Chain of responsibility update – are you compliant?

Chain of Responsibility (CoR) is an issue that affects everyone involved in business. As we’ve previously noted, it doesn’t matter whether you’re behind the wheel, a desk, in a warehouse or on the end of spanner, everyone has obligations and responsibilities that need to be kept front of mind when it comes to staying CoR compliant.

In October 2018, the Federal Government introduced some important changes to CoR regulation that now places more emphasis on a top-down, end-to-end management system for the heavy vehicle supply chain.

Sal Petroccitto, CEO of National Heavy Vehicle Register (NHVR), describes these changes as a “significant leap forward in recognising that everyone in the heavy vehicle supply chain has a role to play in ensuring safety.”

“The reforms complement national workplace safety laws, and place a positive duty-of-care on supply chain parties,” he says. “Duty holders who assess their risks and manage them will be complying with both the NHVR and workplace safety law.”

While these changes specifically address heavy vehicles, they still have an impact across all industries, and indicate shifting attitudes to the operation and management of vehicles in the workplace.

So what are some of the major changes in heavy vehicle regulation?

Increased penalties

The changes see an increase in the range of penalties that can be applied for violating CoR obligations. The penalties are more closely aligned to existing workplace health and safety laws.

For Category 3 offences (breaches of safety), a corporation could be fined up to $500,000, while individuals could be hit with a maximum $50,000 fine.

For Category 2 offences (risk of death or injury), companies now risk fines of $1.5 million and individuals face a maximum $150,000 fine. For the most serious of offences – Category 1 offences (recklessness)– companies now face fines of up to $3 million, while individuals could face fines of up to $300,000 and, or, five years jail.

Vehicle standards

Another significant change involves the inclusion of heavy vehicle standards to existing components like mass, dimension, loading, speed and fatigue. This means that all the parties in the chain are now responsible for the roadworthiness of a heavy vehicle.

Standard of legal duty

An important change relates to a shift in the test for prosecution at an organisational level from “all reasonable steps” to “all reasonably practical steps to ensure the safety of their transport activities.”

Executive office holders also face some pretty significant changes in their obligations under the new regulations. The new standards of executive liability are changing from “reasonable diligence” to “due diligence”.

Together, these new standards of liability, according to Nathan Cecil, Partner at Law firm Holding Redlich, mean that businesses will need to adopt a management system framework that includes monitoring policies and procedures, awareness and training, contracts, compliance monitoring and executive reporting.

The changes in the legislation, says Paul Gaynor, founder and Director of Logistics Safety Solutions, require a fundamental shift in industry-wide CoR culture concerning heavy vehicle usage.

“If you engage a supplier to bring raw materials in, and that supplier engages a carrier to deliver it, and there’s an accident and, let’s say, people and motorists are killed, the authorities can now look at the transport company, the supplier and you as a customer and ask what you did to minimise or eradicate the risk of that occurring. If you can’t answer it, then you could be fully involved in a prosecution.”

“You can’t contract out the obligation; you can’t say “we have a contract with a carrier who accepts all responsibility…’ Authorities will brush that contract aside as being non-applicable and they’ll still hold you accountable. You can’t say, ‘we didn’t know,’ and you can’t say, ‘we weren’t aware, and therefore we shouldn’t be accountable’,” he explains. “You have to be aware and you have to manage it.”

“The reforms are all about strengthening and aligning CoR and OH&S laws and the terminology, which is a really good thing in a lot of ways,” says Paul. “It clarifies that executives have to take pro-active due diligence to manage truck activities within the supply chain. You can see [just in that wording] that [the changes are] bringing all of OH&S language into the CoR environment.”

“Companies need to have a top-down, end-to-end CoR management system for their supply chain. Whatever you do for OH&S, you need to do for CoR. It’s as simple – or as complicated – as that.”

Craig Porter, Head of Commercial Vehicles and After Sales Manager for SG Fleet Australia and New Zealand, echoes Paul’s thoughts, pointing out, while CoR legislation relates to vehicles with a gross vehicle mass of more than 4.5 tonnes (except in WA and NT), operators of smaller vehicles would be wise to pay attention to the changes.

“It’s not just about the direct operators of trucks or heavy transport,” explains Craig. “The CoR, like we talk about, really refers to where your link fits in that chain. That chain stretches quite a long way. If you have a warehouse, or you receive deliveries, or you have a contract that relies on the supply of goods; if you have any of those things, it relates to the chain of responsibility.”

“There are laws, or conditions within these laws, which talk about how vehicles are loaded, how they appear at your dock when they’ve been loaded, and what constraints you put on timing or volume around deliveries. These laws apply to everybody regardless of what your business is and, much like SG Fleet, we have a role to play in that chain.”

For a full breakdown of the changes in Chain of Responsibility, visit NHVR.gov.au

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