Australia: Navigating the Heavy Vehicle National Law: Commercial considerations for directors, executives and compliance teams

Last Updated: 5 November 2018
Article by Michelle Taylor and Alice Blackburn

In brief - All parties in heavy vehicle supply chain share responsibility for safety of their transport activities

On 1 October 2018 significant amendments to the Heavy Vehicle National Law 2012 (HVNL) came into effect. There are no transitional provisions which means these changes apply now.

This update provides a snapshot of the amendments in effect, including a revision of the concept 'Chain of Responsibility' and the potential civil and criminal consequences that may flow from non-compliance, and the industries that are impacted.

Is your business involved in "transport activities"?

It is well understood that the "Chain of Responsibility" (CoR) concept drives the HVNL. The CoR places certain legal obligations on all parties in the transport and logistics supply chain to regulate the operation of heavy transportation vehicles in respect of: mass, dimension, load restraint, driver fatigue management, speed compliance and roadworthiness.

The CoR shifts liability from the traditional owner/operator paradigm to a shared responsibility on all parties in a supply chain who have control or influence over a heavy vehicle transport job. That is, the safety of transport and logistics activities is a shared responsibility by all parties in the CoR.

The amendments introduce a new concept of liability for "transport activities". This means that there is a primary safety duty for any activities, including business practices and making decisions, associated with the use of a heavy vehicle on the road. For example, this includes anyone who requests the delivery of goods or services by heavy vehicles.

This impacts companies, organisations, executives and managers in the following industries:

  • building and construction
  • mining and resources
  • energy, utilities and renewables
  • environment, waste and water management
  • local government
  • agriculture

Key changes to the Heavy Vehicle National Law up close

The amendments to the HVNL were triggered by the Heavy Vehicle National Law and Other Legislation Amendment Act 2016 (Qld) and Heavy Vehicle National Law and Other Legislation Amendment Act 2018 (Qld) (Amendments).

Change Summary

Proactive primary duty of care

Section 26C

The HVNL previously took a reactive approach to heavy vehicle incidents. That is, a supply chain operator could point to an example of what "reasonable steps" it had taken to avoid liability under the HVNL.

The Amendments impose a proactive primary duty under section 26C, which states:

"Each party in the chain of responsibility for a heavy vehicle must ensure, so far as is reasonably practicable, the safety of the party's transport activities relating to the vehicle."

"Transport activities" means any activities, including business practices and making decisions, associated with the use of a heavy vehicle on a road.

This duty is consistent with workplace health and safety (WHS) laws standard of "so far as is reasonably practicable" (not "reasonable steps").

For example, this amendment places a positive obligation on all parties in the CoR to ensure that heavy vehicle transport activities are being conducted with roadworthy vehicles.

Due diligence duty for executives

Section 26D

Section 26D imposes a due diligence obligation on executive officers to ensure that the transport or supply chain company complies with its primary duty under section 26C.

For the purpose of the Amendments, an "executive" is not just a director but any person who is concerned or takes part in the management of the corporation. This may expose executives to personal liability in circumstances where the corporation enters liquidation. The same applies for those who have control or responsibility over the company's compliance programs and procedures.

If an executive officer breaches his or her due diligence duty, they may be faced with either significant civil penalties or worse yet, criminal conviction, even if the company has not been proceeded against for, or convicted of, an offence relating to the primary duty.

Section 26D(3) lists a number of steps that are considered as "reasonable" for an executive officer to take, and include:

  • acquiring, and keeping up to date, knowledge about the safe conduct of transport activities
  • gaining an understanding of the nature of the legal entity's transport activities and the associated hazards and risks
  • ensuring that the legal entity has and uses appropriate resources to eliminate or minimise hazards and risks

Statutory shared responsibility in line with WHS laws

Section 26A

The safety of transport and logistics activities is a shared responsibility by all parties in the CoR. While the concept of a shared responsibility falls in-line with the standard imposed by WHS laws, the CoR creates a broader (and higher) responsibility.

Under WHS laws, responsibility falls on a party's workers, visitors and contractors.

However, parties in a supply chain who may not be physically present on-site may be captured by the CoR regime.

Prohibited requests or contracts

Section 26E

The HVNL prohibits a person from asking, directing or requiring a driver of a heavy vehicle or a person in the CoR, to do something which would have the effect of causing a driver or person in the CoR, to breach, for example, fatigue requirements or mass management systems.

This could include a request to deliver goods or cargo by a particular time or by stipulating a certain period of time to deliver a number of consignments, and incentivising that arrangement.

Contravening section 26E carries a maximum penalty of $10,000.

Penalties for non-compliance with primary duty of care obligation under the HVNL

The failure to comply with the primary duty of care under section 26C is an offence, which carries both pecuniary and criminal consequences. The maximum penalty for breaching section 26C varies depending on the culpability and recklessness of the offending.

For a corporation, the maximum range of penalties for a breach of section 26C are $500,000 to $3,000,000.

For an individual, they are:

  • $50,000 to $300,000, or
  • 5 years' imprisonment (only if the offending is in circumstances where the person does not have a reasonable excuse, engages in conduct related to the duty that exposes the individual to a risk of death or serious injury, and the person is reckless as to the risk), or
  • both financial penalty and imprisonment (only arises when the offending is in circumstances where the person does not have a reasonable excuse, engages in conduct related to the duty that exposes the individual to a risk of death or serious injury, and the person is reckless as to the risk)

While the extent and effect of the Amendments are yet to be tested and will inevitably develop, much will turn on the:

  • underlying policy objectives and drafting of the Amendments, and
  • expectations and standards of the Regulator

Exposure for directors, executives and compliance managers

The HVNL, as in force:

  • creates positive due diligence obligation on not only directors and executives, but also those in your organisation who have control or responsibility over the company's compliance regime
  • creates significant penalties for breaching or contravening the HVNL
  • imposes financial penalties if your organisation's contracts have the effect of causing fatigue to drivers of heavy vehicles, or fatigue to those within the CoR
Michelle Taylor Alice Blackburn
Transport and logistics
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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