Tuesday, 11 February 2014

Submissions - The Australian Risk Policy Institute (ARPI)

The Review of the Road Safety Remuneration System

The Commonwealth Government has called for submissions on the Review of the Road Safety Remuneration System.
Due: 15 January 2014

ARPI considers that it would be desirable that policies to be pursued in meeting the objectives or a reduction in trucking related road accidents and the regularisation of driver terms and conditions should be consistent and mutually supportive.  While the existing scheme attempts to deal with both objectives, within the existing constitutional structure, this would ordinarily be more appropriately addressed through cooperative State legislative.  If the Commonwealth proposed to repeal the scheme, this might properly be deferred until States have an opportunity to legislate to deal with the issues noted below.
Simply put, we have a new scheme that's better than nothing. If it is to be repealed, for whatever reason, the vulnerabilities which exist because of systemic disregard for safety must be dealt with by the States. 
ARPI encourages the Commonwealth and its agents to expressly consider risk policy in its final report.


There are a lot of road accidents involving trucks (about 25% of all road fatalities).  Most of these occur on major highways.  Some of these can be attributed to poor road conditions, others to driver fatigue or mechanical failure.  At immediate risk of death or injury are truck drivers and other road users – and this risk is exacerbated by conditions of employment and usage that do not give appropriate regard to safety.
Employment/engagement arrangements in the trucking business are bifurcated.  On one hand are drivers employed by trucking operations and who are subject to ordinary industrial arrangements overseen by Fair Work Australia.  On the other hand are self-employed drivers, not employed by trucking operations but instead engaged on a job by job basis, and receiving remuneration according to the private contractual arrangements relevant to each job.  Self-employed drivers do not necessarily own their own vehicles and some of these, for all intents and purposes, have the same work schedules and working routine as employees. 

Within the industry, there has been concern about poor remuneration and conditions.  There is cogent evidence that drivers in both groups are sometimes placed under exceptional pressure to deliver – often involving the driver being indirectly required to break road rules to meet required deadlines. While ARPI is aware of the commercial risks that flow from failure to meet contractual deadlines, the safety of drivers and other road users should trump such commercial considerations.  With driver-owners, there has also been significant discontent with queuing systems, where these drivers may be subject to long periods of unpaid down-time.  Finally, there have been some shocking recent examples of trucking companies operating their fleets in poor or dangerous conditions.

Trucking operations and their clients, and state and commonwealth governments have been remiss in not addressing the serious systemic risks that have emerged in this sector.

In 2013 the Commonwealth created the scheme now under review with a stand-alone Tribunal to deal with these issues.  The legislation was made mid last year and the first order of the new Tribunal was made in December.  The order requires written contracts for all haulage.  Plans need to be developed for all 500km+ travels and there are new training requirements and documented policies (drug and alcohol).

The new scheme has been controversial.  ARPI understands that during passage of the legislation, the then Liberal opposition opposed the legislation.  Senator Abetz announced a review of the scheme on coming to office, noting concern that the scheme would not be effective in addressing safety issues within the transport industry.  He also expressed concern about the duplication and burden involved in the new scheme.  Worker representatives have arguing that dismantling the scheme will lead to a continuance of the existing rate of accidents.  This position depends in part on research showing an association between pay and conditions and road accident rates, the reduction of driver fatigue.  The Master Builders believes that the new scheme will adversely affect the costs of transport to and from building sites – and this may be indicative of the view held by the general retail sector.  ARPI would agree with them if the additional cost is unproductive, but to the extent it represent the real cost of operating safely within the road rules, ARPI would disagree.  The Independent Contractors Australia previously took wider exception to the scheme – arguing that it breached competition principles, could lead to price fixing, and result in increases in road transport costs.  It argued that “This is a recipe for complete confusion, and a bureaucratic shambles with overlapping authorities trying to work out what’s going on”. 
Objectives and Vulnerabilities
The stated objective of the scheme, and the initial actions of the Tribunal and stakeholders under the Scheme, have been to address systemic problems within trucking operations to minimise the involvement of trucks in motor vehicle accidents.  An additional objective of the scheme, is the improvement of conditions of those involved in trucking operations.  A link between both of these objectives is asserted by proponents of the scheme, but they remain quite separate objectives which are usually amenable to different legal and industrial policy approaches. 
ARPI starts from the initial position that a broad consideration of vulnerability defines the level of risk rather than the fragmentary consideration of specific instances of risk.  Accordingly, in considering this issue, ARPI has sought to understand the real risks and real consequences of accidents involving trucking operations, in the first instance at the level of those involved in such accidents (road users, including truck drivers) but equally looking at the upstream, downstream and knock-on effects of a failure to protect the vulnerabilities of all stakeholders in trucking operations (such as the impact of the policy on retailers or those responsible for funding road maintenance). 
In this regard ARPI notes that the issues of road safety and the terms and conditions of employees (but not owner-drivers) are the present responsibility of a number of state and commonwealth schemes dealing work place safety, heavy vehicle regulation, road maintenance programs and industrial schemes.  While the existing programs have relatively well defined areas of responsibility, the new scheme straddles all of these programs.  This may lead to duplication and confusion about legal obligations.

In considering systemic risk, ARPI considers that it would be desirable that policies to be pursued in meeting these objectives should be consistent and mutually supportive. 

ARPI notes that the two key objectives addressed by the scheme are significantly different.  In this respect ARPI makes the following general observations:
1.       The existing scheme attempts to deal with both objectives, at the same time.  However, in doing so, the Commonwealth has strayed from its ordinary constitutional responsibilities, exposing the scheme to downstream challenge and to possible conflicts with directions of other state and commonwealth agencies.  The Commonwealth has no direct power to deal with self-employed drivers or interstate road contracts (and relies, instead, on an indirect or implied conferral of power).  The constitutional responsibility to act in this area is instead a core responsibilities of the States.  Arguably the States have been remiss for not working together and dealing with the vulnerabilities in play as a result of trucking operations.  In relation to one-off projects, the States have demonstrated that they are capable of acting in concert to deal with complex uniform legal reform (the uniform defamation legislation is an example of one such success).  [ARPI notes that the authors of the Commonwealth Constitution foresaw the need for systemic cooperative action by State Governments across of wide range of policy areas such as this.  The Constitution requires the establishment of an Interstate Commission to develop consistent legislative responses to issues of joint concern - the failure to establish an Interstate Commission as required under the Constitution is a key systemic failure of federation.  ARPI notes that the failure to address this issue is another example of States not legislating cooperatively in the absence of a constitutional institution such as an Interstate Commission.]
2.       At the centre of the new scheme is a standalone Commonwealth tribunal.  Unlike State tribunals, Commonwealth tribunals are complex entities with limited self-enforcement capacity.  The first order of this Tribunal is interesting.  The requirement that all haulage contracts be reduced to writing addresses an important element of the accountability structure.  The requirement for a plan for long distance haulage similarly seems straightforward.  Both are important contributions to addressing the vulnerabilities noted above.  However, neither of these orders needed a Tribunal – both are ordinarily found as statutory provisions within the domestic law.  As noted above, this is within the clear legislative powers of the States acting in concert.

January 2014

Note that this submission reflects input from other ARPI members.

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