Responsibility = Legal Liability
- Apr 2, 2015
- 6 min read
Having returned from the 25th Annual Conference of the Australian Trucking Association in Hobart, I found it very surprising and somewhat naïve of professional transport operators (as well as high risk practices of their customers) that they were being asked by their customers to accept liability for their negligence or failure to implement effective Chain of Responsibility (CoR) provisions in their business.
This style of “passing the buck” does not sound as though it has been tested by the most of ardent of legal professionals and it is only a matter of time when this will be tested amongst the legal fraternity (I only hope at not a great unfortunate expense of an individual).
In essence to accept the penalties imposed on them by the relevant authorities for breaches of CoR should they occur?
The law is quite specific:-
HEAVY VEHICLE NATIONAL LAW (NSW) - SECT 742
742 Contracting out prohibited
(1) A contract is void to the extent to which it-
(a) Is contrary to this Law; or
(b) Purports to annul, exclude, restrict or otherwise change the effect of a provision of this Law; or
(c) Purports to require the payment or reimbursement by a person of all or part of a penalty that another person has been ordered to pay under this Law.
In essence you cannot contract out your legal responsibilities or be made to accept a contract that purports to do so.
And further,
HEAVY VEHICLE NATIONAL LAW (NSW) - SECT 4
Regulatory framework to achieve object
The object of this Law is to be achieved by a regulatory framework that-
(a) Establishes an entity (the National Heavy Vehicle Regulator) with functions directed at ensuring the object is achieved; and
(b) Prescribes requirements about the following-
(i) The standards heavy vehicles must meet when on roads;
(ii) The maximum permissible mass and dimensions of heavy vehicles used on roads;
(iii) Securing and restraining loads on heavy vehicles used on roads;
(iv) Preventing drivers of heavy vehicles exceeding speed limits;
(v) Preventing drivers of heavy vehicles from driving while fatigued; and
(c) imposes duties and obligations directed at ensuring heavy vehicles and drivers of heavy vehicles comply with requirements mentioned in paragraph (c)(i) to (v) on persons whose activities may influence whether the vehicles or drivers comply with the requirements;
In essence a consignor or consignee has the same responsibilities as a driver or a transport manager for ensuring items (i) to (v) are achieved.
In National Heavy Vehicle Law Part 10 Division 2 “Matters relating to reasonable steps”, there is a requirement for all parties in the chain to conduct fatigue and speed risk assessments in context of their position in the Chain. Most believe this is a drivers or Transport Company’s duty and identifies a lack of awareness or training for each party to perform their individual part in the chain. For example to provide amenities for drivers, journey plans prepared and confirmation the driver is fit for duty prior to departure, timely advice as to loading or unloading time, queuing and parking requirements on site and effective communications between all parties.
Penalties are quite substantial ranging from infringement notices, court imposed penalties and demerit points. The full list of penalties is shown in the following link,
So what should you do as a carrier, as a consignor, or a consignee?
Firstly it must be clearly understood that CoR is non-discriminatory and applies to all participants in the supply chain.
Sit down together and discuss who the participants are in your particular supply chain, and what the obligations are on each party.
Secondly develop a Code of Practice that applies to your supply chain. The Australian Logistics Council has available Codes of Practice for key industries plus a National Logistics Safety Code.
There are currently five NLSC Codes of Practice in the Transport & Logistics industry – one for the steel industry, one for the retail sector i.e. fast moving consumer goods (FMCG), one for the coal seam gas industry, one for the electrical cable industry and a code for the tanker industry. Determine which Code best identifies with your business and work through the Code to seek out your compliance responsibilities.
Thirdly once you have determined your appropriate Code ask for a Gap analysis audit to be conducted on your business by an approved Auditor. Modal Logistics can provide you with such an audit which covers National Heavy Vehicle Law, WHS requirements. State Transport Regulations, Fair Work Act and the appropriate Code of Practice for your business. Such a Gap analysis will help you to identify the key requirements of your business that need attention. A corrective action plan then can be put in place to help you work towards compliance. Documents can also be provided to assist with record keeping, agenda items for review meeting and templates to assist with managing the various aspects of CoR.
Fourthly as an outcome of the audit this will also determine if training and education is required, given CoR affect every employee in the supply chain, there will be a need to develop a change management plan that assists each employee understand and take responsibility for their role in the supply chain. The Transport & Industry Kills Council provides specific training packages for each aspect of the supply chain and this can be tailored to suit each individual and business Modal Logistics is an approved Trainer and Assessor and has expertise in developing and delivering such training cross CoR requirements.
Fifthly once all is understood and training has been put in place, it is now a requirement that the business conducts regular internal audits to ensure compliance is being maintained. By holding a number of internal audits either daily, weekly or monthly depending on volume of activity. It is also useful to have an annual external audit to test compliance. This will help identify areas of improvement or areas where the law has changed and review may be necessary.
Sixth and final requirement is to identify key performance measures and continuous improvement opportunities. By having bench mark measures you are able to identify compliance but most importantly how improvements are being made and the benefits form such improvements.
Is CoR a cost centre or a profit centre?
How do you view statutory compliance costs? The cost of training, auditing, policy development, record keeping and the many more requirements placed on a business.
The ability to develop and manage such policies and procedures can be quite expensive and many will say I cannot be bothered, we will do the minimum amount required or we will get the carrier to accept the responsibility. This is a dangerous position to adopt. We have already discussed the penalties that apply, the impositions that may be placed on your business but most importantly your reputation as a business.
The cost of such penalties can be five times those imposed on an individual for a corporation or three times those of the commercial benefit the corporation received by not adhering to the CoR requirement. For example causing a driver to meet a deadline for delivery which exceeded fatigue
safety, may incur a corporation three time the gross benefit of the sale of the goods, or by overloading the vehicle the penalty could be three times the value of the overloaded goods. These penalties are tough and costly and exist to cause corporations to accept their responsibilities.
It has been documented that where a company introduces a Code of Practice for safety there will be benefits in multiple areas. Ian Ross from Origin Energy presented a paper to the Australian Logistics Council in August 2014 (click for further information Origin Energy Safety Journey).
Ian states and I quote “An independent audit of Origin Safety systems identified that where the Logistics Safety Code is implemented fully across all functions (from contract engagement to delivery) of a sub project it contributed to a 40% improvement in our ability to manage safety and compliance risk.”
The areas of improvement included:-
Legal Compliance, WHS Risk Assessment, Fatigue Management, Communications, Safe Loads, Speed Management, Equipment, Driver Health, Sub-Contractor Management, and Operational Infrastructure.
This is a significant improvement and benefit to the business and what outweighs the cost of any penalty.
Please do not be complacent about CoR and your responsibilities, you cannot pass your liability to another person or entity, talk to Modal Logistics as to how we can help you manage your responsibilities and minimise your liabilities.
And finally do not put yourself in a position of having to sign a harsh and unconscionable contract. The Road Safety Remuneration Tribunal Part 3 Sections 7 and 8 deal with contracts with transport drivers and other contracts in the supply chain which ensure your individual and corporate protection in achieving Chain of Responsibility requirements.
Modal Logistics has experience in Contract preparation and contract negotiation and can assist you in each of these areas.
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