Australia: What do amendments to chain of responsibility legislation mean for supply chain participants?

IN BRIEF - AMENDMENTS TO AFFECT ALL STATES AND TERRITORIES EXCEPT WA AND NT

Changes to the Heavy Vehicle National Law (HVNL) are set to be introduced in mid-2018. Participants in the supply chain and their executive officers should be aware that these changes will affect their primary duty, executive officer liability, penalties and defences and take action to manage the obligations imposed under the amended legislation.

WHAT IS THE CHAIN OF RESPONSIBILITY?

The Chain of Responsibility (CoR) is a set of specific obligations imposed under legislation on participants in the supply chain where goods are to be transported by road at some point throughout their journey.

The CoR was introduced in 2005 and amended in 2012 with the introduction of the HVNL.

Persons with responsibilities under the HVNL include (but are not limited to) a driver or operator of a heavy vehicle, an employer or prime contractor of the driver, a shipper of goods for road transport using a heavy vehicle, a loading manager for any goods in the vehicle, and a loader of any goods in the vehicle. The HVNL imposes certain obligations on these parties with respect to, among other things, fatigue management, maximum permissible mass and dimensions of vehicles, and load restraint.

These obligations are in addition to existing safety obligations imposed on supply chain participants (such as those introduced by the International Convention for the Safety of Life at Sea).

CHAIN OF RESPONSIBILITY AMENDMENTS TO THE HEAVY VEHICLE NATIONAL LAW

Amendments to the HVNL have recently been approved and are due to take effect in mid-2018. These amendments will be incorporated into the HVNL and introduced in all Australian states and territories with the exception of Western Australia and the Northern Territory.

  1. New Primary Duty - the "so far as is reasonably practicable" test

    Under HVNL amendments, every participant in the CoR will be under a non-transferrable duty to ensure, "so far as is reasonably practicable", the safety of that party's transport activities relating to the heavy vehicle. Each party must also ensure, so far as is reasonably practicable, that its conduct does not cause or encourage the driver or any other party to breach any CoR Laws. This will replace the previous obligation to take "reasonable steps" to ensure compliance.

  2. Executive Officer Liability

    As part of the amendments, a duty will be imposed on executive officers to exercise due diligence to ensure that a corporation complies with its duties under the amended HVNL. Breach of this duty may result in executive officers being held personally liable. Based on the wording of the new amendments, it is possible for executive officers to be held liable for breach of this duty, even where the corporation has not committed an offence under the HVNL.

  3. Penalties

    Amended penalties have also been introduced in line with the new primary duty including a maximum of five years imprisonment, a $300,000 fine for individuals or a $3 million fine for corporations.

  4. Defences

    It is important to note that defences for offences under the HVNL have also been amended to encourage a targeted and business specific approach by companies and individuals. Accordingly, whether a business or individual has in effect "done its best" to comply with its obligations will be judged in relation to what was reasonably practical for the particular business, rather than by a prescriptive checklist of reasonable steps.

WHO WILL BE AFFECTED BY THE CHANGES TO THE HEAVY VEHICLE NATIONAL LAW?

The HVNL amendments will affect all parties who have control or influence over the transportation of goods in a supply chain where the transportation of goods by road will play a part (within the scope of the HVNL). The CoR is designed to include persons at all stages of the supply chain from operators and packers to employers, contractors and executive officers.

WHAT SHOULD SUPPLY CHAIN PARTICIPANTS AND EXECUTIVE OFFICERS DO?

Supply chain participants should review and implement policies and practices to effectively manage the risk of breaches of the HVNL within the organisation, but also to manage risks in the supply chain from participants "up the line" and to stop the transferral of risk "down the line". This may include employee training, creation and implementation of management plans, amendment of policies and procedures and review of key commercial agreements.

Stephen Thompson
Road transport
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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