintenance--which is how it has been portrayed in the past.

Senator O'BRIEN --Does CASA employ licensed aircraft mechanical engineer qualified staff?

Mr McIntyre --Yes, we do. We call them airworthiness inspectors.

Senator O'BRIEN --Has there been any shortage of applicants for those positions with those qualifications?

Mr McIntyre --Not that I am aware of. Some of the more specialist positions we find difficult to fill, and that is not surprising. In the areas of aircraft certification, there are very few people in this country that have the depth of experience that we would be looking at for employment in those roles. But in the maintenance area I am not aware of any difficulties whatsoever in employing AWIs.

Senator O'BRIEN --What level of rigour is now being applied to the auditing of the high capacity operators, Qantas and Virgin Blue?

Mr Toller --I will ask my head of Compliance to answer that one.

Mr Williams --I am not sure how you would want me to measure it.

Senator O'BRIEN --I am not sure how long your watch has been, but has there been a change in the level of rigour or the number of planned and unplanned audits in, say, the past 12 months?

Mr Williams --We are auditing according to schedule, and I can get you the numbers. There have been a couple of what we would call special audits, and there are different things that would trigger an audit. We have planned a total of 27 audits for this fiscal year, and we have completed about 26 per cent of them so far.

Senator O'BRIEN --Is that 27 of each of the airlines, or 27 in total?

Mr Williams --That is 27 in total of the high capacity--that is, above 38 seats.

Senator O'BRIEN --What was the previous financial year's target number of audits?

Mr Williams --I will have to take that on notice.

Senator O'BRIEN --Was the target met? You may need to take that on notice; I am not sure.

Mr Williams --Yes, it was. To my knowledge, it was met.

Senator O'BRIEN --Do you know whether it was a different target from this year's?

Mr Williams --I will have to take that on notice. I do not have the exact figures.

Senator O'BRIEN --Were defects or show cause matters issued in relation to those audits?

Mr Williams --I would have to get the exact numbers, but usually we have what we call `requests for corrective action'. They are usually generated out of that for things that require correction but are not immediate safety concerns. Each audit generally does generate numbers of those.

Senator O'BRIEN --Can you get those numbers for us?

Mr Williams --Yes. Previously, the numbers that you asked for are in our annual report on public record on page 44. I can read them out, if you would like, or we can give you a copy.

Senator O'BRIEN --It might be helpful to read them out, thank you.

Mr Williams --Our planned audits were 196; completed, 187; and uncompleted, nine--which is 95 per cent of the target, and so I stand corrected.

Senator O'BRIEN --That is for last financial year?

Mr Williams --Yes.

Senator O'BRIEN --That is high capacity?

Mr Williams --Yes. Excuse me, that is general. Sorry; I am looking at the wrong one. Let me correct that. Planned was 53 and completed was 52, for a 98 per cent completion rate.

Senator O'BRIEN --Did you say you planned 27 this financial year?

Mr Williams --Yes, Senator.

Senator O'BRIEN --So why have you cut the number of planned audits by almost half?

Mr Williams --I will have to take that on notice, as far as the detail is concerned.

Mr Toller --The figures that were being quoted were actually just for the fourth quarter. In the first three quarters, we did 100 per cent of our targets, which were 39, 35, 37 and then, for some reason, 53 in quarter four. The reasons for that, we will certainly investigate and report back to you on.

Senator O'BRIEN --So the target number was 160-odd for the year?

Mr Toller --Yes: 170 or 160.

Senator O'BRIEN --Whatever it was, it is a lot more than 53 or 27. Is the number 27 that I have been given for a quarter or a year?

Mr Toller --The number 27 is for the high capacity.

Mr Williams --That is high capacity.

Mr Toller --This is the combined number for high capacity and low capacity--in other words, for all RPT carriers.

Senator O'BRIEN --My questions were about high capacity.

Mr Williams --Yes.

Mr Toller --Indeed. We will take that on notice, and we will provide you with the figures.

Senator O'BRIEN --Can you tell us how much it costs to audit high capacity RPT operators per year, or what it cost last year and what the budget is for this year?

Mr Toller --We can, but I do not have a figure available for you now. We will take that on notice as well.

Senator O'BRIEN --As a matter of interest, where does the majority of the money go? Does it go to on-the-ground inspections or the staff to do that?

Mr Toller --The cost is entirely a staff cost. Those staff are fulfilling a number of functions, including the auditing of the operators, the facilitation of the expansion of Virgin Blue and the introduction of new fleets for Qantas and Virgin Blue. They have a number of tasks. To work out exactly what percentage of their task is spent on auditing, we have those numbers because we analyse them, but I do not have them available.

Senator O'BRIEN --I want to ask about the types of facilities that you audit. For example, how often would you audit the whole of the operations of the Qantas maintenance centre in Melbourne? Is it once a year, three times a year?

Mr Williams --We have different periods. Essentially the goal is to audit the entire airline every three years but, because of the size of it, we take it in chunks and program out through that cycle.

Senator O'BRIEN --Can you tell me how often a year the whole of that operation would have been audited, in effect?

Mr Williams --Again, it depends on the size of the operation. I could take it on notice to give you some examples.

Senator O'BRIEN --And how many times in the past three years has the Qantas maintenance facility been audited or visited unannounced?

Mr Williams --I will take that on notice.

Senator O'BRIEN --Thank you. I want to ask about the ATSB Ansett report. The ATSB report of the Ansett 767 groundings was critical of the CASA procedure and of other organisations. What has or will CASA do or change in response to that report?

Mr Toller --CASA accepted all of the recommendations of the ATSB report. We have not yet responded to it; we are obviously still within our 60 days. But the most critical thing that we did was our own review of our procedures regarding service bulletins. That was the review that was discussed with the committee when Ansett was being discussed. It was the three-tiered one, if you remember, that was put out to a panel of independent experts and then to an international expert as a final overseer. We got recommendations from all three tiers. The bottom tier made a number of recommendations. These were endorsed by the expert group, who added a few more; and then the international expert added one or possibly two more on top of that. We have an action plan as a result of that, and that action plan is ongoing. I could not tell you exactly where we are in relation to that at this stage, but it is being monitored.

Senator O'BRIEN --No doubt your formal response to the report will be made public?

Mr Toller --That is a matter for the ATSB. We do not have a problem with it being public, certainly.

Senator O'BRIEN --The ATSB report on the Ansett investigation also made a pointed reference to the need for particular and additional vigilance when airlines are facing economic risk. For example, in an ATSB press release, they said:

The Ansett 767 maintenance case highlights the need for organisations to be continually mindful of potential threats to aviation safety, particularly when commercial pressures intensify and there are significant changes to structures and the broader environment.

And they said in summary:

In addition, there were delays in adapting regulatory oversight of Ansett in response to indications that Ansett was an organisation facing increasing risk.

Did CASA accept that general statement?

Mr Gemmell --I am not sure whether you are talking of a recommendation or an observation that was made by ATSB. In recommendations, we formally roll through observations that are made to us and we think about them. We were aware of that sort of problem prior to the Ansett episode. We had been looking at methodologies by which we could isolate problems that might exist in an airline and make sure that we gave them increased attention. Things like major change, financial difficulties--all of those sorts of things--are now triggers for us to think about whether we will put more resources and more auditing effort into an airline.

Senator O'BRIEN --So you have got procedures in place to monitor the economic health of airlines?

Mr Gemmell --We look at these issues. It is somewhat less than perfect, because we do not have any great basis on which to have knowledge about the finances of an airline--for example, Ansett--but we do have the capacity, because of our general observance of airlines and our close association with them, to know when they are in some difficulty. It is not conclusive of anything; it is simply another factor that may trigger our taking a closer interest in that airline. An example of that would be a period of substantial change. Some of the ownership changes we saw flow through the airline sector following Ansett caused us to have a pretty close observance of some of those airlines to make sure they managed to conduct operations safely during that period.

Senator O'BRIEN --How do you monitor the economic health of airlines?

Mr Gemmell --We observe what is available to us. Some of that is generally available.

Senator O'BRIEN --On the public record?

Mr Gemmell --Yes. We have got nothing particularly that is privately provided to us.

Senator O'BRIEN --So you are not going to knock on doors and say, `How are things going?'

Mr Gemmell --Indeed, that is part and parcel of what is done. Remember, we have people out there talking to operations and inspecting them all the time. You are talking to people who are working in the airline. They have some knowledge and some idea of what is happening to that airline. Again, it is not conclusive of anything; it is just an indicator. You can pick up signs of stress in an airline caused by a variety of factors. Nowadays, that stress factor would cause us to look a bit harder at that operation.

Senator O'BRIEN --So you do not engage business analysts?

Mr Gemmell --We do have a process in terms of entry control to look at the financial viability of operators and, indeed, we do employ a business analyst to assist us in assessing that financial viability. But it is an entry control process and, again, it is designed to make sure--

Senator O'BRIEN --So once you are in, you are no longer assessed by the business analyst?

Mr Gemmell --We do not use our business analysts to look at the finances of an operation. It would be a big task if we were to try to undertake that.

Mr Toller --Could I just make the observation that the ANAO in its report Aviation safety compliance follow-up audit did comment on these financial viability assessment issues. The final paragraph, paragraph 37, in its report stated that the ANAO considers that CASA has adequately addressed the recommendations from the 1999 audit relating to the increased effectiveness of financial viability assessments and generally supports the thrust of the way that we approach it.

Senator O'BRIEN --In the light of the new enforcement powers that have been talked about, do you think that when it was grounded at Christmas 2000 and Easter 2001 Ansett would have sought access to the proposed new power to seek a Federal Court stay on a decision to ground an operator?

Mr Toller --That would be pure speculation. I cannot answer as to what Ansett may or may not have done in those circumstances. They had the right, anyway, if they had wished to, to appeal to the Federal Court over the decision that we took. They elected not to do that but to fix the problem instead.

Senator O'BRIEN --Do you believe the enforcement powers available to CASA at that time were sufficient and fair?

Mr Toller --I can answer that but not in the context of Ansett. I have been on the record a number of times as saying that CASA would like more enforcement tools, that we were to a certain extent hampered by only having very light or very heavy actions that we could take. That said, I do not believe that that would have changed in any shape or form the decision that we took over Ansett.

Senator O'BRIEN --In the context of now knowing the full facts about Ansett's operation, would CASA have made the same decisions in relation to the regulation of Ansett?

Mr Toller --I think that is probably what I just said.

Senator O'BRIEN --I am not sure whether you did, but perhaps you can clarify it for me.

Mr Toller --In terms of reflecting, as we have over the last few days, as to whether we would have made a different decision with different tools, the answer that we came up with was that we believed we would not.

Senator O'BRIEN --So voluntary undertakings in that circumstance would not have been useful.

Mr Toller --We used a voluntary undertaking anyway as a means of addressing the situation with Ansett. The question that you have asked probably implies: would it have been more useful had it been an enforceable voluntary undertaking? In the case of Ansett, the answer is no, a voluntary undertaking did not need to be enforceable in the circumstances that existed there. But there are times when it would be good to have an enforceable voluntary undertaking.

Senator O'BRIEN --Have you changed your views about the regulation writing power and where the responsibility for that should lie?

Mr Toller --I think the simple answer to that is no.

Senator O'BRIEN --So they should stay with CASA.

Mr Toller --I do not think my views are relevant. The government has decided that they should remain with CASA.

Senator O'BRIEN --I am sure you will be delighted to learn, Mr Toller, that I am going to put the rest of my questions on CASA on notice, and we will save them up until February.

Mr Toller --Excellent. Thank you.

ACTING CHAIR (Senator Buckland) --As there are no other questions, we will move on to the Transport Regulation Division. Thank you to those who are leaving us for their cooperation.

[12.28 p.m.]