Are we safe up there? Damning evidence to a Senate inquiry suggests the Civil Aviation Safety Authority may be failing as a safety watchdog.

SENIOR executives from Australia’s air safety regulator were disgruntled when they fronted a special Senate inquiry earlier this month. Surprised by the Federal Government’s decision to call a snap inquiry into their administration of the Civil Aviation Safety Authority, they made their displeasure clear.

“After we had given our evidence at the last estimates (in May), the inquiry was announced and certainly I was disappointed … a number of these issues have been ventilated quite a lot,” CASA’s deputy chief Shane Carmody told the senators.

Carmody’s comments highlight the friction that has developed between members of the Senate’s Rural and Regional Affairs and Transport Committee and CASA management in recent years.

Labor’s Kerry O’Brien and CASA chief Bruce Byron have been particularly prickly combatants, with the Tasmanian senator pursuing the Howard-government appointee over his expensive overseas travel, his scheduling of time-off to coincide with Senate hearings and his $350,000-plus annual salary.

In addition to showing their displeasure at being the subject of an inquiry, CASA’s leadership let it be known they were disappointed that the many changes they had introduced to the organisation – including reform of its approach to safety regulation and a 50% staff turnover – had not been “broadly recognised in the community”.

While it may be true that most Australians are unfamiliar with CASA’s reforms, the policy changes – particularly regarding safety regulation – have not been lost on pilots, engineers, former CASA staff, families of air crash victims and other industry participants.

In fact, Byron’s mission to have CASA seen as a “valued partner” of the aviation industry rather than a “nanny regulator” is a topic that features prominently in many of the 50 submissions received by the inquiry.

Critics of Byron’s policy argue that the move towards self-administration is worrying, particularly as airlines look to cut costs to cope with soaring oil prices and a bleak global economic outlook. Submissions from pilots, unions and former CASA officials said such times demanded a rigorous regulator.

But Byron, an experienced pilot and former airline executive, has made little secret over the past three years of his desire to introduce a “more sophisticated” approach to CASA’s role as safety regulator. It is, he said last year, “something that has really been dear to my heart for some time”.

Looking to the aviation regulatory regimes in the US, Canada and Europe for inspiration, Byron has pushed CASA in the direction of educator rather than enforcer. “CASA will not be knocking on your door armed with the regulations and a plan to dig around until breaches are found,” he said in 2006.

The desire for a smooth relationship with industry is evident right across CASA. Even its job advertisements contain the sentence: “CASA works to be a valued partner with the aviation industry.”

Byron and his management team reject criticisms that this approach has led to a cosy relationship between CASA and the aviation industry. “When at times we have to be a firm regulator, that is what we have to do,” he told the inquiry.

CASA’s ostensibly firm hand was on display soon after the Senate inquiry was announced late last month, with the authority ordering a safety check of air operations in northern Australia, where in one of the nation’s worst air crashes 15 people were killed at Lockhart River in Queensland in 2005.

However, the initiative was not well received by some of the families of the Lockhart victims, who regarded it as a cynical attempt to appear tough as the organisation faced parliamentary scrutiny.

What the Senate inquiry has made clear is that CASA’s approach to safety regulation has been the cause of considerable debate and angst within the organisation. Deputy chief executive Carmody revealed an almost 50% turnover in staff, with some choosing to move on and others going “because we no longer had a place for them”.

Byron linked some of the 134 redundancies at CASA to the cultural change he and his team have tried to implement.

A victim of that change is the man who was its general counsel between 1995 and 2006, Peter Ilyk. The lawyer told senators that CASA was treading on dangerous ground by playing down its responsibility for safety regulation.

“It (CASA) was not set up to be a partner with industry. It was not set up to promote industry. It was not set up to bow to industry pressure. CASA was set up to regulate the industry and enforce the safety rules,” Ilyk argued.

CASA’s decision to stop publishing air operator suspensions or cancellations on its website suggests a dangerously close relationship between the regulator and industry, according to Ilyk. “Such publication would not be in the spirit of partnership,” he said.

Ilyk told senators that governance failures had flourished under the new arrangements, including a reluctance to tackle the big operators such as Qantas. He said he had brought these to Byron’s attention but “not long after raising my concerns, I was terminated”.

“I think there was a lot of industry pressure to get rid of particular people that happened to criticise industry or took a tough stance,” Ilyk said.

“Towards the end of my career, the CEO simply ignored all of my emails … One of the ones I sent to the CEO at the time outlining my concerns about governance failures in CASA was never answered formally. We had a CEO meeting about three months later and the only response I got from the CEO was, ‘Don’t you ever send me a minute like that again.’ At that point I knew I was on the slippery slope out.”

Asked about Ilyk’s claims, Byron said that to the best of his knowledge he always responded to concerns raised by senior staff, either by accepting what they said or rejecting it. He did not recall ever telling people not to send him certain material again and reminded senators that ex-CASA staff making submissions might be “disaffected”.

Another former CASA employee, Joseph Tully, who was a policy manager in the general aviation group, supported Ilyk’s criticisms. Tully told the inquiry that four senior CASA technical staff had been forced out of the authority since 2005 after registering concern about CASA’s approach to safety regulation.

Rod Bencke, a CASA veteran of 21 years, was blunt in his assessment of the authority’s standing: “It is my belief that CASA will not be an effective regulator until its operations and ethos have been comprehensively reviewed and effective correction action taken.”

On what has CASA based its controversial new regulatory approach? The answer is a mix of the “partnership” models adopted by aviation regulators in the US, Europe and Canada in recent years.

Unfortunately for CASA, these regimes, which emphasise industry self-administration, have this year come in for strong criticism from law-makers and public sector watchdogs in their respective countries.

In April, James Oberstar, the chairman of the US House of Representatives Committee on Transportation and Infrastructure, said the US Federal Aviation Administration had shown a dangerous lack of compliance with inspection requirements, resulting in thousands flying on potentially unsafe aircraft.

Oberstar’s comments came after a congressional investigation revealed a discount airline was flying 737s that had defects which should have been detected by FAA inspections.

“It reflects an attitude of complacency at the highest levels of FAA management, a pendulum swing away from vigorous enforcement of regulatory compliance towards a carrier-friendly, cozy relationship with the airlines,” he said.

Two months ago, the Canadian Auditor-General Sheila Fraser criticised Transport Canada’s decision to let the aviation industry conduct its own safety inspections without first assessing any of the risks involved. Fraser said the policy “could have sweeping implications for air safety in Canada”.

In Australia, it is not just former CASA employees who are worried by the authority’s push for better relations with industry while moving away from the traditional role of a watch-dog style regulator.

Captain Ian Woods, president of the Australian and International Pilots Association, told senators that CASA had failed to meet required standards in enforcing industry compliance with safety regulations. This failure, he said, meant CASA was “unable to act as a necessary counterweight to balance shifting economic and regulatory frameworks”.

“Some people would say that it is never possible for the one organisation to balance safety regulation with commercial necessity and they should be separated,” Woods said.

“A number of occurrences I have personally witnessed lead me to conclude that CASA gave due consideration to its obligations there and at times confused those obligations and was not clear and definitive enough standing up for safety regulation.”

Adding weight to criticism of CASA’s relationship with industry is its refusal to release its audits of the overseas facilities, mainly in Asia, that are increasingly used by Qantas and Virgin Blue to maintain their jets. This has caused the Australian Licensed Aircraft Engineers Association to accuse CASA of putting the interests of foreign-owned companies before those of the Australian public.

Though the Senate inquiry has been a bruising experience for CASA executives, they have not been without support. Qantas and Virgin Blue applauded CASA’s regulatory policy.

“The shift by CASA to a risk-based approach to safety, where the focus is on safety outcomes, with the responsibility for managing day-to-day safety risks resting with industry, is supported,” Qantas said.

Importantly, Byron can point out to his critics that Australia still enjoys an airline safety record the envy of the world. “I am the first to say that we, CASA, do not have an easy job, but I stand by the record of my organisation over the last few years. We do not expect to receive bouquets for the work we do, but I would like to believe that most of the industry, from time to time, and on considered and calm reflection, acknowledges that CASA delivers real safety outcomes,” said Byron, who is not seeking re-appointment as CASA chief.

But critics, such as CASA’s former chief lawyer Peter Ilyk, suggest Australia is more than ever in need of a strong aviation regulator, given the growing pressure on airlines to cut costs and the possible negative effect that could have on safety and maintenance standards. “The fact that there have not been any accidents and the fact that people have not died does not mean that there is no safety problem.”