Chain of Responsibility Whos job is it Mark

Chain of Responsibility Who’s job is it ? Mark Williams Director Sanmar Consulting Group Pty Ltd

Mark Williams – Background ü 35 years in Transport Industry - Victorian Country Manager TNT Logistics Manager Bunge Group General Manager Kalari Transport (Swire Group) General Manager Bulktrans NT (BP / AFD) National Manager Motor Risk Services – AIIL - Oamps Ltd. Business Manager – VSuthern Transport Managing Director Sanmar Consulting Group - Established in 1998 - Business & Logistics Consulting - Senate submission on Fatigue in the Transport Industry

Today’s discussion • State of Transport Industry - Viability - Road Safety Remuneration Order - Competing objectives • Co. R - Am I a target? - The role of the NHVR - Compliance V’s Management of Risk - What is at stake? • Fatigue and other factors - What is it & what causes fatigue? - Other factors

The Freight Task Ahead Ø The freight task is to double over 15 years Ø Professional Drivers are in short supply Ø Sub Contractor Pool is diminishing Ø Labour pool is diminishing Ø Capable Middle Managers are hard to find Ø OH&S / HSE Compliance requirements are stricter Ø NHVR & Chain of Responsibility

Road Freight - Industry Issues • DRIVERS - average 53 years - high turnover rates and low replenishment, employment costs to escalate • FUEL COSTS - plenty of oil, only 40% of resources tapped, continued increase in worldwide demand (Asia, China, India) - environmental issues, supply cost and refining capacity the real issues • VIABILITY - returns well below reasonable expectations for most operators - staffing, training, maintenance and compliance suffering - Cash Flow & Payment Terms - excessive levels of “risk taking” prevalent • COMPLIANCE - Govt. focus is absolute when it comes to OH&S / HSE - many companies unaware / unable / unwilling to meet their responsibilities

Viability Source: ABS 2015, Australian Industry 2013 -14 cat. 8155; ABS (2015) Survey of motor vehicle use cat. 9208

The Issue with Drivers - Average is over 50 years - Many older drivers have serious long term health problems and will exit sooner than they should - Working hours are long, often far too long - Stimulant abuse is at unacceptable levels - Over 30% of truck drivers who are killed have stimulants in their bloodstream Long Distance Drivers do get tired ! - Wages are not much more than 10 years ago - Floating population – 30% turnover rate - Low level of new entrants into industry - Insurance penalties make it difficult to engage young persons

COMPETING OBJECTIVES INCREASED RISK HSE Drivers $ Customer Service Productivity VIABILITY EXPECTATIONS Costs $ ROI

Road Safety Remuneration Order - RSRO § The TWU drew a line between Road Safety and Remuneration and got the Federal Govt. to agree … (to a point) § The YES vote: The legislation is required to financially protect and keep safe S&M operators in the road transport industry § The NO vote: It is a ploy by the TWU to gain more members by creating more employee jobs by forcing Subbies out of work § Industry and Associations are at odds on the need and benefits of the order: some want it and some don’t. § Contractors and Associations are at odds: some see it as an important safety initiative, (correlation between remuneration and safety) and want it and some don’t agree and don’t want it.

According to the Legislation: The Road Safety Remuneration System was established to: • Address the high incidence of fatalities and injuries for truck driving in Australia • Reduce the economic costs to the economy as a result of road safety incidents • Estimated 30 per cent below-award rate remuneration for owner-drivers; - the significant influence of commercial arrangements on owners/driver road safety; unpaid queuing time as identified by the NTC • Remove economics incentives for unsafe work practices and to provide drivers with a safe and fair workplace

According to the Legislation Objectives: To promote safety and fairness in the road transport industry by: • ensuring that road transport drivers do not have remuneration-related incentives to work in an unsafe manner • removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices • ensuring that road transport drivers are paid for their work, including loading or unloading their vehicles or waiting for someone else to load or unload their vehicles • developing and applying reasonable and enforceable standards throughout the road transport industry supply chain to ensure the safety of road transport drivers • ensuring that hirers of road transport drivers and participants in the supply chain take responsibility for implementing and maintaining those standards • facilitating access to dispute resolution procedures relating to remuneration and related conditions for road transport drivers.

RSRS: Figure 5: Link between safety outcomes and economic pressures Source: Adapted from the Department of Education, Employment and Workplace Relations Safe Rates Safe Roads Directions Paper (2010) p. 5

Kilometres per driver travelled p. a. – averaged. Time period Short-haul Long-haul 56, 488 224, 347 1, 177 4, 674 Yearly Weekly Source: ABS 2015, Survey of Motor Vehicle Use cat. 9208. 0 Long Distance Drivers – on average drive 224347 kms p. a. Equates to: based on average 65 kms per hour, (includes loading & unloading times) Based on 48 weeks = 72 hours per week.

Causes Of Heavy Vehicle Accidents Source: National Truck Accident Research Centre 2015, Major Accident Investigation Report, Brisbane

RSRO – My View § The RSRO in its present simplistic form it is only fully workable as a fall back position when operators are in a dedicated or closed loop. § There is no model that accommodates the variability of iterant intrastate / interstate haulage where a contractor gets paid more to go Northbound and less to go Southbound due to “market forces” - EG: less general freight in Brisbane than there is in Victoria. § There is no flexibility in the model rates that allows for higher productivity outcomes which can effectively reduce logistics costs – current legislation is anti continuous improvement & lacks incentives § Fuel variability: the highest cost in a long distance trucking business is not properly considered…. . . it goes up and down but the model stays the same! § NO consideration of M/T travel to load points, in particular to intrastate and remote locations § IF can be made right: will it help deliver on viability and safety ? – YES

Co. R – AM I A TARGET ?

Coroner’s View “Of all of the industries in Australia, freight is perhaps one of the most robust, productive and inherently important. It is however, an industry fraught with many dangers and sadly, a vast range of safety issues and hazards. ” Graeme Johnstone – Victorian State Coroner

The Chain of Responsibility – ALL IN Corporations Employers Primary Producers Schedulers Company Directors Consigners Contractors Operators Drivers Importers / Exporters Loading Managers Loaders / Unloaders Consignee

Chain of responsibility - Co. R • CHAIN OF RESPONSIBILITY - goes right to the top. • Includes everyone involved in the process, including customers • Businesses often do not have the money or the resources to keep up with rapidly changing legislative requirements • Businesses rely on Industry experts to keep them informed and protected • Experts can assist you to understand how to meet OH&S and Co. R obligations • BUT you should have processes that protect yourselves !

What do the lawyers say? • Peter Rankine Senior Associate – Wilson Lawyers Ground Floor, 32 Logan Road, Woolloongabba Qld 4102 • P: 07 3217 4630 F: 07 3217 4679 • prankine@wilsonlawyers. net. au • www. wilsonlawyers. net. au

NHVL – Co. R Requirements § NHVL – National Heavy Vehicle Law - industry required to meet the requirements of the HVNL - 1000 pages of legislation § Executive Officers responsibilities: - Executive Officers of a company include not only its directors but any person regardless of title who is concerned or takes part in the management of the company. (S 636 (1) & (2). § If a company commits an offence Executive Officers can also be liable where they either: – Knowingly authorised or permitted the conduct constituting the offence; or – Knew or ought reasonably to have known of the conduct constituting the offence or that there was a substantial risk that the offence would be committed (S. 636 (1) & (2)).

NVHL – Co. R – The Defence § It is a defence for the Executive Officer to prove that they: – Exercised reasonable diligence to ensure the company complied with the provision; or – Were not in a position to influence the conduct of the company in relation to the offence (S. 636(3)). § In determining whether the Executive Officer ought reasonably known something the court may consider: – The persons abilities, experience, expertise, knowledge, qualifications and training; – The circumstances of the offence; and – Any other relevant matter prescribed by the regulations (S. 632). § Penalties – what is at stake? : - $52450 for a company & $10490 for an individual - Possible loss of contracts, refusal of insurance indemnities

Reasonable Steps § § The Act stipulates individuals must either prove they were not in a position to influence the conduct of the corporation or used all due diligence to prevent the contravention. Reasonable Steps Defence - an industry “code of practice” may be used as a “reasonable steps” defence § What are “reasonable steps”. - must be able to demonstrate that all reasonable steps were taken or that there were no reasonable steps that could have been taken to prevent the breach § Examples: Rosters, Vehicle Maintenance, Load Restraint - rosters, schedules, fatigue and work records must be maintained for compliance & audit - there must be evidence that maintenance has been completed - loads must be constrained in accordance with the “Load Restraint Guide” www. nhvr. gov. au/law-policies/heavy-vehicle-national-law-and-regulations

Proposed changes to Executive Officer liability: § By letter of 16 May, 2012 the president of the Queensland Law Society wrote to Minister for Transport and Main Roads stating amongst other things: “The Society is strongly of the view that derivative liability and the reversal of the onus of the proof is inappropriate , contrary to fundamental tenets of our legal system and unfairly discriminates against corporate officers. ” It seems Draft amendments may be released in May, 2016 aligning matters with Work Health and Safety Act. Current offences may be replaced with an overriding duty on the Chain of Responsibility parties to exercise due diligence so as to ensure as far as reasonably practicable the safety of road transport operations. In conjunction with that it is expected that Executive Officers liability provisions will be amended to impose on Executive Officers a requirement to exercise due diligence to insure that the company complies with its duties and obligations under the NHVL

RISK – WHAT’S AT STAKE ! Quad Triple B Double Single Rigid > > > $1. 2 M. $0. 9 M. $0. 6 M. $0. 5 M. $0. 2 M.

WHATS REALLY AT STAKE ? The Cost: $25. 0 M ++ 1 Deceased Driver 1 Widow, 3 Fatherless Kids Work Cover Police Coroner Investigations Lawyers Litigation Lismore Truck & Train Collision in foggy conditions. Finding: Driver did not drive to the conditions !!

Objective - Create Safety Culture 1. Compliance approach - Truck. Safe (Generic) Manual - NHVAS, NHVR, Record keeping, Basic Training, Auditing - Minimal Staffing - May not fully satisfy Court of Law 2. AS/NZS 4801 – OHS and Safety Management Systems - Meet AS 4801 / OH&S Continuous Improvement System - Workplace Hazard Assessments - Sophisticated Management Tools, Predictive Risk Analysis - GPS, In Cab Fatigue Alert Systems, Drive Cam, “FAID” Schedule pre planning & previews, - Medical assessments - Sleep Services - Dedicated Staffing and Continuous Improvement processes - More likely to satisfy Court of Law

Compliance – What’s the Road Map ? 1. Meet requirements of OH&S Act. ü Company Policy & Procedures Manual - “the way we do things around here”. - Operators Instruction Handbooks (SOP’s) ü OH&S Manual (Policy & Procedures) - Assessment of Risk / AS 4801 - Toolbox / OH&S meetings, minutes - Fatigue management systems ü Maintenance System (NHVAS) - Preventative, Notification, Monitor, Records

Risk Management – What’s the right standard ? Fuel efficient method Preferred method

EMPLOYING & INDUCTING STAFF – How to: • • Pre Employment steps: Make out an Application Form Verify driving record & licenses Check references IF OK, • Interview and determine skill level • Test drive, record results • Medical test • • IF OK, Letter detailing terms and conditions of employment Induction Process & where necessary “jockey” with others 3 Months trial period, regular reviews Formal assessment at end of 3 month period

EMPLOYING STAFF – How not to: • Driver rolled truck on Newell Hwy at 1. 00 am - company short of drivers - driver rolled truck 5 hours into the run • Truck Owners reaction - driver speeding on a bend, sacked driver • Root Cause Analysis - driver was on 1 st load for the Company & on his own - driver had not been assessed or inducted properly - driver lived 1 hour from work - driver was having marital problems - driver had been awake for 18 hours when accident occurred • Conclusion - driver poorly managed into the business - driver was fatigued and degraded at time of accident - driver and operator lucky that driver was not injured or killed

Case Study: Rollover of a Cattle Truck • Driver rolled cattle truck on dirt road at 1. 00 pm - driver was experienced and not fatigued - driver rolled truck 500 mts from delivery point • Truck owners initial (over) reaction - driver was speeding and was on the phone - driver did not load the cattle properly - driver to be sacked • Root Cause Analysis - driver was not speeding: verified by GPS doing 25 klm per hour - driver was not on the phone: handed over his phone records - driver moved over on the narrow dirt road to allow another vehicle to pass and road shoulder collapsed - truck was loaded incorrectly by the driver and the yard loader, (mitigating circumstances) resulting in a high centre of gravity load

Case study: Co. R conclusion: § Driver and loader not properly trained / instructed in the loading of a high centre of gravity cattle load § Operations provided a “load card” instruction to the driver and when the driver queried it was told that it could not be changed. Driver did not challenge operations instructions. § Truck could have rolled over at any point on the journey due to the way it was loaded with the heavy cattle on the top deck. § Local shire had a responsibility to ensure road was suitable and safe to use § Operator did not have a permit to use that particular road (common practice as the cost of local council permits State wide would be $100 K p. a. ) § Cost of accident $150 K plus increased insurance premiums next year Chain of responsibility – who’s in: Owner, Operations, Driver, Loader & Local Shire Root Cause Analysis process undertaken enabled the driver to keep his job, the business to recognize deficiencies in communications and training and highlighted permitting issues with local councils within the State.

Fatigue – Drowsiness - Attentiveness - What causes Accidents? 13% Fatigue 27% Speed 16% Driver error Industry sources say fatigue is closer to 30% contributing factor

Fatigue – What is it ? • What are we really talking about? • Fatigue – Gets worse the more you do - Time on task - Physical exertion • Drowsiness – Gets worse the less you do - Time on task - Time of day (circadian rhythms) - Time awake

The Human Factor • Monash University Study • Survey conducted on 255 Interstate Truck Drivers - 40% admitted to nodding off at the wheel at least once or twice in the past 3 months - 45% said that they would get sleepy on at least half of all trips - Most said they would continue to drive to meet log book regulations and delivery deadlines

WHAT CAUSES FATIGUE - DROWSINESS ? ü Lack of Quality Sleep - need 5 x 1. 5 hour cycles (7. 5 hours) uninterrupted each night ü Circadian Rhythms (body clock) and Time of Day ü Time Awake & Time Spent performing a task ü Age, physical fitness, medical conditions ü Sleep Disorders: Sleep Apnoea, Narcolepsy

Sleep Apnoea - how does it affect you ? v Sleep Apnoea • Cessation of breathing during sleep – 10 to 60 seconds • Excessive relaxation of mouth & throat muscles obstructing air flows, and induces snoring • 5% of population and 20% of Truck drivers effected • At risk if overweight, and can cause severe medical problems, stroke, diabetes, high blood pressure, depression • Symptoms include – daytime sleepiness, poor memory and concentration, morning headaches, irritability, mood swings, sexual dysfunction • 15 times greater risk of an accident if effected v Narcolepsy • Falling asleep without notice

Lets Congregate ! 2. 30 pm in the afternoon

SHIFT WORK & FATIGUE • There is NO “ideal” shift work schedule • Shift work is taxing on humans and may contribute to increased health issues as people age • 70% of the population are not suited to shift work • Long Distance Truck & Bus Drivers are shift workers • Rotating Shift work is more taxing than fixed shifts • If rotating shifts, minimize frequency, 2 week rotations preferred minimum • Plan to give shift workers more family & recovery time • Often shift workers do it for the extra money with no understanding of the long term tradeoffs

How tired are we ? At 13 hours awake functionality is degraded and at 17 hours awake we are the same as. 05 and in the high risk zone

Drivers are not the only fatigued people ? § Fleet Controller / Manager can be the most Sleep deprived person in a Transport business • • • Takes phone calls at all hours Responsible for Customers outcomes On – Road Safety / Work Schedules Workshop & Management liaison Reports on Productivity outcomes Responsible for Fleet utilization § Makes poor decisions when tired • Suffers “BURN OUT”

Nobody wants this? Hume Hwy - 4. 00 am in the morning

THANK YOU FOR LISTENING Mark Williams Sanmar Consulting Group