The FPP Test What you need to know

1. The FPP TestWhat you need to know Commercial Transport/Tourist Flight Operators Presentation AIA Aviation Week Conference July 2011

2. Overview • Overview of the FPP test; application to senior person roles • The continuing obligation to remain fit and proper • Inter-relationship between FPP criteria and the Director’s exit powers • Re-entry into the system www.amclegal.co.nz

3. FPP in the aviation context • Why does it apply to aviation participants? • To protect and promote • the public interest in aviation safety • the interests of participants in the aviation system • How is this achieved? • Entry control – participants must satisfy the FPP test (s9 CA Act) • Exit control – enforce sanctions where participants do not satisfy the FPP test (s17-20 CA Act) • Who decides? • The Director of Civil Aviation, the Courts www.amclegal.co.nz

4. FPP test • Civil Aviation Act 1990 • Section 10(1) mandatory FPP criteria – must have regard to the person’s role or intended role in system; and: • Compliance history with transport safety regulations including any convictions, infringements or other evidence of offences • Related experience within the transport industry • Knowledge of, and compliance with, civil aviation regulatory requirements • Physical, mental health or serious behavioural issues • Section 10(2) and (3) – Director may also consider any other matter and evidence as is considered relevant, from any source. www.amclegal.co.nz

5. Senior Person FPP assessment: CEO • Focus – whether the senior person will safely and responsibly exercise control over the privileges of the organisation’s aviation document; and engender good aviation safety culture • Taking into account: • Knowledge of aviation system regulatory requirements or intended management structure • Related experience (if any) in the transport industry • Past civil aviation regulatory compliance record – individual and/or organisation • Evidence of transport offences or other relevant convictions – eg fraud, dishonesty offences • Management experience, references, testimonials • Adverse reports or information www.amclegal.co.nz

6. Continuing FPP obligations • Section 9(3) – any person who holds or has control over the exercise of any privileges of an aviation document must continue to satisfy the fit and proper person test – condition of every aviation document • S12 CA Act obligations on participants to – • Comply with the Act, Rules and conditions attached to aviation documents (s12(2)); and • Carry out the functions and activities relating to aviation documents safely and in accordance with prescribed safety standards (s12(3)) • S12 compliance key part of s15A investigations; and • Significant to consideration of whether a senior person remains fit and proper to continue in role www.amclegal.co.nz

7. FPP Disclosure obligations • Continuing obligation to disclose any information relevant to mandatory s10(1) criteria – eg subsequent conviction for a driving offence • Failure to disclose relevant information about FPP status • Is an offence under s49(1)(c) • Could itself lead or contribute to an adverse FPP determination • New Zealand Law Society v Mitchell [2011] NZAR 81 • Lawyer struck off for failing to disclose 39 convictions • Court of Appeal noted he may have met the FPP standard to practice law if the convictions had been disclosed www.amclegal.co.nz

8. FPP criteria and exit powers • Power to suspend, impose conditions or revoke aviation document on fit and proper person grounds: • s17(1) – grounds for initial suspension include contravening or failing to comply with s49 by holder of aviation document • s17(4) and s18 powers to suspend, impose conditions (for a specified period or permanently) or revoke aviation documents • s19(2) – Criteria for use of those powers include any conviction, or evidence of transport safety offences committed, or non-compliance with transport safety regulations; and • s 19(3) –Any other relevant matter or evidence about the person • = Clear inter-relationship between FPP criteria and exit powers against individuals who hold aviation documents www.amclegal.co.nz

9. Use of exit powers where a senior person is no longer considered fit and proper: • Director may withdraw senior person approval on FPP grounds • But • Absent any other widespread evidence of organisational non-compliance history, this may not justify use of s17-18 powers against the organisation; and • Provided affected senior person can be replaced, organisation should be permitted to continue to operate • Withdrawal of all senior persons approvals = may justify use of exit powers against organisation www.amclegal.co.nz

10. Proposed adverse decisions • s10, s11 FPP decisions - The Director must: • Disclose any adverse information taken into account and allow the person to refute or comment on it; and • Notify any proposed adverse decision, and consider any submissions, in accordance with s11; and • Notify the final decision and, if it is adverse, explain the consequences • S66 – Right of appeal against adverse decisions affecting validity and exercise of privileges of aviation documents • Note - currently no direct right of appeal by senior person against adverse FPP determination www.amclegal.co.nz

11. Points to Note: • Financial or economic impact of adverse decision - may be considered but ‘plays second fiddle’ to aviation safety • Past convictions or adverse record that did not previously lead to an adverse decision – can be taken into account • Fact that person has been charged with offence – may be relevant dependent on circumstances • Hearsay evidence and adverse reports to CAA: • McCool v Rushcliffe Borough Council [1998] UK – • The decision maker must not rely on “prejudice or assertions shown to be ill-founded or gossip or rumour… [but may rely on] anything which a reasonable and fair minded decision maker, acting in good faith and with proper regard to the interests of both the public and the applicant, could properly think it right to rely on” www.amclegal.co.nz

12. Re-entry into the system • No statutory bar on any person denied entry or ‘exited’ from the system in re-applying • Director must consider any new application • Factors that will influence decision • Length of time since previous adverse decision • Demonstrated efforts to address behaviour that lead to adverse decision, eg • Retraining • Rehabilitation • Acceptance of past wrongs • Change in attitude • Any other matters relevant to future involvement in industry www.amclegal.co.nz

13. Questions? • Other sources of information: • www.amclegal.co.nz – articles on FPP issues as published in NZ Aviation News • www.caa.govt.nz – search under “F” for fit and proper persons • CAA Personnel Licensing Unit www.amclegal.co.nz