From 1 October 2018, a number of amendments to the Heavy Vehicle National Law (HVNL) will come into effect that significantly impact existing ‘chain of responsibility’ (CoR) duties and the overall regulatory framework.
These amendments are relevant to all parties in the CoR, which includes businesses that operate heavy vehicles over 4.5 tonnes and businesses that consign, pack, load or receive goods by these heavy vehicles.
For this reason, any business that plays a role in the CoR should carefully consider these amendments, what impact they may have, and take steps to ensure compliance with the new regulatory framework by 1 October 2018.
What is the HVNL?
The HVNL regulates drivers and off-road parties who influence the supply and logistics chain – this regulation is commonly referred to as the ‘chain of responsibility’.
The HVNL provides a single national law for the consistent regulation of heavy vehicle operations across most of Australia. All Australian states and territories, except Western Australia and the Northern Territory, are participating jurisdictions for the purposes of the HVNL and have adopted the HVNL as a law.
What are the amendments to the HVNL?
Broadly speaking, there are four key amendments to the HVNL which are expected to commence on 1 October 2018:
1. Primary duty - The amendments will impose a primary duty, similar to work health and safety, on a party to ensure, so far as is reasonably practicable, the safety of a party’s transport activities. Without limiting this general requirement, each party in the CoR must, so far as is reasonably practicable:
a. eliminate public risks and, to the extent it is not reasonably practicable to eliminate public risks, minimise the public risks; and
b. ensure the party’s conduct does not directly or indirectly cause or encourage:
i. the driver of the heavy vehicle to contravene the HVNL; or
ii. the driver of the heavy vehicle to exceed a speed limit applying to the driver; or
iii. another person, including another party in the CoR, to contravene the HVNL.
2. Shared responsibility - The safety of transport activities is an issue ‘shared’ between each party in the chain. The parties in the supply chain include:
a. an employer of the driver;
b. a prime contractor for the driver;
c. an operator of the vehicle;
d. a scheduler for the vehicle;
e. a consignor or consignee;
f. a packer of any goods in the vehicle;
g. a loading manager for any goods in the vehicle; and
h. a loader or unloader of any goods in the vehicle.
Any prosecution will consider the actions of each party in the supply chain.
3. Due diligence requirements for executives - Executives of entities that have a safety duty (being entities that have, among other duties, a primary duty under the HVNL) must take steps to ensure that the entity complies with that safety duty.
4. Specific prohibitions - The amendments introduce a number of specific prohibitions on asking, directing or requiring a party in the CoR to do something that the person knows, or ought reasonably to know, would have the effect of causing a driver to exceed a speed limit, or drive while fatigued or in breach of a work/rest hours requirement. A similar offence also exists that applies to contracts that would have the same effect i.e. contractually ‘compelling’ an offence.
Why is this important?
The amendments to the HVNL represent a significant shift in regulatory focus.
By way of example, under the current regime a party can raise the ‘reasonable steps’ defence if charged with an offence under the HVNL. The new regime removes the ‘reasonable steps’ defence and replaces it with a positive duty on each CoR party to ensure, so far as is reasonably practicable, the safety of the party’s transport activities relating to the vehicle.
Further, the maximum penalty for breaches of the HVNL is being significantly increased to $3 million for a corporation and $300,000 or 5 years imprisonment (or both) for an individual.
What should you do?
To prepare for the upcoming changes, you should:
1. Be aware of your obligations under the new regulatory framework and ensure that the right stakeholders (including contractors) are compliant with their new HVNL duties on, or ideally before, 1 October 2018.
2. Consider how these amendments impact existing procurement/contracting practice. In particular, does your organisation have sufficient controls in place to monitor and ensure that contractors will comply with its HVNL obligations? Further, does your organisation’s current audit and risk controls sufficiently address the new HVNL duties (particularly given the wide scope of the primary duty)?
3. Conduct due diligence on your commercial arrangements to ensure counterparties are required to ensure compliance with HVNL and that commercial agreements are compliant with the HVNL overall. For example, organisations cannot simply subcontract their obligations under the HVNL. In addition, organisations should carefully consider any existing contractual terms, or proposed contractual terms, to ensure that they are not captured by the specific prohibitions on ‘compelling’ a contravention of the HVNL.
4. If you are an executive, consider how you will comply with your due diligence obligations and whether your compliance with your due diligence obligations is best addressed as part of existing due diligence processes that may apply under other regulatory regimes (such as work health and safety).
If you have any questions relating to this article, please contact the authors: Jacqui Barrett, Partner- Commercial and Corporate; Aaron Dearden, Partner - Employment; or Stephanie Gribbon, Lawyer on +61 2 8267 3800.