The myth of Australian leadership in air safety has been exposed in a damning audit by the International Civil Aviation Organisation (ICAO). In the final report of the audit carried out in February 2008 the body finds CASA lacks the competencies, resources, training, and regulatory powers to carry out a broad range of critical functions and meet Australia’s obligations under the ICAO treaty. While Australia's response in the sanitised final version of the audit pledges to fix deficiencies by no later than the end of this year, they will require a far better use of the hundreds of millions of dollars it has so clearly wasted each year on the ineptitude and ineffectiveness of CASA in the ten years since the previous ICAO audit. The audit is a huge wake up call to the government, which left much of the dead wood bureaucracy which was responsible for air transport administration under the previous government in place. This is the world’s peak aviation safety organisation telling Canberra that CASA is so inept it didn’t even exercise oversight of the strict operational requirements of ETOPS or long range operations over water of twin engined wide bodied airliners, like Qantas A330s and V Australia 777-300 ERs. It finds CASA hasn’t even exercised effective oversight over those it delegates from industry to carry out functions on its behalf and those it directly employs are inadequately trained or monitored. ICAO says that in CASA in general "the training provided to technical staff is insufficient to address the competency requirements for all the technical tasks." ICAO found that "There are no regulations in Australia that…clearly define the direct accountability for safety on the part of senior managements of airlines." This is one of the foundations of airline governance in the developed world, in defining the corporate responsibility for maintaining safety standards by airline executives. It even found that Australia didn’t compel airlines to preserve to the maximum extent flight black box recorders in the event of a crash or serious incident. Australia had either deficient or non existent rules for the reporting of sub standard or fake spare parts for aircraft and had failed to develop a program to ensure the safe transport of dangerous goods by air. Regardless of what undertakings or remedial action CASA claims it is now undertaking, the audit shows that the last 10 years of safety oversight have been dysfunctional and inadequate. The audit’s final report is a negotiated document. The audit team provides the interested parties with a draft, those parties take exception or otherwise to the wording, and a to-and-fro process occurs which retains the conclusions made by the auditors but in a language the parties are prepared to live with. The audit was also conducted between 18-28 February last year, well before the CASA special audit of Qantas discovered that the airline’s safety standards were slipping, and also, that CASA had been clueless or mute as the case may be about those failings for years prior. The audit was over when Qantas discovered it had forgotten a crucial airworthiness directive to complete modifications to the forward pressure bulkhead in five of its Boeing 737-400s, but then claimed it didn’t matter anyhow. It did. It was serious. Airworthiness directives are by definition serious directions to remedy air safety issues. The former head of engineering, David Cox, who played down the matter has since left Qantas, and CASA to this day has denied officially having any responsibility for tracking and ensuring compliance with airworthiness directives. The audit recommends that Australia sufficiently fund its air safety investigator, the ATSB so that it can investigate all rather than a selection of significant accidents and incidents and fulfil its ICAO treaty obligations in that regard. Two things stand out from this report. One is that Australia has agreed to fix almost all of these issues by the end of this year, which will require profound and widespread change in CASA. The other is that for close on ten years prior to this audit the reputation of Australia as a leader in aviation safety was more the result of luck than rigour.