Meeting corporate obligations along the supply chain is not just good practice - when it comes to workers' safety, it’s the law. This came sharply into focus last week as raids and prosecutions of transport companies operating in NSW and Victoria generated substantial media attention.
All this comes less than two weeks after the first ABC Four Corners report for 2014; an exposé on unsafe practices and systems of work in the heavy vehicle industry that revealed problems relating to corporate governance, legal compliance and enforcement.
Anyone with corporate governance responsibilities should take note. Neither the governance issues at the heart of this problem, nor the ability to prosecute over unsafe work practices in the supply chain, are confined to the transport industry.Ensuring the safety of workers
Specifically, important parallels can be drawn between Chain of Responsibility (COR) laws (operating in the heavy vehicle industry since 2003) and the new Work Health and Safety legislation (WHS Act) that commenced in QLD, NSW, ACT, Commonwealth and NT jurisdictions in 2012 and in TAS and SA in 2013. Both sets of laws justifiably require those who direct work to ensure the safety of workers performing that work. The WHS Act makes businesses responsible for the health and safety of workers they engage and those whose work they influence or direct.
A “worker” is defined as any person who carries out work for a business, including as an employee, contractor, subcontractor, self-employed person, outworker, apprentice or trainee, work experience student, employee of a labour hire company placed with a “host employer” and volunteers (WHS Act 2010).
Similarly the National Heavy Vehicle Regulator suggests the introduction of COR legislation means:
for the first time, all parties in the road transport supply chain – the consignor, consignee, packer, loader and scheduler, drivers, owner-drivers and operators as well as directors, partners and managers – could be held responsible for their actions (or inactions) relating to breaches of the road transport, fatigue, speed, mass, dimension and load restraint laws.
Last week’s Four Corners investigation of heavy vehicle safety suggested a need for greater enforcement of COR provisions. While mechanisms for holding transport companies to account for unsafe work systems and practices exist, financial and custodial sanctions appeared to be falling only on the drivers.
Drivers reported being instructed to meet “impossible deadlines” or risk losing work. Yet they, not the companies allocating the schedules, were the ones penalised for speeding and log book infringements. Four Corners confirmed 45 drivers for Blenners Transport had paid fines exceeding A$65,000 for more than 150 offences, while the company directing the work not only escaped prosecution but had its fatigue management accreditation renewed. This raised serious questions about the operation of COR enforcement and accreditation processes.
Wednesday’s raid on the Coles depot by NSW Police and RMS inspectors highlighted a potential double standard. Reports claimed the raid identified “13 minor defects, nine load restraint breaches, one major defect, one weight breach, two unregistered vehicles and other issues…” and as a result, says the RMS website, “Coles may be served with improvement notices”.
Had these same infractions been identified once trucks had left the depot, the drivers would undoubtedly face immediate and significant fines, not improvement notices (e.g. load restraint fines vary from A$825 to $55,000 per offence) - despite the trailers usually being loaded and sealed before the drivers arrive to collect them.
Legal advisors suggest that while regulators can charge anyone in the COR, in practice they tend to prosecute the vehicle’s driver. The driver is then forced to appeal the charge by nominating the responsible party. This puts drivers in an unenviable position, particularly those precariously employed as casuals or sub-contractors, because they risk jeopardising future work. Importantly, the significant increase in infringement penalties under the national heavy vehicle laws (introduced this month) may mean drivers will lose either way.
A turning point?
New WHS laws allow those directing work along any supply chain to be held accountable for the safety of people performing that work. However, (COR) history suggests that whether they will be held accountable may depend on the political will of governments to adequately resource and support inspection and enforcement activities.
Efforts by NSW police, NSW RMS and VicRoads to direct attention “up” the transport industry supply chain are increasingly visible and may signal a turning point in corporate accountability for worker safety. At the very least, it puts those in charge of resourcing, maintenance, scheduling and procurement on notice.
Sharron O'Neill has received safety governance research funding from CPA Australia, the Institute of Chartered Accountants (ICAA), the Safety Institute of Australia (SIA) and Safe Work Australia.