30 April 2018
5 min read
#Transport, Shipping & Logistics
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In this article we look at some of the most critical compliance components of Chain of Responsibility (CoR) compliance performance reporting for executives.
Why?
Executive compliance performance reporting is one of our ‘Big Five’ key compliance measures.
Under the current Heavy Vehicle National Law (HVNL), executive officers of a corporation (directors and those concerned in the management of a corporation) can be personally charged, prosecuted and fined if a corporation commits a breach of the HVNL.
Under the mid-2018 amendments to the HVNL, executives (directors and those concerned in the management of a corporation, partners in a partnership and managers in an unincorporated body) will have a proactive duty to ensure that their business is doing everything reasonably practicable to avoid any CoR incidents. Under the new laws, executives can be personally charged, prosecuted and fined if their business is not proactively managing this risk – even though no CoR incident has occurred.
So, under both the current and new laws, executives can be held accountable if they are not properly managing business compliance.
As part of discharging that duty, executives have to be aware of the CoR risks faced by their business and what the business is doing to manage those risks. But that is only two-thirds of the pieces in the puzzle. The third piece is that executives must know whether the measures implemented are effective in avoiding or mitigating CoR risks. In order to complete the puzzle then, executives need to understand the compliance performance of the business, which is where executive compliance reporting comes in.
Without such reporting, executives will not be meeting their obligations. Under the new laws, executives could be fined up to $300,000 and jailed for up to five years for failing to meet their obligations.
What?
Executive compliance performance reporting must show the executive two things:
General health and performance
This level of reporting needs to show the executive that the business has in place an effective and complete CoR risk management framework. Reporting measures could include:
Specific insight into issues and trends
This level of reporting needs to show executives that the business is maintaining an active watch over the occurrence of CoR issues and incidents. Reporting measures could include:
It is important that ‘incidents’ are recorded, not just breaches. ‘Incidents’ are non-conformance issues identified and rectified before a vehicle hits the road. Although caught, they still identify a break somewhere in the Chain.
For critical breaches or incidents (e.g. involving injury), it is important that the executive have some details of the circumstances, due to their severity and impact on the business, third parties and/or public. For critical incidents, the executive must be better informed as they will be called upon to make more in-depth decisions in response.
It is also essential that some form of trend analysis is presented e.g.:
When?
Given that the executive have an active duty, in fact, a pro-active duty, to manage compliance, reporting needs to be timely and current in order to be able to be acted upon.
If the business has a safety or compliance group that sits under the executive and meets to consider CoR compliance performance monthly, then they can report up to the executive on a quarterly basis. If the business does not have such a group that meets monthly, the executive should consider the CoR compliance performance figures monthly.
However, there should be some elasticity or responsiveness in this time guideline and out-of-cycle executive reporting may be required where e.g.:
Author: Nathan Cecil
* A version of this article was originally published in CoR Adviser. This article is © 2017 Portner Press Pty Ltd and has been reproduced with permission of Portner Press.
Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.
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