In this case study, we examine a recent undertaking our client entered into with a transport sector regulator. In a situation where the court processes may have resulted in substantial penalties, costs and time wasted, we worked collaboratively to reach an undertaking with the regulator that avoided this outcome and instead added substantial value to our client’s operations and longer-term potential.
Our client in this case was a waste management operations enterprise whose customers include households and large businesses.
It was alleged to have failed to comply with section 96(1)(c) of the Heavy Vehicle National Law (NSW) Act, which stipulates that “a person who drives, or permits another person to drive, a heavy vehicle on a road must ensure the vehicle, and the vehicle’s components and load, comply with the mass requirements applying to the vehicle, unless the person has a reasonable excuse”.
The alleged failure was a “severe risk breach”, for which the legislation prescribes a maximum penalty of $10,000, plus an additional maximum $500 for every additional 1% over a 120% overload.
Our client was served with a CAN to defend proceedings brought against it by Transport for NSW (TfNSW) at the Downing Centre Local Court.
It was alleged that the weight detected on an axle of the vehicle in question was overloaded by more than 25% in excess of the statutory limit of 9 tonnes, and that the vehicle’s gross vehicle mass was more than 2 tonnes in excess of the statutory limit of 15 tonnes.
Our team prepared an Enforceable Undertaking (EU), a legally binding commitment, which was submitted for consideration by the National Heavy Vehicle Regulator.
Our EU provided undertakings that would allow existing transport safety management systems at our client’s premises to meet Chain of Responsibility compliance requirements and a commitment to the identification, assessment and control of risks through a strict delineation of the weight of bins permitted to be carried by its various heavy vehicles.
The EU also specified the various enhancements of processes that were undertaken after the alleged contravention.
Several rectifications were made to enhancing our client’s systems that assess and control risks, including the re-training of all employees in regards to:
- The proper procedure for arranging for the accurate Heavy Vehicle to be sent for collection
- The proper procedure of weighing each axle group by utilisation of the Heavy Vehicle’s hydraulic arms before transportation of bins to waste facilities.
The EU contained several enforceable commitments offered by our client that included a commitment that the behaviour that led to the alleged contravention had ceased and would not reoccur, as well as a commitment to the ongoing effective management of public risk associated with transport activities.
Finally, the EU contained several other strategies that our client agreed to adopt. These included:
- The delivery of a training course in order to re-train all customer service representatives and management staff in the enhancements and modified processes across its operations
- The delivery of a training course in order to re-train all employees on the Chain of Responsibility obligations and responsibilities; and
- The issuing of a directive to all employees regarding the enhancements and rectifications to be enacted.
The Regulator subsequently accepted the EU and as a result, Transport for NSW withdrew the CAN and the formal proceedings, which allowed our client to avoid the severe monetary penalties for its alleged breach.
This case highlights the potential to organisations from enforceable undertakings and agreements with regulators. In most industries, a collaboratively crafted approach with regulators can avoid substantial costs, other types of penalties and unlock value through improved systems and processes.