Civil Aviation Bill introduced to Parliament

After five years of preparation, the Civil Aviation Bill has been introduced to Parliament.  The aviation industry has seen dramatic change in the three decades since the current Civil Aviation Act was passed in 1990 and despite numerous amendments to the Act in this period, the legislation has struggled to keep pace.  The Bill is an attempt to completely overhaul and modernise New Zealand’s regulation of the aviation industry, and will replace both the Civil Aviation Act 1990 and the Airport Authorities Act 1966.

Overview of the changes introduced in the Bill 

New provisions relating to safety and security in civil aviation include the following:

• Drones: The definition of “pilot-in-command” is expanded so as to impose the same duties on the operator of an unmanned aerial vehicle or “drone”[1] and the definition of “accident” is widened to cover “aircraft intended to be flown without any person on board”.  The Police and CAA response officers are also given the power to seize, detain, or destroy UAVs, and may obtain a warrant to search a home or marae in search of such aircraft.[2]  Despite submissions by the NZ Airports Association on a 2019 Exposure Draft, the Bill does not provide other industry users with such powers.

  BARNZ also submitted in 2019 that regulations were needed to levy drone users for the costs they impose on the aviation system, which are currently being borne by airlines, and that the Ministry should have powers to require drones to be equipped with capabilities such as position fencing and geo-fencing.  The Bill does confer a broad power on the Crown to impose levies on aviation participants, but does not provide for compulsory position or geo-fencing equipment.

• National security checks: It is contemplated that rules made under the new Act will require a national security assessment for certain categories of applications for aviation documents (such as pilot licences).[3]

• Landside security areas: Aviation security (AvSec) services and powers now cover temporary (less than 30 days) “landside security areas” at airports, which can be designated when the Minister considers it necessary to respond to a heightened threat environment, in addition to airside security areas.  AvSec and police constables will have powers to search persons in or approaching these areas.[4] 

• Aviation security generally: There is a new infringement offence of being present in an airside or landside security area without the required identification or submitting to a search.[5] 

• In-flight security: Part 11 and Schedule 10 of the Bill contains provisions that authorise firearms, weapons and ammunition for carriage and use on board an aircraft by in-flight security officers.  These amendments also permit the Director of Civil Aviation to authorise foreign security officers to pass through airside and landside security areas while carrying firearms and weapons (when accompanied by a constable).  It is intended that these provisions will be divided into a separate Bill after the second reading and will come into force after the Civil Aviation Act 2021 has been enacted.  This is likely due to these provisions not being included in the 2019 Exposure Draft, and therefore requiring more extensive submission from the industry and other interested parties.

• Enforceable undertakings: There is a scheme of enforceable undertakings in respect of contraventions or alleged contraventions of civil aviation legislation.[6]  This is modelled on the Health and Safety at Work Act 2015.[7]

• “Just culture”: An accident or incident notification will not be admissible in a criminal proceeding against the individual who provided the notification unless the criminal proceeding concerns the falsity of that information.[8]  In addition, persons who fully and accurately notify the CAA of an incident, or who report the incident to a person who is required to notify the CAA, have qualified protection against offence proceedings brought by the CAA – the Director of Civil Aviation may take action only if satisfied that the public interest in taking action outweighs any adverse impact that the proceeding will have on future accident or incident notifications (e.g. if the person has been grossly negligent, reckless, or is a repeating previous dangerous behaviour).[9]

Environmental sustainability 

The Bill imports the International Civil Aviation Organization’s (ICAO’s) Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA):[10]

• The holder of a New Zealand AOC flying internationally must develop, implement, and maintain an emissions monitoring plan, approved by the Ministry of Transport, for monitoring and recording fuel.

• The operator must submit emissions reports to the Ministry.

• The Ministry will calculate the offsetting requirements for each reporting period.

• The operator must submit emissions unit cancellation reports to the Ministry for each reporting period.

CORSIA provides for carbon-neutral growth in the international aviation sector.[11]  Environmental groups have been critical of CORSIA, arguing that it is “useless to plant trees if emissions keep on growing”.[12]  It would not be surprising if there were some pressure during the Bill’s progress through Parliament to introduce more ambitious emissions targets.  In particular, we note that section 5R of the Climate Change Response Act 2002 provides that the Climate Change Commission must advise the Government by the end of 2024 whether the 2050 target for emissions reduction should be amended to include international shipping and aviation, and the Green Party, which seeks a zero-carbon economy, holds the deputy chair of the Transport and Infrastructure select committee.

Airport regulation 

A perennially fraught issue in the aviation industry is airport charges.  Airlines operate on very tight profit margins, and airports require major capital expenditure not only for construction and expansion but also simply for maintenance. 

Section 4A of the Airport Authorities Act 1966, which was inserted in 1997, provides that every airport company may “set such charges as it from time to time thinks fit for the use of the airport”.  Air New Zealand has in the past refused to pay, and brought judicial review proceedings in respect of, landing charges – with partial success against Nelson Airport and unsuccessfully against Wellington Airport.  A dispute over unpaid Auckland Airport landing charges was settled before proceedings were issued.

An exposure draft of the Bill was released to the aviation industry for consultation in 2019, which proposed removing airports’ ability to price as they think fit and reducing airport consultation thresholds.  Submissions from the New Zealand Airports Association and individual airports strongly criticised the proposed abolition of the airport charges regime; whereas the Board of Airline Representatives of New Zealand (BARNZ) recommended that the Bill go further, including:

• amending Part 4 of the Commerce Act 1986 to apply ‘negotiate arbitrate’ regulation to New Zealand’s major international airports (which would remove the need for the review process currently required under the Commerce Act before such regulation could be introduced); and

• requiring a new ‘capital project agreement threshold’ whereby airports would need to get the agreement of at least one substantial customer before undertaking any aeronautical project more than ten times the value of the consultation threshold.

The Bill represents a compromise between these two positions, in that it removes the ability for an airport to ‘price as it thinks fit’, and generally requires airports to consult with airlines around airport charges and capital expenditure over a fixed amount.[13]  No doubt both the airports and the airlines will have more to say about this compromise position.

Claims against carriers 

The Bill’s provisions relating to international and domestic carriage by air are largely the same as parts 9A and 9B of the current Act, with the addition of the right of a person to bring a claim against a carrier in the Disputes Tribunal as well as before a court.[14]

Next steps 

The Bill now awaits its first reading in Parliament, following which it will be referred to the Transport and Infrastructure Committee for detailed consideration and submissions.

With 481 clauses and 10 schedules, the Bill is significantly larger than the Civil Aviation Act 1990 and the Airport Authorities Act 1966 combined.  The Ministry of Transport, which drafted the Bill, admits that it is complex.[15]  Accordingly, the select committee process will likely take some time.  In particular, we expect there will be extensive discussion on the importation of the CORSIA scheme and on the question of airport charges, as discussed above.

If you have any questions about the Civil Aviation Bill, please get in touch with our Aviation team or your usual contact at Hesketh Henry.

Disclaimer:  The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.

[1] Clause 5.

[2] Part 9, subpart 4.

[3] Clauses 74, 357.

[4] Clauses 147, 148, 152.

[5] Clause 168.

[6] Part 9, subpart 6.

[7] Health and Safety at Work Act 2015, ss 123-129.

[8] Clause 342.

[9] Clause 343.

[10] Part 6, subpart 3.

[11] See https://www.transport.govt.nz/area-of-interest/environment-and-climate-change/corsia/.

[12] https://www.greenpeace.org/canada/en/press-release/25362/the-climate-aviation-coalition-presses-icao-to-respond-to-climate-emergency-radically-cut-air-traffic/.

[13] Clauses 231-232.

[14] Arbitration as allowed by the Montreal Convention, the Warsaw Convention, or the Guadalajara Convention, is also included in the term “court”: cl 255.

[15] Ministry of Transport “Te Pira mō te Mana Rererangi – Civil Aviation Bill” < https://www.transport.govt.nz/area-of-interest/air-transport/civil-aviation/>.