Reference Section Implementation of the Yamoussoukro Decision on the Liberalization of Access to Air Transport Markets in West and Central Africa a report by Charles E Schlumberger Team Leader, Regional Air Transport Projects, The World Bank Charles E Schlumberger is Team Leader for Regional Air Transport Projects at The World Bank in Washington, DC, where he oversees the Finance, Private Sector and Infrastructure Network of the Africa Region. In this function, he manages regional and countryspecific projects for the development of air transport, including projects of liberalization and air safety enhancement mechanism. He is also responsible for the development of the financial sector of several African states. Prior to his appointment to The World Bank in 1998, Mr Schlumberger held the position of Vice-President at Union Bank of Switzerland, where he was responsible for international credit restructuring. Prior to his activities in financial institutions, he worked as a lawyer on aviation-related matters and in general practice. Mr Schlumberger graduated in 1986 with a Law Degree from Basel Law School, focusing on Aviation Law and Bankruptcy Procedures, and, in 1989, he received an MBA from Harvard Business School. 1 Introduction and Background The World Bank helps developing countries to fight poverty and to establish economic growth that is stable, sustainable and equitable. Transport is crucial to development without access to jobs, medical facilities, education and other amenities, quality of life suffers; without access to resources and markets, growth stagnates and poverty reduction cannot be sustained. For underprivileged countries, air transport will become the crucial factor for its sustained economic development. Worldwide, 40% by value of all manufactured trade will be transported by air. Foreign investment depends on ease of access and on an efficient transport system. Air transport is a key factor for the economic and political integration of large countries or regions. The strongest growth of air transport is projected in underprivileged regions. However, a poor national safety record will seriously hinder further development due to lower demand and increased cost (for example insurance cost and lack of international air carrier co-operation and code-sharing ). To facilitate the development of air transport in Africa, the ministers in charge of civil aviation adopted in November 1999 a major decision for the gradual liberalization of scheduled and nonscheduled intra-africa air transport services ( The Yamoussoukro Decision ). The Yamoussoukro Decision was formally endorsed in Lomé, Togo, on 12 July 2000 by the Conference of Heads of State and Government representing all members of the Organization of African Unity. The Yamoussoukro Decision takes precedence over all multilateral and bilateral agreements affecting air services between and within signatory states. In West and Central Africa (WCA), the ministers of transport of the Economic Community of Western African States (ECOWAS), of the Economic and Monetary Community of Central Africa (CEMAC) and of Mauritania signed a Memorandum of Understanding to set out common guidelines for: establishing the economic regulation for effective liberalization; strengthening safety and security; and sustaining the financing of air transport in WCA. Their main objective was to be ready for full liberalization by December 2002, the end of the transitory period, and they sought support from The World Bank to develop their own capacity to carry out the process. The World Bank, in addition to financing several country-specific air transport projects, is supporting the air transport liberalization in WCA with two grants. A first grant, approved in 2000, facilitated the air transport officials agreement on a framework to implement the necessary reform, including a detailed action plan. To reach this agreement, a major workshop was organised in Bamako in March 2001 to develop the understanding of economic and technical regulation requirements in order to implement the Yamoussoukro Decision successfully. This workshop was attended by the directors of civil aviation, air transport officials, regional airlines, regional organisations and several air transport organisations such as the International Civil Aviation Organization (ICAO), the International Federation of Airlines Pilots Associations and the African Airlines Association, as well as by representatives from donors such as the African Development Bank, the European Union and The World Bank. A second grant, approved in 2002, provided the required support to the steering committee and the two institutions ECOWAS and CEMAC to further develop the options under each key activity, to determine the tasks that might be better performed at the country and regional levels and to monitor the development of the industry on the ground, particularly because of the rapid changes and problems experienced by most airlines worldwide. In addition,
Implementation of the Yamoussoukro Decision this grant has financed several studies concerning: economic regulation of air transport services; consistency analysis between the WCA countries legal framework for civil aviation and the Yamoussoukro Decision; and a new mechanism for technical regulation of air transport services with a priority training programme to develop the capacity of the national civil aviation authorities (CAAs) in technical regulation. Formulating policies and setting the rules to supplement the Yamoussoukro Decision shall be carried out at a co-operative level involving all concerned states. Day-to-day administration of the rules and enforcement shall be carried out at the national level except where the task has been placed at a common level. Monitoring the states compliance with the common rules shall be a responsibility of the common regulatory authorities. A second major workshop and conference was held in Lomé, Togo, in February 2003. The Council of Ministers of Transport and the CAAs of WCA, as well as other organisations and participants, have discussed the technical note and action plan that was prepared by the two project secretariats of ECOWAS and CEMAC with the participation of experts from The World Bank. The technical note and action plan is divided into two parts, which are summarised as follows. Part I Air Transport Economic Regulation Framework for the WCA Region The Need for an Economic Regulatory Framework Liberalization of air transport is widely recognised to have the potential to generate tangible benefits for consumers, industry participants and its related industries and the community as a whole. To achieve this objective, it is also widely recognised that there is a need for a supplementary adequate economic regulatory framework guaranteeing fair competition, transparent conditions of access to the market and consumer protection. The scope of the regulation should not be restricted to air transport as such, but should also encompass such related activities as airport management, ground handling and the marketing of air transport services. This regulatory framework must be established over a geographical area covering several states and should be large enough to develop a competitive market that is conducive to economies of scale and attractive for investors while, at the same time, fitting into the pan-african system that was created by the Yamoussoukro Decision. Regulatory Functions An adequate air transport economic regulation consists of different regulatory functions that do not need to be carried out all at the same level. Settlement of the disputes that may arise between states or between carriers certified by different states, especially those regarding the interpretation of the common rules, shall be a responsibility of the common regulatory authorities or the common judicial system where this exists. Disputes arising between carriers of the same state, a carrier and a consumer and a carrier and a state shall be settled at the national level by the national regulatory or judicial system and shall be subject to appeal to the common regulatory authorities or the common judicial system where this exists. The common regulatory authorities shall also have the right to order remedial action on their own initiative whenever the market dysfunctions or a state is not complying with the rules or the consequence of the settlement of a dispute requires remedial action to be extended to parties not involved in the dispute. Enforcement of settlements and remedial actions decided by the common regulatory authorities shall be carried out under the responsibility of the state(s) involved and under the laws of such state(s). Should a state default in implementing a ruling of the common regulatory authorities, this state shall be liable to the common regulatory authorities and all involved parties. The common regulatory authorities shall collect, compile, process, store and facilitate dissemination of statistics and other relevant data so as to base their rulings on appropriate information and to perform a function of economic monitoring of the market. Further, the states shall have an obligation to notify the common regulatory authorities of all relevant information such as the issuance, cancellation or suspension of an air operator certificate (AOC). 2
Reference Section 3 Principles for the Grouping of States While the final objective is the establishment of a continent-wide single market, it is recommended that the participating states should, as a first step, establish subregional groupings that cover the 23 WCA states as an intermediate step. Three of the existing subregional organisations within the WCA region, namely the West African Economic and Monetary Union (UEMOA), the Banjul Accord and CEMAC, may constitute the basis for establishing such groupings. Institutional Organisation Where institutions have already been established and duly vested with economic regulation powers and have made progress towards establishing common rules with cross-sector scope, such institutions should be used as economic regulatory authorities for air transport. Further, where an existing organisation has established a specific dispute settlement body with a judicial character (for example UEMOA s Court of Justice ) and a binding legal authority over the participating states, such a body should be designated as the common authority for the settlement of disputes related to air transport regulation. Legal Harmonisation Legal harmonisation is needed at three levels unless a multilateral common aviation area solution is implemented: harmonising domestic legislation with the common rules this involves a number of activities, such as incorporating the Yamoussoukro Decision and the specific rules enacted by each grouping of states into the participating states domestic legislation and a common procedure for enactment and enforcement of the regulations, abolishing all domestic legislations, as well as existing air services agreements, in so far as they conflict with the Yamoussoukro Decision; reconciling air transport regulatory provisions and common economic cross-sector rules, in particular the criteria applying to the air transport sector with regards to such concepts as market dominance and anticompetitive practices, etc.; and establishing standard air services agreements within the group of participating states, with other Yamoussoukro States and with non-yamoussoukro states and determining the commitments expected from the participating states in respect of negotiation, continuation and/or cancellation of bilateral air services agreements with non-yamoussoukro states. CAA Capacity-building National CAAs will retain substantial responsibilities in the field of air transport, in particular: advising their respective governments regarding proposed common policies and rules prior to approval and enactment; administering and enforcing the common rules; collecting and compiling relevant national statistics and other data to be passed to the common regulatory authorities; and assisting their respective governments in negotiating air services agreements with states not party to the Yamoussoukro Decision, and administering and monitoring such agreements. To perform their duties and exercise their responsibilities, the national CAAs need strengthening in the following three main areas: achieving administrative and financial autonomy; strengthening their human and technical resources through training, technical assistance and transfer of experience, better recognition of skills, capacities and responsibilities; and developing a common understanding of policy objectives and common rules among the participating states this can be achieved through exchange of experience, transnational workshops and exchange of staff on mediumterm appointments. Action Plan and Funding To implement these recommendations, an action plan has been prepared and submitted to the Council of Ministers together with the current recommendations. The actions have been estimated in terms of timing, resources and cost. Funding will have to be obtained through the assistance of multilateral and bilateral donors, supplemented by contributions from the participating states. Implementation of the action plan will not necessarily take place at the same pace in the three subregional groups. It is therefore recommended that each grouping formed on a voluntary basis by the participating states should submit its own implementation proposal for consideration by the participating donors.
Implementation of the Yamoussoukro Decision Part II Aviation Safety Oversight Enhancement Mechanism for the WCA Region The main objective of aviation safety oversight enhancement is the removal of obstacles to, and enhancement of, the technical capacity of states for the development of safe and efficient air transport services in the subregion, thus enabling successful implementation of the Yamoussoukro Decision. Three separate studies were carried out to assess the safety oversight situation within WCA. The studies put forward the prevailing situation in the states concerned with respect to safety oversight and explored mechanisms that could be implemented for ensuring sustainability of the safety oversight programme. Status of Safety Oversight Within the Subregion A number of significant findings resulted from the aforementioned studies: most states need to develop modern basic aviation laws and regulations; few states have sufficient qualified and experienced inspectors for safety oversight functions; few states have developed manuals and procedures for use by their technical staff; only few states have sufficient aeronautical activities to ensure retention and potential augmentation of technical expertise; the inspection programmes vary from nonexistent to reasonable; general training is scarce and technical training very limited in all but a few states; wide differences exist between states with reference to their aeronautical population; technical staff size is not proportional to aviation population of states; few states have provided reasonable funding of their aviation administrations and the budget is often insufficient to hire experts or even to perform basic inspections; and there is limited progress in the implementation of ICAO audit corrective action plans. The findings reconfirm the poor status of aviation safety in WCA, where, according to ICAO, the record in terms of a lack of effective safety oversight and aircraft accidents is the worst in the world. If not addressed adequately, this alarming situation will worsen with the increase in air traffic that is expected to result from liberalization of the sector. For the implementation of adequate safety standards, but also for the continued maintenance of compliance to ICAO safety and security standards, countries need to establish a funding mechanism for their CAAs. For smaller countries, or for countries with a small air transport sector, regional safety agencies might be the best approach to securing on-going funding. Regional Safety Oversight Mechanism and Allocation of Roles To address the poor safety standards arising mainly from inadequate funding of national CAAs, the establishment of a viable mechanism for the exercise of aviation safety oversight within WCA, which includes the separation of responsibilities, is imperative. Certain safety oversight activities must be retained and executed directly by individual states in accordance with their capacity and obligations under the Chicago Convention, while other safety oversight functions could best be executed at a regional level (see Table 1). Out of the various options considered, the grouping of states in several subregional safety oversight agencies (SOAs) appears the most preferred. The main reason why states will form regional groups lies with the fact that they will be closer to permanently correcting a fundamental problem of a low volume of regulatory activities. By forming groups of states, the cost of hiring and retaining experts will be shared among all Member States, resulting in important savings and in the access of each Member State to a variety of qualified experts. This recommendation is also supported by the fact that there is non-uniformity in the safety oversight capacity of the states. As a result of the physical dimensions of the African continent, and independent of the mechanism that will be adopted by the states for the specific purpose of safety oversight, it is suggested that states form groups of approximately eight members. These groups should be created based on affinities with geographical proximity and economic associations as the most important. Further, existing associations or unions like UEMOA, CEMAC and the Banjul Accord are examples of groups of states that could share their safety oversight technical resources within a reasonably short timeframe. Based on existing economic subregional organisations, it is most appropriate that the grouping of states shown in Table 2 form three subregional SOAs. 4
Reference Section Table 1 Regional (Safety Oversight Agency) Training and maintaining expert pool (inspectors, AOC process, personnel licensing, accident investigation/ prevention, etc.) Carrying out safety inspections (airworthiness/flight ops) Auditing of safety compliance (routine audits to ensure safety compliance of states) Arbitration on safety matters (e.g. judgment of challenged withdrawal of a licence) Harmonisation of primary aviation legislation and regulations Standardisation of safety oversight guidance material National (CAA) Training (for local needs) Inspections (where the state has the means and capacity) Issuing of licences and certificates (personnel, airworthiness, air carrier operations, etc.) Enforcement of laws, regulations, procedures, etc. Adoption and ratification of harmonised aviation legislation and regulations Adoption and utilisation of standard guidance material Harmonising Aviation Legislation and Regulatory Instruments regulations all in compliance with the provisions of ICAO annexes and manuals for adoption by states. With only a few exceptions, most of the WCA countries rely on outdated aviation laws, which do not provide adequate authority or sufficient resources for the CAAs. Since there is no modern statutory authority for the air transportation sector in many of the countries, the necessary regulations, procedures and processes for enforcing international safety standards on air operators, the airworthiness of aircraft and personnel licensing do not exist or are inadequate. Further, in order to be able to group into subregional SOAs and to implement the ICAO safety recommendations effectively, the states are required to harmonise their basic aviation laws and regulations. Action Plan Development of guidance material Develop draft procedural manuals for flight operations and airworthiness certification, surveillance and personnel licensing for adoption or modification of the states existing manuals. Training Design and implement a comprehensive training and qualification programme for regional flight safety inspectors and national inspectors to qualify them in the full range of certification and inspection duty functions. Surveillance and certification programmes Develop certification and surveillance programmes annually in consonance with the certification and surveillance activities of the individual states. To address the safety shortcoming of states in the regions and to fulfil the safety aspects for the implementation of the Yamoussoukro Decision, several actions on a regional and national level have to be implemented. Advice to participating states Assist states on safety-related aspects of their national equipment and infrastructure. National Level 5 Regional Level Implementation of subregional projects The different SOAs adopt and implement the ICAO Cooperative Development of Operational Safety and Continuing Airworthiness Project (COSCAP) for their groups of states. Harmonisation of basic aviation law Provide detailed recommendations to the states concerning the establishment or modification of basic aviation law, which must establish the CAA structure, must provide for specific operating regulations and must set a range of enforcement mechanisms. Harmonisation of regulations and practices Develop generic flight operations regulations, airworthiness regulations and personnel licensing Restructuring of national CAAs Facilitate the financing of national civil aviation activities through the creation of legally mandated, operationally and financially autonomous CAAs. Training All states must address training requirements for inspectors as identified in ICAO audits and studies. Harmonisation of laws, regulations and practices States must amend their aviation law, regulations and other elements of their safety oversight activities in close co-ordination with group members. Air operator certification Before states issue any new AOCs, all conditions in the ICAO Standard of Recommended Practice need to be applied integrally, and operators already issued with
Implementation of the Yamoussoukro Decision AOCs, but not in compliance, must be audited to ensure that they meet certificate requirements. Enforcement of rules States must develop a safety oversight enforcement programme within 12 months. Phasing out non-type certificated aircraft used in commercial air transport operations States do not issue new AOCs to operators of non-type certificated aircraft because of safety concerns. Where these have already been issued, states must adopt a phasing out programme. Table 2 GROUP A GROUP B GROUP C (UEMOA and Mauritania) (Banjul Accord) (CEMAC and São Tomé) Benin Cape Verde Central African Rep. Burkina Faso Gambia Cameroon Côte d Ivoire Ghana Congo Guinea-Bissau Guinea Equatorial Guinea Mali Liberia Gabon Níger Nigeria Chad Sénégal Sierra Leone and São Tomé et Principe Togo and Mauritania 6