Under the Heavy Vehicle National Law (HVNL), it is mandatory for businesses to have compliant 'business practices' in place. A party in the chain of responsibility may breach the HVNL if they fail to have these mandatory business practices, even where no incident or accident occurs.
Summary of mandatory 'business practices'
Under the primary duty contained in section 26C of the HVNL, parties in the chain of responsibility must ensure, so far as is reasonably practicable, the safety of the party's transport activities. 'Transport activities' means activities associated with the use of a heavy vehicle on a road and is defined to include conduct (such as consigning, packing, loading and receiving goods) and expressly includes a party's 'business practices'. 'Business practices' are defined to include:
- CoR compliance policies and working procedures
- CoR compliance induction and ongoing education processes
- CoR compliance assurance contract terms in every
- CoR compliance assurance systems
- CoR compliance performance reporting for executive officers.
The latter two aren't expressly included in the definition, but are requirements of the primary safety duty and referred to in the primary guidance material issued by the National Heavy Vehicle Regulator. These are the 'Big Five'.
Step 1: Develop a CoR compliance policy and procedure
The first step is to develop and implement a CoR compliance policy and working procedures within your business and between your business and every other party in the chain with whom you deal. A CoR compliance policy should set out a summary of the CoR obligations that are imposed within your relevant supply chain. It should also show how those obligations should be addressed by each relevant party and what might be done in the event that those obligations are not met. A copy of your policy should be provided to each of the other parties in the chain.
Step 2: Improve awareness and implement compliance training
People in your business cannot comply unless they know what is required of them under the HVNL. They also need to know how your business has resolved to manage its primary compliance obligations (i.e. as contained in your compliance policy and procedures). To do this, you need to roll out your compliance policy and working procedures within your business and supply chain. All CoR-facing staff and subcontractors should be provided with awareness briefings and training in your policies and procedures. Likewise, suppliers should be notified of your policies and working procedures that are relevant to them. General awareness and training should be refreshed periodically and a process should be put in place to ensure that all new staff and contractors are inducted.
Step 3: Include compliance provisions in your supply chain engagement documents and contracts
Your CoR compliance policy and procedures should be given legal force where possible. The best ways to do this is to include CoR compliance prequalification screenings into your supplier and subcontractor engagement process and include specific CoR compliance provisions in your supply chain contracts. All suppliers and subcontractors should be screened to ensure that they are aware of and have in place systems to manage their CoR obligations. Counterparts who can demonstrate this can likely be trusted to operate, with base level, ongoing performance checks. Counterparts who aren't able to demonstrate this can still be engaged, but may have to be subject to greater compliance management oversight and monitoring. In contracts with road transport supply chain participants, you should also include terms that require them to comply with the HVNL and your policy and procedures. Under the HVNL, these terms are called 'compliance assurance conditions'. You should reasonably detail them in your contracts and include penalty provisions that will allow you to withhold payment or suspend or terminate the contract if your counterparts do not comply with their CoR obligations. 'Compliance with all laws' type clauses have been held by the courts not to be sufficient.
Step 4: Implement compliance performance monitoring procedures
CoR compliance is not static. You will need to monitor your compliance policy, procedures and the compliance performance of suppliers and subcontractors to establish that they are being followed and compliance assurance conditions are being met. Your business should implement a system of internal and external compliance cross-checks to ensure that this is happening. All compliance issues should be logged, investigated and rectified or resolved. Compliance statistics should be analysed to identify non-compliance trends or gaps within your risk assessment, policies or procedures and these should be proactively addressed.
Step 5: Ensure a top-down approach to compliance
CoR compliance must occur from the top of the tree down to the roots. Your executive officer, directors and managers must all be involved and exercise oversight over your compliance framework. The executives have an independent duty under the HVNL to do so. In order for them to discharge their duty, the executive need to receive compliance reporting information. This will allow them to check how your business and your counterparts in the chain are performing and provide them with assurance that your CoR compliance system is functioning properly. It will also ensure that any repeat or significant non-conformance is being addressed at an operational level. Successfully designing and implementing the Big Five is essential in order for businesses to meet their primary safety duty and for the executive to meet their due diligence obligation.
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.
