1 General outline
1.1 Overview of the Regulations
Recognition of the increased threat of unlawful interference to critical aviation infrastructure since the September 11 terrorist attacks has prompted the improvements to Australia’s aviation security regulations. Since September 2001 the Australian Government has significantly strengthened aviation security with measures including:
• enhanced passenger and baggage screening;
• tighter airport access control;
• hardened cockpit doors;
• wider implementation of security programs;
• broader requirement for aviation security identification cards;
• expanded explosive detection capability;
• stricter security arrangements for international and domestic cargo;
• arrangements for screening checked baggage at certain airports; and
• upgraded counter-terrorism first response capability.
To consolidate and streamline Australia’s new aviation security arrangements the Aviation Transport Security Act 2004 (“the Act”) was developed and given Parliamentary approval (and Royal Assent) in March 2004. The Act provides the framework for the new aviation security regime, the Aviation Transport Security Regulations 2005 (“the Regulations”). The Regulations incorporate the new aviation measures listed above and are effective from 10 March 2005[1].
The Regulations comprise nine divisions:
Part 1 - covers preliminaries and definitions.
Part 2 - covers the transport security programs (TSPs) that aviation industry participants (airports, aircraft operators, regulated air cargo agents (RACA), certain airport tenants and Airservices Australia) must have. These programs are to set out how security for the operations will be managed.
Part 3 - covers airport areas and zones. It also covers requirements for the supervision of embarkation and disembarkation of aircraft, facilitation of passenger check-in and baggage handling, controlling access to airside, the requirement to display Aviation Security Identification Cards (ASICs) or Visitor Identification Cards (VICs), airport signage, security restricted areas, landside security and (at the 11 airports) counter-terrorist first response.
Part 4 - covers security measures - screening and clearing of people, baggage and cargo in different areas, weapons and other prohibited items, onboard security, and dealing with persons in custody.
Part 5 - covers the powers of officials - security guards, screening officers, law enforcement officers and aviation security inspectors.
Part 6 - deals with security identification; in particular, ASICs and VICs.
Part 7 - covers enforcement - infringement notices and payment of penalties. Failure to comply with many of the regulations under all Parts attracts financial penalties. These penalties equate to financial penalties as defined by s. 4AA of the Crimes Act 1914.
Part 8 - covers AAT reviewable decisions – including many of the Department’s decisions authorised in the Act as Regulations.
Part 9 - has miscellaneous provisions.
1.2 The requirement for a Regulation Impact Statement
This Regulation Impact Statement (RIS) assesses the Government’s proposed aviation security Regulations.
A RIS is a well-established practice for assessing the likely impact of proposed policy and regulation on affected stakeholders, aligned sectors, the economy and broader community. The RIS must comply with the Australian Government’s RIS requirements, A Guide to Regulation (the ‘Guide’) as produced by the Commonwealth Office of Regulation Review (ORR),
The Guide is designed to assist officials working on the development, review and/or reform of regulation. Government regulators in all Australian Government departments, agencies, statutory authorities and boards are required to use RISs. The Guide sets down the major elements of a RIS - including analysis of the costs, benefits and impacts of regulatory proposals, identification of alternative approaches and consultation - all of which underpin sound policy formulation.
The ORR’s Guide requires that a RIS address the following matters:
• a statement of the problem or issue identification the proposed regulatory action seeks to address;
• the specified objective in terms of outcomes and goals that the regulatory action seeks to achieve;
• a statement of the proposed action and its alternatives;
• an impact assessment of the costs and benefits of proposed actions, including direct and indirect economic social costs and benefits;
• an outline of the consultation that has taken place with those affected by the regulatory action;
• an evaluation of the proposed action and any alternatives to recommend a preferred option[2], including relevant conclusions; and
• implementation and review procedures that will be established to ensure ongoing monitoring of the operation and appropriateness of the proposed regulatory action.
This RIS follows the Guide recommended by ORR.
2 Problems
Following the September 11 tragedy in the United States, in which terrorists hijacked aircraft and crashed them into buildings with major loss of life and damage to property, many countries including Australia decided that they needed to tighten their aviation security. The Australian decision is embodied in the Act. The Regulations have been drafted because, as discussed below, voluntary or market forces alone are unlikely to suffice.
Good regulations help achieve community objectives without imposing unnecessary costs on business or the community. In the case of aviation security, the Regulations should help prevent unlawful interference to aircraft without imposing unnecessarily costs on the industry, and ultimately, on users of air transport services[3] or taxpayers.
2.1 Background
The Australian economy and society in general relies heavily on commercial aviation for business and leisure travel and air freight because of the country’s size and its distance from other countries. It needs a sufficient level of air services with an appropriate level of safety. There are tradeoffs – for example, extreme security measures could price aviation out of parts of the market or deter passengers through inconvenience. Nevertheless Australia’s air transport security system needs to be robust enough to protect its critical components and maintain customer confidence.
Maintaining a secure operating environment to transfer passengers, freight and crew safely has been the focus of aviation security since the Chicago Convention in 1944. Aviation security is founded on the prevention of unlawful interference with aircraft including sabotage (eg shooting a plane down or placing a bomb on board) and hijack (to a particular destination, or in order to commit a terrorist act). Deterrence, detection and prevention have been the primary basis for reducing these risks.
There has been increased awareness of the risks of acts of terrorism since the events of 11 September 2001 in the United States. The world’s aviation sector has had to demonstrate that it has responded to the increased threat of unlawful interference. Together with governments, the aviation sector has reviewed its security procedures and controls to improve their effectiveness.
In 2003, the Air Navigation Act 1920 (ANA) was amended by the insertion of new Parts 3 and 3A. These, together with regulations made under the Air Navigation Act, the Aviation Navigation Regulations 1947 (ANR), laid out the Government’s air transport security arrangements as envisaged at the time and were accompanied by a RIS. The Air Navigation Act, Parts 3 and 3A, are repealed by the new Act and the provisions in the ANR made under those Parts are likewise repealed.
International aviation matters are coordinated by the International Civil Aviation Organisation (ICAO) through the Convention on International Civil Aviation. Australia was a founding member when the Chicago Convention first formally convened on 7 December 1944. As a signatory to the Chicago Convention, one of the purposes of the legislation package is to meet Australia’s obligations under the Convention.
There are several problems with Australia’s existing aviation security arrangements:
• the increased terrorist threat, and knowledge of the way the September 11 terrorists got onto planes, showed a need to tighten security throughout the aviation sector, especially at Australia’s busiest airports;
• the 2002 Cornall Inquiry[4] into counter-terrorism arrangements in Australia found there was a need to review the passenger and baggage screening arrangements at Australian airports. It also recommended that more stringent background checks be performed before granting staff members access to secure areas of airports;
• the review of aviation security by the Secretaries’ Committee on National Security indicated a need for a broader scope to aviation security regulatory arrangements;
• the overlapping nature of Australia’s aviation legislation. The difficulty of administrating the complex set of laws was highlighted in the Australian National Audit Office’s audit of aviation security in Australia[5]. The audit found the quality of setting, monitoring and reviewing performance targets suffered as a result of insufficient levels of interaction between the decentralised industry and the regulator; weaknesses in the ‘chain of authority’ to undermine regulatory compliance and enforcement; and
• The ICAO has responded to the September 11 terrorist attacks by further amendments to Annex 17 of the Chicago Convention. These Regulations will ensure that Australia will meet its obligations under the Chicago Convention and its Annexes.
The Government’s rationale was broadly supported by the industry participants[6] together with the view that the existing regulations had been in place for many years and were due for review in any case (Section 6 covers the consultations).
The Regulations, as a whole, provide a consolidation and updating of past regulations and, in many respects, go beyond them. As such, the Regulations are best considered as a whole. Therefore, this RIS will cover all the Regulations but focus primarily on the provision being implemented for the first time. Although consistent with the Act, the Regulations make the impacts more apparent; so this RIS will cover some of the same ground as the RIS for the Bill[7].
2.2 Market failure
Notwithstanding the physical characteristics of the aviation sector which make flying regular commercial jet services inherently susceptible to unlawful interference, there are also underlying economic factors which cause an aviation security system to deliver inadequate security standards if unregulated. The presence of these economic fundamentals, known as market failures, may create an environment where the optimal level of aviation security is not obtained. Market failure is relevant to aviation security for the following reasons:
• there are externalities in that some of the beneficiaries of sound aviation security are outside the sector - e.g. residents and places of business who are not harmed by aviation based criminal activity or terrorism, owners of assets which are not damaged by aviation based criminal activity or terrorism;
• although the direct beneficiaries of improved aviation security are passengers, airline owners etc, there are public good (non rivalry) aspects in that one citizen’s benefit from reduced aviation based criminal activity or terrorism does not affect another's benefit from it; information is imperfect - as discussed later it is hard to assess the benefits of security measures. Individual passengers are not well placed to determine the soundness or otherwise of a particular airport’s or airline's security arrangements; and
• a feature of aviation is its network structure. Security at one airport can affect security at another, and security at one airline can affect airports and other airlines. These are network externalities. Any one participant may face an incentive to under-invest in security because some of the benefits accrue to others. If others think likewise, investment in aviation security would be lower than society prefers.[8]
Without an appropriate regulatory framework the possibility of market failure in the aviation security system exists. As recent history has shown, the consequences of inadequate security can be large and catastrophic. Therefore, regulations designed to overcome the market failure are required to prevent the market from determining the optimal level of aviation security, instead enabling democratically elected policy makers to help establish the optimal allocation of resources for aviation security.
3 Objectives
The Australian Government’s decision to update the regulatory framework for aviation security was designed to strengthen, expand and consolidate Australia’s aviation security measures in response to the increased security threat.
The objectives outlined in Part 1 of the Act (which stipulate the objectives of this regulatory regime) are designed to counteract the problems identified above:
• to ensure a consolidated, consistent, modern, and transparent framework for aviation security;
• to implement the recommendations of policy reviews relating to Australia’s counter-terrorism arrangements, as demanded by the Government;
• to ensure that Australia’s international aviation responsibilities are met in accordance with the standards framed by the Chicago Convention on International Civil Aviation ; and
• to maintain Australia’s status as a secure provider of aviation transport infrastructure, thus avoiding the social and economic costs potentially associated with implementing inappropriate security measures for Australia’s civil aviation operations.
3.1 New security requirements
Besides consolidating and updating the existing regulations and clarifying responsibilities, the Regulations extend coverage to a wide range of aviation services and airports.
The main consolidation is that for the checked baggage screening requirements from the ANR (Checked Baggage Screening). The Regulations extend and tighten the requirement for identity cards and associated background checks, and introduce the concept of joint security programs at airports. Much of the substance of the Regulations is similar to the existing regulations under the ANA (although updated).
The main new areas which implement the Government’s decision to expand the aviation security regulatory regime are:
• extending the coverage of the regulatory package to a wider range of aircraft through the concept of prescribed air services: a regular public transport service, a jet service, or an air service with a maximum takeoff weight above 5700 kg;
• replacing the existing categorisation of airports with the concept of a security controlled airport - as gazetted by the Secretary under s.28 of the Act. This will initially result in around 180 airports being so designated. They will generally be airports servicing regular public transport aircraft, airports in and around metropolitan areas (where appropriate given consideration of the risk), and airports in close proximity to Australia’s major airports;
• the introduction of Transport Security Programs (TSPs) which replace and extend the requirements of the current Aviation Security Programs required under the ANA and significantly expand the number of aviation participants required to have a TSP;
• wider application of aviation security identification cards (ASICs) to cover people accessing secure areas of security controlled airports and expanded arrangements for ensuring the integrity of the administrative arrangements associated with the issue of these cards. To assist aviation industry participants in the extension or introduction of these arrangements a transition period has been included;