Implementation and Administration of the Civil Aviation Safety Authority's Safety Management System Approach for Aircraft Operators
The Civil Aviation Safety Authority (CASA) is responsible for regulating aviation safety in Australia, the safety of Australian aircraft operating overseas as well as for regulating and administering Australia's airspace. In September 2008, the Senate Committee on Rural and Regional Affairs and Transport presented a report on the Administration of the Civil Aviation Safety Authority and related matters. That report made three recommendations, one of which requested an Australian National Audit Office (ANAO) audit of CASA's implementation and administration of the regulation of aircraft operators' Safety Management Systems (SMS'). ANAO agreed to this request with the objective of the audit being to assess CASA's implementation and administration of an SMS approach to regulating aircraft operators.
An SMS is a systematic approach to managing safety, which encompasses organisational structures, accountabilities, policies and procedures. Amendments to the Convention on International Civil Aviation (commonly referred to as the Chicago Convention) made in 2006 require that contracting states regulate the SMS' of aircraft operators. As a contracting state to the Chicago Convention, Australia is required to mandate that aircraft operators implement an SMS.
1. The Civil Aviation Safety Authority (CASA) is responsible for regulating aviation safety in Australia, the safety of Australian aircraft operating overseas as well as for regulating and administering Australia's airspace. In September 2008, the Senate Committee on Rural and Regional Affairs and Transport presented a report on the Administration of the Civil Aviation Safety Authority and related matters. That report made three recommendations, one of which requested an Australian National Audit Office (ANAO) audit of CASA's implementation and administration of the regulation of aircraft operators' Safety Management Systems (SMS'). ANAO agreed to this request with the objective of the audit being to assess CASA's implementation and administration of an SMS approach to regulating aircraft operators.
2. An SMS is a systematic approach to managing safety, which encompasses organisational structures, accountabilities, policies and procedures. Amendments to the Convention on International Civil Aviation (commonly referred to as the Chicago Convention) made in 2006 require that contracting states regulate the SMS' of aircraft operators. As a contracting state to the Chicago Convention, Australia is required to mandate that aircraft operators implement an SMS.
3. Consistent with Australia's international obligations, CASA is progressing with the regulation of operator Safety Management Systems. Significant work was undertaken to change the relevant regulations so as to require regular public transport operators to use an SMS that has been approved by CASA. The regulatory changes came into effect in January 2009.
4. However, operators were not required to have an SMS acceptable to CASA in place from January 2009. Rather, to allow each regular public transport operator to plan for and implement an SMS in a timely and effective way and to ease the burden placed on both affected operators and CASA, CASA allowed operators to adopt a phased approach to implementing an SMS. The first phase required operators to implement SMS elements that were relatively easy to set up, including the development of an SMS manual. The second and third phases related to progressively more complex elements of an SMS.
5. CASA's SMS approval processes have also been phased. To date, work has focused on the first part, termed ‘Document Evaluation'. This has involved CASA assessing, through desktop review, whether the SMS manual submitted by an operator contained the required elements, and whether these were suitable for the operator.
First Approval Stage: Document Evaluation
6. The number of regular public transport operators fluctuates. A total of 35 operators submitted an SMS manual to CASA for assessment, comprising 18 high capacity operators and 17 low capacity operators. CASA employed and provided training to system specialists who were responsible for assessing the SMS manuals provided to CASA by operators. In addition, CASA developed a comprehensive checklist to inform the decision as to whether the SMS manual submitted by each operator should be approved. Nevertheless, there were some shortcomings in the documentation assessment process, including instances where there was not a clear and consistent evidentiary trail to support CASA's decision to approve the SMS manual that had been submitted by the operator. Accordingly, ANAO has made one recommendation aimed at enhancing the rigour of CASA's desktop review of an operator's SMS.
7. CASA approved the proposed SMS of each of the 35 operators. However, under the phased approach, full SMS implementation is not scheduled to occur until October/November 2010 for high capacity operators and February 2011 for low capacity operators (see Table S 1).
Source: ANAO analysis of CASA data
Second Approval Stage: Capability Assessment
8. In order to have their SMS approved, operators had to satisfy CASA that their SMS manual documented and suitably described safety systems and processes that were appropriate to the operator, or that any missing/inadequate elements would be addressed in a timeframe that CASA considered acceptable. Accordingly, CASA approval of an operator's SMS was not on the basis that CASA was satisfied that the SMS manual was being used by the operator and that the documented systems and processes effectively managed safety risks. Rather, these aspects were to be addressed in the second stage of CASA's SMS approval process, referred to as ‘Capability Assessment'.
9. At the time ANAO audit fieldwork was completed, a Capability Assessment of one operator had been undertaken by CASA as part of its scheduled surveillance activities. Whilst the desktop review of this operator's manual had not identified any shortcomings, CASA's surveillance activities found that important elements of the SMS manual were not being complied with and that planned development of safety management systems had not occurred.
10. This example highlights the risks involved with granting an approval based solely on a desktop documentation evaluation. In this respect, CASA has informed ANAO that it is continuing its ‘normal' oversight and surveillance against the existing regulatory requirements.
Formal agency comments on the proposed report
CASA welcomes any constructive review and external scrutiny of its processes and procedures. In addition to the recommendation, which CASA supports, the report has identified a number of areas where CASA can improve and it is the intention to apply appropriate measures to ensure that lessons learnt will be applied in future especially in relation to the introduction of new regulations.
Notwithstanding this, it should be noted that CASA remains at the forefront of Civil Aviation Authorities worldwide and our implementation of safety management systems in the aviation industry is at the leading edge across ICAO member states. Although not indicated within the report, CASA undertook a review of lessons learnt from other regulators in their implementation of SMS and has diligently applied these in our approach. Ensuring the ongoing safety of aviation has been and will continue to be paramount to CASA in the introduction of any new systems or regulations.
Department of Infrastructure and Transport
Given the report and its recommendation primarily relate to CASA, our comments concentrate on those matters which are within the scope of the department’s responsibilities.
I note the report has incorporated background information on the international and domestic policy settings for the implementation of the SMS regulatory model. The inclusion of this information clarifies the role of the International Civil Aviation Organisation (ICAO) in Australia’s aviation safety framework as well as the responsibilities of the Australian Government’s aviation agencies.
In regard to your request for an update on the State Safety Program (SSP), the department has prepared a draft SSP which has been circulated to a cross-agency team assisting in the preparation of the SSP and the Aviation Implementation Group. A project plan which outlines the strategy, governance arrangements and timelines for development of the SSP has been prepared and is being implemented.
Consistent with ICAO’s timelines, the project has a November 2010 completion date. The Aviation Policy Group was advised of progress at its August 2010 meeting and will oversee final development of the SSP.
The report notes that progress with the Regulatory Reform Program has been slow. To this end, a dedicated taskforce comprising drafters and technical specialists from the Office of Legislative Drafting and Publishing and CASA was established in March 2010 to focus resources on completion of the Program by the end of 2011.
2] The focus of this audit was on regular public transport operators who hold an Air Operator's Certificate (AOC) granted by CASA under section 27 of the Civil Aviation Act 1988. In particular, the audit focused on: high capacity operators, being those operators using aircraft certified as having a maximum seating capacity exceeding 38 seats or a maximum payload exceeding 4200 kg for scheduled flight services; and all other operators with scheduled flight services, which are referred to in this report as ‘low capacity operators'.
 The SMS manual may comprise a single manual or suite of manuals that set out the details of how an operator's proposed SMS would comply with the legislative requirements.
 CASA's current compliance approach involves conducting surveillance, which consists of operational surveillance and scheduled annual audits against the conditions of an operator's AOC. The air transport sector is examined by CASA against nine elements, one of which is the operator's SMS. On an annual basis, a sample of the elements are selected and examined so as to provide a snapshot of the system under review, with a full audit cycle covering all nine elements for each operator taking three years to complete.