Source: https://condonlaw.com/2017/05/two-years-later-sms-update/
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Two Years Later: An SMS Update - Condon & Forsyth LLP
Two Years Later: An SMS Update
May 12, 2017 | Client Bulletins
By: Jane M. Sigda, Andrew J. Nadel
While experiencing a downward trend in accidents and incidents, the aviation industry continues to champion efforts to institutionalize safety. In 2015 the Federal Aviation Administration (FAA) adopted a Final Rule, known as Part 5, requiring all Part 121 carriers (generally U.S. commercial carriers) to implement a Safety Management System (SMS) into their operations. SMS, “the formal, top-down organization-wide approach to managing safety risk and assuring the effectiveness of safety risk control,”1 is intended to increase aviation safety through the promotion of a safety-oriented culture. Part 5 relies upon, and conforms with, the standards set forth in the United Nation’s International Civil Aviation Organization (ICAO) Annex 19 to the Chicago Convention – “Safety Management.”2
Under Part 5, Part 121 air carriers have until March 2018 to adopt and implement an approved SMS program consisting of four key components:
1) Safety Policy (commitment to safety culture);
2) Safety Risk Management (risk identification and analysis);
3) Safety Assurance (data-driven evaluation of risk controls); and
4) Safety Promotion (individual training and communication).3
Countdown to Part 121 Compliance
Part 5, which came into effect in March 2015, gives Part 121 air carriers a three-year period to fully develop and implement an SMS program acceptable to the FAA Administrator. Within the three-year window, certain deadlines must be met. For example, each Part 121 carrier was required to submit an implementation plan to the FAA for review no later than September 9, 2015, and each plan was required to be approved on or before March 9, 2016.
Although all major U.S. airlines had safety programs in place prior to the FAA’s adoption of Part 5, all programs must now comply with the regulation’s requirements by the 2018 deadline. Part 5 does not mandate a “one size fits all” approach to SMS. Instead, it allows carriers to implement a plan that includes existing programs, policies, or procedures, including components of an existing SMS.
Part 5 requires all carriers to document:
an SMS implementation plan;
a safety policy outlining the objectives of the company;
a commitment to safety management and objectives;
designation of the responsibilities of an accountable executive and management representatives; and
a coordinated emergency response plan.
The FAA’s “Common Issues in SMS Review and Validation”4 details the SMS criteria that the FAA takes into account when determining whether an organization’s SMS program meets the requirements of Part 5. Some airlines have already announced FAA approval of their SMS programs.
Extension of SMS in the Aviation Industry
The FAA has been working to implement SMS throughout the aviation industry, beyond Part 121 operators, for some time. In 2010 the agency approved SMS for Air Traffic Control (ATC) and began the process to implement SMS at Part 139 airports. Since the promulgation of Part 5, the FAA has promoted voluntary compliance and has stated that it intends to expand Part 5 to other certificated entities, including:
Part 135 operators (commuter, on-demand, and other operators);
Part 21 original design and manufacturing organizations;
Part 141 pilot schools;
Part 142 training centers; and
Part 145 maintenance, repair, and overhaul (MRO) stations.
SMS for Part 139 Airports – A Two-Prong Approach
In October 2010, the FAA published a Notice of Proposed Rule Making (NPRM) requiring all Part 139 airports to create and establish SMS in the airfield environment.5 In comments to the NPRM, industry participants raised concerns about the substantial burden on smaller airports as a result of the proposed Rule. Additionally, because the 2010 NPRM was concurrent with the NPRM applicable to Part 121 operators (which resulted in Part 5), the FAA received significant comments regarding the interoperability of both SMS programs. In 2016 the FAA issued a Supplemental Notice of Proposed Rulemaking (SNPRM). Notably, the SNPRM limited the applicability of the proposed Rule to require SMS only if the airport is:
a certificated airport classified as a small, medium, or large hub airport in the National Plan of Integrated Airport Systems;
identified by the U.S. Customs and Border Protection as a port of entry, designated international airport, landing rights airport, or user fee airport; or
identified as having more than 100,000 total annual operations.6
The SNPRM’s limitations on applicability effectively reduced the number of airports affected by the proposed Rule from 566 to 265.
At the time of the SNPRM, the FAA also stated its intention to develop a two-prong SMS approach to Part 139 airports by implementing an “internal SMS” program within the Office of Airports in addition to the external operations addressed in the 2010 NPRM and 2016 SNPRM. The internal SMS would include “applying SMS to the review of Airport Layout Plans, construction safety and phasing plans, proposed modifications of standards, non-construction airport changes, Part 150 noise compatibility proposals that impact aircraft operations and new and revised FAA airport standards.”7
Following the issuance of the SNPRM, industry stakeholders continued to comment on the overlapping or conflicting SMS programs present in the airport environment. Industry stakeholders also raised concerns about protection of data, particularly because many airports are operated by public entities and subject to federal Freedom of Information Act (FOIA) disclosures and applicable state counterparts. Several commenters suggested that the FAA create and sponsor a database to which the airport operators could submit safety data, thereby protecting the information from FOIA requests.
The SNPRM comment period has now closed and “comment analyzation” is underway.
SMS for Part 21 Design and Manufacturing Organizations
During the comment period to the NPRM for Part 5, Original Equipment Manufacturers (OEMs) and other aviation manufacturers stressed the need for flexibility in any SMS required of manufacturers. Specifically, they requested that the FAA allow for an integration of existing and proposed programs. OEMs also raised concerns regarding the protection of sensitive safety and proprietary information since Part 5 does not provide any significant protection for SMS data. Although documents created in the design and implementation of SMS programs may be protected under federal law, SMS development plans are only a small subset of the daily operational data developed in any SMS program. The majority of SMS data, therefore, could be made public or be required to be produced in civil litigation. While the FAA has not announced any changes regarding protection for safety documents and data, ICAO has announced revisions to Annex 19, effective in 2019, addressing the need to limit the disclosure of a certificated entity’s data.
Part 21 manufacturers have been working with the FAA to alleviate concerns raised during the Part 5 rulemaking process. The FAA Aircraft Certification Service (AIR), the office responsible for administering and overseeing safety standards governing design, production and airworthiness of civil aeronautical products (including the operational safety of aircraft), initiated a Part 21 SMS Rulemaking Project to incorporate ICAO’s Annex 19 requirement that OEMs and other manufacturers implement SMS.8 Feedback from the Manufacturers SMS (MSMS) Pilot Project9 and the Part 21/SMS Aviation Rulemaking Committee (ARC) is being used by AIR to develop an NPRM expected to be released in 2018.10
In advance of any rulemaking related to SMS for aviation manufacturers, the Aerospace Industries Association (AIA) and the General Aviation Manufacturers Association (GAMA) developed National Aerospace Standard (NAS) 9927 titled “Safety Management Systems and Practices for Design and Manufacturing” to assist OEMs with voluntary SMS implementation.11 The FAA considers NAS 9927 to be compliant with ICAO Annex 19 and Part 5, and has encouraged manufacturers to follow the guidelines. Upon the issuance of a Final SMS Rule for Part 21 manufacturers, however, the FAA will require a gap analysis of the voluntary program for compliance with the Final Rule, with consideration given to SMS already implemented.12
FAA Encouraging Voluntary Implementation in Advance of Rulemaking
While the FAA gradually rolls out SMS requirements, it is promoting voluntary program development ahead of mandatory compliance. As noted above, OEMs and other aviation manufacturers, as well as aviation manufacturing trade groups, are working with the FAA to implement SMS prior to any Final Rule. For certificated entities like non-Part 121 operators, MROs, and training organizations, the FAA has launched the SMS Voluntary Program (SMSVP) to assist them with voluntary SMS implementation. The program includes significant resource documents: Advisory Circular (AC) 120-92B (SMS for Aviation Service Providers); the SMS Implementation Guide; the SMS Voluntary program guide (both available through the Flight Standards Information Management System (FSIMS)); the FAA’s AFS SMS newsletter; and tools specific to organizations, such as gap analysis tools for air carriers and MROs.13 According to the FAA, an SMS developed within the SMSVP satisfies ICAO SMS requirements and, therefore, will be accepted by other ICAO Member States.14 The FAA also notes that certificate holders in the SMSVP must meet all program requirements to achieve and maintain FAA recognition.15
Part 135 operators are relying upon the SMSVP to implement programs to comply with regulations from the European Union. In 2014, the EU published Commission Regulation No. 452/201416 mandating that Third Country Operators (TCO) meet the requirements of ICAO Annex 19 by November 26, 2016.17 (The European Aviation Safety Agency (EASA) defines a TCO as any holder of a certificate issued by a non-EASA country). Under the new EASA regulation, Part 135 operators must have an ICAO Annex 19 compliant SMS to fly to EASA countries.18 Additionally, Annex 19 standards require that an operator’s SMS must be “acceptable to the State”19 – meaning that for Part 135 operators, the SMS must be approved by the FAA. The effect of the EASA regulation is voluntary compliance with Part 5 by US-based Part 135 operators through the FAA’s SMSVP.
It is unknown whether SMS development will be affected by the current emphasis on regulatory reform. Given the efforts underway, particularly in supporting voluntary compliance, it is expected that the FAA will continue to support SMS programs, with or without regulatory backing. Nonetheless, the aviation industry has shown its willingness to prioritize safety by creating and adopting voluntary safety programs as it has moved from reactionary safety practices to a preventive, process-oriented, and company-wide safety culture.
This article updates our January 20, 2015 Client Alert, “FAA Releases Final Safety Management System Rule,” available at https://condonlaw.com/2015/01/jane-sigda/.
1 14 C.F.R. § 5.5 (2016).
2 Annex 19 is the first new Annex adopted by ICAO in over 30 years. It arose out of the recommendation of the 2010 High Level Safety Conference which concluded that, in light of a predicted increase in aviation travel, a new Annex was necessary to address safety risks proactively “to ensure that [the] significant capacity expansion is carefully managed and enabled through strategic regulatory and infrastructure developments.”
3 14 C.F.R. § 5.3 (2016).
4Available at https://www.faa.gov/c/content/dam/faa/sms/documents/reference_library/common_issues_in_sms_review_and_validation.pdf.
5 75 FR 62008 (October 7, 2010).
6 81 FR 45872 (July 14, 2016).
7 FAA, Fact Sheet – Office of Airports Safety Management Systems Efforts, July 12, 2016 (available at https://www.faa.gov/news/fact_sheets/news_story.cfm?newsId=20554).
8 FAA, Safety Management System, SMS for Design and Manufacturing Organizations (available at https://www.faa.gov/about/initiatives/sms/specifics_by_aviation_industry_type/design_and_manufacturing_organizations/).
9 “The MSMS pilot project is an industry outreach effort that seeks to collect input on potential rulemaking requirements, scalability, applicability, implementation assessment, oversight methods, and tools and guidance as they relate to SMS implementation in the design and manufacturing domain. The information collected through this effort will help the FAA validate the framework, guidance material, and oversight and assessment tools and methodologies, as well as provide the AVS SMS rulemaking team data and recommendations on scalability and applicability to part 21 certificate and approval holders.” Report from the Aircraft Certification Process Review and Reform Aviation Rulemaking Committee to the FAA, May 22, 2012 (available at https://www.faa.gov/regulations_policies/rulemaking/committees/documents/media/acprrarc-4202012.pdf).
10 FAA, Safety Management System, SMS for Design and Manufacturing Organizations (available at https://www.faa.gov/about/initiatives/sms/specifics_by_aviation_industry_type/design_and_manufacturing_organizations/).
11 FAA Letter to AIA and GAMA, June 9, 2016 (available at https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/air/transformation/certification_strategy/media/NAS_9927.pdf). NAS 9927 is available for purchase at http://www.aia-aerospace.org/standards/.
13 Voluntary Implementation of SMS for Non-Part 121 Operators, MROs, and Training Organization (available at https://www.faa.gov/c/sms/specifics/sms-non-part-121.html).
14 8900.1 CHG 465, Volume 17 Safety Management System, Chapter 4 Safety Management System Voluntary Program (available at http://fsims.faa.gov/wdocs/8900.1/v17%20safety%20management%20system/chapter%2004/17_004_001.htm).
16 Commission Regulation (EU) No 452/2014, 29 April 2014 (available at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2014.133.01.0012.01.ENG).
17 “New EASA TCO SMS Requirements Coming this Fall,” FAA SMS Newsletter, Summer 2016 (available at https://www.faa.gov/about/office_org/headquarters_offices/avs/offices/afs/afs900/sms/media/SMS_Newsletter_Summer_2016.pdf).
19 FAA, InFO, European Aviation Safety Agency (EASA) Third Country Operators (TCO) Authorization, October 3, 2016 (available at https://www.faa.gov/other_visit/aviation_industry/airline_operators/airline_safety/info/all_infos/media/2016/InFO16018.pdf).
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