Transport Minister Barbara Creecy has issued a Ministerial order to the Airports Company of South Africa (ACSA) board to engage in a mediation process with Airports Coordination Services (ACS).

This follows engagements with the ACSA board on several occasions to discuss its dispute with the ACS in relation to hold baggage screening (HBS) and related services at ACSA’s airports.

The dispute also involves the South African Civil Aviation Authority (SACAA).

According to the Airports Company Act, the Minister has the power to take the necessary steps to safeguard national security where a risk to critical infrastructure, public safety or the national interest has been identified.

“I am concerned about the negative impact the protracted litigation could have on the integrity and reliability of HBS as the first line of defence against threats in the aviation system at ACSA’s airports,” Creecy said.

The dispute has resulted in multiple review applications, interdictory proceedings and related appeal proceedings in the High Court.

“In this regard, I am satisfied that intervention is necessary to prevent potential disruption, compromise of national security and reputational harm.

“As such, my engagements with the ACSA board have, in the main, related to finding a solution to resolve the dispute amicably and timeously to obviate any destabilisation of an essential national security function,” Creecy said.

The objective of the mediation is to reach a settlement within the parameters of the applicable regulatory framework which avoids a protracted legal dispute and safeguards national security, she noted.

“We thank . . . Creecy for her decisive intervention and leadership in calling for mediation. ACS is committed to participating in this process in good faith and we welcome the opportunity to find a long-term solution that protects passenger safety and upholds aviation standards,” ACS CEO Duke Phahla said on June 5.

The board has, therefore, been ordered to finalise and execute a mediation agreement which contains several terms of reference.

There is a short-term issue relating to the continued and efficient functioning of the HBS system at ACSA’s airports and compliance with regulatory and international frameworks; compliance with international safety standards, which include the implementation of interim measures relating to the maintenance regime; and whether ACS and ACSA can or should install any HBS maintenance-related equipment, including the back-up HBS units.

Creecy also noted that the dispute pertaining to the entity that is statutorily responsible for the provision of the HBS and interrelated services, and by implication, the application of Section 217 of the Constitution, needs to be addressed at the mediation.

She added that the long-term issues relate to the provision of service of HBS and its maintenance, compliance with the applicable regulatory frameworks, budgetary and fiscal constraints, the safety of passengers who use ACSA’s airports, potential revision of agreements, and the commercial relations between the parties.

Creecy said the mediation proceedings must incorporate good faith negotiations as the legal prescripts require that parties to the mediation, act in the best interests of national security.

She stipulated that the parties must prepare and submit a comprehensive report within two weeks of the order, setting out the total costs incurred in relation to the dispute to date. This report must include a detailed breakdown of all the legal fees, disbursements and any other associated expenses borne by the State.

ACS was established by the airline industry to provide HBS services on behalf of airlines operating at ACSA-managed airports.

Under South Africa’s Civil Aviation Regulations and Technical Standards, it is the airlines as operators, not ACSA, that bear the statutory responsibility for screening checked baggage. ACS was therefore set up by airlines as the vehicle to perform this function and has been doing so for more than 20 years with no major security incidents over this period.

In May 2023, ACSA revealed plans to insource HBS services, effectively ending ACS’s established role in delivering these functions on behalf of airlines.

ACSA followed this with the launch of a R3.15-billion tender to acquire new screening equipment. The move represented a significant change in the operating model and sparked major concerns from both ACS and the airline industry about potential impacts on service continuity, regulatory alignment, and financial efficiency.

ACS challenged ACSA’s insourcing decision through a review application launched in November 2023. Several court rulings have been in favour of ACS, including multiple interim orders allowing it to continue replacing aged HBS equipment at airports while the broader legal issues are reviewed. 

“We strongly believe that the current challenges can be resolved without further delay or public expenditure through the courts. Our priority is, and always has been, the safe, secure, and compliant screening of baggage on behalf of our airline clients and their passengers,” Phahla said.