If CASA does not set the rules for how Units of Competency are assessed, why do they require them?

Good question. For licencing purposes, CASA wants to ensure that an engineer has sufficient technical knowledge and appropriate practical experience. The technical knowledge is assessed by the CASA Modular exams (see the FAQ What is a Module?). To prove practical experience, CASA uses (borrows) the MEA Unit of Competencies from ASQA but is only interested in seeing the performance evidence from these units, as this satisfies the practical requirements.

Note: Despite CASA only wanting to see the performance evidence from the relevant units of competency, these units CANNOT be satisfactorily completed unless all ASQA requirements are met, which includes both performance evidence AND knowledge evidence. 

See the FAQ How can I tell if I have fully achieved an ‘MEA’ unit, and been recognised as satisfying all of the unit’s requirements?