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Today's directions hearing is expected to set the matter down for a 10-day hearing in December.

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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.

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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 {Hmm kind of conflicts with.."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..."}. 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?

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ASR 251813

For rectification:

• Standby Compass bubble;
• Evidence of lightning strike;
• Numerous exterior decals missing;
• Compass correction card dated April 2000 and 2002; and
• Damage to RH nosewheel.

RCA 321071 has been issued for failure to comply with CAR 50 - Reporting of Defects.

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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?

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