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Gas supplier fined under COR: could your company be prosecuted this way?

May 14, 2015

We were speaking to one of the most experienced contributors to the CoR Adviser this week, Colin Karlson.

Colin has decades of experience in compliance and auditing in the supply chain sector, and he’s seen the rise and evolution of chain of responsibility legislation in that time.

In his view, one of the biggest issues currently facing the sector is the relative lack of awareness among senior managers within the off-road parties -load managers, consignors and consignees.

Here’s one recent case that demonstrates how consignor and load manager responsibilities have changed. Once upon a time, loading a vehicle safely was perceived to be the responsibility of a driver and/or operator. In fact, this has not been the case now for several years – a fact that is still not understood by a number of parties.

Kemp v Air Liquide (2014) – consignor fined $5,500

Air Liquide, a multinational business that supplies industrial gases, had engaged Doble Express (a transport operator) to convey gas cylinders on its behalf.

The Doble driver had secured the 3.5 tonne cylinders with one ratchet strap. As he negotiated a bend at speed, the cylinders shifted and unbalanced the trailer and truck, causing a collision in which another motorist was killed.

As operator, Doble received a significant fine ($24,750, very close to the legal maximum of $27,500) for the load restraint breach.

But Air Liquide was prosecuted too. Investigation by the prosecutor revealed that:

• It had no formal agreement governing the arrangements between itself and Doble; and
• It provided no written directions or instructions to Doble concerning the secure and safe restraint of its goods.

Generally, Air Liquide required transport providers to collect consignment documentation from its depot. In this case, the usual procedure was not followed, and the cylinders were collected directly from a third party.

Although Air Liquide had taken steps after the fatal incident to address its COR obligations, including a national working group and a structured safety and risk management process, the NSW Supreme Court ruled that a penalty was necessary to give effect to the COR requirements that it take all reasonable steps to prevent a contravention.

That said, the fine of $5,500 was only 20% of the maximum penalty available to the court.

What it means for your business

Drivers and operators are not the sole focus of enforcement action for breaches of road transport law. The prosecution of Air Liquide shows that even that where one party is found to be primarily at fault, other parties may be investigated and penalised for their actions or inactions.

In practical terms, it means that what was once a road transport matter is now a matter for every party in the supply chain. Without active systems in place to minimise the chance of road transport laws being breached, your business could be at risk.

Until next time,
The CoR Adviser Team