Opinion: Exercise control over supply chain links

By: Nathan Cecil


Compliance assurance conditions in supply chain contracts are broad and need managers’ attention

Opinion: Exercise control over supply chain links
Nathan Cecil says the HVNL approach to COR compliance in the supply chain often leaves many parties scratching their heads.

 

Section 620 of the Heavy Vehicle National Law (HVNL) sets out some examples of steps that you can (and should) take to satisfy your general Chain of Responsibility (COR) compliance obligation to take all reasonable steps to avoid any breach of the HVNL. 

Two of those recommended steps relate to exercising supervision and control over other parties in the chain.

In this article, we look at how you can, and should, work those supervision and control mechanisms into your contracts throughout the supply chain.

Contracting for the ‘all reasonable steps’ defence

Readers know that all COR participants in the supply chain must take ‘all reasonable steps’ to avoid any COR breach of the HVNL.

However, because supply chain functions, operations and the conduct of the heavy vehicle road transport tasks are conducted in any number of ways, there is no fixed and final definition of what will constitute all reasonable steps within the HVNL.

Instead, the HVNL mandates that parties in the chain should conduct an assessment of the COR compliance risks arising within their supply chain. Then they should implement suitable control measures to avoid or mitigate those risks.

This approach is said to give parties in the chain the flexibility to manage their compliance. In reality, it means parties in the chain are left scratching their heads and wondering what they are required to do and when they have done enough.

Thankfully, the HVNL does include some guidance as to the kinds of assessments and control measures parties could consider undertaking and implementing.

Suggested control measures

Two of the suggested control measures contained in s 620 of the HVNL are that you should take steps to:

  • exercise supervision or control over others involved in activities that could lead to a contravention; and
  • include compliance assurance conditions in relevant commercial arrangements with other responsible persons for heavy vehicles.

So, parties are required to exercise supervision and control over other parties involved in the supply chain whose actions could impact the conduct and/or safety of the road transport.  

One of the ways in which you could do that is to include terms in your contracts with those parties that require them to comply with the HVNL.

You could also provide notice of, and guidance in relation to, compliance with your COR compliance policies and procedures. 

Who is a ‘responsible person for a heavy vehicle’?

Section 620 says that "compliance assurance conditions" should be included in contracts between any "responsible persons for a heavy vehicle". These include the:

  • owner, driver, operator of a heavy vehicle;
  • person in charge of a heavy vehicle, its garage address or the base of its driver;
  • person appointed to certify and monitor compliance under one of the heavy vehicle accreditation schemes;
  • person who provides an intelligent transport scheme in relation to a heavy vehicle;
  • person in charge of a place entered by an authorised officer;
  • consignor of goods for road transport;
  • packer of goods in a package, pallet or freight container for road transport;
  • person who loads goods or a container for road transport;
  • person who unloads goods or a container containing goods consigned for road transport;
  • person who receives goods packed outside Australia in a freight container or other container or on a pallet for road transport in Australia;
  • owner or operator of a weighbridge or weighing facility used to weigh the vehicle, or an occupier of the place where the weighbridge or weighing facility is located;
  • responsible entity for a freight container (a consignor, person who arranges road transport or offers the container for transport or the importer);
  • loading manager or person who controls or directly influences the loading of goods in a heavy vehicle for road transport;
  • scheduler of a heavy vehicle; and
  • employer, employee or subcontractor of any of the above.

A shorter way of saying the above is that you should include compliance assurance conditions in your contracts or terms and conditions with everyone.

This will include all other parties in the chain with whom you deal, such as materials/products suppliers, manufacturers, importers/exporters, logistics providers, warehouse operators, operators of loading/unloading and distribution centres, road transport operators and consignors/consignees.

Nathan Cecil is a partner at Holding Redlich.

Read the full column in the February edition of ATN.

 

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