What is Compliance & Enforcement (C&E), what is Chain of Responsibility (CoR) — are they different or are they the same? Let’s dispel some myths: CoR is an alternate term for C&E, so why do we have different names?
If you want a short explainer, Urszula Kelly, Logistics Bureau’s Senior CoR Consultant, sheds some light on this matter and gives some tips on what other things to know and avoid.
However, in this article, we’re going to delve into the topic a little deeper. Effectively, the “Chain” in CoR explains how the legislation impacts industry. The “Chain” implies that if one link of the chain is affected, then all the links in the chain are affected.
As such, no longer is a driver out on their own if they have a road law breach — there is now a connection through the chain to all people along the chain who had some influence over the driver and the load carried. This means that drivers responsible for breaches are not the only ones held accountable; all parties in the transport supply chain share the responsibility.
Basically, what reasonable steps did all the parties in the chain take to ensure that the load and driver were legal on our roads?
From the diagram you can see that if the driver defaults and ends up with a road law breach, effectively all those in the chain right through to Director level can be held accountable for any action of the driver, and they will be required to show they have taken Reasonable Steps to ensure the driver did not breach road law.
What is Chain of Responsibility (CoR)?
Chain of Responsibility (CoR) is a significant law in Australia that ensures everyone involved in the transport chain is accountable for ensuring safety. Administered by the National Heavy Vehicle Regulator (NHVR) and part of the Heavy Vehicle National Law (HVNL), CoR applies to all parties who have control or influence over the transport of goods.
This includes consignors, packers, loaders, drivers, and consignees. The essence of CoR is that it requires all parties in the supply chain to take reasonable steps to prevent breaches of the HVNL and to ensure the safety of their operations. This means that safety is a shared responsibility, and everyone from the top down must work together to maintain compliance and protect the integrity of the transport chain.
Scope and Impact on the Heavy Vehicle Industry
But it does not stop there; other parties involved in the chain are also implicated. As a transport company you are affected, but the company you are carrying goods for can also be implicated. Even their suppliers could become part of the chain.
The heavy vehicle industry is subject to stringent regulatory compliance and responsibilities, particularly under the Heavy Vehicle National Law (HVNL) and work health and safety regulations.
For example, if you are contracted to carry goods for a large company both in and out of a site, you as a transport company are part of the chain; the company you are contracted to are part of the chain for goods they despatch from the site, but also for goods they organise to bring into the site.
Effectively, C&E/CoR is “umbrella” legislation that encompasses road rules in its own state — for example, fatigue: maximum work hours in NSW and Victoria are only 15, in Queensland it’s 16, and in WA it’s 17. Although the hours differ from state to state, the C&E/CoR legislation takes into account these variations.
Key Areas Covered Under C&E/CoR
There are ten prime areas covered, which are:
- Load restraint
- Mass management, including gross vehicle mass for vehicles exceeding 4.5 tonnes
- Dimensions
- Fatigue
- Speed control & management
- Drugs, alcohol & driver health
- Equipment suitability & maintenance
- Documentation & training
- Subcontractor/supplier control & assessment
- Operational facilities
These ten areas may be well established or not within a business, and many businesses consider themselves in full control of these areas. However, if an incident occurred and an investigation followed, could you say “yes” to the following questions if they were asked about the ten areas listed:
- Do you have a policy that covers “X” — show me?
- Do you have a procedure that covers “X” — show me?
- Have you implemented that policy and procedure for “X” — show me?
- Have you implemented active education for CoR — show me?
- Can you provide demonstrable documentary evidence of what you have done in 1, 2, 3 and 4 — show me?
Primary Duty and Executive Due Diligence
The primary duty under CoR is to ensure the safety of heavy vehicle activities over which a person or business has influence or control. This duty extends beyond just managing one’s own activities; it also includes ensuring that actions do not cause or encourage other parties to breach the law.
For instance, businesses must not incentivise drivers to speed or drive whilst fatigued. Executive due diligence is a critical aspect of this framework, requiring executives to exercise due diligence to ensure their business complies with its primary duty and other safety duty provisions of the HVNL.
This involves identifying and assessing risks, implementing controls to mitigate or eliminate those risks, monitoring and reviewing the effectiveness of these controls, and continuously improving the safety management system. By doing so, businesses can manage safety effectively and uphold their legal obligations.
Safety Management Systems (SMS)
A Safety Management System (SMS) is a formally structured document that outlines all identified risks and hazards, along with the practices and processes put in place to mitigate or eliminate them. Whilst the Heavy Vehicle National Law (HVNL) does not mandate an SMS, having one is highly recommended as it provides a straightforward way to meet primary duty obligations.
An effective SMS should include comprehensive policies and procedures for Chain of Responsibility (CoR) compliance, risk management, and incident reporting and investigation. By implementing an SMS, businesses can systematically manage safety risks, ensure compliance with safety laws, and create a safer working environment for everyone involved in the transport chain.
Establishing Effective Policies & Procedures for Safety Management Systems
When developing Policies & Procedures (P&P) to ensure safety, there are five areas which we need to focus on to prevent major pitfalls:
- The P&P themselves: to what level of detail should they go? If the P&P fail to have enough detail, then their impact may be too loose and not cover the legislation effectively. If they are too lengthy, they become a voluminous document that is never read, let alone used.
- The risk of making the P&P too specific and restrictive, which means that if a situation deviates from what has been prescribed, workers will become paralysed as they will not be able to make decisions on how to handle a situation.
- Not taking into account all the relevant groups. Under new legislation, a person engaged to complete a task on a site (including on a truck) will be deemed a “worker”, regardless of how they are engaged.
- P&P of intent rather than action: this habit is common with many companies, which develop P&P that look great on the bookshelf but bear no resemblance to what actually happens within the business.
- Copying a P&P system from a “mate” or elsewhere in a business group, completing a “search and replace” on the business name and logos.
Golden Rules for P&P
- Know how your business actually works before you start
- You must be able to “map” your business processes
- Compare your actual processes to the CoR/C&E regulations and see where the gaps are
- Fix up the gaps in your business
- Write concise P&P to cover what you actually do
- Train “workers” on the actual application of P&P
- Do not get drawn into developing a complicated P&P system: keep it simple, keep it legal
Industry Codes of Practice by the National Heavy Vehicle Regulator
The introduction of CoR/C&E legislation and responsibility laws raises questions about ensuring compliance across the supply chain, particularly with subcontractors. The solution lies in industry Codes of Practice (CoP). A CoP ensures that common problems and fixes are shared, reducing cost and complexity.
The Refrigerated Warehouse & Transport Association (RWTA) has developed and had accredited their Code of Practice, allowing businesses to apply a common system regardless of size. This means all businesses have a common system, and all contractors — large or small — have a common code to follow.
Penalties for Non-Compliance
The penalties for breaches of the safety duty under CoR are stringent and comparable to fines under workplace health and safety laws. These penalties serve as a deterrent and a guide to courts, with maximum fines imposed only for the most severe offences. Individuals found responsible for a breach could face fines of up to $300,000 or five years’ imprisonment. Companies, on the other hand, could be liable for fines of up to $3 million.
Prosecutors need only establish that a business or an individual within it failed to take adequate precautions to avoid a foreseeable risk. This underscores the importance of proactive risk management and adherence to safety laws to avoid severe financial and legal consequences.
Driver Obligations under CoR
Whilst heavy vehicle drivers are not considered part of the chain unless they own the vehicle, they still have significant responsibilities under CoR. Drivers must adhere to safe driving practices and comply with their employer’s safety procedures. They should be aware of the safety risks associated with their transport task and take steps to mitigate or eliminate these risks.
Employers, in turn, must ensure that their drivers are well-trained in safe driving practices and possess the necessary skills and knowledge to perform their job safely. By fostering a culture of safety and compliance, both drivers and employers can contribute to a safer and more efficient transport chain.
Auditing and Accreditation
The Importance of Professional Auditing
The true purpose of an audit is to discover how the obvious and hidden components of your business match up to a standard. This is a highly technical and ever-changing area, and knowledge needs to be kept current at all times.
Who Should Be Audited for Primary Duty Obligations?
If you are a consignor or receiver of goods, you are directly involved in C&E, especially when dealing with heavy vehicles. Therefore, if you send or receive goods, it is a requirement that your part in the C&E chain is checked, audited, and verified to ensure compliance. This extends to light vehicles under 4.5 tonnes.
Audit Tools and Implementation
An audit tool converts policies and procedures into a usable checking system. It should include:
- Coverage of the ten primary points of compliance
- Detailed breakdowns of specific requirements
- Clear evidence requirements
- Numeric assessment capabilities
It is recommended that:
- External audits be conducted annually by independent auditors
- Internal audits be conducted quarterly using the same tools
- The audit tool aligns with external standards for consistency
Conclusion
Compliance with CoR/C&E legislation requires a comprehensive approach encompassing proper policies and procedures, industry codes of practice, and regular auditing.
Success lies in keeping systems simple, practical, and aligned with actual business operations, whilst ensuring all parties in the supply chain understand and meet their responsibilities.
