Amendments to the Heavy Vehicle National Law

Heavy Vehicle National Law (HVNL) is currently in place in every Australian State except Western Australia.

From 1 October 2018, amendments to the HVNL will impose new Chain of Responsibility (COR) obligations upon every party in the heavy vehicle transport supply chain, not just the drivers of heavy vehicles.

The COR imposes a non—transferrable primary duty, which cannot be delegated via contract or otherwise, which extends legal liability to all parties who have control or influence over the transportation of goods in the heavy vehicle supply chain (within the scope of the existing HVNL) including corporations, employers, prime contractors, vehicle operators, schedulers, consigners, consignees, receivers, loaders and unloaders.

The amendments to the HVNL will mean that parties to the supply chain will have a positive duty to eliminate and minimise risk by doing everything ‘reasonably practicable’ to ensure that transport—related activities comply with the HVNL and Work Health and Safety laws.

Here’s a short 2-minute video that provides brief overview of COR

For more information about COR, please Click Here

Who is Affected?

The Chain of Responsibility obligations are expected to impact over 165,000 businesses that use heavy vehicles in their supply chain.

The Chain of Responsibility amendments will also impose a primary duty upon company executive officers to exercise due diligence to ensure that a corporation complies with its duties under the Heavy Vehicle National Law Under its amendments, an executive officer may be found personally liable for Chain of Responsibility offences committed by employees, or the corporation, under the Heavy Vehicle National Law.

The penalties for breach of the new laws will be a maximum fine of $3 million for a company and a maximum fine of$300,000 or five years imprisonment (or both) for an individual.

It will be important for corporations to demonstrate the implementation of policies, procedures and training to effectively manage the risk of breaches of the Heavy Vehicle National Law within the corporation and throughout the supply chain.

 

Claims

In defending a claim for breach of the Chain of Responsibility, it will be necessary to provide evidence that a party did all that was ‘reasonably practicable’ to minimise risks and ensure safety. The factors such as the likelihood of the risk occurring; the degree of harm; the entity’s knowledge of the risk; ways to remove the risk and whether this is feasible, as well as whether the costs of removing the risk are proportionate will be consider when determining whether an entity has ensured safe practices.

Insofar as unintentional breaches of the Heavy Vehicle National Law are concerned, there are a number of liability policies that potentially provide cover to companies and their employees in respect of legal costs incurred defending a prosecution, and for civil fines and penalties that may be imposed. Such policies include management liability policies, directors’ and officers’ policies and standalone statutory liability policies.

Hence, Companies and relevant employees will need to review their liability policies and consider whether cover will be provided for legal costs incurred in defending a prosecution and/or for penalties that may be imposed under the new Heavy Vehicle National Law.

Importantly, an ’executive officer’ means anyone involved in the management of a corporation. It extends beyond directors and officers, as defined by the Corporations Act 2001 (Cth), to those who have the capacity to impact upon management decisions or exercise managerial discretion.

Cover will not be provided where criminal conduct is proven, or for criminal fines and penalties. Liability for civil penalties arising from acts or omissions that are intentional, deliberate, dishonest, fraudulent, grossly negligent or reckless will also likely be excluded.

 

Tips for Compliance

In light of the new laws, entities within the transport and logistics industry may wish to take the following actions to ensure compliance:

• Reviewing internal policies and procedures to ensure that other members of the supply chain are not incentivised to breach the Heavy Vehicle National Law
• Revising key commercial agreements to define the role of each entity within the Chain of Responsibility
• Introducing control measures, such as regular compliance monitoring and executive reporting, to ensure that breaches do not occur
• Developing Chain of Responsibility compliance policies (such as a Code of Conduct) or adopting the National Heavy Vehicle Regulator Registered Industry Code of Conduct
• Incorporating Chain of Responsibility obligations into employment contracts, such as an express clause requiring employees to comply the Chain of Responsibility legislation; and
• Providing training to employees to ensure they understand and comply with Chain of Responsibility

Further Information

The National Heavy Vehicle Regulator (NHVR) is Australia’s independent regulator for all heavy vehicles. Their vision is to have: A safe, efficient and productive heavy vehicle industry serving the needs of Australia.

The NHVR website provides comprehensive guidance and information, including:

• A Chain of Responsibility Gap Assessment Tool
• Fatigue Management
• Heavy Vehicle Confidential Reporting Line (HVCRL)
• Industry Codes of Practice
• Risk Management Steps
• Roles and responsibilities of each party in the supply chain
• Categories of breaches and penalties

 

Transport Industry Insurance

At Optimum Insurance, we make choosing an insurance policy easy, by providing an expert, tailored service to equip you with the right policies for your business and minimise your risk. For more information about Transport Industry Insurance and to obtain a quote, contact us online or call one of our friendly staff on 1300 739 861.