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Madam Speaker, Honourable Members

The South African Civil Aviation Authority Bill creates the South African Civil Aviation Authority.

This is the fourth Bill in a series that creates independent agencies or authorities to perform functions on commercial lines that were previously done by the Department of Transport and indirectly subsidised by government.

Following the opening of the South African Maritime Safety Authority, the SA National Roads Agency and the SA Cross-Border Road Transport Agency, this Bill seeks to establish the fourth and last agency following the restructuring of the Department of Transport into an organisation whose core function is policy and regulation.

It is a comprehensive Bill comprising 25 clauses and a schedule of amendments to relevant existing aviation legislation. Time permits me only to highlight the key features of the Bill.

It is important to mention that the South African Civil Aviation Authority Levies Bill, which authorises levies on participants in the aviation industry, accompanies this Bill, in order to defray the costs incurred by the CAA in administering and regulating the industry.

The Levies Bill is a Money Bill and as such must be dealt with separately. I will again refer to this Bill when I deal with the financing of the CAA.

The Civil Aviation Authority Bill creates the South African Civil Aviation Authority and transfers to it the administration of all South African civil aviation legislation designed to ensure aviation safety and compliance with our obligations under various international aviation treaties.

The legislation to be administered by the CAA is set out in Schedule 1 to the Bill. Policy- making responsibility - as opposed to administrative and regulatory oversight - will remain with the Minister.

The objects of the CAA as set out in clause 3 of the bill are to control and regulate civil aviation in the Republic, to ensure the efficient functioning and development of the civil aviation industry and, in particular, to control, regulate and promote civil aviation safety and security.

Extensive studies, which took over a year to complete, were undertaken in order to prepare the South African Civil Aviation Authority Bill and South African Civil Aviation Authority Levies Bill.

These studies included a detailed analysis of our own civil aviation regime and existing legislation, as well as exhaustive studies of civil aviation practice and legislation in other countries such as Australia, New Zealand, the United Kingdom and Canada.

A wide range of departmental and external expertise was brought to bear on the drafting process and industry stakeholders and role players were consulted extensively throughout the process.

It is therefore with confidence that I present to you the two Bills currently before this House.

The CAA will be constituted as a statutory authority. In the early phases of discussion on the legal identity of the CAA, the option of creating a company under the Companies Act was considered and extensively debated within the industry.

However, the option of constituting the authority as a statutory body was finally preferred as more suitable to the CAA's core functions as a primarily regulatory body rather than a conventional business.

The CAA will act through a Board comprising of a Chair, the CEO (ex officio) and up to 5 other members.

Membership will normally be for a maximum term of 5 years, but in the interests of continuity of experience and expertise, individual members will be eligible for re-appointment for one further term.

All members of the Board, with the exception of the CEO, will be part-time members appointed by the Minister of Transport.

At least two board members must represent participants in civil aviation and at least two must have special knowledge of or experience in matters relating to the functioning of the Authority.

The Board is expected to act independently and various provisions are aimed at ensuring this. Most importantly, the CEO is appointed by the Board - again for an initial maximum five-year term, but with eligibility for re-appointment.

However, in order to ensure close monitoring of the operations of the new Authority in its early years, the first CEO will be a provisional appointment by the Minister of Transport for a maximum three-year term. Only thereafter will the successor CEO be eligible for appointment by the Board.

I have said that the core functions of the new CAA will be primarily regulatory. However, from the outset it will be expected to function in accordance with business principles.

Clause 15 of the Bill mandates that an annual Business Plan, which must include a full 5-year Financial Plan, be presented in advance and approved by the Minister of Transport.

The Bill provides for a written and publicly available performance agreement between the Minister and the Authority, and lists the factors, which the CAA must take into consideration in preparing the Business Plan.

The CAA must also perform its functions in accordance with South Africa's international obligations under conventions and treaties to which it is a signatory.

I now turn to the issue of the financing of the CAA, which will be regulated both by the South African Civil Aviation Authority Bill and the South African Civil Aviation Authority Levies Bill.

Under the Civil Aviation Authority Bill, clause 14, the CAA will be, inter alia, funded from prescribed civil aviation regulatory charges.

These charges - which embody the user-pays principle - will be fees for services or facilities rendered by the CAA and will be calculated on a cost-recovery basis.

They can include charges for the examination and certification of aviation personnel and the survey and certification of aircraft and airports.

In terms of the Civil Aviation Authority Levies Bill, the authority can, after giving notice in writing to the Minister, impose levies on aircraft passengers and participants in the aviation industry, together with appropriate penalties for the non-payment of such levies.

The Minister of Transport, acting in consultation with the Minister of Finance, must approve determinations by the CAA on the imposition of levies in writing.

As a further safeguard of the public interest, consultations will be held with the industry before any determination under the CAA Levies Bill is enacted.

My government is committed to the principle of accountability and there are provisions in the Bill expressly designed to ensure accountably and control over the CAA.

However, two important examples to which I would like to draw the House's attention are the following:

Firstly, the Minister of Transport's obligation to approve Business Plans and enter into a written Performance Agreement with the CAA in relation to the performance of its functions operates as a form of public control which may if necessary amount to the power of veto over CAA proposals to create certain charges and levies.

Secondly, under clause 16, the CAA is also governed by the Reporting by Public Entities Act, which imposes a range of duties on Public Entities with which Members of this House will be familiar.

Collectively, the various provisions in the Bill ensure a large degree of public accountability.

The intention is that the CAA will open by 1 October 1998, the date on which responsibility for administering the legislation specified in Schedule 1 to the Bill will be passed to it.

In conclusion, I wish to express my appreciation to the Portfolio Committee on Transport for it understands in handling the administrative amendments, which were introduced to improve the quality and soundness of this Bill.

In order to ensure a smooth transition to the new system, I call upon the House to accept the Second Reading of the South African Civil Aviation Authority Bill, [and its companion Bill, the South African Civil Aviation Authority Levies Bill].

Issued by Ministry of Transport

4 August 1998