ARTICLE
16 March 2025

CoR compliance in the construction industry

HR
Holding Redlich

Contributor

Holding Redlich, a national commercial law firm with offices in Melbourne, Canberra, Sydney, Brisbane, and Cairns, delivers tailored solutions with expert legal thinking and industry knowledge, prioritizing client partnerships.
Investment in CoR compliance and governance practices to mitigate this risk is money well spent.
Australia Transport

What is Chain of Responsibility?

The Chain of Responsibility (CoR) is part of a national heavy vehicle safety compliance framework. It applies to all parties having an interest in the transport of goods by heavy vehicle, including any person who consigns, packs/prepares, schedules, loads, carries, unloads or receives goods transported by heavy vehicle and anyone who operates a heavy vehicle or loading/unloading facility – even if they do not own or operate any heavy vehicle themselves.

In the construction sector, CoR obligations will apply to principals, contractors and subcontractors, purchasers and receivers of materials and operators of load-out/staging and project sites – in relation to any activity associated with the carriage of goods by heavy vehicle.

The governing principle is that all parties must ensure so far as reasonably practicable the safety of their transport activities and ensure that their requirements or conduct do not require or encourage any other person in the CoR to breach their obligations.

In addition, the laws impose a separate duty on executives to exercise due diligence to ensure that their business is discharging its CoR duties.

Why is CoR relevant to the construction sector?

CoR compliance is an essential component of any construction project involving a physical supply chain and heavy vehicle activities.

This sector is a key target for enforcement action, having been identified by the enforcement authorities as an industry with low awareness and limited compliance implementation.

Adding to the complexity in properly managing CoR compliance on construction projects is the routine engagement of subcontractors to perform all or part of the transport activities associated with projects, such as delivery of procured goods, materials and equipment; relocation of goods, materials and equipment between sites and the removal of soil and spoil.

How can you meet your CoR obligations?

All stakeholders involved in a project and who perform, control or influence the conduct of any transport activity must implement a risk and performance management framework under the CoR laws.

That framework must address your own performance (including training, performance monitoring and rectification) and, where relevant, the CoR compliance performance of contractors/subcontractors. In addition, the framework must provide for periodic executive compliance performance reporting.

In larger projects, project owners or principal contractors often implement a "CoR Standard" or similar within project tender arrangements. The "CoR Standard" sets out the minimum compliance standards and measures that other stakeholders must implement and demonstrate in order to be awarded work and which will be monitored throughout their performance on the project.

What happens if you get it wrong?

Breaches of the CoR are prosecuted as criminal offences. Liability for CoR breaches cannot be contracted out or passed on, but can be managed and avoided.

Maximum penalties are $3.98 million for corporations and $398,776 plus up to 5 years' imprisonment for individuals (i.e. executives). In addition, regulators can enter into enforceable undertakings with parties in the CoR, which can require significant financial undertakings by businesses – with two past examples requiring the construction business to invest $250,000 or more in CoR compliance initiatives to avoid being prosecuted.

So investment in CoR compliance and governance practices to mitigate this risk is money well spent.

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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