Proposed Part 149 Organisations - recipe for tyranny?

[Jim McDowall]

Why the proposed Part 149 organisations are not required

 

History of RAAO’s

 

The first of these bodies was the GFA. It set the benchmark and CASA used the structure as a template for other bodies.

 

Today, the GFA is withering away as it chews itself up in an amateur bureaucratic feast.

 

There is a lesson here for all recreational aviation bodies.

 

Unfortunately, many of those CASA employees who are driving the P149 solution are refugees from the very bodies they seek to regulate and perhaps their minds are closed to the legal constructs associated with them and thus potentially any other solutions. This is aided and abetted by the existing bodies who are concerned with their continued existence as distinct from representing the interests of their members. It may be subtle but interest in the continued existence of a organisation is not necessarily the same as the interests of the members of that organisation.

 

Conversely can you imagine the outcry if all the private pilots of Australia were required to join a national aviation association?

 

Associations as Part 149 organisations

 

We are all required to join a P149 organisation to pursue our chosen field of recreational aviation by virtue of the various CAO’s. If there was not this requirement they would probably not exist.

 

Typically these organisations are associations incorporated under various Sate statutes. The common law and in most cases, statute, the relationship between the members and the Association is that of a contract. The common law has held for centuries that a contract cannot be altered except by the agreement of both parties. This means that the rights and liabilities of the members cannot be altered without the concurrence of the membership. These rights and liabilities cannot be imposed unilaterally by an executive and or board acting alone or by an external third party unless the members delegate that authority.

 

Associations act for the benefit of members, not for its own purpose or for an external third party. What may be good for the third party or the association as a body or its employees may not be of benefit to the members. For example, CASA may command that RA-Aus employ a minimum of 20 staff on a minimum salary of $100,000 per annum to remain a RAAO. This is clearly not beneficial to the members but of benefit to the organisation’s employees and CASA.

 

The Moral Hazard

 

In the main P149 organisation currently receive funding to carry out certain activities on behalf of CASA. Whilst this financial link exists the Board, charged with maintaining a financially liquid organisation whilst meeting the stringencies associated with the funding, will always have regard to this ongoing arrangement in any negotiations with CASA. In this case it is unlikely that a P149 organisation will fearlessly advocate on behalf of members.

 

Conflict of Interest

 

The arrangements imposed by CASA through the various CAO’s and funding agreements place the organisations in a position of conflict between their roles as advocates on behalf of the members and the role required by the CASA arrangements as regulators. For example an agreement between CASA and GFA:

 

“D.CASA has for a number of years provided the Organisation with financial assistance for ensuring that the Members conduct Aviation Activities in accordance with the CASA Approved Procedures. This financial assistance has been limited to certain functions, but has been conditional on the Organisation performing other functions set by CASA as requirements for the continued operation of the CASA Regulatory Exemptions.”

 

Moreover in executing the agreement GFA (“the Organisation”):

 

“The Organisation warrants that no conflict of interest or risk of conflict of interest exists in relation to the performance of its obligations under this Deed.”

 

Can you imagine a trade union or similar body designed to advocate on behalf of its members entering into such a deed? It is self evident that the role of a regulator is naturally conflicted with the role of an advocate, especially when a financial pipeline is attached the regulator role.

 

CASA’s ignorance of other legislation

 

In constructing the P149 paradigm it appears to act as though the only legislation that matters is that which CASA administers. This is not the case. Clearly the various Associations Acts must be taken into account, potentially the Corporations Act in as much as it may govern the activities of large associations acting nationwide and the Human Rights legislation by demanding membership of an organisation (the “freedom to associate” also includes the freedom not to associate) to name a few.

 

A better way?

 

CASA currently delegates many activities to individuals and organisations. AOPA has previously proposed a company to undertake these contracted roles for CASA. I understand that similar ideas are being examined by RA-Aus. The concept has merit. Private bodies and individuals are able to charge fees for service which are in the main determined by the market place. GA exists in this sort of environment. So why cant recreational aviation.

 

Sure, the existing bodies may be casualties but they really only exist as a result of legislative compulsion. They would need to demonstrate their worth in the long run by showing real benefits for members.

 

Summary

 

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

 

C. S. Lewis English essayist & juvenile novelist (1898 - 1963)

 

 

[robinsm]

Given the greed of many private enterprise organisations, would we be better off financially under such an agreement?

 

 

[nong]

Bravo, Jim. You have produced a thoughtful essay.

 

A cowed RAAus accepting money from CASA whilst pretending to represent it's "membership" makes me want to vomit.

 

CASA has established a career path for retiring RAAus managers who "tow the line" for CASA, whilst in RAAus employ.

 

 

[Jim McDowall]

Given the greed of many private enterprise organisations, would we be better off financially under such an agreement?

It is not only about money but while we are on the subject to be able to operate a VH registered glider costs about twice that of a VH registered experimental homebuilt if they are maintained commercially. The difference is the GFA membership, gliding club membership (you have to be a member of a club to be a member of the GFA) and their various administrative costs.

Also genuine marketplaces (as distinct from the contrived "marketplaces" arising from privatisation of public utilities) serve to moderate greed. Perhaps the airline market demonstrates this well.

 

The point really is that CASA has within its existing structure the ability to enable recreational aviation by delegating to private bodies those tasks undertaken by the RAAO's thereby avoiding the issues I outlined.

 

If the argument is that volunteer organisations are more cost effective - generally the only volunteers are the Board members and the organisations employees really run the show.

 

 

[Guest Andys@coffs]

The flaw I can see is the concept of a mature market applying a stabilising influence on costs......where does this mature market exist? There aren't outsourcing companies that do the work of RAAO's on tap and setting up a single entity to do so simply inserts another party to feed.... The issue is chicken or egg, we don't have a mature market and no way to create a competitive one in such a small environment.

 

However we do have the ability to consolidate and introduce economies of scale.... But that would require aviators to look at the similarities in what we do , which is inherently the opposite of what aviators tend to do which is to create differences and to subdivide yet again.

 

For an entity like RAAus the funding from CASA is a very small portion of the revenue pie. You infer that the income casa provides buys influence....wrong IMHO, RAAOs are self administering, not self regulating, CASA maintains the regulation role for itself and that alone gives it a hand of 4 aces....self administration is about doing what CASA Intends us to do without the inefficiency and costs of government involvment, in a way that is user pays.

 

Andy

 

 

[facthunter]

The DUAL role is a conflict and always will be.

 

Can the CASA really fully delegate it's responsibilities? and if so under what remuneration arrangement and provision of support ?( particularly relating to indemnifying the organisation against legal action.

 

There was always talk of a "Parallel Path" to avoid the reality and perception of a monopoly Where is it?. Duplication is expensive. Amalgamation of like minded organisations with proper governance enforced would be better as we don't get anywhere near enough numbers to cover a place as big as we have in Australia. Nev

 

 

[Jim McDowall]

The DUAL role is a conflict and always will be.Can the CASA really fully delegate it's responsibilities? and if so under what remuneration arrangement and provision of support ?( particularly relating to indemnifying the organisation against legal action.

There was always talk of a "Parallel Path" to avoid the reality and perception of a monopoly Where is it?. Duplication is expensive. Amalgamation of like minded organisations with proper governance enforced would be better as we don't get anywhere near enough numbers to cover a place as big as we have in Australia. Nev

I tried the parallel path with gliding. In the end CASA used its "cost recovery" gambit that applies to all who seek C ASA authorisations and I retreated - I was not about to sign a blank cheque. Any who have read CASA's position paper on the Parallel Path would know that it is a hollow concept designed only to meet legal requirements but in reality designed to endorse to position of the existing recreational aviation bodies.

 

 

[Jim McDowall]

The flaw I can see is the concept of a mature market applying a stabilising influence on costs......where does this mature market exist? There aren't outsourcing companies that do the work of RAAO's on tap and setting up a single entity to do so simply inserts another party to feed.... The issue is chicken or egg, we don't have a mature market and no way to create a competitive one in such a small environment.However we do have the ability to consolidate and introduce economies of scale.... But that would require aviators to look at the similarities in what we do , which is inherently the opposite of what aviators tend to do which is to create differences and to subdivide yet again.

 

For an entity like RAAus the funding from CASA is a very small portion of the revenue pie. You infer that the income casa provides buys influence....wrong IMHO, RAAOs are self administering, not self regulating, CASA maintains the regulation role for itself and that alone gives it a hand of 4 aces....self administration is about doing what CASA Intends us to do without the inefficiency and costs of government involvment, in a way that is user pays.

 

Andy

Andy you miss the point. If there are 20 people authorised to do what RA-Aus does now there will be a competitive market. The problem I have with any organisation claiming to represent me is that we are usually presented with outcomes without genuine input from the user base. Part 149 is a case in point. There has not been any public consultation since 2007 but the RAAo's continue to negotiate mostly without feedback to members. But soon we will be presented with an outcome.

 

 

[facthunter]

AS you state though who will stand up to the CASA when they have you over a barrell? It's time for ALL aviation groups to start getting together and organise some representatives to make their opposition known. I would start by talking with AOPA. Nev

 

 

[Guest Andys@coffs]

People????

 

What RAAus does takes a team of admin folk, operations folk and technical specialists, the latter are as rare as hens teeth...if you feel you can find20 teams of people to do what RAAus does then your dreaming especially as they are "authorised persons" within the CASA vernacular, something that cant be found in a kellogs cornflake box.

 

When we in RAAus have lost our Tech manager for whatever reason replacing him (or her) become a major event where we try and find a new one, or parasite one from the existing RAAO's who is looking for a move for whatever reason.....

 

And again I ask, where are these 20 (teams) coming from, where is this mature market you speak of? I accept that in the fullness of time if there were 20 alternates available and working then people could make a choice as to who they use, but how are these 20 teams going to eventuate..... And how are they going to make a living from a potential marketplace of 20,000 members.....1,000 members each supporting a team of a minimum of 3-4 means to my way of thinking, where salary is 50% of the cost base of the org and salary is as a minimum on cost adjusted of $250k then you have $500k pa shared by 1000 or a cost of $500 ea before anything is achieved....and that's cheaper than what we have today how?

 

Andy

 

 

[facthunter]

Every section of aviation in Australia is running out of "Qualified People" particularly in technical and flying training skills assesment and development, areas. This should not be a surprise if we examine how the industry has changed particularly in Organisations removing themselves from the responsibility of training their own staff to their own particular standards and requirements.. Nev

 

 

[Mike Borgelt]

Very eloquent exposition, Jim.

 

Can you imagine the outcry if all holders of driver's licences were required to belong to an automobile association?

 

The "parallel path" was a CASA construct which they never intended to exist. It was a mere legal fig leaf to conceal arguably collusive behaviour between CASA and certain Sport aviation bodies. In fact after 2009, when the previous CASA CEO took the reigns, it ceased to exist. There was at the time a "parallel path" gliding operation in South Australia which had been CASA inspected, approved etc which was shut down. Who benefits from this?

 

As I said on the SAAA GM thread, what happens in the future if one of these recreational aviation orgs goes broke or ceases operation for some reason? It has been stated that the activity will cease until another organisation takes over? How long can that take (including CASA approval)?

 

We now have the situation of SAAA becoming a SASAO. Why? The aircraft are VH registered, the pilots have CASA RPL, PPL or higher. The leadership wants to force Experimental homebuilt operators to belong. Why?

 

This from an organisation so incompetent that it let itself get diddled out of $185,000, or so I've heard. I wonder how much of that can be recovered? I'd rather not belong to a circus like that.

 

At present there are people outside the SAAA who can issue the Airworthiness certificate for your home built. What is the problem with continuing this way? The SAAA has also presided over a significant roll back of the conditions

 

under which a homebuilt can be operated (a result of some internal machinations re existing 101.28 aircraft owners wanting Experimental conditions without simply being told to put the aircraft into Experimental). Are they really operating in the interests of the members? Or is it that a few misguided people running the organisation think that what benefits the organisation automatically benefits the activity and the members?

 

 

[Jim McDowall]

People????What RAAus does takes a team of admin folk, operations folk and technical specialists, the latter are as rare as hens teeth...if you feel you can find20 teams of people to do what RAAus does then your dreaming especially as they are "authorised persons" within the CASA vernacular, something that cant be found in a kellogs cornflake box.

 

When we in RAAus have lost our Tech manager for whatever reason replacing him (or her) become a major event where we try and find a new one, or parasite one from the existing RAAO's who is looking for a move for whatever reason.....

 

And again I ask, where are these 20 (teams) coming from, where is this mature market you speak of? I accept that in the fullness of time if there were 20 alternates available and working then people could make a choice as to who they use, but how are these 20 teams going to eventuate..... And how are they going to make a living from a potential marketplace of 20,000 members.....1,000 members each supporting a team of a minimum of 3-4 means to my way of thinking, where salary is 50% of the cost base of the org and salary is as a minimum on cost adjusted of $250k then you have $500k pa shared by 1000 or a cost of $500 ea before anything is achieved....and that's cheaper than what we have today how?

 

Andy

I suppose Steve Dines (and others) makes a living! Stop thinking terms of organisations and start thinking about function. Remember GA does this in this manner already.

 

 

[Jim McDowall]

Very eloquent exposition, Jim.Can you imagine the outcry if all holders of driver's licences were required to belong to an automobile association?

 

The "parallel path" was a CASA construct which they never intended to exist. It was a mere legal fig leaf to conceal arguably collusive behaviour between CASA and certain Sport aviation bodies. In fact after 2009, when the previous CASA CEO took the reigns, it ceased to exist. There was at the time a "parallel path" gliding operation in South Australia which had been CASA inspected, approved etc which was shut down. Who benefits from this?

 

As I said on the SAAA GM thread, what happens in the future if one of these recreational aviation orgs goes broke or ceases operation for some reason? It has been stated that the activity will cease until another organisation takes over? How long can that take (including CASA approval)?

 

We now have the situation of SAAA becoming a SASAO. Why? The aircraft are VH registered, the pilots have CASA RPL, PPL or higher. The leadership wants to force Experimental homebuilt operators to belong. Why?

 

This from an organisation so incompetent that it let itself get diddled out of $185,000, or so I've heard. I wonder how much of that can be recovered? I'd rather not belong to a circus like that.

 

At present there are people outside the SAAA who can issue the Airworthiness certificate for your home built. What is the problem with continuing this way? The SAAA has also presided over a significant roll back of the conditions

 

under which a homebuilt can be operated (a result of some internal machinations re existing 101.28 aircraft owners wanting Experimental conditions without simply being told to put the aircraft into Experimental). Are they really operating in the interests of the members? Or is it that a few misguided people running the organisation think that what benefits the organisation automatically benefits the activity and the members?

Re: SAAA maintenance course - their website says the courses are operated on a cost recovery basis but then have a discounted schedule of course fees depending on time as a member of SAAA. If it were truly about cost recovery the price would be the same for allcomers irrespective of length of membership. Come to think about it wouldn't you discount it for new members to get them more involved and create networks (which is really what the SAAA was established to do). OF COURSE it is only about the money to keep the organisation afloat at the end of the day.

 

 

[Jim McDowall]

Every section of aviation in Australia is running out of "Qualified People" particularly in technical and flying training skills assesment and development, areas. This should not be a surprise if we examine how the industry has changed particularly in Organisations removing themselves from the responsibility of training their own staff to their own particular standards and requirements.. Nev

Its not just aviation Nev - look at the demographics in teaching, nursing and the construction industry to name a few. We are now reaping the benefits in "short termism" bestowed upon us by the economic rationalists, a political elite and a financial system that has no moral compass.

 

 

[Guest Andys@coffs]

I suppose Steve Dines (and others) makes a living! Stop thinking terms of organisations and start thinking about function. Remember GA does this in this manner already.

I cant believe you said that!........CASA manage GA at great expense to the taxpayer, far more than it spends in any way on RA. The payments that CASA makes to all RAAO's I would be surprised if it exceeds $1m in tota which is a cork in an acean of its GA costs. double it to include the whole SASAOS CASA Team structure and its probably still not in any way close to being comparable. As a broader benefit to taxpayers, of the RAAO approach it has shirked most of its liability.....back on to the RAAO members who have to pay for expensive forms of liability insurance...... It hasn't moved all of its liability as the recent RAAus related court case showed....but to me (who wasn't involved in any way in that case) that was more about the plaintiffs lawyers ensuring deep pockets were part of the equation cause RAAus pockets were loud to the sound of moths only.....

 

If looking at this from a Government perspective, especially fiscal and risk there is no way on earth that they will move back to a GA like structure to cover RA........

 

Is that what you meant?

 

The point that was made about what happens if an incorporated association based RAAo becomes insolvent is a real and valid concern......We don't know what would happen but unless things improve financially across the board (and no that is not an RAAus specific statement, just my personal view on the broader RAAO community) there is every chance we may all get to spectate...if it happens to your favourite RAAo then there is every chance of sustained pain.....

 

Andy

 

 

[Jim McDowall]

I cant believe you said that!........CASA manage GA at great expense to the taxpayer, far more than it spends in any way on RA. The payments that CASA makes to all RAAO's I would be surprised if it exceeds $1m in tota which is a cork in an acean of its GA costs. double it to include the whole SASAOS CASA Team structure and its probably still not in any way close to being comparable. As a broader benefit to taxpayers, of the RAAO approach it has shirked most of its liability.....back on to the RAAO members who have to pay for expensive forms of liability insurance...... It hasn't moved all of its liability as the recent RAAus related court case showed....but to me (who wasn't involved in any way in that case) that was more about the plaintiffs lawyers ensuring deep pockets were part of the equation cause RAAus pockets were loud to the sound of moths only.....If looking at this from a Government perspective, especially fiscal and risk there is no way on earth that they will move back to a GA like structure to cover RA........

 

Is that what you meant?

 

The point that was made about what happens if an incorporated association based RAAo becomes insolvent is a real and valid concern......We don't know what would happen but unless things improve financially across the board (and no that is not an RAAus specific statement, just my personal view on the broader RAAO community) there is every chance we may all get to spectate...if it happens to your favourite RAAo then there is every chance of sustained pain.....

 

Andy

What was the court case?

If recreational aviation was treated like PPL's flying experimental aircraft with dispensations similar to those applying to the smaller end of aviation in Canada it would be cost effective - remember all these organisations pre date the experimental category and LSA. It is time to re-argue the case for them not simply defend the status quo and address the inbuilt conflict in the system. The fact is other jurisdictions are able to manage this without Part 149 organisations.

 

 

[Guest Andys@coffs]

cost is only part of the government equation....risk reduction by shifting liability to one or more organisations between it and a plantiff is probably of as much import to CASA.

 

The court case was the Goulbourn Sting accident follow on...I say recent but in reality it finalised quite some time ago...recent as a word is relative to your own specific points of reference.

 

If you search on this website for Goulbourn Sting Accident I reckon you'll get dates and outcomes from the resulting threads the search returns.

 

Don't get me wrong I don't for one moment argue that what we have is the only approach that CASA could take......but I do argue that until CASA devolves Regulation its entirely their decisions as what form and function we fly under....If waiting for change to occur for changes sake then its only going to happen if CASA can further reduce the RA cost impost on them, or further separate its liability exposure from any potential plaintiffs. Anything else, as you've correctly identified with the short termitis focus is unlikely to be a consideration.....It may well from time to time be draw out and re whitewashed as lip service is applied before status quo is happily reapplied....... The real and current risk of insolvency is much more likely to change the playing field but I suspect that anyone hoping for a painless transition is likely to be sorely disappointed if that occurs....

 

Andy

 

 

[dazza 38]

I still don't think it is fair that we have to be a member of the RAA too fly RAA aircraft and GA jockeys don't have to be a member of anything to fly VH registered aircraft.

 

 

[Guest Andys@coffs]

Yeah, I can see that....but Dazza you've been in both camps.....which one does your wallet speak for? Its like that constant argument we hear about "Buy Australian" I don't believe there is an Australian alive that doesn't agree with that sentiment...and yet our Wallets demand otherwise....

 

 

[dazza 38]

Yeah, I can see that....but Dazza you've been in both camps.....which one does your wallet speak for? Its like that constant argument we hear about "Buy Australian" I don't believe there is an Australian alive that doesn't agree with that sentiment...and yet our Wallets demand otherwise....

There is no doubt that GA is more expensive than RAA. But I also think that competition is good as well. I don't like monopolies.

 

 

[Geoff13]

I love monopoly, I always win when I play it.

 

 

[Jim McDowall]

Yeah, I can see that....but Dazza you've been in both camps.....which one does your wallet speak for? Its like that constant argument we hear about "Buy Australian" I don't believe there is an Australian alive that doesn't agree with that sentiment...and yet our Wallets demand otherwise....

Andy justify why these supposed additional costs are required, what they would be and who would they be paid to. Recreational aircraft are typically flown and maintained under various exemptions. How do complying with these exemptions cost? If an experimental aircraft owned and operated by a PPL only requires a schedule 5 annual to be operated why should any other recreational aircraft be any different? As for insurance this is a valid point but only in respect of group purchasing power - there is no CASA requirement to insure aircraft

 

 

[turboplanner]

Easy fix, shut down CASA, and operate the private aviation segments as fully self administering bodies reporting direct to the Department.

 

Major reason against that is the unruly content on social media over the past decade. indicating the sports are not responsible enough, and the Department could have a contingent liability.

 

Works fine in other sports.

 

 

[facthunter]

You have to introduce a bit of pragmatism into this. 3rd party insurance is compulsory with road vehicles, and there are victims of crime payments

 

You can't get money from a bankrupt but innocent parties have to be protected. somehow and insurance is one way to cover that

 

. Sometimes a structure that appears to lack certain sophisticated modelling works well because the members WANT it to work. No design for a management of members interests will ever be perfect as all possible problems cannot be anticipated in advance either. Nev