As an executive of a company in the Chain of Responsibility (CoR), you must exercise due diligence to ensure your business complies with the Heavy Vehicle National Law (HVNL).
However, a recent case before the Supreme Court of South Australia demonstrates that some executives still have misconceptions about their due diligence duty obligations. In this case, an executive argued that she was obliged under the executives' duty in the HVNL to disclose safety issues and non-compliance to third parties. While the court found that this disclosure did not form part of the executives' duty, this does not mean that executives do not have significant responsibilities under the HVNL.
In this article, we provide an overview of these duties, including the types of actions executives can take to comply with their HVNL obligations and what happens if they fail to do so.
Who is an executive?
An executive under the HVNL includes directors and individuals in senior management positions who are concerned with or take part in the management of the business.
The executive duty obligation under the HVNL
Under section 26D of the HVNL, an executive of a company which forms part of the CoR must exercise due diligence to ensure that the company complies with the safety duty (i.e. the primary duty under section 26C of the HVNL).
There are two things to note about the executives' duty:
- there does not need to be any prior breach by the business for an executive to be prosecuted – the executive duty is independent. Therefore, if an executive fails to act proactively to perform their duties, they can be prosecuted
- the very purpose of section 26D is to make executives, even directors who are not usually involved in the day-to-day running of their businesses' transport activities, responsible for ensuring their businesses comply with the HVNL. Rather than focusing on the business' liability as a whole, section 26D allows each executive to be held independently liable where they fail to discharge their obligations with due diligence. The intended result is that all levels of a business are attentive to and cooperating to meet the requirements of the HVNL.
Exercising 'due diligence'
The executives' duty in section 26D refers to the term 'due diligence' to describe the minimum standard of behaviour that the HVNL imposes on executives.
To discharge these obligations, executives are expected to have an ongoing understanding of their businesses' transport activities, legal obligations and the associated risks related to those activities. They are also expected to ensure that their businesses are equipped with appropriate resources to eliminate or minimise those risks, to implement processes to address safety hazards, to comply with the business' primary duty and to report incidents and that those measures are effective.
Actions executives can take to comply with the executive duty obligation
- Learn about their business' obligations under the HVNL and understand what they mean for their business.
- Ensure their business has a system that identifies, assesses and manages risks in respect of safety duties and transport activities.
- Ensure their business implements a reporting system for employees and other CoR parties to notify them of HVNL breaches.
- Keep informed about HVNL breaches and remedial actions if they occur.
- Ensure their business has appropriate equipment and procedures to comply with its HVNL requirements, this includes loading restraint procedures and measures to accurately weigh loads.
- Ensure their business provides training and instruction to employees and contractors on their HVNL obligations and steps to achieve compliance. This should include role-specific training. For example, providing schedulers and managers with additional training on preventing situations where drivers are asked or directed to breach fatigue requirements. Other training could be on work and rest time requirements and how to detect signs of fatigue.
- Executives should ensure their businesses regularly review their risk assessment, training and reporting systems to ensure they are working effectively.
Tell-tale signs that executives are not complying with their duty
- Delegating their duties to others such that they have no knowledge of systems implemented by their business to comply with HVNL obligations.
- Repeat offences by the company and its employees tend to indicate a systemic failure starting from the executive level down to the operational levels of the business.
- Limited or no training to employees on their obligations under the HVNL. Training employees can be a costly process which often requires approval from the executive and managerial levels of businesses. The absence of it suggests that executives are not discharging their obligations properly.
What if executives breach their duty?
The maximum penalty for a contravention of section 26D depends on which safety duty the executive has failed to ensure the business is complying with. For example:
- if the failure relates to a breach of the business' primary duty under section 26C, then the relevant maximum penalty would be $300,000 or five years imprisonment or both
- if the executive failed to cause its business to comply with the general safety requirement not to use an unsafe heavy vehicle, then the maximum penalty would be $6,000
- if the executive failed to ensure that its business had a system for training or checking that speed limiters are not tampered with, then the maximum penalty would be $10,000.
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.