TM Law’s Australian transport team looks at important changes to the law on heavy vehicles, and the implications for responsibility in the supply chain.
Amendments to the Heavy Vehicle National Law (HVNL) which will become law on 1 October 2018 and in particular, the Chain of Responsibility (CoR) provisions will mark an important shift in the philosophy underlying the existing HVNL. The current CoR framework which applies to all participants in the transport chain, is centred on prescriptive legislation to ensure compliance with vehicle dimensions, load restraints, driver fatigue and speed laws. The amendments will extend the shared responsibility for heavy vehicle safety to include vehicle standards and maintenance and will allow more flexibility for businesses to introduce their own procedures, or to follow an industry code, to comply with the HVNL. The amendments also contain numerous changes to the compliance requirements of parties involved in the transport supply chain. This article aims to highlight some of these significant proposed amendments.
Primary duty of all parties
The amended HVNL will introduce a general primary duty on all parties in the supply chain involving road transport to ensure safe practices and heavy vehicle safety. This means all entities such as depots, terminals, exporters and importers as well as vehicle operators, will have a duty to ensure the safety of their transport activities. The duty of a person will be to ensure “so far as is reasonably practicable” the safety of their transport activities related to the vehicle. This differs from the current regime which refers to taking “all reasonable steps” and brings the language in line with current work health safety laws. What is “reasonably practicable” is likely to depend on:
- the likelihood of the hazard or risk;
- the degree of harm that might result;
- what the person knew or ought to have known about the hazard or risk and the way to eliminate or minimise that hazard or risk;
- the availability and suitability of ways to eliminate or minimise the risk; and
- the cost associated with eliminating or minimising the risk (including whether the costs are grossly disproportionate to the risk).
Unlike the current regime, which in the event of a prosecution requires the defendant to prove they have not breached the HVNL, the amended HVNL will reverse the burden of proof. It will be up to the prosecution to prove that the HVNL has been breached. Increased investigative powers will, however, facilitate this process.
There are also significant penalties for breaches of a primary duty. Breaches of the new primary duty attracts penalties in three categories which are calculated according to the severity of the risk which the offence poses, as follows:
- Category 3: breaches safety duty – $50,000 for an individual or $500,000 for a corporation;
- Category 2: risk of death/injury – $100,000 for an individual or $1,000,000 for a corporation; and
- Category 1: breach of the duty with recklessness – five years imprisonment or $300,000 (or both) for an individual and $3,000,000 for a corporation.
Broadening the duty of executives
The new CoR laws will expand the liability of executive officers to impose a due diligence requirement on them to ensure that parties in the chain of responsibility comply with their legal requirements. Where a legal entity has a duty as set out under the HVNL, an executive of that legal entity, which extends to anyone who takes part in the management of the business, must exercise due diligence to ensure that the legal entity complies with the duty.
Due diligence is helpfully stated to include taking reasonable steps which in summary are:
- to acquire and keep up to date, knowledge about the safe conduct of the transport activities; and
- to gain an understanding of the nature of the legal entity’s transport activities; and the hazards and risks, including the public risk, associated with those activities; and
- to ensure the legal entity has, and uses, appropriate resources to eliminate and minimise those hazards and risks; and
- to ensure the legal entity has, and implements, processes to eliminate or minimise those hazards and to verify that the resources and processes are being used and implemented
It is clear from this provision that the term “due diligence” and what is expected of the executives is set at quite a high standard. Executives will be required to have considered all aspects of the chain of responsibility requirements and to have procedures in place to ensure that the organisation is compliant with the HVNL and that the procedures are being followed.
Powers of authorised officers
Authorised officers will have increased powers to investigate business practices to review how effectively legal obligations under the HVNL are being managed. They will have increased powers to obtain evidence extending even to third party providers outside the supply chain. In addition, these powers do not need to be triggered by a roadside inspection or an incident. Instead they can be used in a proactive way to enquire so as to ensure safe practices across the supply chain.
Accordingly, businesses should be careful to retain documents and all forms of electronic records which might demonstrate that an entity has done all things reasonably practicable to comply with the CoR laws.
Defences and Penalties
The changes to the legislation bring in two new processes in relation to the defence or prosecution of a matter by the National Heavy Vehicle Regulator (NHVR)
Firstly, a registered industry Code of Practice is admissible as evidence of whether or not a duty or obligation under the HVNL has been met. Whilst the Code would not be definitive, the Court may have regard to it as evidence of what is known about a hazard or risk and may rely upon the Code in determining what is reasonably practicable in the circumstances to which the Code relates. The NHVR has produced guidelines for preparing and registering an industry Code of Practice. A Code, which is by its nature, industry agreed, is clearly a good starting point in showing that an organisation’s obligations have been met.
Secondly, there is the introduction of enforceable undertakings as an intervention option. If a person contravenes or is alleged to have contravened the HVNL, the regulator or an authorised officer may accept an undertaking made by that person, provided the undertaking will ensure that the person thereafter complies with the HVNL. Once the undertaking is accepted by the regulator or authorised officer, they must use reasonable diligence to have any proceedings against the person discontinued as soon as possible.
Failing to comply with the accepted undertaking attracts a maximum penalty of $10,000. It should be noted that making the undertaking is not an admission of guilt by the person offering to make the undertaking.
Preparing for the introduction of the HVNL amendments
Queensland is the host jurisdiction for the new legislation and the amending bill was introduced into Queensland Parliament on 15 February 2018. Once commenced in Queensland, on 1 October 2018, the HVNL will apply in all states and territories except Western Australia and the Northern Territory.
The list of parties in the chain of responsibility has not been altered by the upcoming amendments. If you are a party in the transport supply chain now, you will be a party after the changes. Businesses and most importantly their executives and management should become involved in implementing the HVNL amendments, review contracts with parties up and down the supply chain, revise employee training protocols and workplace practices and oversee the business is equipped to accommodate and implement the changes in the HVNL which are designed to manage risk and improve transport safety along the supply chain.