The decision by the Council of Australian Governments (COAG) earlier this month to establish new national regulatory arrangements for rail, road and marine safety represents a significant expansion of Commonwealth involvement in areas traditionally within the State and Territory sphere. However, until the reforms are in place, questions will continue to be asked about whether the move is necessary or able to deliver the productivity benefits that COAG is seeking to achieve.
National Regulators For Rail, Road And Marine Safety
On 2 July 2009, COAG outlined in a communiqué that it agreed to proceed with a suite of national regulatory changes for maritime safety, rail safety and heavy vehicles. The key initiatives involve the establishment of national regulatory arrangements in each of the transport modes currently regulated largely at State level.
- The Australian Maritime Safety Authority (AMSA) will become the national safety regulator for all commercial shipping in Australian waters.
- A single national regulator will be established to regulate heavy vehicles.
- Further consideration will be given to the establishment of a national rail safety regulator.
COAG believes that these measures will remove inefficiencies arising from inconsistent jurisdictional requirements, streamline regulatory arrangements and reduce the compliance burden and transport costs generally. However, COAG maintains that efficiencies gained in moving to national transport safety regimes will not be made at the cost of safety.
The COAG decision follows a process of consultation with government and industry laid out in its February 2006 timetable for regulatory reform of transport safety.
COAG's initiatives in the rail area seek to address what are seen as shortcomings of the present State based regulatory schemes for rail safety. At present, a rail operator must be accredited in each State and Territory in which it operates, and may be subject to differing regulatory requirements in each.
Over recent years there have been some significant moves towards a national approach to rail safety. A 1996 Intergovernmental Agreement on Rail Safety led to partial harmonisation of rail safety rules and to the establishment of a national panel of rail safety regulators to facilitate coordinated decision making across jurisdictions. Model national rail safety legislation was enacted in 2007, based substantially on the Victorian Rail Safety Act 2006 which had established a new framework for rail safety based on statutory safety duties, application of 'chain of responsibility' principles for determining accountability and a new accreditation framework directed at management of major safety risks.
Despite these reforms, sectors of the industry operating in multiple jurisdictions believe there is a need for more consistent adoption of the national rules and for a more seamless decision making framework. A recent report by the National Transport Commission (NTC) proposed further reform options, including:
- Enhancement of the existing state-based system, under which States and Territories would all enact legislation based on the model Bill and work towards greater uniformity and coordination, particularly in relation to operator accreditation.
- Establishment of a single regulator to administer rail safety on a national basis, combined with a single national body (ie the Australian Transport Safety Bureau) to investigate rail incidents.
The NTC report argued strongly in favour of a single national regulator as the best means of creating a unified national market in rail. However, it appears that COAG may have had some reservations about whether the creation of a single national regulator can be justified, particularly as metropolitan rail networks, which carry the majority of passenger traffic, have relatively limited interface with national operations.
In its 2 July 2009 decision, COAG agreed to develop a 'national rail safety regulatory system', but will not make a decision on the scope and form of that system until it receives further advice from the Standing Committee on Transport at the end of 2009, and the Australian Transport Council (ATC) (which is composed of State and Territory Transport Ministers) in 2010. The ATC is to present a final proposal to COAG for approval by mid-2011.
In road transport, COAG agreed to press forward with the establishment of a single national regulator for vehicles with a loaded mass of more than 4.5 tonnes.
This decision clearly builds on the progress made towards national uniformity in road transport regulation through successive initiatives of the NTC (and previously, the National Road Transport Commission).
Heavy vehicle operations are currently regulated by State and Territory road and traffic authorities, although the legislation and operating rules for heavy vehicle registration, driver licensing, vehicle standards and vehicle operations are substantially uniform, being based on template or model legislation developed by the NTC.
The reform process commenced with the 1991 intergovernmental Road Transport Agreement. That agreement provided for the Commonwealth to pass template laws for the ACT and then required the States and the Northern Territory to adopt and apply the template as their own law. Under the Agreement, regulations relating to registration, licensing, vehicle standards, mass and loading, oversize vehicles and dangerous goods transport were developed and largely implemented by each of the jurisdictions.
In 2003, the 'template legislation' model was replaced by a more flexible arrangement under which States and Territories agreed to adopt the substance of 'model laws' developed by the NTC. Laws relating to fatigue management, intelligent access and compliance and enforcement were developed under that model.
However, despite these significant reforms, areas of inconsistency continue to exist, partly because the template and model legislation have not been consistently implemented by all States and Territories, and partly because of variations in the way different agencies administer the laws.
The Commonwealth has taken the view that these inconsistencies continue to impose costs on, and inhibit optimal productivity in, the road transport industry. In December 2008, the Department of Infrastructure, Transport, Regional Development and Local Government (DITRD) published a consultation paper recommending the establishment of a single national regulator for heavy vehicles to oversee a single set of national heavy vehicle laws.
COAG adopted these recommendations in its communiqué of 2 July 2009. Implementation is likely to occur in stages over an approximately two year time frame. At the same time, COAG also commissioned the next stage of research needed to move towards more efficient heavy vehicle charging.
Responsibility for regulation of marine safety is currently divided between State and Territory regulatory agencies, which regulate recreational and commercial boating as well as intra-state shipping, and the federal body, AMSA, which regulates interstate and international shipping.
Safety standards for the survey, design, construction, crewing, operation and administration of vessels are set out in a national code (the USL/NSCV code). However, those standards have to be adopted into State and Territory law before they take effect.
The Commonwealth has taken the view that inconsistent application and administration of the national standards have led to a greater than necessary regulatory burden for participants in the maritime industry, particularly those operating on a cross jurisdictional basis.
A DITRD Consultation Paper published last April 2009 suggested that maritime safety should become the exclusive responsibility of AMSA under new Commonwealth legislation or an expanded version of the Navigation Act 1912 (Cth). Under the proposal, AMSA would become solely responsible for setting standards, but would likely work with State agencies to deliver services.
COAG has now agreed that AMSA should become the national safety regulator for commercial marine operations. A regulatory scheme is to be developed to come into effect on 1 July, 2011. Transitional provisions will apply to existing ships for approximately three years after which they will be required to re-register under the new system.
COAG's decisions in the transport area show that the Commonwealth, States and Territories all agree that while much has been achieved, further work is needed to achieve a seamless national operating environment for surface transport. Moreover, the latest initiatives are a clear signal that the Commonwealth is prepared to force the pace of reform by becoming more active in areas that have traditionally been seen as areas of State responsibility. In road and marine, the decision to move towards a single national regulator appears to be locked in, although for rail, the issue is still open.
The big question is whether the move to single national regulators will, as is hoped, lead to improved safety, lower compliance costs, and fewer impediments to interstate operations or whether it will simply add a further layer of administration to what are already highly regulated sectors.
The practical impacts are likely to be significant, and transport operators will need to monitor developments closely. Changes in regulatory arrangements may involve changes in compliance and risk management, and this in turn is likely to have both operational and cost impacts.
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