Performance-based Safety Regulation & Oversight

Executive summary

A ‘Performance-based’ regulatory and oversight approach, which focuses on desired, measurable safety outcomes, rather than prescriptive processes, can become an important tool to manage and enhance safety in view of the expected significant growth in air traffic.

While a performance-based approach can improve safety, it can also pose new hazards if implemented or overseen inadequately, if perceived as a means to save money and resources, or if allowing for any kind of de facto industry self-regulation. The financial sector, the oil-drilling or the nuclear industries have shown the potentially disastrous consequences if things go wrong.

Hence, a careful, gradual step-by-step approach – with regular feed-back loops – is required to safely transition from a Compliance-based prescriptive scheme to a Performance-based approach. It must be acknowledged that a number of – and possibly even a majority of – stakeholders/users, including national oversight authorities may not be able to transition to such a scheme any time soon or even at all.

This is why a Compliance-based prescriptive scheme must remain in place in order to set a floor of sufficient, clear and strict standards for all stakeholders. In fact, the Compliance-based and the Performance-based approaches are complementary; they should not substitute each other but add on an additional safety layer.

A Performance-based scheme can only be considered if the following conditions are fulfilled:

a) The system ‘maturity’ (European, national and operator-level) needs to be assessed and established prior to implementing such a scheme.
b) A prior assessment of the operators’/organisations’ safety culture needs to be carried out by independent external auditors.
c) Adequate and sufficient resources need to be allocated by all stakeholders, both during the implementation and then during the continuous oversight.
d) Front-end safety professionals – in particular flight crew and their representation – need to be involved as equal stakeholders at all stages and levels.
e) A Compliance-based prescriptive scheme must remain in place in order to set a floor of sufficient, clear and strict standards for all stakeholders.
f) A failsafe mechanism is required to step in to effectively remedy the situation when failures within the Performance-based regulation or oversight system occur.
 
Introduction
 
With the publication of A-NPA 2014-12 by EASA and the corresponding stakeholder consultation by the European Commission, the Agency has re-launched the debate about possible advantages and drawbacks of complementing the present Compliance-based prescriptive safety legislation scheme by a Performance-based scheme.
 
While all stakeholders agree that prescriptive legislation alone may not always adequately fulfills its purpose, it does certainly provide a clear minimum of requirements that all stakeholders need to achieve.
 
Moving to a performance-based system – while in theory a logical step in a Safety Management environment – may however quickly erode safety standards and safety levels, if implemented badly, too quickly and without regular assessment and feed-back loops, and if not properly overseen by the National Aviation Authorities (NAAs) and EASA.
 
The possible benefits of a performance based regulation environment, as noted by EASA, are:
  • Better focus on achieving the desired safety performance;
  • Improved understanding of risks and clearer identification of the required mitigations;
  • More tailored oversight activities that focus on the areas of greater concern or need;
  • Efficiency through a better targeting of resources;
  • Better legislative adaptability and flexibility;
  • Improved focus on the individuals in the aviation system and their role in safety;
  • Possibly more active involvement & interaction of all actors in managing the system.

It is to be noted that these potential benefits can only be achieved if a number of steps are undertaken and certain requirements are fulfilled to ensure a proper introduction of performance-based regulation.

ECA’s Position

The successful implementation of a performance-based system into aviation will hinge in no small part on the ability of oversight authorities, both NAA and EASA, to provide enough and adequate resources and expertise to provide credible, harmonized and effective safety oversight across the industry and across EU Member States. Performance-based regulation and risk-based oversight will also require oversight authorities to manage their resources much more efficiently, as this type of oversight will be more resource-intensive than checking compliance with prescriptive rules.

Performance based regulation will require a totally transparent approach involving all aviation stakeholders. This includes that stakeholders will need to share a common understanding of the principles and ethics that underlie/create a basis of the system as well as ‘mutual trust’ and cooperation among the three pillars of such a system: authorities, companies and (air crew) employees.

Stakeholders need to acknowledge the fact that not all parts of the aviation system will be able – i.e. mature enough – to follow the path to Performance-based regulation and oversight. For this reason a Compliance-based prescriptive scheme must remain in place in order to set sufficient, clear and strict standards for all stakeholders – to ensure a uniform and high ‘floor’-level of safety across the industry.

Those operators/organizations that fulfill additional, higher safety standards and that commit themselves to the additional burdens and controls of a Performance-based scheme may then be granted additional flexibility, subject to strict continuous oversight by the authorities.

In order to obtain and retain these privileges, the operators/organizations will need to demonstrate continuous commitment and excellence, transparency and willingness to improve. These requirements for operators will have to include, among others:

  • A Safety Management System (SMS) that conforms to latest industry standards / best practice and that is proven to function throughout the organisation. This should include FRM (Fatigue Risk Management), LOSA (Line Operations Safety Audit), FDM (Flight Data Monitoring), reporting systems and other tools;
  • Adherence and commitment to Just Culture principles1 and clear ethical values and a system to monitor and positively influence the company safety culture;
  • A pro-active, transparent cooperation and experience sharing and exchange of information with both the oversight authorities and front-end safety personnel, including pilot representatives.
The implementation will have to be a gradual, step-by-step process that includes regular assessment & feedback loops, an ‘emergency break’ mechanism, and must be overseen both at national level and by EASA at European level.
 
Implementation of a Performance-based regulatory scheme must take into consideration the ‘maturity’ of both the system as a whole and its individual components/stakeholders and their ability to fulfill their obligations. Therefore, it must be acknowledged that a number of (and maybe even a majority of) stakeholders/users, including possibly national authorities may not be able to transition to a Performance-based scheme. They will have to stay on – or fall back upon – the compliance based prescriptive rules. It also means that many NAAs will probably have to fulfill two types of oversight, at least for the foreseeable future: Performance-based oversight of those operators/ organizations that are mature enough for such a scheme, and compliance-based oversight for those that are not (yet) ready.
 
To prevent that Performance based regulation and oversight will lead to the industry – or parts of the industry – de facto self-regulating itself – with only a light-touch superficial oversight – more resources are needed both for the NAAs and EASA.
 
Hence, as long as EASA (and NAAs do not have the necessary resources and expertise to substantially increase the frequency, quality and depth of their oversight responsibilities – any move to Performance-based regulation and oversight must be considered very cautiously and be refrained from, if there is any doubt. In this respect, EASA will have to carry out in-depth ‘fitness-checks’ of any NAA that intends to move to a Performance-based system and oversight. In the longer term, it would be advisable to set up an independent body – similar to the US NTSB – to assess the overall functioning of the new system and its oversight components at national level (NAAs) and European level (EASA and Commission), and to issue recommendations on how to improve the system and prevent safety lacunae...
 

Read more in our "Civil Aviation Legislation & Oversight: Can it guarantee safety?" brochure