Advisory Circular AC 00-58 Self-Disclosure: Legal quagmire or is confession good for the soul?

Advisory Circular AC 00-58 Self-Disclosure

Legal quagmire or is confession good for the soul?

By Stephen P. Prentice

July 1999

Stephen P. Prentice

On March 27, 1990, the Federal Aviation Administration announced a major change in its enforcement policy towards air carrier certificate holders. The new policy is designed to improve safety compliance by forgoing a civil penalty when an air carrier promptly discloses to the FAA an apparent violation and takes prompt action to correct the apparent violation and, as appropriate, preclude its recurrence."

- Internal Evaluation Model Program Guide

History
In early 1990, the FAA anticipated the workload they saw coming down the pike and in a flash of good thinking, said "Let's start a program where technicians and operators will confess their sins to us before we uncover them via inspection."

The idea was to promote safety, of course, and perhaps reduce the field inspector's workload a bit. Think about the reduced workload. No reports, no LOIs, no hearings, etc. It's a great idea that was originally described in Advisory Circular AC120-56 published in 1992. The public interest is certainly served by offering incentives to promote safety by encouraging technicians to find violations, report them, take steps to correct them, and prevent them from reoccurring. The incentive was simply that FAA would forgo any civil penalty actions (fines) for the apparent violations. Sounded like a great program, but it does have limitations.

In 1998, the program was revised slightly with the issuance of another Advisory Circular (AC 00-58), but in essence, it remained the same.

How it works
Most technicians who work in the air carrier arena probably are aware of Self-Disclosure. Management is aware of it and may well have made use of the procedure. Very simply put, it allows a certificated entity (135, 121, 145, 147) to confess violations of the FARs and avoid potential monetary penalties. (Civil Penalties).

Where, for example, an air carrier fails to properly inventory parts and accessories' historical data so that it can't prove operating time on various parts, they can confess this fact and outline the problem to the FAA. By "fessing up" to their inspector, they may avoid a civil penalty. By following the instruction of the Advisory Circular, you can be reasonably assured you won't get hammered for the apparent violation.

Others protected
The confession rule extends to outsiders also. The procedure applies to individual airmen and other "agents" of the certificate holder. So, any shop, technician or individual, certificated or not, that does work for an air carrier can also be protected under the terms of AC 00-58. The airman or agency doing the work must be acting on behalf of the air carrier, however. There can be no protection under the program unless you can show a relationship to the principal. This can open the door to a lot of argument and leaves lots of room for the lawyers.

Where, for example, a repair station violates an FAR with respect to a repair on an air carrier aircraft or part and therefore the air carrier violates the FAR, then all is forgiven if confession is made. However, as some have found out, you have to be very careful about what you confess to!

Certificate actions excluded
The self-disclosure program protects against civil penalties (fines) only! It does not protect against certificate actions. What's the difference you say? Well when you or your company's "qualification" to do what it is that you do is put into question in any way, then all bets are off and you will most likely be shut down — at least until the qualification issue is addressed. Even when you confess and follow the instruction contained in AC 00-58, the FAA need not accept the deal. If they feel a qualification issue is involved they can simply say that the program does not apply to you and shut you down.

The qualification issue is always the FAA's ace in the hole because it is such a powerful tool and a convenient way to avoid any forgiveness. Keep in mind that the qualification issue is also present in the Aviation Safety Reporting System (ASRS) that also exempts you from a sanction in a certificate action as well as a civil penalty action. But, there is a big difference. Remember, FAA does not have access to an ASRS report unless you should introduce it in a hearing or otherwise make it available to them. So, before you start confessing under AC 00-58 rules, you have to be sure that a qualification issue is not going to be raised or is present in any way. An air carrier can be grounded, shop secured, or a technician's certificate pulled before you even get a chance to play under the rules of AC 00-58!

Some mandatory reporting excluded
Another little publicized and easily overlooked addition to the revised AC 00-58 is the exclusion of people who are charged with a duty to report failure, malfunctions, and other defects under FAR 21.3. Where they fail to make reports when they are due they can't confess and expect immunity. This has to do with TSO, STC, and type certificate holding manufacturers and is obviously for safety related reasons. So, if you deal with issues under FAR 21.3 and failed to file a required report, don't look to this procedure to help you or your company.

On the other hand, for other violations, the FAA could bring a civil penalty action against a PMA holder and their individual employees for violations of 21.3 among other sections. Self-disclosure would be available for these non-reporting types of apparent violations. One can only specula te why 21.3 was specifically singled out for exclusion.

What about mandatory reporting requirements under FAR 121 and 135? Are they next to be excluded? If 21.3 reporting requirements are excluded, can 121 and 135 reporting requirements be far behind? Or, are they already excluded by inference? (Lurking under the qualification issue?). What's the difference? If a company failed to make these required reports and found this problem, should they confess? The apparent violation could be classified as a qualification issue. Remember, once disclosed, you can't take it back! It might be more prudent to file an ARC 277 and hope for the best.

General rules
Now that we know for whom the procedure applies and what it won't do for you, let's examine the nuts and bolts.

There are five (5) general rules regarding the "confession" program:

1. The certificate holder must notify FAA immediately after finding the violation and before the Agency has found it by any means.
2. The violation must have been inadvertent.
3. No question of qualification is involved.
4. Immediate action is taken upon discovery to correct the problem.
5. The certificate holder must develop a comprehensive fix and a schedule for completion, including a self-audit process to ensure compliance. A full report outlining the process must be prepared and approved by FAA.

Once all the requirements are met, the FAA Principal Inspector then has authority to close the case with a Letter of Correction.

What FAA really wants The whole purpose of the self-audit process is to encourage its use on a regular basis. Under the rules of FAR 121 a continuing analysis and surveillance program is mandated for 121 carries to ferret out problems before they cause an accident. (FAR 121.373). Under the so called CAS system a 121 air carrier is required to prepare reports and advise FAA of its general health in the area of its inspection program, maintenance, and any deficiency found in those programs. This air carrier mandatory audit program is somewhat narrow in scope; however, and generally covers only maintenance and inspection. What is encouraged further is a comprehensive overall continuous audit of the complete airline operation. Once such a program was in place, the overall health of the operation could be examined on a regular monthly basis. This type of program today is voluntary in nature and is governed by AC 00-58 and the Air Carrier Internal Evaluation Program Guide.

Bottom line
What the FAA wants is a self-policing system. FAA believes ATOS — the Air Transportation Oversight System will eventually fill this role. ATOS is a new FAA oversight approach that uses a system safety concept and depends one hundred percent on an in-house self-audit and reporting procedure to discover and report automatically any anomalies detected in the system. Certain large air carriers are already onboard in this system.

Of course, you would think that all this self-regulation might reduce the need for FAA personnel because the carriers and computers would do all the work. Dream onÉthese systems seem to create more and more paper for more and more people to analyze and inspect. ATOS itself requires additional personnel to manage the system.

Thanks to computers, these systems will provide work forever!

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