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Barrier Aviation and Senate estimates Hansard report

This is the entire Barrier references from Monday:

Barrier Aviation:

Senator FAWCETT: There are a few issues I would like to cover off on. First, can you give us an update on what is happening with Barrier Aviation. It is some months now, I understand, since they were given a ‘show cause’ and ceased operating. Can you give us an update on what has occurred there?
Mr McCormick: I will ask my general counsel to give you the time line on that. While he is coming forward to the desk I can tell you that we started on 23 December with a ‘serious and imminent risk’ situation. At this moment we have no application on record from Barrier Aviation to continue or appeal their air operator certificate cancellation. But I will leave that to my general counsel.
Senator FAWCETT: You say you have nothing on record. My understanding is that they have sought, numerous times, to appear before the AAT. Are you saying that they never have or that there is nothing currently on record?
Mr McCormick: I will defer to my general counsel.
Mr Anastasi: In relation to the question you just asked, there was an application by Barrier on 9 May 2013 for the reissue of its AOC, air operators certificate. That followed CASA cancelling the air operators certificate on 13 March 2013. In relation to the more recent application for the AOC, CASA refused to issue that AOC on 31 July, and that was largely on the basis of the reasons for which it cancelled the AOC. Barrier sought review in the Administrative Appeals Tribunal of both of those decisions and, ultimately, after a hearing was listed in December, withdrew both those applications on 16 October.
Senator FAWCETT: Would you clarify it for me, though. My understanding is that CASA sought on a number of occasions, or at least one if not more, immediately after Barrier’s ceasing operations—so we are talking early 2013—a delay in the proceedings of the AAT. Would you clarify if that is correct.
Mr Anastasi: I do not think it is correct that CASA sought any delay in the hearing of the tribunal proceedings. It was in fact Barrier Aviation that on a number of occasions did not comply with the directions of the tribunal to file evidence and other documents. On that basis, the tribunal listed non-compliance directions hearings to ascertain Barrier’s position in that regard. It was one year, almost to the day, from the time that CASA suspended the AOC to the time that the matter was listed for hearing, and I can say that that was largely because of the way in which Barrier represented itself in the tribunal. It never sought expedition of a hearing. CASA invited Barrier to do so and said that we would not oppose any expedition of a hearing, which would often be the case where there is a suspension in place and an applicant would seek an expedited hearing. They did not seek that.
Senator FAWCETT: To clarify, what you are telling me is that a company has been grounded and at no time did it seek to expedite a hearing before the AAT, nor did it comply with the requirements of the AAT to provide the evidence that the AAT said it needed, and that at no time did CASA come to the AAT and seek an extension because CASA did not yet have its evidence or its brief ready to take to the AAT?
Mr Anastasi: In relation to the first question, my understanding is that at no time did Barrier seek expedition of a hearing. It did at one point complain to the tribunal when December dates were offered—this was in around August or so—but at that late stage that was all the tribunal could offer. In relation to the compliance by Barrier of the tribunal’s directions, it did not comply with some of the directions. I did not say that it failed to comply with all of them. As to whether CASA complied with the directions of the tribunal, my understanding is that it generally did. If it did not, there may have been an occasion where there was a one-week or so delay in the filing of documentation, largely because of the size and complexity of the issues at hand.
Senator FAWCETT: So CASA, with all of its resources, having determined that the company was not fit to fly, still at some point felt that it did not have enough evidence to comply with the AAT’s requirements. Surely, before you actually took the decision to essentially demolish a business you would have all your facts established. Is that not a reasonable assumption?
Mr Anastasi: We had that evidence, but in these types of matters it is common for the applicant to file its evidence first and CASA is given an opportunity by the tribunal to respond to that evidence. Therefore, CASA has to take into account and examine that evidence and then respond to it. There were some factual issues that were raised for the first time with CASA, and CASA had to deal with them and put its own position. I should highlight that, in that respect, there were many hundreds of pages of evidence and attachments filed by Barrier that CASA had to respond to in, I think, a four-week period.
Senator FAWCETT: Could I clarify something. My understanding is that Barrier had three core areas of operation and that CASA’s concerns related to incidents at one of those sites. Is that correct?
Mr Anastasi: The concern centred on its Horn Island operation—that is correct.
Senator FAWCETT: There were no issues at the other two locations. Is there any reason why the restrictions on their AOC covered all of their operations rather than just the one that could have had the focus on it?
Mr Anastasi: My understanding is that, whilst Horn Island was the focus of CASA’s investigation, there were some regulatory compliance issues at its Darwin operation and more generally in relation to the operator as a whole, which was based in Cairns. But, if it was only the Horn Island operation where CASA detected the main issues, I think it would have been a very artificial position for CASA to say to an operator, ‘You’re a serious and imminent risk to safety at one of your ports, but you will fly in relation to the other two,’ especially when CASA has to have regard to the fact that there is a common management structure across all the operations. This was largely a family owned business with a very small management structure. So for CASA to take that view I think would have been a very artificial way of approaching the safety risk they had identified.
Senator FAWCETT: How much of the safety risk that was identified was based on the notes that were taken by, I believe, a CASA employee or delegate on Horn Island?
Mr Anastasi: They were largely based upon a diary that was seized by CASA under a search warrant. That diary had been kept by a Barrier Aviation base manager at Horn Island, and that was the principal basis for the suspension.
Senator FAWCETT: Sorry, yes, you are correct—it was a base manager up there. Did CASA ever seek other opinions on the validity of some of the entries in the diary? My understanding is that some of them went to things like a rough-running engine. In the industry, people have talked about different situations that will cause rough running and that no maintenance action may in fact be required for that to be rectified. Were they taken just on face value or was there an attempt to get some context put around those statements?
Mr Anastasi: Firstly, the main attempt to do so was to review the aircraft maintenance documentation. That was done. There was also effectively a peer review of some of the matters by CASA’s airworthiness engineering branch. I think it is fair to say that CASA ultimately only relied upon a relatively small number of those entries—mainly those that were such that CASA was confident constituted a major defect and having regard to its description and its comparison to the maintenance records, that it was likely that there was a defect in the aircraft at a particular time, as described in the diary.
Senator FAWCETT: Had any of the operations ever had an accident or an incident?
Mr Anastasi: I understand there had been a number of incidents. There was an accident involving an aircraft, but there was a dispute with Barrier as to who was the operator of the aircraft. Barrier said it was not the operator, yet one of its pilots was flying it.
Senator FAWCETT: Was he employed by Barrier at the time, as in was he flying it as a Barrier pilot or was he just a person who normally worked for Barrier who was flying the aircraft?
Mr Anastasi: My understanding is that that was a pilot employed, effectively, by Barrier, preparing the aircraft for it, but I think that ultimately that featured very marginally in CASA’s decision.
Senator FAWCETT: So we have a company where there has not being an accident, except one in dispute—
Mr Anastasi: Not an accident where people were killed, but there were a number of incidents involving its aircraft. Mr McCormick: That was a fatal accident—the one with the pilot.
Senator FAWCETT: I understand that, but there is some dispute around that. What I am trying to establish is: we have a situation here where CASA, with very deep pockets, has run a process that has gone over a number of months and a company that, barring that accident, does not appear to have had a bad safety record. Two of its operations appear to have had quite contemporarily good records in terms of engagement in the industry. I am puzzled as to the fairness of a process whereby they are yet to have their day before the tribunal. The feedback I get from their side of the story is that they have attempted on a number of occasions to appear before the tribunal, and the delays are not on their side. What I am trying to clarify exactly from CASA’s point of view is what has caused the delay as to their having their day in court.
Mr McCormick: I think it was open to Barrier on the very next day after we took the serious and imminent risk action to go to the Federal Court and attempt to get an injunction. To my knowledge, there were a number of taxiing incidents that had not been reported to the ATSB, collisions between aircraft and that sort of thing. There is an extensive number of maintenance issues in this manual and we have not ever actively tried to prevent Barrier from appearing at any venue it wishes to appear at—and we would be there. As Mr Anastasi said, we took a week longer to respond to Barrier’s evidence. Barrier changed legal advisers a number of times.
We were at all stages prepared to meet them somewhere, and, given the amount of publicity that went around this, particularly in the local press in Cairns, I very much would have welcomed the opportunity to have these issues pulled out into the open so that we could see exactly what maintenance has been going on.
We have not necessarily finished with some of the maintenance providers, but they are not actually actively doing anything at the moment. There are extensive issues—and this goes to what Mr Anastasi said—unpicking the organisation and saying that only Horn Island is involved. With these types of operations—multiple use of aircraft and multiple use of pilots—it is not possible to unpack the AOC in that manner.
But the option has been open to Barrier at any stage to bring this on in the Federal Court. Indeed, when we did go to the Federal Court, on 22 February, the Federal Court did make an order under section 30DE(2) saying just that—prohibiting Barrier from doing anything authorised by its AOC until such time as the matter was heard. The matter has been open to Barrier to bring on.

From later in Hansard:

Senator FAWCETT: I would like to come back to a few more questions about Barrier Aviation. I am still trying to understand exactly the process that has gone on here.
Mr McCormick, you had a company that you obviously had grave concerns about in terms of its safety. You obviously did audits of that company. What kind of resource would normally be allocated to an audit of a company, as you have described it—a family run company? How many people and for how long—what sort of resources—would normally be thrown at that?
Mr McCormick: I will ask our Executive Manager of Operations to give you a better idea about that. The ownership structure does not drive the number of inspectors; it is the size of the operation that drives that, as you would appreciate.
Senator FAWCETT: Sure.
Mr McCormick: As a background to Barrier Aviation, when the documentation was first brought to me suggesting that there was a ‘serious an imminent risk’ issue I was not satisfied that there was sufficient information given. By the time we did issue that order I was more than satisfied that the information was sufficient, as was confirmed. I think we have taken a couple of questions on notice about our way through our discussion with Barrier Aviation. The option has been open to Barrier Aviation for some time—all of this year—to take some action.
Senator FAWCETT: One of the problems we have is that we hear complaints from industry. Without an AAT process having occurred we do not get to see the objective facts of a matter. One of the few vehicles we have to try and get the other side of the story is this process of Senate estimates, which is why I am trying to get the balance of the facts to understand what has eventuated in this process. I want to see whether, in fact, we have a problem with our system or whether appropriate process was gone through.
Mr Campbell: I think your question was about how much resource would be put into an audit of an organisation of that size. The audits we have done recently would have been done within our certificate management team structure. So, in an audit like we would expect to involve flight operations inspectors, air worthiness inspectors and safety systems inspectors. Within the certificate management team, the CMT will decide how many people are appropriate for the audit and how long the audit will take. Audits, as you would realise, are sometimes like following a trail. You cannot always be sure how long it is going to go. Sometimes when you do an audit you find that everything is great; it does not lead to anything else. Other times things move on because the guys gather evidence which says that we need to go an look at this or that, and that sometimes leads to other things. I would expect three or four people to be involved in an audit like that and for it to take place over several days on site. Then, of course, often they will take away photocopies of material or logbooks and do a whole lot of work off site as well.
Senator FAWCETT: So three to four people over several days is what you think would be normal?
Mr Campbell: Depending on where it led and the size of the organisation, and Barrier have several locations, so we would have had to move people around to those various locations.
Senator FAWCETT: So you think four people for two weeks twice is an excessive amount at just their Cairns headquarters?
Mr Campbell: Like I said, it depends where it leads—and where it was leading was not that fantastic. I have to say that before we even had the information from Horn Island we were looking seriously at show cause action at that time. There had been a couple of audits done that year. There was one done—if I recall, it was a special audit—which resulted in quite a large number of non-compliance notices and, if I recall, the issue of about 12 ASRs against aircraft, four of which were coded ASRs and required maintenance on the aircraft before further flight. There was a lot of concern about that organisation and about the things that were going on there.
Senator FAWCETT: What kind of concerns would normally be conveyed in the verbal outbrief at the end of an audit? Would they normally give the AOC holder a broad understanding of the nature and seriousness of a concern?
Mr Campbell: Yes, I believe so.
Senator FAWCETT: Do CASA hold any records of what the content of those verbal outbriefs are?
Mr Campbell: I think you are talking about an exit meeting. I believe that we still have an exit meeting under our current processes and our current surveillance manual, and I believe there would be records of that meeting.
Senator FAWCETT: Are you able to provide those to the committee? Again, I am only getting one side of the story at the moment, and my understanding is that the exit meeting did not indicate any serious problems that would indicate a show cause notice forthcoming.
Mr Campbell: I would not expect our inspectors to be talking about show cause at an exit meeting, quite frankly. I think that is a decision that we make as part of our coordinated enforcement process, and it requires input from more people than just the inspectors to start talking about things like a show cause notice. I would expect them to say, ‘We found this and this and this,’ and we will be in touch with them.
Senator FAWCETT: I believe Horn Island was the area where the most concern was. I think there was an audit done—I think Twin Otter was the aircraft that was of concern. Can you tell me how many defects were found on that aircraft when you did the audit?
Mr Campbell: I do not recall the Twin Otter. I will have to take that one on notice.
Senator FAWCETT: My understanding is that it was less than a handful of things like landing lights. Again, there is no AAT process we can look at to understand the balance of this argument. Are you able to provide me—even if it is in confidence—with a record of what the deficiencies were that caused the concern in CASA, because I am certainly not seeing the same story from the other side that would lend weight to a grounding situation, which is essentially what has occurred?
Mr McCormick: Yes, we will take that on notice and provide you with all the documentation we can. I am cognizant that the committee had a discussion earlier today with Mr Mrdak about FOI versus committee requests, and we acknowledge that anything we give to you will be in confidence. We will do our utmost to give you anything we have available on that, and we will certainly find the reports you refer to and the recommendation paperwork that came to me which led to the serious and imminent risk decision. Is it satisfactory that we go up to that decision point?
Senator FAWCETT: Yes, that would be good.
Mr McCormick: We will do that. We will take that on notice.
CHAIR: I regret to inform the committee that that is the end of CASA. Questions, that is—I was just corrected by the secretary. It is not the end of CASA, just the end of them being here. I now call ATSB.

 

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