Reducing Road Deaths through a Chain of Responsibility
The road crash epidemic has plagued Thailand for decades and is a major cause of deaths, supply chain interruption and economic damage. Every year, about 13,000 people lose their lives on the roads, with an uncountable number ending up in hospital instead of at their destination. The Thailand Accident Research Centre estimated the economic losses from road accidents at 232 billion baht per year or 2.8% of GDP.
Tragically, the logistics industry is a significant contributor to these appalling statistics as many major accidents involve industrial and commercial transport (trucks, buses, minivans and commercial pickups). While the majority of Thailand's motor vehicle accidents involve motorcycles and private vehicles, we are continually shocked by graphic images in the popular press of the carnage resulting from accidents involving heavy commercial vehicles.
The blame for accidents is often directed solely at the drivers behind the wheel, with causes variously attributed to speeding, overloading or poor loading, fatigue, drug use, licence violations, weather, poor road conditions, carelessness or bad vehicle maintenance.
However, what is often ignored is the responsibility and accountability of the owners and management directly responsible for the operational tasking of vehicles, driver behaviour, delivery practices and vehicle safety. Often after a serious accident, we hear that the driver fled the scene for fear of retribution – but the transport operator is often not held accountable and unsafe practices continue. Who is really accountable?
Learning from our neighbours: Recent Chain of Responsibility (CoR) legislation introduced in Australia has resulted in a dramatic improvement in road safety and a reduction in deaths and accidents involving commercial vehicles. Complying with the new law is a shared responsibility: anybody who has control over a transport task can be held responsible for breaches of road laws and may be legally liable. All parties in the road transport supply chain have specific obligations to prevent a breach.
Importantly, the legislation provides wide-ranging powers, allowing regulators to investigate and prosecute both along the entire supply chain and up and down individual organisations. These powers ignore contract arrangements and past practice, unless they comply with the standard. If you exercise control or have influence over a transport task, you can be held legally liable for your actions, inaction or demands, if they cause or contribute to a breach. The law requires you to take all reasonable steps to prevent your conduct from causing, or contributing to, a breach.
If a driver breaches the road laws, effectively all those in the chain, right through to board directors, can be required to show that they took reasonable steps to ensure the driver did not breach the road law. But it does not stop there: as a transport company you are affected, but the company for which you are carrying goods or its suppliers can also be implicated as part of the chain.
Mind the insurer: International brands are becoming more closely associated with their logistics and transport service providers. The potentially irreparable brand and commercial damage, as well as legal implications of major commercial vehicle accidents, presents a real and alarming business risk to potential investors.
Lenders typically rely on a borrower taking out relevant insurance coverage to reduce the risk of their security decreasing in value. Lenders should be aware that an insurer likely will deny indemnity under a claim from a transport operator (for replacement fleet value, loss of profits or other policies) where the loss to the insured results from a transport operator having breached applicable laws or other safety regulations.
Time for change? Given the desire of the current government in Thailand to undertake major reforms of national policies and practices, there is no better time to introduce changes in legislation that can result in reducing heavy and commercial vehicle accidents. A Chain of Responsibility law would directly affect those responsible for vehicle safety.
The leading Australian transport company Linfox, which has operated in Thailand for more than 15 years, already has a zero-tolerance policy towards accidents or breaches in driver or road safety. Not surprisingly it now operates one of the largest transport fleets in the country with demand for its services increasing. Linfox has modelled its road safety programme in part on the CoR regulations in Australia and has benefited accordingly. Its peers in Thailand could benefit from doing likewise.
(Sources: PPB Advisory, LBA Australia, CoR Australia)
The Link is coordinated by Barry Elliott and Chris Catto-Smith as an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: Barry.Elliott@inslo.com