Earlier this year, the National Transport Commission (NTC) released an Issues Paper which dissects and analyses the regulatory style and structure of the Heavy Vehicle National Law (HVNL).
The Issues Paper is the first step for the NTC’s review of the HVNL and discusses the regulatory foundation of the HVNL. The Issues Paper looks at the assumptions underpinning the existing law before and sets the framework for further issues papers to be released which are specific to particulars areas of the Chain of Responsibility (CoR).
The NTC’s Issues Paper
There are different principles which underpin government regulation.
Firstly, under prescriptive or "rules based" regulation the government is responsible for identifying risks and prescribing specific risk treatments. It leaves the roles of risk identification, analysis and controls with the government, with regulated parties required to apply the controls i.e. the government says what parties to the CoR can or can’t do.
Secondly, under performance-based regulation, the government is responsible for identifying risks and setting commensurate performance standards for risk treatments. An example of such regulation is the National Heavy Vehicle Regulator’s (NHVR) Performance-Based Standards Scheme, which is designed to help parties in the CoR develop innovative ideas for vehicle design which can improve productivity and achieve safer performance.
Thirdly, a risk-based regulatory framework focuses on risks associated with non-compliance with legal rules, rather than the legal rules themselves. More specifically, the regulator identifies and assesses the risk associated with non-compliance by a particular regulated entity and/or with a particular obligation or group of obligations.
The NTC argues that it is this approach which best makes use of limited public resources and focuses on regulators’ efforts on harm minimisation.
The crux of the Issues Paper is that the best form of regulation is a well-targeted risk-based regulation compared to alternative regulatory principles such as prescriptive regulation.
Why a risk-based regulation?
The aim of all regulation is to minimise the use of public resources while at the same time ensuring that harm is minimised as much as possible. Increasingly, governments are expected to do more with less and avoid regulatory burden on the free-market, while also delivering positive outcomes.
A risk-based approach to regulation centres on the principle that regulation should target the most significant risks to safety. The Issues Paper asserts that, "Risk-based regulation focuses on ‘harm prevention and the promotion of outcomes, and choosing the appropriate instruments to achieve performance’."
Risk-based regulation is the preferred regulatory concept adopted across Australia.
In March 2014, the Australian government released a Guide to Regulation, which endorsed a risk-based and outcomes based approach to regulation. The federal government’s position was clear – cutting existing red tape and limiting the flow of new regulation is a high priority.
With that background, New South Wales introduced the Quality Regulatory Services (QRS) Initiative to assist regulators to implement regulations which are ‘easier and less burdensome for business[es] and the community’ through a risk-based approach to prioritise effort in assisting compliance, and identifying and enforcing instances of non-compliance.
The Queensland and Western Australian governments have released their own Guide to Better Regulation and Service Priority Review, respectively, which consider that a risk-based approach to regulation should be adopted by all government agencies.
In October 2016, the NSW government released a guidance document for regulators which determined that regulators were:
Risk-based approach to compliance?
According to the Issues Paper – no, or at least not as much as it should.
The Issues Paper determines that the HVNL is not risk-based and contains inconsistent rules and regulations that are disproportionate to the risks it seeks to manage.
It argues that the HVNL does not sufficiently target the most significant risks to safety in the heavy vehicle industry. The HVNL does not expressly address risks directly related to driver competence, fitness for duty and authorisation which are integral to driver safety and does not respond proportionally to the risks it seeks to manage.
The Issues Paper also sees the HVNL as being highly prescriptive with almost two-thirds of the HVNL containing prescriptive provisions which focus too heavily on administration instead of outcomes.
The Issues Paper finds that one of the big problems with the HVNL is that the legislation is "paper heavy" and that the legislation does not adequately incentivise the industry to adopt advancing technologies such as fatigue monitoring devices and telematics.
Questions around what documents need to be kept, what needs to be produced and what documents CoR parties need to ask from their counterparties are often raised in relation to HVNL compliance. It is this area where the HVNL fails to adhere to a risk-based approach to compliance and is instead fairly prescriptive in its requirements.
The time for submissions on the Issues Paper has now closed, however the NTC has begun to roll other new issues papers in relation to safe practices, access to suitable routes and effective fatigue management which are all still open for submissions should readers wish to be heard on these issues.
Authors: Geoff Farnsworth
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.
Published by Geoff Farnsworth