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Customs Brokers and Forwarders Council of Australia National Conference
3pm, Friday 31 October 2014
Sheraton Mirage Resort & Spa, Gold Coast
Speaking time: 20 minutes
Good afternoon. My name is Paul Retter and I have been at the National Transport Commission since July 2013.
Today I am going to discuss the role of the NTC, look at our transport reform agenda, and probably of most interest to you – examine the concept of “chain of responsibility” and how it may affect you.
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NTC
The NTC is a statutory authority funded by the Federal Government and all eight states and territory Governments. Our role is to develop national transport reforms that are designed to improve the safety, environmental impacts, productivity and efficiency of Australia’s transport network.
Inconsistent or unnecessary laws and regulations affect transport efficiency because they cost business time and money.
We provide independent advice to the nine Transport Ministers on reforms that will make a major difference to the national transport system. The advice we give is evidence-based – looking at both costs and benefits to industry and government, and the wider community. We work closely with industry and government agencies to develop robust, cost effective options.
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TransportReform Agenda
Some of you may be aware of our work in developing nationally consistent laws through reforms such as the National Heavy Vehicle Law and National Rail Safety Law.
Until 2013, we had 28 regulators in the rail, road and maritime transport space and 8 sets of state and territory law for each mode.
In theory, we should now have just three regulators– the National Heavy Vehicle Regulator, the Office of the National Rail Safety Regulator, and the Australian Maritime Safety Authority.
This initiative is expected to save over $12 billion over the next 20 years, freeing up funds for other priorities and projects, and saving industry time and money by reducing the costs of compliance.
In May this year, Australia’s transport ministers approved a range of new legislative reforms and national policy settings proposed by the NTC. One of these was a Chain of Responsibility review – we are currently investigating whether any changes are required to the way duties are constructed within the HVNL in order to improve its fairness and effectiveness.
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Chain of responsibility
Most people see chain of responsibility as a very technical term and a detailed law, which is difficult to understand. However, I’m going to couch if differently today. I’d like you to look at it from your business perspective, from a supply-chain perspective, and how it affects you in your day-to-day operations.
Chain of responsibility is fundamentally about safety – it’s about the safety of drivers, about the safety of the community. It is about ensuring that the people who make the decisions about their transport operations are accountable for those decisions. It recognises that off-road parties have the ability to influence on road activities, which can potentially lead to breaches of the Law.
The crux of it is this – chain of responsibility seeks to identify those parties that may control, influence or encouragecertain on-road behaviour by making them legally accountable for their actions.
It’s about making sure all parties in the supply chain take appropriate and reasonable steps to prevent breaches from happening. Also, it’s about inaction – where not doing something may cause or encourage a breach.
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Heavy Vehicle National Law
Chain of responsibility is not a new concept. Its application to heavy vehicles has been in discussion since the early 1990s and it has been included in model laws since 1997.
The Heavy Vehicle National Law has four types of duties: General; Intermediate; Process-based and specification standards.
Each of these is different, some specify who they apply to and what needs to be done to comply and others are broader. Today, I will look at General duties and fatigue as an example. General duties are based on the idea that everyone has a duty of care to ensure their own safety as well as that of others.
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Duties and Responsibilities
This duty applies to a party in the supply chain – this can include the consignor; loader/packer; loading manager; driver’s employer; driver’s prime contractor; operator of the trucking company; scheduler; unloader; consignee.
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You can see from this table, the parties in the supply chain and the areas where specific duties are assigned. As you can see a person can be responsible for undertaking a number of duties and as a result has numerous responsibilities.
It is important to understand that a person becomes a party in the supply chain by virtue of the function they fulfil, not by their job title. For example the job title does not have to include the word “scheduler”. If someone is involved in assigning driving jobs and deliveries and giving instructions to drivers, then they are performing some of the functions of a “scheduler”. It is also possible to act as more than one party in the chain at the same time. In small companies in particular, one person may schedule, load and drive the truck.
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In the past, many within “supply chains” believed that only the operators of a trucking company or the driver could be held accountable under chain of responsibility laws, but this is not the case – as illustrated in this Figure.
How does this affect me?
You may be thinking how does this affect me? As a freight forwarder, I manage the logistics of importing and exporting goods. As you have just heard, Chain of responsibility takes in all people in the supply chain.
For example, you may have no contact with a driver directly, but if you are responsible for a driver’s schedule and the driver is told they must have their load to the dock by a specific time, and you know it takes x-hours for them to reach that dock. Have you taken into consideration that there are major road works on that route? And detours, meaning longer driving time. Two things may happen. The driver will drive for longer periods without rest – or speed – or the load will not reach its destination by the time required. Directing the driver to reach their destination by the appointed time, knowing there are external hurdles that they cannot change, reinforces your role as one of the links responsible in this chain. Overly strict policies can encourage the driver to speed or drive longer hours.
This is a breach of the law and you and your company could be penalised for this. Even worse, if there was a truck accident and people were injured or killed, then you could be deemed as one of the parties responsible. This is how chain of responsibility works – holding other parties accountable for influencing on-road behaviour.
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What penalties are in place under the legislation?
Under the Law, breaches of Chain of Responsibility can be both administrative and court imposed and can be tailored to address specific types of offences. Examples of administrative penalties that may be issued include:
- Improvement notices – identify areas of risk and require a responsible person to address non-compliance
- Warnings – put a responsible person on notice to address non-compliance where a minor breach is detected
- Infringement notices – can be an alternative to court proceedings for a less serious offence.
Courts may issue fines as well as having the ability to impose:
Supervisory intervention orders; prohibition orders; and commercial benefits penalties.
In addition, body corporates have a five times multiplier imposed on their penalty.
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Real examples of prosecution under the Law
I am now going to provide you with some real-life examples of how chain of responsibility can affect a company.
Recently a large trucking company, and its owner, were fined over $300,000 for breaching fatigue management laws in NSW. The offences related largely to false and misleading work-diary entries, with some offences also relating directly to the excessive hours worked by the driver (fatigue breaches).
NSW Roads and Maritime Services prosecuted the company and owner under chain of responsibility legislation.
RMS stated that “this sends a powerful message to industry that courts will not tolerate this illegal and dangerous behavior of those in the supply chain who place demands on others to drive when fatigued or to speed.”
The second example was in 2010 when RMS issued an Improvement Notice to Patrick Stevedores, requiring it to take all reasonable steps to prevent a likely contravention of a mass requirement. This was issued to Patricks as a loader and due to the likelihood of a breach of a mass requirement and/or a breach of transport documentation requirements. The issue of the Improvement Notice came after some 234 RMS intercepts revealed a breach rate of 26 per cent.
The improvement notice issued to Patricks was part of broader compliance operations conducted at the Sydney ports precinct in 2011, where RMS served improvement notices to many stevedore operators in connection with loading practices to ensure road safety and asset protection in NSW. RMS advised Sydney ports stakeholders that the transport of commercial loads (such as containers) is the responsibility of all supply chain parties to ensure mass restrictions are not exceeded and their related policies and procedures in connection with their loading practices, do not contravene the law. To ensure heavy vehicle movements are effective, safe and legal, Sydney ports stakeholders have installed weigh devices. These provide an effective and economical tool for self-regulation to ensure heavy vehicles are weighed before leaving the port to prevent overloading.
The third example is of a company in NSW, KGB Protective Clothing, who were convicted and charged in 2013 as both a loader and consignor.
The company was charged for a breach of load restraint requirements, when part of the load of five prefab steel beams fell from the trailer and collided with six motor vehicles travelling in the opposite direction. As a result of the load falling from the vehicle, a woman was killed, and six vehicles and the road were damaged.
The company, as loader of the goods, and as consignor, pleaded guilty to the charges.
The KGB staff that placed the load onto the vehicle were under supervision of KGB. They were not trained in load restraint. Nor did they measure the dimension of the load.
The Judge was satisfied beyond reasonable doubt, “that the failure by the company in either of its capacities in which it was charged (loader and consignor) caused the death of the woman. If the load had been properly secured, such that it was unlikely to fall, as the legislation required, then this death would not have happened.”
The company was convicted for two offences under the existing law at the time – Road Transport Act (2005) – one as a loader, where they were fined $18,000; and ordered to pay the Prosecutor’s costs of $25,000. They were also convicted under the Law as a consignor, but due to ‘double jeopardy’ laws, were not fined.
The judge stated, “the proper punishment of the company will operate as a general deterrence for other companies who consign and load goods onto heavy vehicles for transport on the public roads of NSW from committing breaches of transport legislation, in particular of load restraint requirements, and thereby enhance road safety.”
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The final example, from September last year, is where two companies were ordered to pay compensation for an accident involving an oversize load that brought down a pedestrian bridge in Maitland in 2009. This is the first time in Australia a road compensation order has been issued against parties in the chain of responsibility.
RMS launched the prosecution against all parties in the chain when the footbridge collapsed after being struck by a vehicle exceeding height limits.
The heavy vehicle operator was ordered to pay $1million in compensation and was also fined, and the consignee was ordered to pay $400,000 and fined.
RMS stated that ‘‘all parties in the chain of responsibility need to be aware of their responsibilities, whether they are a loader, scheduler, driver, owner, consignor or consignee.”
It is crucial to consider how the actions and roles you perform in your job might influence others in the chain – particularly on the road.
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Transport Sector and Training
As we are all too aware, transport and logistics is one of Australia’s most dangerous occupations. When you consider that work-related road crashes currently account for 50 per cent of all occupational fatalities and 15 per cent of national road deaths, it’s not a stretch to say that freight transport is one of the most dangerous sectors to work in within Australia. Incidents can affect a company’s bottom line through damage to reputation, lost productivity, increased insurance premiums and compensation claims.
It is more important now than ever that business and their employees understand their obligations under chain of responsibility. There is no specific requirement under theHeavy Vehicle National Law to undertake any mandatory courses inChain of Responsibility. However, a prudentcompanyalong the supply chain would invest in employee training as part of takingreasonable stepsto ensure they and their drivers comply with the Law and other relevant road transport laws.
One way to do this is for companies to provide in-house training and information for their employees, or through undertaking external formal courses.
The Transport and Logistics Industry Skills Council in conjunction with the Transport and Supply Chain Industry and Regulators have developed a number of recommended accredited programs for training in Australia.
Finally it is important to remember – you know your business best – it is up to you to decide what is reasonable and to implement those reasonable steps. It is worth noting, when engaging freight companies you should always consider their safety record. Can they prove that their work practices adhere to current chain of responsibility laws? It is not about avoiding legal penalties, but about keeping drivers and our community safe.
It is crucial that we work on this together – business and government – to ensure we are improving the laws and regulations that will help all parties in the supply chain work to ensure safe on-road behaviours.
Thank you
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