COSTLY COMPLIANCE: Steve Shearer said massive compliance units and systems are blowing out unnecessary costs significantly.
COSTLY COMPLIANCE: Steve Shearer said massive compliance units and systems are blowing out unnecessary costs significantly.

Compliance managers go too far with demands, says SARTA

THE SOUTH Australian Road Transport Association has gone on the offensive to quell what it described as an absurd level of interference by some compliance managers.

In a stinging Facebook rebuke, SARTA executive director Steve Shearer said a wide range of operators are reporting increasing demands from large corporate clients.

"This is reaching ridiculous proportions in some cases as the clients' respective heads of compliance build bigger and bigger compliance monitoring units and impose significant and utterly unjustified administrative and financial burden on their transport providers,” Mr Shearer wrote.

Mr Shearer said this issue is a massive and unintended consequence of last October's chain of responsibility amendments which now mean every party in the supply chain has a duty to ensure the safety of their transport activities.

Those changes were also accompanied by a significant increase in fines for breaches with companies now liable for a $3 million penalty and individuals $300,000 and/or five years in jail for the most serious offences.

Mr Shearer said SARTA led the way in its campaign some months ago to ensure there wouldn't be any unnecessary knee-jerk reactions from the industry.

In his statement he wrote that the NHVR, at SARTA's suggestion, issued a significant and very telling media release which made it very clear that:

1. Third parties are NOT responsible or liable for all aspects of your transport activities and operations, just their own activities; and

2. The liability of each and every party in the chain of responsibility starts and ends with their respective level of influence and control over the activity concerned; so

3. ANY CLIENT THAT INJECTS ITSELF INTO YOUR BUSINESS ACTIVITY AND DEMANDS EXTENSIVE DATA AND RECORDS ABOUT YOUR ACTIVITY IS IN FACT INCREASING THEIR OWN LEGAL LIABILITY because they are increasing their level of influence and control over your activities.

"That means the client is shooting themselves in the foot and putting a legal noose around their own and their directors' necks.

"The massive compliance units and systems that some of the overzealous CoR chiefs (and their auditors who are trumping up work for themselves at your expense), are blowing out their own compliance costs significantly.

He said the people who need to be targeted effectively with this message from the NHVR are the directors of the client companies because they will care as they are obliged under the Corporations Act to:

1. Minimise their and their Corporation's legal liabilities;

2. Minimise their costs, especially unjustifiable costs.

"So SARTA is in dialogue once again with the NHVR in an endeavour to get the message through to the Directors and Boards of Corporate Clients of road transport operators, in the expectation that they will sit on their over-zealous Compliance Managers who are going far beyond their corporation's level of influence and control over your transport activities.

"You and we probably would not care so much about this if:

1. Their requirements were reasonable; and

2. They paid you for the cost of their own demands .... But they don't !

"Why is this happening in the first place? Because the Corporate Clients' lawyers are either completely missing the point about the level of influence and control, or they are advising their clients that that have to do more rather than less because a court MIGHT find them in breach otherwise. So SARTA is proposing the revised HVNL2.0 must make crystal clear that:

1. Third Parties are NOT liable for the actions of their transport providers, so long as the Third Party gets their bits right and meet their obligations; and

2. Third Parties are entitled to rely upon the various accreditations held by their transport provider as evidence that they meet their CoR obligations in relation to the issues covered by those accreditation schemes.”

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