The hard road ahead: 'Due diligence' obligation under new 'chain of responsibility' regime

  • Health and safety has long been a significant issue for the Australian road transport industry.
  • To improve road safety, directors, officers and senior managers of Australian businesses that make use of heavy vehicles will soon be exposed to personal liability under the new ‘chain of responsibility’ laws that are set to commence in mid-2018.
  • Directors, officers and senior managers will face significant penalties and potential jail sentences if they fail to exercise due diligence to ensure the safety of heavy transport activities related to their business.

The Australian road transport industry is highly competitive and characterised by a significant number of operators, ranging from owner-drivers and small family businesses to national and multi‑national corporations. Small operators with one to two vehicles represent almost 90 per cent of all operators and account for approximately 75 to 85 per cent of turnover in the industry.1

Competitive and economic pressures mean there is an incentive for operators at the base of the supply chain to compromise on safety to meet the delivery and price requirements of customers at the top of the supply chain. These pressures contribute to poor safety outcomes: the road transport industry has a high rate of serious injuries and fatalities (nearly twice the average across all industries).2 Safe Work Australia reported 535 worker fatalities in the road transport industry between 2003 and 2015, accounting for 17 per cent of all work-related deaths in Australia during that period.3

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