Impact of Chain of Responsibility (CoR) Law Changes on...

Container Transport Alliance Australia (CTAA)

Impact of Chain of Responsibility

(CoR) Law Changes on Contractor

Management

Neil Chambers, Director

Container Transport Alliance Australia

Container Transport Alliance Australia (CTAA)2

Anyone who has influence is

responsible for safety

ConsignorPrime

contractorOperator Driver Scheduler

PackerLoading Manger

LoaderUnloaderConsignee

Contractor Relationship


Compliance components

© HoldingRedlich2016 3

Mass

Dimension

Load restraint

Fatigue

Speed

Vehicle maintenance


Primary Duty – A New

Direction in Legislation


Executive Officer Liability

© HoldingRedlich2016 5

Executive Officers are

required to exercise

reasonable diligence to

ensure that their corporation

does not commit a CoR

offence

Executive Officers = Directors

and any person engaged or

concerned in management

Executive Officer

Organisation

Operations

Internal Compliance Chain


Reasonably Practicable?

The likelihood of the risk occurring

The degree of harmWhat the person

knows about the risk

Ways to remove or reduce the risk & whether they are

feasible

Cost of modifying is proportional to the

risk

Reasonably practicable means something that is, or was at the time,

reasonably able to be done to ensure health and safety, while taking into

account and weighing up all relevant matters including:


Practical Impacts of

Primary Duty

• Proactive and preventative outlook

• Identify, assess and control risk

• Recognise obligations and requirements as ‘risks’

• Manage requirements with best practice

• Develop an assurance regime to ‘test effectiveness’ of system

1. Demonstration of compliance – including training / awareness

2. Monitoring, risk-based and interval audit regimes

3. Consultation with, clients, partners and sub-contractors


Compliance Framework

CoR compliance

Policy/procedures

Awareness/training

Contracts

Compliance monitoring

Executive Officer reporting


Future of CoR Investigations

Collaborative approach

where appropriate

Review of systems

Focus on business

practices and risk

management

Enforceable

undertakings

Information gathering

powers


New CoR Penalties

Category 3 – breaches safety duty

$50,000 Individual; $500,000 Corporation

Category 2 – risk of death/injury

$100,000 Individual; $1m Corporation

Category 1 – recklessness

5 years imprisonment, $300,000 Individual

$3m Corporation


Penalties – Wait There’s More!

• Individual - $300K + 5 years’ imprisonment

• Corporation - $3 millionPenalty

• UnlimitedCompensation

• Unlimited and usually far more than any penalty

Costs

• Unlimited / springboard effectConsequential loss/damage

• Importer liable for load restraint of goods manufactured/packed within shipping container by independent third party Chinese manufacturer

• Did not take all reasonable steps to exert influence and control over conduct of manufacturer

• Company fined $25K

• Directors each fined $4.5K

• Company ordered to payprosecution costs of $170K

• Company now faced withpersonal injury actions $3M+

Notaro v Futurewood & Ors


Remondis CoR Prosecution

Remondis contracted to Lake Macquarie Council

Remondis contracts Jet Group to transport waste

Jet Group vehicle weighed on each journey – WB

dockets inserted in invoices to Remondis – Jet Group

paid on weight

Despite WB dockets, Remondis failed to check vehicle

overloading by Jet Group

50 offences – overloading between 3 to 16 tonnes

Remondis argued reasonable to rely on Jet and

weighbridge operated by Lake Macquarie to ensure

loads legal

Court – every party in chain has joint and several duty

to ensure compliance

Court – critical to have active system in place to

manage risk …

Penalty – fine: $732,206 + costs: $250,000 = $902,206


Profile / Reputation

Impact of Chain of Responsibility (CoR) Law Changes on...

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