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Opinion: Assess and reduce risk

An outline of what the new chain of responsibility laws really mean

 

On October 1, new Chain of Responsibility (COR) laws will come into effect. They build on work health and safety (WHS)-style due diligence provisions.

In summary, the effect of the new provisions will be to impose a ‘duty’ on all the participants in supply chain to assess the risks associated with task performing and take steps to either eliminate or mitigate those risks.


Baroni helped explain what a director’s duties are in a comment piece he wrote for ATN earlier this year. Check it out here


Primary Duty

The current obligations are framed into a positive duty, which is similar to the duty contained in the WHS laws.

Each party in the supply chain will carry the burden of that duty. That duty will now be found in section 26C of the legislation and is expressed as follows:

  1. 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
  2. Without limiting subsection (1), each party must, so far as is reasonably practicable:
    • Eliminate public risks and, to the extent it is not reasonably practicable to eliminate public risks, minimise the public risks; and 
    • Ensure the party’s conduct does not directly or indirectly caused or encourage:
      • The driver of the heavy vehicle to contravene this Law;
      • The driver of the heavy vehicle to explain exceed a speed limit applying to the driver; or
      • Another person, including another party in the chain of responsibility, to contravene this Law
  3. For subsection (2)(b), the party’s conduct includes, for example:
    • The party asking, directing or requiring another person to do, or not to do, something; and
    • The party entering into a contract:
      • With another person for the other person to do or not to do, something; or
      • That purports to annul, exclude, restrict or otherwise change the effect of this Law.

It should be noted that, as a consequence of these amendments, Chapter 5 of the legislation will be completely omitted from the new legislation.

This will mean that provisions such as the current duty with respective business practices, for example contained in section 204 of the current legislation, will be omitted. So too will the “reasonable steps” defence. This means that the current test as to whether a participant in the supply chain took “all reasonable steps” to stop a breach occurring, will be replaced with, as noted above, a duty more in line with current WHS laws.

The new test will require a participant in the supply chain to adopt a forward-looking approach to take all reasonable steps, as far as reasonably practicable, to stop the breach occurring in the first place.

This test is somewhat different as it means that, for example, once a risk has been identified, a participant will be in breach unless they take “all reasonable steps, as far as reasonably practicable” to reduce or eliminate the risk that has been identified.

It should be noted that offences in relation to the primary duty have been divided into three distinct categories, which adopt the same approach as the WHS laws.

Therefore, an offence will be committed if:

  • The person has a duty under section 26C;
  • The person, without a reasonable excuse, engages in conduct related to the duty that exposes an individual to a risk of death or serious illness or injury; or
  • The person is reckless as to the risk.

Further, section 26D imposes a duty on all the executives of the company, which requires the executives to exercise due diligence to ensure that the company complies with the relevant duty.

The term “due diligence” is defined and includes taking reasonable steps:

  • To acquire, and keep up-to-date, knowledge about the safe conduct of transport activities;
  • To gain an understanding of the nature of:
    • the legal entity’s transport activities; and
    • The hazards and risks, including the public risk, associated with those activities
  • To ensure the legal entity has, and uses, appropriate resources to eliminate or minimise those hazards and risks; and  
  • To ensure the legal entity has, and implements, processes:
    • To eliminate or minimise those hazards and risks;
    • For receiving, considering, and responding in a timely way to, information about those hazards and risks and any incidents;
    • For complying with the legal entity’s duty under section 26C; and
    • To verify that relevant resources and processes are being provided, used and implemented.

Consequently, it is important that ‘executives’ understand they have non-delegable obligations which are same as those found in WHS laws.

Practical Implications

The amendments remove the detailed list of “reasonable steps” from the current law and basically replace them by imposing a duty on participants to ensure “safety so far as reasonably practicable”. This is now consistent with WHS laws.

The consequence of this amendment will mean that the primary duty holder is allowed a degree of flexibility in determining how it should comply with that duty.

However, this also means that the duty holder will have to have prepared some form of risk assessment, which identifies risks associated with performance of the task and what measures are put in place to minimise or eliminate that risk.

Maurice Baroni is a barrister at Denman Chambers

 

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