Why would CASA issue foreign AOC's at all
Timber,
Go read Part 129 and associated advisory material, and it will all become clear. and it is all easily accessible on the CASA web site, the "rules" and who has the AOCs.
There is also the not inconsiderable matter of the web of bilateral air services agreements between the Australian and various other nation, Australia's rights and obligations under the Chicago Convention and a significant number of other UN Conventions. Your starting point is our Air Navigation Act 1920, also easily available on the web.
When it is all boiled down, a number of you are saying that the horrendous costs (in time and money) of dealing with CASA should be visited on foreign operators, to "level the playing field", by increasing foreign operator's costs. ------ Even where there is no "safety" issue.
Quite frankly, the now required two yearly IOSA audits of individual international operators is a far better indication of the standards of an operator than most audits by regulatory authorities --- or CASA.
As for artificially raising foreign operators costs, in the quest for some kind of "level playing field", ask the various State and Federal tourism bodies and consumer organisation, or the ACCC, what they think about that !!
I would guess such imposition of artificial costs comes under the general heading of non-tariff trade barriers/protectionism, a rather big no-no under sundry trade treaties.
Tootle pip!!