Enforceable undertakings – NHVR’s new approach to contraventions of the Heavy Vehicle National Law

One of the “hot topics” in heavy vehicle compliance is the National Heavy Vehicle Regulator’s (NHVR) new approach to enforcement and penalising contraventions of the Heavy Vehicle National Law (HVNL).

In a recent case, Laing O’Rourke Australia Construction Pty Ltd (LORAC) was charged by the NHVR for two severe breaches of mass requirements. Historically, this would attract the imposition of a strict penalty from the NHVR and, perhaps, may have involved the matter being contested in a court proceeding. However, upon a submission by LORAC to make an undertaking to resolve its business practices to mitigate against the risk of future breaches of the HVNL, the NHVR decided not to prosecute.

So, what happened in LORAC’s case and what will the NHVR take into account when determining whether the offence will be prosecuted, or whether they will accept an enforceable undertaking in its place?

LORAC’s case

Transport for New South Wales (TfNSW) (formerly Road and Maritime Services) charged LORAC with two offences in 2018 and 2019. It was alleged by TfNSW that:

1. on 16 October 2018 at 11:04am, a registered heavy vehicle operated by LORAC was weighed at Mount White on the Pacific Highway and the weight detected on axle group 1 of that vehicle was 7.88 tonnes, 21.2 per cent over the 6.5-tonne weight allowed
2. on 24 May 2019 at 6:42am, a registered heavy vehicle operated by LORAC was weighed at Kankool on the New England Highway. It was alleged that the weight detected on that vehicle was 26.92 tonnes, 34.6 per cent over the 20-tonne weight allowed.

Both of these were offences contravened section 96(1)(c) of the HVNL. TfNSW commenced prosecutions against LORAC on the basis of the above alleged contraventions.

In response to the prosecutions, LORAC requested, under part 10.1A of the HVNL, for the NHVR to accept an enforceable undertaking in lieu of a penalty.^[1]

What is an enforceable undertaking?

An enforceable undertaking is a written statutory undertaking or agreement by a person or a company that:

• proposes an alternative to prosecution for their alleged contravention under the HVNL
• is entered into voluntarily to take specified steps to address shortfalls in their compliance
• demonstrates to the NHVR the alleged offender’s ability to effect profound reform of their transport activities by implementing effective measures to improve the management of public risks and benefit the community in ways not achieved by other sanctions.

An enforceable undertaking creates substantial obligations for the person making it. In LORAC’s case, it committed to implement a national interventional Chain of Responsibility training program, to implement a national supply chain intervention program that extended the training program to its suppliers, and to engage a third-party auditor to monitor and provide substantive recommendations to their Safety Management System. These undertakings were estimated to cost around $249,500 – significantly more than the total penalty that would have been applied to LORAC.

Whether the NHVR accepts an enforceable undertaking instead of proceeding with prosecutions against a contravener of the HVNL is a matter of discretion for the NHVR. However, the NHVR must consider various factors set out against the NHVR Policy – Enforceable Undertakings.

The NHVR takes into account the following matters:

• the nature and extent of the act or omission alleged
• the person's compliance history
• whether the enforceable undertaking delivers benefits to the public beyond the Promisor's compliance with the law Proposing an Enforceable Undertaking
• the quality of the strategies proposed and the extent to which they are likely to achieve measurable improvements in heavy vehicle transport safety
• the benefits of the proposal to individuals who might be affected by a similar contravention
• the likely improvements in safety within the Promisor's business or operations
• the likelihood that the proposed undertaking will result in sustained improvement in compliance after its completion
• the person's ability, including their financial ability, to meet the terms of the proposed enforceable undertaking
• the significance of the commitment compared to the capability of the person
• the support the person has provided, and has committed to providing into the future, to an injured or affected person(s)
• input from injured and affected individuals
• the likely outcome should the matter be dealt with through legal proceedings
• reports or assessments of investigating or prosecuting agencies who have had conduct of the matter.

In LORAC’s case, the NHVR considered that:

• LORAC had not been the subject of an enforceable undertaking under the HVNL or otherwise
• LORAC had not been convicted of any offence under the HVNL
• prior to the proposal of further works, LORAC had already made significant inroads in rectifying their compliance and transport systems – which showed a commitment and willingness for positive change
• the three-tiered approach – the subject of the undertaking was considered to deliver benefits to the drivers, other parties in the chain of responsibility, the wider transport community and the broader community
• the value of the undertaking far exceeded the penalties that would have been imposed
• the undertaking is likely to achieve successful outcomes
• the commitment to deliver the undertakings was realistically achievable.

As a result, the NHVR preferred to accept the enforceable undertakings provided by LORAC (instead of proceeding with the relevant prosecutions against LORAC), as the undertakings were likely to achieve lasting organisational change within LORAC. As the NHVR further noted, this is a more beneficial outcome because the reforms subject of the undertakings proposed would not have been achieved in this case because they were not compellable by way of prosecution alone.

What does this mean for you?

LORAC’s case indicates that the NHVR is willing to take a pragmatic approach to enforcement. This is a good thing for both operators and the wider community. It ensures that, while offences under the HVNL are taken seriously by the regulator, the main goal of the legislation is still in the centre of the decision makers’ minds when considering the appropriate punishment – that is to make the heavy vehicle industry safer for both its operators, other people in the chain of responsibility and the general community.

The flexible approach to penalties provides for the intended outcome effectively and affords businesses the opportunity to ensure their business practices are up to par – without having a blemish on their records.

However, this is all in the hands of the contravening person. The NHVR will not suggest or solicit the undertaking. Remember, this is a voluntary promise and may only be initiated by the party to which it applies and not by the NHVR, notwithstanding that the proposal may arise as a result of a discussion between the party and the NHVR. The NHVR cannot even be approached to assist with drafting the undertaking. The person, or their legal representative, must do it at their own expense.

Furthermore, these undertakings, like LORAC’s, must be robust and detailed. Acceptance of the undertaking under the HVNL is not guaranteed.

Where a proposed undertaking is not accepted, the NHVR will not rely on the proposal as an admission against interest in a subsequent prosecution. While the submission does not permit a denial of guilt, it does not require an admission either.

Where there is uncertainty about whether there would be any likelihood of an undertaking being accepted – because of the business’ prior compliance history, for example – a preliminary enquiry may be made to seek the prospects of the application.

In any event, should you find yourself in the unfortunate position that LORAC found itself where it had breached the HVNL, your business can seek a present a robust set of systems in the form of an undertaking to avoid an adverse conviction and penalty.

Noting the regulator’s new approach to enforcement, this may present an opportunity for operators to modernise and update their approach to statutory compliance and ensure that the objectives of the legislation are being fulfilled – without being taken to the principal’s office.

Author: Nathan Cecil

^[1] For serious category 1 offences that are prosecuted under section 26F of the HVNL, a person cannot apply to have their penalty be commuted to an enforceable undertaking. These offences are those where a person, without a reasonable excuse, engages in conduct that exposes an individual to a risk of death or serious injury or illness.

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 article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Nathan Cecil

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