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Is Your Company Ready for the Coming Chain of Responsibility Changes?

Updated: Nov 4, 2018

Changes to the Heavy Vehicle National Law (“HVNL”) are expected to come into force later this year (possibly by 1 July). The HVNL imposes obligations on everyone involved in the supply chain of goods, from raw materials providers through to the retail sellers of finished goods, including employees, drivers, executives and directors (all, “participants”), to ensure the safety of heavy vehicle operations (over 4.5 tonnes gross vehicle mass). Consequently, the law has come to be known as the “Chain of Responsibility” (“CoR”) law.


The goal of CoR is that everyone involved in the supply chain shares responsibility for preventing breaches of the HVNL. Therefore, any person who controls (or has influence over) any transport task is part of the CoR and must ensure compliance, to the extent they are reasonably capable, with such matters as:

  • packing of goods;

  • safe loading and unloading procedures;

  • load restraints;

  • maximum permissible vehicle mass;

  • reasonable transport scheduling (i.e. realistic journey plans to reduce speeding and promote sufficient rest for drivers);

  • road safety laws; and

  • fatigue management.

Note that the HVNL does not apply to vehicles in Western Australia and the Northern Territory, but it does when those vehicles cross into states and the ACT where the HVNL applies



Changes to the HVNL for 2018


1. A New Primary Duty


Currently, the HVNL requires CoR participants to take “reasonable steps” to ensure compliance with the HVNL – and provides detailed lists of those reasonable steps. This has a ‘backward looking’ effect of deeming CoR participants liable for any breaches of the law that have occurred.


The new amendments to the HVNL, on the other hand, impose a ‘forward looking’ (or ‘proactive’) primary duty on each participant to “ensure, so far as reasonably practicable, the safety of the party’s transport activities”. In other words, CoR participants will be required to anticipate potential breaches of the law and take steps where necessary to prevent them.

This new primary duty, which replaces the current method of listing detailed steps, provides CoR participants more flexibility in determining how their organisation will comply with the primary duty. (See our recommendations at the end of this article.)


The term “reasonably practicable” is a standard of care requirement that brings the HVNL into line with national workplace health and safety laws, which apply a similar approach to this standard of care. This standard takes account of a number of matters in assessing whether a risk may require preventative action, including a person’s ability to recognise the risk, the likelihood of it occurring, the potential degree of harm, and the costs to mitigate or remove the risk.


2. Liability for Company Executives

In addition to the new primary duty discussed above, the amendments to the HVNL impose a duty on executive officers to proactively ensure that their company complies with the law. Specifically, executives must exercise “due diligence”, which the HVNL states includes taking the following “reasonable steps”:

  1. Keeping up to date on the safe conduct of transport activities;

  2. Having knowledge of the company’s transport activities and any risks associated with those activities;

  3. Ensuring the company implements processes for minimising risks, responding to risks and incidents, and complying with the HVNL; and

  4. Verifying the company’s CoR processes are being followed.

Note that executives can be convicted personally of an offence for failing to follow their duty even if proceedings are not brought against their company for a breach of the HVNL. Again, this is similar to workplace safety laws.


3. Penalties

The amendments to the HVNL introduce new penalties in accordance with the new duties. A failure to comply with those duties is deemed a criminal offence. Individuals can be fined up to $300,000 and imprisoned for up to 5 years (or both), and companies can be fined up to $3 million.



Summary


The amendments to the HVNL have been designed to emphasise that all CoR participants must work proactively to identify risks and take steps in the transportation chain where reasonable to eliminate or minimise those risks.


For example, if a person loading a truck with goods notices that the driver of the truck looks fatigued, that loader is obligated to take reasonable steps to ensure that the driver’s condition does not jeopardise the safe operation of the vehicle for the duration of the trip to the destination, such as by reporting their observations to a supervisor or the trucking company prior to the departure of the truck. The loader would then need to take reasonably practicable measures to ensure the driver’s condition has been addressed before their departure.


Recommendations


In preparation for the new requirements, we recommend that businesses:

  • review and update, or put in place, CoR policies and procedures;

  • communicate those policies and procedures to all employees;

  • ensure that adequate training is provided to all relevant employees;

  • review their current business dealings to ascertain if they have a CoR responsibility (i.e. if they send, receive or transport goods);

  • undertake appropriate due diligence on carriers; and

  • review contracts with suppliers, customers and transport operators to ensure, as far as possible, that CoR obligations are being met.

Executives who in the past may have delegated CoR responsibilities to subordinates must now become personally involved in the company’s CoR processes to ensure those processes are followed.


* * * * * *


We can help with the development of a CoR program, or with a review of one already in place, to ensure that your company is prepared for the new law.


For more information on compliance with the CoR, the National Heavy Vehicle Regulator provides a CoR Gap Assessment Tool on its website, at: https://www.nhvr.gov.au/safety-accreditation-compliance/chain-of-responsibility/cor-gap-assessment.