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AIRPORTS REGULATIONS (AMENDMENT) 1997 NO. 177
EXPLANATORY STATEMENTSTATUTORY RULES 1997 No. 177
Issued by the authority of the Minister for Veterans Affairs for the Minister for Transport & Regional Development
Airports Act 1996
Airports Regulations (Amendment)
Section 252 of the Airports Act 1996 (the Act) allows the Governor-General to make regulations prescribing matters that are required or permitted by the Act to be prescribed, or that are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Airports Regulations (Amendment) deal with two separate matters relating to the finalisation of the Phase 1 leases for Melbourne, Brisbane and Perth airports:
* the prohibition of specified kinds of subleases and licences, in accordance with powers deriving from Sections 34 and 35 of Part 2 of the Act (as amended by the Aviation Legislation Amendment Act (No. 1) 1997); and
* record keeping and giving of information, in accordance with powers deriving from Section 60 of Part 3 of the Act.
In Part 2, the Act sets out a number of requirements regarding the leasing and management of airports. Division 6 of this Part details a number of restrictions on lessees, and provides, under Sections 34 and 35, that regulations may prohibit specified kinds of subleases of an airport lease (for example leases; for the purposes of prostitution) and specified kinds of licences relating to an airport lease (such as those which are inconsistent with the continued operation of the airport site as an airport). The Aviation Legislation Amendment Act (No. 1) 1997 inserted a number of new regulation making powers into the Act. In summary, the new Sections allow Regulations to be made that:
* prohibit specified kinds of terms from being included in a sublease of an airport lease or a licence relating to an airport lease (Sections 34A and 35A);
* require terms to be included in a sublease of an airport lease or a licence relating to an airport lease (Sections 34B and 35B);
* prohibit a declaration of trust in respect of a sublease of an airport lease or a licence relating to an airport lease (Sections 34C and 35C); and
* provide that a beneficial interest in a sublease of an airport lease or a licence relating to an airport lease must not be transferred independently of the legal interest (Sections 34D and 35D).
The Aviation Legislation Amendment Act (No. 1) 1997 also includes new subsections 34(4) and 35(4) which give current sublessees and licensees a period of 90 days to amend any sublease or licence which is in conflict with the regulations. If this is not done the sublease or licence terminates.
The Airports Regulations (Amendment),
* extend the list of prohibitions which are placed on subleases and licences (including prohibitions on prostitution, residential development and uses which are inconsistent with the continued operation of the airport site as an airport) to include subleasing to trusts (refer to clauses 2.10 and 2.18 in Schedule 1); and
* provide a process for the Secretary to be able to exempt certain subleases from the specified prohibitions (ie. the prohibitions on companies other then constitutional corporations, residential development and trusts - refer to clauses 2.05, 2.11, 2.13 and 2.1g).
Additionally, the rights of existing sublessees and licensees are preserved and these agreements are exempted from the new subleasing prohibitions while they remain unamended.
The Act sets out requirements on the ownership and control of an "airport-operator company', ie a company which either leases an airport under the Act or manages a leased airport. The Act limits foreign ownership of an airport-operator company to 49%, limits ownership by an airline to 5%, and precludes a person holding more than 15% of, or exercising practical control over, both an airport-operator company for Sydney Airport and any one of Melbourne Airport, Brisbane Airport and Perth Airport. The Act also requires that the central management and control of an airport-operator company be ordinarily exercised at a place in Australia, and that a majority of the company's directors be either Australian citizens or ordinarily resident in Australia. These requirements are set out in Part 3 of the Act.
Section 60 of the Act states that the regulations may make provision for and in relation to requiring a person to keep records, give information to the Minister and give information to an airport-operator company, where the records and information are relevant to establishing compliance with the ownership rules of the Act.
The Airports Regulations (Amendment) require that an airport-operator company
- maintain a register of stakes held in the company in a form which permit an assessment of the level of foreign and airline ownership in the company, and cross-ownership (where relevant) between the company and another airport-operator company (refer to clause 3.22 of schedule 2);
- provide to the Minister periodical reports against all requirements of Part 3 of the Act, ie to report on the level of foreign, airline and cross-ownership, the place where central management and control of the company is normally exercised, and the citizenship/residency of directors (refer to clause 3.23);
- provide to the Minister such other information relevant to compliance with the requirements of Part 3 of the Act, including a copy of the register, as the Minister requests (refer to clauses 3.24 and 3.25); and
- advise the Minister if it has reason to believe that any requirement of Part 3 is not met (refer to clause 3.26).
The Act prescribes a maximum penalty of 50 penalty units for non-compliance with a requirement of the regulations, and provides for the Minister to seek orders from the Federal Court requiring compliance. Details of the Regulations appear in the Attachment. The Regulations commenced on 1 July 1997.
Attachment
Item 1 -Commencement
Regulation 1.1 provides for the amended regulations to commence on 1 July 1997.
Item 2 -Amendment
Regulation 2.1 provides that the Airports Regulations are amended as set out in these regulations.
Item 3 - Regulation 2.01 (interpretation)
Regulation 3.1 defines terms used in the regulations.
Item 4 - Regulations 2.04 (Prohibited Winds of subleases and licences) and 2.05 (AAT review of decisions)
Regulation 4.1 deletes regulations 2.04 and 2.05 and substitutes new regulations 2.04 to 2.20. Schedule 1 contains details of the new regulations
Item 5 - New Division 3.2 in Part 3
Regulation 5.1 inserts into the Airports Regulations a new Division 3.2, Par: 3, as set out in Schedule 2.
SCHEDULE 1
This schedule contains details of new regulations 2.04 to 2.20.
Clause 2.04 - Prohibited kinds of Subleases
Subregulation 2.04 (1) prohibits subleases of an airport lease where: the sublease is inconsistent with the continued use as an airport of the airport site; the sublease is for the purposes of prostitution; or where a sublease relates to the transfer of airport management rights and no prior approval has been given by the Minister under paragraph 33 (1) (a) of the Act. Paragraph 33 (1) (a) of the Act requires that the airport lessee company not enter into an airport management agreement without the written approval of the Minister.
Subregulation 2.04 (2) prohibits subleases where the sublessee is not a constitutional corporation, a bank other then a bank established or operated by a State or Territory, the Commonwealth or Commonwealth authority or, where the sublease is for a single-site retail business, an individual. The regulation also prohibits subleases for residential development. These prohibitions remain in place unless the Secretary makes a declaration about the sublease under regulation 2.05.
Subregulation 2.04 (3) prohibits subleases to a State or Territory Government or authority unless the Secretary approves the sublease under regulation 2.07.
Subregulation 2.04 (4) provides that subleases, as defined in section 26 of the Airports (Transitional) Act 1996, which existed at the time of the granting of the relevant airport lease are bound by subregulations 2.04 (1), (2) and (3) only if they are varied after the commencement of the regulations. This ensures that current sublessees are treated fairly.
Subregulation 2.04 (5) stipulates that subleases identified in subregulation 2.04 (4) which are varied after the commencement are subject to subregulations 2.04 (1), (2) and (3).
Clause 2.05 - Secretary may declare that specified subleases are not prohibited
Subregulation 2.05 (1) provides for the Secretary to declare, on application that subregulation 2.04 (2) does not prohibit a sublease to which the subregulation would otherwise apply.
Subregulation 2.05 (2) provides that the Secretary must make a decision on an application made under subregulation 2.05 (1) within 30 days.
Subregulation 2.05 (3) requires that the Secretary be satisfied that, if the declaration is made, the sublease will not have the effect of frustrating the objects of the Act.
Subregulation 2.05 (4) requires that in making a decision under subregulation 2.05 (1) the secretary must take into account; the duration of the sublease, the size of the area subject to the sublease and the terms of the sublease.
Subregulation 2.05 (5) provides for the Secretary to inform an applicant for a declaration that a sublease will not be prohibited within 7 days of making the decision.
Subregulation 2.05 (6) provides that once a declaration has been made by the Secretary under subregulation 2.05 (1) section 34 of the Act does not prohibit the sublease until the Secretary revokes the declaration under regulation 2.06.
Clause 2.06 Revocation of declaration
Subregulation 2.06 (1) provides that at any time after making a declaration under subregulation 2.05 (1), the Secretary may. by notice in writing, require the sublessee to demonstrate that there has been no change in circumstance that would justify the revocation of the declaration.
Subregulation 2.06 (2) provides that the Secretary must revoke the declaration if he or she is satisfied that the change to the sublease has the effect of frustrating the objects of the Act.
Subregulation 2.06(3) requires that the Secretary take into account changes in the duration, coverage and terms of the sublease in considering whether to revoke a declaration.
Subregulation 2.06 (4) provides that 9 the Secretary, after considering any evidence produced by the sublessee, considers that the declaration should be revoked then he may revoke the declaration.
Subregulation 2.06 (5) provides that the Secretary must give notice in writing of the revocation and a statement of reasons for the revocation.
Subregulation 2.06 (6) provides that the revocation will become effective 1 month after the notice is provided to the sublessee.
Clause 2.07 Approval of sublease to State Government etc
Subregulation 2.07 (1) provides that the secretary may approve a sublease under subregulation 2.04 (3).
Subregulation 2.07 (2) requires that the Secretary, in considering an application to approve a sublease under subregulation 2.04 (3), take into account whether the activity relating to the sublease will be carried out in a commercial manner, whether the State or Territory government or authority has given a written undertaking to comply with Commonwealth laws and whether an obligation or restriction imposed by a law of the State or Territory will be inconsistent with the Act, the regulations or the proposed sublease.
Subregulation 2.07 (3) provides that the Secretary may approve a sublease to a class of State or Territory government authorities or to a State or Territory in relation to a class of functions of government.
Clause 2.08 - Prohibited terms In lease
Regulation 2.08 prohibits the use of a term in subleases that imposes an obligation inconsistent with an obligation under the Act.
Clause 2.09 - Mandatory terms in subleases
Regulation 2.09 requires that for subsection 34B (1) of the Act, a sublease must stipulate that the sublease is automatically terminated when an interest in the sublease is created in favour of a person that is, either alone or in partnership, in a position to exercise control over either or both the operation of the airport or the development of the airport.
In addition, a sublease must stipulate that any underlease of the sublease contains the above provision.
Clause 2.10 - Prohibition on dealings with subleases by way of trust etc
Subregulation 2.10 (1) stipulates that, for sections 34C and 34D of the Act, the sublessee of an airport lease must not dispose of the sublease by way of declaration of trust or transfer a beneficial interest in the sublease independently of the legal interest in the sublease (other than by way of enforcing a loan security)
Subregulation 2.10 (2) provides that subregulation 2.10 (1) does not apply if the Secretary has made a declaration under subregulation 2.11 (2).
Clause 2.11 - Secretary may declare that specified dealing with subleases not prohibited
Subregulation 2.11 (1) defines the term 'deal with a sublease' for the purposes of regulation 2.11.
Subregulation 2.11 (2) provides that the Secretary may, on application, declare that regulation 2.10 does not prohibit the transfer or disposal of the sublease.
Subregulation 2.11 (3) requires that the Secretary make a decision on an application under subregulation 2.11 (2) within 30 days after the application is made.
Subregulation 2.11 (4) requires that, in making the assessment of an application under subregulation 2.11 (2), the Secretary must take into account, the duration of the sublease, the size of the area subject to the sublease arid the terms of the disposal or transfer.
Subregulation 2.11 (5) requires that the Secretary be satisfied prior to making a declaration under subregulation 2.11 (2) that the transfer or dealing in relation to the sublease would not frustrate the objects of the Act.
Attachment
Subregulation 2.11 (6) requires the Secretary to advise the applicant of his or her decision within 7 days of making the decision under subregulation 2.11 (2). The Secretary must provide a successful applicant with a copy of the instrument or, alternatively must provide a statement of reasons for the refusal where the application was rejected.
Subregulation 2.11 (7) provides that if the Secretary makes a declaration under subregulation 2.11 (2) Section 34C and 34D of the Act are taken not to prohibit the disposal or transfer of the sublease.
Clause 2.12 - Prohibited kinds of Licences
Subregulation 2.12 (1) prohibits licences where: the licence is inconsistent with the continued use as an airport of the airport site; the licence is for the purposes of prostitution; or where the licence relates to the transfer of airport management rights and no prior approval has been given by the Minister under paragraph 33 (1) (a) of the Act. Paragraph 33 (1) (a) of the Act requires that the airport lessee company not enter into an airport management agreement without the written approval of the Minister.
Subregulation 2.12 (2) prohibits licences where the licensee is not a constitutional corporation, a bank other than a bank established or operated by a State or Territory, the Commonwealth or Commonwealth authority or, where the licence is for a single-site retail business, an individual. The regulation also prohibits licences for residential development. These prohibitions remain in place unless the Secretary makes a declaration about the licence Under regulation 2.05.
Subregulation 2.12 (3) prohibits licences to a State or Territory Government or authority unless the Secretary approves the licence under regulation 2.15.
Subregulation 2.12 (4) provides that licences, as defined in section 26 of the Airports (Transitional) Act 1996, which existed at the time of the granting of the relevant airport lease are bound by subregulations 2.12 (1), (2) and (3) only if they are varied after the commencement of the regulations. This ensures that current licensees are treated fairly.
Subregulation 2.12 (5) stipulates that licences identified in subregulation 2.12 (4) which are varied after the commencement are subject to subregulations 2.12 (1), (2) and (3).
Clause 2.13 - Secretary may declare that specified licence are not prohibited
Subregulation 2.13 (1) provides for the Secretary to declare, on application, that subregulation 2.13 (2) does not prohibit a licence to which subregulation would otherwise apply.
Subregulation 2.13 (2) provides that the Secretary must make a decision on an application made under subregulation 2.13 (1) within 30 days.
Subregulation 2.13 (3) requires that the Secretary be satisfied that, if the declaration is made, the licence will not have the effect of frustrating the objects of the Act
Subregulation 2.13 (4) requires that in making a decision under subregulation 2.13 (1) the secretary must take into account the duration of the licence, the size of the area subject to the licence and the terms of the licence.
Subregulation 2.13 (5) provides for the Secretary to inform an applicant for a declaration that a licence will not be prohibited within 7 days of making the decision.
Subregulation 2.13 (6) provides that once a declaration has been made by the Secretary under subregulation 2.13 (1) section 35 of the Act does not prohibit the licence until the Secretary revokes the declaration under regulation 2.14.
Clause 2.14 Revocation of declaration
Subregulation 2.14 (1) provides that at any time after making a declaration under subregulation 2.13 (1), the Secretary may, by notice In writing, require the licensee to demonstrate that there has been no change in circumstance that Would justify the revocation of the declaration.
Subregulation 2.14 (2) provides that the Secretary must revoke the declaration if he or she is satisfied that the change to the licence has the effect of frustrating the objects of the Act.
Subregulation 2.14(3) requires that the Secretary take into account changes in the duration, coverage and terms of the licence in considering whether to revoke a declaration.
Subregulation 2.14 (4) provides that if the Secretary, after considering any evidence produced by the licensee, considers that the declaration should be revoked then he or she may revoke the declaration.
Subregulation 2.14 (5) provides that the Secretary must give notice in writing of the revocation and a statement of reasons for the revocation.
Subregulation 2.06 (6) provides that the revocation will become effective 1 month after the notice is provided to the licensee.
Clause 2.15 Approval of licence to State Government etc
Subregulation 2.15 (1) provides that the secretary may approve a sublease for subregulation 2.12 (3).
Subregulation 2.15 (2) requires that the Secretary, in considering an application to approve a licence under subregulation 2.15 (3), take into account whether the activity relating to the licence will be carried out in a commercial manner, whether the State or Territory government or authority has given a written undertaking to comply with Commonwealth laws and whether an obligation or restriction imposed by a law of the State or Territory will be inconsistent with the Act, the regulations or the proposed licence.
Subregulation 215 (3) provides that the Secretary may approve a licence to a class of State or Territory government authorities or to a State or Territory in relation to a class of functions of government.
Clause 2.16 - Prohibited terms in licences
Regulation 2.16 prohibits the use of a term in a licence that imposes an obligation inconsistent with an obligation under the Act.
Clause 2.17 - Mandatory terms in licences
Regulation 2.17 requires that for subsection 35B (1) of the Act a licence must stipulate that the licence is automatically terminated when an interest in the licence is created in favour of a person that is, either alone or in partnership, in a position to exercise control over either or both the operation of the airport or the development of the airport.
In addition, a licence must stipulate that any further licence of the licence contains the above provision.
Clause 2.18 - Prohibition on dealings with licences by way of trust etc
Subregulation 2.18 (1) stipulates that, for sections 35C and 35D of the Act, the holder of a licence relating to an airport lease must not dispose of the licence by way of declaration of trust or transfer a beneficial interest in the licence independently of the legal interest in the licence (other than by way of enforcing a loan security).
Subregulation 2.18 (2) provides that subregulation 2.18 (1) does not apply if the Secretary has made a declaration under subregulation 2.19 (2).
Clause 2.19 - Secretary may declare that specified dealing with licence not prohibited
Subregulation 2.19 (1) defines the term 'deal with a licence' for the purposes of regulation 2.19.
Subregulation 2.19 (2) provides that the Secretary may, on application, declare that regulation 2.18 does not prohibit the transfer or disposal of the licence.
Subregulation 2.19 (3) requires that the Secretary make a decision of an application under subregulation 2.19 (2) within 30 days after the application is made.
Subregulation 2.19 (4) requires that, in making the assessment of an application under subregulation 2.19 (2), the Secretary must take into account, the duration of the licence, the size of the area subject to the licence and the terms of the disposal or transfer.
Subregulation 2.19 (5) requires that the Secretary be satisfied prior to making a declaration under subregulation 2.19 (2) that the transfer or dealing in relation to the licence would not frustrate the objects of the Act.
Subregulation 2.19 (6) requires the Secretary to advise the applicant of his or her decision within 7 days of making the decision under subregulation 2.19 (2). The Secretary must provide a successful applicant with a copy of the instrument or, alternatively must provide a statement of reasons for the refusal where the application was rejected.
Subregulation 2.19 (7) provides that if the Secretary makes a declaration under subregulation 2.19 (2) Section 36C and 35D of the Act are taken not to prohibit the disposal or transfer of the licence.
Clause 2.20 - AAT review of decisions
Regulation 2.20 provides that decisions made by the Secretary in accordance with the regulations proposed in this amendment are subject to review by tie Administrative Appeals Tribunal.
SCHEDULE 2
This schedule contains details of the new Division 3.2.
Division 3.2 - Record keeping and reporting
Clause 3.20 - Meaning of certain terms
Regulation 3.20(1) defines terms used in the regulations.
Clause 3.21 - Relationship with Corporations Law
Regulation 3.21 clarifies that the requirements of the regulations do not affect the applicability to an airport-operator company of the reporting requirements of the Corporations Law.
Clause 3.22 - Airport-operator company to keep register
Subregulation 3.22(1) requires an airport-operator company to keep a register of stakes held in the company by foreign persons and airlines, and any stakes which are relevant to establishing the degree of cross-ownership between an airport-operator company for Sydney Airport and one for any of Melbourne Airport Brisbane Airport and Perth Airport.
Subregulation 3.22(2) specifies the particulars that must be recorded in the register in respect of each stake. As the Act defines a person's stake to include the interests held by the person and the person's "associates", the register must record the individual interests, called "direct control interest" under the Act, which make up a stake.
Subregulation 3.22(3) requires that the register be kept in a form which allows individual stakes to be aggregated. This provision recognises that the interests of a 'person may contribute to more than one stake, for example they may contribute to the person's own stake and the stakes of the person's associates This means that the aggregate stake hold by foreign persons, for example, is not necessarily the sum of the stakes held by individual foreign persons.
Clause 3.23 - Airport-operator company to make returns
Subregulation 3.23 requires that an airport-operator company provide the Minister with annual reports, within 14 days of each anniversary of the company becoming the lessee or management company for a leased airport.
A report must state whether, in the opinion of the board, the foreign ownership, PO airline ownership or cross-ownership limits of the Act were exceeded at any time during the previous year. The report must also advise certain details of stakes held in the company which are relevant to monitoring the ownership of the company against those limitations, and must advise against the requirements of the Act that the central management and control of the company be ordinarily exercised at a place within Australia and that a majority of the directors be Australian citizens or ordinarily resident in Australia.
A report must be signed by a director of the company, verified by statutory declaration by a director and approved by the board.
Clause 3.24 - Minister may request information
Regulation 3.24 empowers the Minister to require that an airport-operator company provide specified information which is relevant to establishing whether the requirements of the Act in relation to the ownership and control of the company are being met.
Clause 3.25 - Minister may request copy of register
Regulation 3.24 empowers the Minister to require that an airport-operator company provide him or her with a copy of the register which regulation 3.22 requires the company to keep.
Clause 3.26 - Company must inform Minister in certain circumstances
Regulation 3.26 requires an airport-operator company to advise the Minister if it has reason to believe that the requirements of the Act in relation to ownership and control of the company are not met. The fact that a requirement of the Act is not met does not in itself mean that the airport-operator company is guilty of an offence under the Act. The Act requires only that an airport-operator company take all reasonable steps to ensure that the foreign, airline and crossownership limits of the Act are not exceeded.
Clause 3.27 - Delegation
Regulation 3.27 empowers the Minister to delegate his or her powers under ',he regulations to the Secretary to the Department of Transport and Regional Development or an SES officer of the Department.