Published on September 30, 2016
A Conflict of
Interest-COI is typically defined as a situation in which an official has
private interests that can and or may be perceived to improperly influence or
interfere with the performance of his or her official duties and
responsibilities. Such improper influence or perceived interference could be
attributed to situations involving financial interest, family, emotional life,
political or national affinity of the official. In the case of Civil Aviation,
organizational COI arises where the organization fails or is impeded to act
impartially due to outside activities or relationships it has with other
entities.
Whether we speak
openly about it, or as usual sweep it under the carpet, as has been the case
ever since the introduction of the “Consideration of Guidance on Conflicts of
Interest motion” introduced to the General Work Programme of the Legal
Committee through a proposal in the working paper A37-WP/80 presented by the
United States. And a survey there after by the ICAO Secretariat some years ago.
Even after it was concluded that it would be useful for all States to have a
framework dealing with conflicts of interest in civil aviation given the
prevalence of such situations in the civil aviation activities of States.
Conflicts of interest hamper effective, independent and impartial regulation
thereby posing risks to aviation safety and security.
We, unfortunately
cannot run away from the pertinent need today, especially that of enacting
consistent rules across the sector to establish and preserve a clear separation
between civil aviation authorities and the activities that they oversee. In the
given context, it is still imperative today to have rules governing conflicts
of interest (“COI”) situations especially in-:
1. Financial interests
in regulated entities;
2. The movement of
individuals from positions in government to industry and vice versa; and
3. The practice of
designating or seconding personnel to carry out oversight functions on behalf
of the Civil Aviation Authority.
The consideration of
these elements remains very appropriate especially if we, were ever to foster
an objective exercise of regulatory responsibilities. From a CAA perspective,
such COI arise, principally, in two different scenarios. First, through
interactions between a Government department its regulatory agencies with operating
entities that are subject to regulation (such as air operators, aviation
training organizations, approved maintenance organizations, design
organizations, production organizations, air navigation service providers,
AVSEC service providers and aerodrome operators). Examples of COI situations
that arise in the course of such interactions include:
- Direct or indirect financial
interests in regulated entities;
- Movement of individuals between
jobs in the regulatory and regulated entities (also referred to as
“revolving door” situations);
- Performance of regulatory duties
by seconded or designated staff of the regulated entities;
- Partnerships or arrangements
between regulatory and regulated entities to advance the commercial
interests of the regulated entities at the expense of the public interest
(leading to what is also referred to as “regulatory capture”); and
- Lobbying of policy or rule-making
bodies on behalf of or in favour of regulated entities;
Second, through
relationships between different organs or entities of the State involved in
civil aviation activities, which could include:
- Overlap of functions between
regulatory bodies and the government or its other organs such as the
military, police, customs and investigative bodies;
- Ownership or control of regulatory
and operator entities by the State as is the case in a number of
Countries; and
- Combination of regulatory and
service provision functions in the same or related entities, as is the
case in some Middle East countries.
It is very possible
that COI (real or perceived), can arise from such interactions or
relationships, and hamper effective, independent and impartial regulation.
Generally, Many States have not developed legal and institutional frameworks to
deal with COI in response to the requirements of their domestic law or with
reference to international treaties, such as the United Nations Convention
Against Corruption of 2003 (UNCAC), or to guidelines or codes of best practice
developed by international organizations such as the Organisation for Economic
Cooperation and Development (OECD) or by relevant professional bodies.
Civil aviation
authorities in many ICAO member States are unfortunately not subject to
government-wide COI frameworks, to frameworks that apply specifically only to
them, or to some combination of such frameworks. Even with ICAO promulgating
certain guidance on COI, identifying the need to mitigate potential COI with
respect to staff carrying out inspection duties and calling for clear
separation of authority between regulatory and state controlled regulated
entities, little if anything can be said of their enforcement and achievements.
Furthermore, even
with a Standard as is promulgated in Annex 19 - Safety Management, in
particular paragraph 3.2, which read together with paragraph 3.3 in Appendix 1,
requires States to establish and implement a safety oversight system ensuring
that personnel performing safety oversight functions are provided with guidance
that addresses ethics, personal conduct and the avoidance of actual or perceived
COI in the performance of official duties, many CAA’s have deliberately
continued to turn a blind eye on it.
ICAO’s Universal
Safety Oversight Audit Programme (USOAP) findings in this area have been that,
in a number of States, where operator or service provider functions are carried
out by the State, there is no distinct separation of responsibilities between
the regulatory bodies and air operators, aerodrome operators, service providers
and aviation training centres and that most States that use experts seconded by
the State’s civil aviation administration or other organization in the State as
investigators, have not established measures to avoid possible COI.
Under the Universal
Security Audit Programme (USAP), it is reported that “quite a number of States
are yet to ensure that the functions and responsibilities of the various
entities within the civil aviation security system are clearly defined to
ensure that there are no overlaps of responsibilities”.
Today financial
interests in regulated entities as well as social interests of individuals,
(leading in some cases to corrupt practices, nepotism and favouritism),
movement of individuals between jobs in the regulatory and regulated entities,
the involvement of the State in regulated activities or entities and lobbying
in favour of regulated entities are amongst the most prevalent sources of COI
in the Civil Aviation Industry. Other situations such as the exertion of
political pressure on regulators to favour regulated entities such as National
Airlines, or Ground Handling entities owned by the politically correct are an
additional source of COI and a reason why regulatory oversight in many
countries has gone to the dogs.
It is rather tricky
since the States are involved in civil aviation activities as an operator or
service provider in many States, the most prevalent activities being their
engagement in the provision of air navigation services, aircraft and aerodromes
operations and the management of aviation training organizations. Moreover,
some civil aviation authorities depend on government subvention or revenue from
regulated activities to support regulatory activities. Furthermore, States that
have aircraft on the civil register that are used for military or police
operations.
These relationships
and activities are subject to aviation safety and security oversight by the
civil aviation administration which raises the potential for vested
organizational COI, whereby civil aviation regulators are unduly influenced or
impeded from acting impartially in dealing with regulated entities due to
common ownership and control by the State or because of having commercial
interests in those entities.
Direct or indirect
interest in regulated entities, partnerships or arrangements between regulatory
and regulated entities to advance the commercial interests of the regulated
entities at the expense of the public interest (leading to what is also
referred to as “regulatory capture”) and the combination of regulatory and
service provision functions in the same or related entities are the three
leading situations that States put aviation safety and security most at risk.
Various situations,
including movement of individuals between jobs in the regulatory and regulated
entities and performance of regulatory duties by seconded or designated staff
of the regulated entities, are also sources of COI albeit to a lesser extent.
Political pressure being applied on the national aviation administration is a
situation not openly disclosed or included in the list of elements identified
as a risk to aviation safety and security.
While a majority of
stakeholders may be of the view that existing ICAO guidance material on COI in
civil aviation is adequate or somewhat adequate. The industry can benefit from
the harmonization of COI practices and measures for dealing with COI in civil
aviation. The rules or guidance on COI must in essence be developed in the form
of Standards, or the development of a model code on managing COI in civil
aviation while at the same time making necessary adjustments to other CAA
regulations dealing with the qualifications of personnel and representatives.
Which today is one of the most abused elements especially, where the executive
in ICAO Member States politically appoint individuals as Minister to head Ministries
in charge of civil aviation or the CAA’s.
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