Australia: Managing CoR compliance of overseas third parties

Last Updated: 21 July 2017
Article by Nathan Cecil
Most Read Contributor in Australia, July 2017

In this article, we focus specifically on how to manage the Chain of Responsibility (CoR) compliance of overseas third parties.

In practice and in the CoR court judgments, we have seen that managing domestic third party compliance is one of the hardest things to get right. Domestic third parties are also part of the Chain and subject to its laws. So, if it is still difficult to secure their engagement in compliance, it is even more difficult to secure the engagement of overseas third parties who are not directly subject to Australian CoR laws.

Important: Compliance can't be contracted out. The operations and conduct of both you and your contractors/supply chain partners must be compliant. One party's compliance or non-compliance will affect the other's.

Who are we talking about?

We are typically talking about overseas suppliers of goods that are shipped to Australia before they hit the Australian heavy vehicle road transport supply chain.

These overseas suppliers are not party to the Chain of Responsibility, which only captures parties in Australia e.g. importers, distributors and logistics providers. Despite them not being parties to the Chain of Responsibility under the HVNL, they are nevertheless a party in the supply chain. As such, their conduct and breaches can still have a material impact on CoR compliance in Australia.

For example, if a shipping container of supplies is insufficiently restrained and shipped to Australia, once it hits our roads, a load restraint offence occurs and the domestic importer, distributor, logistics company etc can all be held responsible and prosecuted.

What CoR components are we talking about?

We are mainly talking about mass and load restraint compliance.

You should ensure that any mass information contained in transport documents (e.g. bills of lading, packing lists, commercial invoices, SOLAS verified gross mass declarations) is consistent and accurate. For example, make sure that the mass information contained in any bill of lading is the same as that included in your commercial invoice. Some overseas exporters under-declare mass on the bill of lading in order to save on freight costs. Usually, you would provide the bill of lading or other shipping documents to domestic transport operators and/or base any Container Weight Declaration on the bill of lading weights. So, any 'creative accounting' on the bill of lading can lead to inaccurate weight declaration on the road. Also, ensure that any loaded mass is within the limit of any shipping container carrying capacity – which is marked on the container information plat on the door of every shipping container.

Insufficient load restraint of goods within shipping containers by overseas suppliers is a huge problem. From our observations, it is one of the key targets for enforcement action by the regulators. Indeed, a number of CoR court prosecutions have been in relation to insufficient load restraint by overseas suppliers.

You should ensure that you:

  • advise any overseas suppliers that load restraint of goods shipped to Australia must meet the Performance Standards contained in Section F of the Load Restraint Guide
  • provide overseas suppliers with an extract of the Performance Standards
  • require overseas suppliers to confirm that the restraint of goods meets the Performance Standards (including asking for copies of any load restraint compliance calculations or evidence of the testing or restraint capacity of any load restraint equipment used, as applicable)
  • keep your eyes open for any signs of insufficient load restraint (e.g. does the restraint actually used match what the supplier said they were going to do and had tested?) or possible failure of load restraint during shipping and transport (e.g. are there signs of load shift or movement during shipment, such as collapsed stacks, broken or strained restraints or signs of packaging units shifting along a shipping container floor?)
  • investigate and resolve any discrepancies or suspected load restraint issues with the supplier as soon as they are observed.

Dimension compliance may arise for non-containerised goods, if the overseas supplier provides you with incorrect dimension figures. As above, you should ensure that all dimension figures provided are consistent and seek clarification if there are any issues or if the figures are found to be incorrect upon receipt.

Speed and fatigue compliance are not likely to arise, as overseas suppliers are unlikely to be involved in booking or scheduling road transport in Australia.

Eyes wide shut

It is not enough merely to tell your overseas supplier that 'mass and load restraint must meet Australian requirements' and then shut your eyes to what happens from there forwards.

If goods are sent with insufficient load restraint, you are deemed to commit a breach under the HVNL and you can be prosecuted and fined. The regulators and the courts therefore expect you to take an active part in making sure that your overseas suppliers are doing the right thing, as per the above recommended steps for load restraint compliance management.

The buck stops with you

We often hear that 'overseas suppliers aren't interested in complying with our laws; they just ignore our requests'. Unfortunately, this isn't a defence in Court.

We understand that it can be very difficult to engage overseas suppliers on issues of local compliance. However, at the end of the day it is usually a bottom line issue – do they want your business and/or does the unit price need to reflect any additional effort required to meet Australian CoR laws?

If overseas suppliers consistently ignore your requests or aren't prepared to meet the CoR standards, you will unfortunately need to make a costs/benefit decision on the risk of continuing to use them.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Nathan Cecil
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