CoR means all parties in a supply chain are required to implement positive actions to prevent breaches of the law relating to speeding, fatigue, mass limits and load securing. The aim of CoR is to make sure everyone in the supply chain takes their fair share of responsibility for ensuring breaches of the road transport laws do not occur.

If your business consigns, packs, loads or receives goods, you could be held legally liable for breaches of road transport laws. At stake are civil and criminal liability as well as reputational damage.

Companies cannot ‘contract out’ their CoR obligations, no matter what their industry sector or part of the supply chain.

The concept of a ‘chain of responsibility’ began in the mid-2000s, when, for the first time, all parties in the road transport supply chain were made liable for breaches. Since then, millions of dollars in fines have been awarded in prosecutions.

CoR is embedded in the Heavy Vehicle National Law, a uniform heavy vehicle code which applies in all states (with the exception of Western Australia and the Northern Territory).

It describes a series of obligations relating to heavy vehicle road transport and the people who are responsible for ensuring those obligations are met, and who will be liable for breaches.

While truck drivers, owners and operators will still be responsible for compliance and liable for breaches, the concept of the Chain of Responsibility is that others in the logistics chain also have a role to play in ensuring good behaviours become culturally ingrained.

Examples of potential breaches include:

› Responsibility of a warehouse operator

(and its directors) or loading manager

for overloading of vehicles;

› Responsibility of a retailer (and its directors)

for speeding if its contractual arrangements

mean that vehicles have to speed to comply

with delivery schedules;

› Responsibility of a manufacturer (and its

directors) for fatigue due to a facility’s

hours of operation.

Moreover, liability will be strict, unless you can demonstrate that you took ‘all reasonable steps’ to prevent a breach occurring.

The obligation to take ‘all reasonable steps’ begins with the Board of Directors. Boards of companies who use or operate logistics services must understand what their company’s obligations under the CoR are, and must put in place appropriate internal and external means for monitoring compliance and dealing appropriately with breaches.

EDITION 1 - FEBRUARY 2015

CHAIN OF RESPONSIBILITY EXPLAINED

STRENGTHENING THE SUPPLY CHAIN

WELCOME Welcome to the first edition of Strengthening the Supply Chain; a new information bulletin on Chain of Responsibility (CoR) by the Australian Logistics Council.

ALC is the peak industry body for Australia’s logistics industry, representing the major Australian logistics supply chain customers, providers, infrastructure owners and suppliers. A key ALC objective is improving safety and compliance with CoR laws.

Your feedback on Strengthening the Supply Chain is welcome. Please send questions and comments to: StrengtheningThe Chain@austlogistics.com.au or contact ALC on 02 6273 0755.

AUSTLOGISTICS.COM.AU

INDEX:PAGE 1 Chain of Responsibility Explained

PAGE 2 Important regulatory changes

PAGE 3 National Logistics Safety Code of Practice

ALC Supply Chain Safety and Compliance Summit

PAGE 4 Review of the NLSC

ALC Safety Committee

ALC Code for Tankers in the Petroleum Industry

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STRENGTHENING THE SUPPLY CHAIN

Important Regulatory Changes The Heavy Vehicle National Law is constantly changing and so it is important that you keep abreast of the changes so that your business is not caught short.

A number of key regulatory initiatives in relation to CoR are currently being progressed by governments, and by federal and state regulators.

These matters are not confined to heavy vehicle operators – all parties in the supply chain need to be aware of these possible developments and changes, and to understand how they may potentially impact on their business.

General Duties The National Transport Commission has published a discussion paper on possible changes to the duties imposed on those involved in the Chain of Responsibility.

Four options are proposed:

1. To create an overarching duty of care broadly across parties and

focusing on safety outcomes, much like those imposed on people

conducting a business or undertaking under occupational health

and safety law.

2. To impose more specific duties on people conducting a transport

undertaking should ensure that laws with respect to mass, dimension

and loading and speeding are not broken.

3. To create additional obligations in the Heavy Vehicle National Law.

4. No change to the law, with attention focussing on more guidance

and education on the obligations of parties and conducting more

investigations of CoR breaches.

Irrespective of the option ultimately adopted by the COAG Transport and Infrastructure Council, additional guidance to help people comply with the law will be developed.

So as to ensure that any changes to chain of responsibility laws will actually work, ALC’s submission suggested that any change to duties will need to be carefully drafted and that any new proposal should be circulated to industry for comment prior to being submitted to government. The ALC Submission is available on the ALC website www.austlogistics.com.au

Heavy Vehicle Road Worthiness The National Transport Commission and the National Heavy Vehicle Regulator will be developing the Heavy Vehicle Roadworthiness Program during 2015 and 2016. It will set up a national system based upon a risk-based approach with the aim of assuring the roadworthiness of heavy vehicles used on Australian roads.

A consultation regulatory impact statement has been published, which proposed four options ranging from taking no action to quite intensive regulation, with the preferred option consisting of a package including:

› a possible change to chain of responsibility laws  to create a duty to

take reasonable steps to ensure that business practices will not cause

a heavy vehicle to be used on a road in a condition that is unsafe,

unroadworthy or non-compliant with vehicle standards; and

› a proposal that will allow a new power to permit the National Heavy

Vehicle Regulator to make aspects of the NHVAS maintenance

management accreditation mandatory for some classes of vehicles or

operators based on risk or operator roadworthiness performance.

ALC will be making a submission on the RIS on behalf of its members.

Governments have also agreed that the National Law will be amended in 2015 in a way that will change how modified heavy vehicles and vehicles subject to defect notices will be regulated, as well as amending the penalty levels for some of the penalties contained in the Heavy Vehicle National Law.

Executive Officer Liability In 2015, there is also expected to be changes to the laws that make board members and senior managers liable for offences under the Heavy Vehicle National Law committed by their companies.

How these laws will change will become clearer over the next few months. ALC will advocate that only those who could reasonably influence events should carry liability, and argue against unnecessary duplication and regulatory options which are overly prescriptive.

ALC Submissions can be accessed at www.austlogistics.com.au

› Executive Officer Liability Project – Stage 2 – 4 September 2014

›Executive Officer Liability – 30 July 2014

Further information will be provided in future editions of Strengthening the Supply Chain.

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STRENGTHENING THE SUPPLY CHAIN

National Logistics Safety Code of Practice ALC has developed the National Logistics Safety Code to assist participants to manage their obligations under CoR laws through practicable and enforceable guidelines across the entire supply chain. NLSC could also be used as evidence that ‘all reasonable steps’ were taken to prevent a contravention of CoR laws.

The NLSC sets out participants’ responsibilities when they control or influence the movement of freight, and applies to issues such as speeding, fatigue, dimension, mass limits and load securing.

A number of industry sectors have developed their own specific codes under the NLSC:

›The Retail Logistics Supply Chain Code of Practice

›The Coal Seam Gas Logistics Safety Code

›The Australian Steel Industry Logistics Safety Code

›The Electrical Cable Logistics Safety Code

A code for tankers for the petroleum industry is being developed and will shortly be ready for testing (see separate story).

ALC Supply Chain Safety and Compliance SummitPlanning is underway for the 2015 ALC Supply Chain Safety and Compliance Summit, to be held at Australian Technology Park, Sydney, on 26-27 August 2015. One of the key messages to come out of the 2014 Summit was the need for a greater focus on practical information and advice, so in 2015, ALC is expanding the summit to include more workshops.

The 2014 Summit, which attracted around 250 delegates, identified four key themes:

› Strengthening and Streamlining the ALC Codes

› Increasing Awareness of Chain of Responsibility across the supply chain

› Sharing safety and compliance information among industry partners to create a stronger, safer and more compliant supply chain.

› More efficient use of technology, such as telematics, to assist logistics companies to meet their Chain of Responsibility obligations

ALC is currently progressing many of the actions identified at the Summit, including:

› Additional training sessions have been held on meeting load restraint requirements

› A new transport app is being developed which will share safety and compliance information among industry partners to create a stronger, safer and more compliant supply chain.

› Analysing steps to improve auditor consistency, which was part of the NLSC audit (see story below)

› Working with ALC members to improve information sharing, with a focus on sub-contractor management

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STRENGTHENING THE SUPPLY CHAIN

Review of NLSCALC recently commissioned a review of the NLSC by Global-Mark Pty Ltd.

The review found that the development and implementation of the industry codes within the NLSC has improved awareness of safety and resulted in better safety outcomes. The report noted a number of strengths in both the management of the Code and the ALC audit program. It did, however, also identify a number of areas where processes or documentation could be strengthened – all of which are being reviewed and actioned by ALC.

ALC Safety CommitteeThe ALC Safety Committee, chaired by Ingilby Dickson, General Manager, Supply Chain and Logistics at Bluescope Steel, is responsible for setting ALC’s policy and direction in regards to Chain of Responsibility and the National Logistics Safety Code. The Committee, which includes representatives from each of the NLSC’s constituent codes as well as ALC Members, takes the lead on promoting the adoption and development of supply chain logistics safety best practices through the ALC National Logistics Safety Code.

For more information on the ALC Codes of Practice, visit www.alcsafety.com.au or contact:

Mr Peter Elliot, ALC Program Manager Safety Peter.Elliot@austlogistics.com.au Phone: 02 6273 0755 Mobile: 0409 915 138

ALC Code for Tankers in the Petroleum Industry A draft Code of Practice is being developed under the National Logistics Safety Code for tankers in the petroleum industry. The next step will be to test it in the supply chain.

The code will provide guidance to the consignors, consignees and transport providers to help them meet their legal obligations in the oil industry (petrol, diesel, lubricant and bitumen) and in the liquefied petroleum gas industry (propane and butane).

Under the proposal the code will use the three-level framework used in the Australian Steel Industry Logistics Safety Code

The code will address a possible order made by the Road Safety Remuneration Tribunal on road transport and distribution and long distance operations which may come into effect in 2015. The code will also address any issues identified by any order in the oil, fuel and gas sector.

SUITE 17B, 16 NATIONAL CIRCUIT, BARTON ACT 2600 | PHONE: (02) 6273 0755 | AUSTLOGISTICS.COM.AU

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