19 June 2018

NTC flags safety assurance and industry self-certification legislation for driverless vehicles

This article was written by Alex Maschmedt and Georgia MacKenzie. 

The National Transport Commission ("NTC") has released a consultation Regulatory Impact Statement on Safety Assurance for Automated Driving Systems (the "RIS"). The RIS is an important next step in setting up a clear safety framework for driverless vehicles to be sold commercially in Australia, and flags the likelihood of a specific legislative regime governing driverless vehicle safety, and the potential for an overall duty of safety to be imposed on all providers of driverless vehicle systems in Australia in future.

Safety of driverless vehicle systems is a key concern for businesses, regulators and the public when looking at the technology, and the recent fatal accident involving an Uber driverless vehicle in Arizona has put the spotlight firmly on the safety of driverless systems. Ensuring clear, comprehensive and reliable safety regulation is essential to ensure public uptake of a technology that, if done correctly, is expected to have clear benefits in terms of reduction in road accidents, environmental impacts and congestion, and increased efficiency of road transport, access to mobility and utilisation of space in urban environments, along with a host of other benefits.

The RIS is therefore a timely piece of the regulatory puzzle for Australia, and offers another opportunity for industry and interested parties to shape regulation of this crucial piece of future technology. Consultation on the RIS closes on July 9th. To talk more about the RIS and how it might affect your business, please get in touch with us.

Context

The RIS follows from the NTC’s 2017 consultation paper which outlined four potential regulatory options for assuring the safety of driverless car systems sold in Australia. Following that consultation, the NTC determined that there was widespread support for a “mandatory industry self-certification” model of safety assurance, which would require the entity responsible for the driverless system (the automated driverless system entity or "ADSE") to certify its driverless system against a set of mandatory safety criteria before it could begin selling the system in Australia.

The RIS examines four options for bringing making this mandatory self-certification system into effect. These four options range from relying on existing administrative measures, to establishing a new regulator, regulatory regime and primary duty of safety (similar to the ‘primary duty of care’ under work, health and safety laws) for ADSEs. The table below sets out each of these options in more detail.

Option 1 – Current approach (baseline option)

Manage safety of vehicles with automated driving systems ("ADSs") through existing regulatory safeguards (eg Australian Design Rules, road rules and the Australian Consumer Law), rather than introducing a new safety assurance system.

  • On first supply of the vehicle: Vehicles with ADSs will be categorised as ‘nonstandard vehicles’ and will need to go through an exemption process under existing Australian Design Rules for vehicles ("ADRs"), which do not accommodate driverless vehicles, before being supplied to market.
  • Under this option, the requirements for being granted an exemption from the ADRs would be uncertain.
  • Registration and in-service performance: Certified nonstandard vehicles would need to be registered by states and territories. Registration requirements would include conditions, which may vary across jurisdictions.
  • Compliance and enforcement: No new offences or compliance/ enforcement measures specific to the ADSE who brought the ADSs to the Australian market. Existing sanctions and penalties would apply to manufacturers (eg vehicle recalls, monetary fines) and consumers (eg removing registration).

Pros

Cons

  • Largely utilises widely-known existing regulatory frameworks.
  • Few changes, costs, time constraints or barriers to industry.
  • Allows for influence of future international developments.    
  • Uncertain requirements for the ADR exemption process. Facilitating widespread exemptions would be burdensome and costly.
  • Vehicles may be subject to inconsistent state/territory-based registration processes, causing regulatory uncertainty for ADSEs and consumers.
  • No mechanisms for regulating registration and in-service performance which are specific to automated vehicle functionality.
  • Limited sanctions and penalties to enforce safety controls on ADSEs, as role of ADSEs in safety compliance would be undefined. Penalties for noncompliance may affect registered owner rather than the ADSE, even though noncompliance would be beyond owner’s control.

Option 2 – Administrative safety assurance system

Introduce a safety assurance system using administrative arrangements under existing regulation.

  • On first supply of the vehicle: As in Option 1. However, the requirements for exemption from the ADRs would be for the ADSEs to self-certify the ADSs against principles-based safety criteria in a Statement of Compliance.
  • Registration and in-service performance: As in Option 1. However, conditions for registration could require that ADSEs ensure continued adherence to their Statement of Compliance (including obtaining approval for any significant modifications to ADSs).
  • Compliance and enforcement: As in Option 1.

Pros

Cons

  • Largely utilises widely-known existing regulatory frameworks.
  • Few changes, costs, time constraints or barriers to industry.
  • Compared to Option 1, greater regulatory certainty for ADSEs about the regulatory requirements to obtain certification of ADSs.
  • Ensures that ADS safety risks are addressed in ADSE’s Statement of Compliance.
  • Vehicles may still be subject to some inconsistent state/territory-based registration processes, causing regulatory uncertainty for ADSEs and consumers.
  • After registration, no mechanisms for regulating in-service performance which are specific to automated vehicle functionality.
  • Limited sanctions and penalties to enforce safety controls on ADSEs, as in Option 1.

Option 3 – Legislative safety assurance system

Introduce a safety assurance system through legislative changes, with a new dedicated national government body responsible for administering the system.

New legislative mechanism allows regulation of ADSs (and ADSEs) separately from the vehicle itself.

  • On first supply of the vehicle: ADSEs must self-certify the ADS against principles-based safety criteria in a Statement of Compliance (as in Option 2). However legislation would provide for a vehicle with a safety assurance system approved ADS to be classified as a standard vehicle under the ADRs.
  • Registration and in-service performance: Standard vehicles under the ADRs can be registered using standard registration processes. A new national government body would regulate the in-service safety of ADSs. ADSEs must ensure continued adherence to Statements of Compliance and report safety-critical events (eg road rule breaches).
  • Compliance and enforcement: Include offences and compliance/ enforcement tools to underpin mandatory features of the safety assurance system (eg offence for providing false or misleading information in Statement of Compliance).

Pros

Cons

  • Clear regulatory requirements for ADSEs in relation to both obtaining certification of ADS and ensuring compliance during in-service performance.
  • New national body would be able to regulate in-service performance of ADSs to ensure ongoing compliance with safety assurance system.
  • Regulating the ADS separately from the vehicle increases the ability to target the correct party if an ADS is faulty and avoids unnecessary recall or deregistration of vehicles. If the vehicle itself is safe, then separate regulation allows the consumer to still operate it with manual controls with the ADS disengaged.
  • Possible safety gaps where risks not identified through the safety assurance system process, or not otherwise captured by prescribed offences.
  • Government must acquire significant knowledge around design standards and technology.
  • Time-consuming and costly for government.

Option 4 – Legislative safety assurance system + primary safety duty

Include all elements of Option 3, as well as a general duty on ADSEs to submit a Statement of Compliance and ensure overall in-service safety of ADSs (a primary safety duty).

  • First supply, registration and in-service performance: As in Option 3, however the primary safety duty on ADSEs would ensure proactive management of in-service safety risks not identified through the safety assurance system process, or not otherwise captured by prescribed offences.
  • The proposed primary safety duty would be similar to the ‘primary duty of care’ under work, health and safety laws, and would be administered by the new national government body. The duty would not be prescriptive, so that it could adapt to developing technology and allow industry flexibility in managing risks.
  • Compliance and enforcement: As in Option 3, however additional sanctions and penalties would apply to ADSEs for breach of the primary safety duty (eg warnings, enforceable undertakings, fines and imprisonment).

Pros

Cons

The primary safety duty:

  • captures additional safety risks/unsafe behaviours to those addressed in Option 3;
  • encourages a strong and proactive focus on safety compliance beyond self-certification;
  • allows for more proactive enforcement, as risk-related behaviour can be addressed before an incident occurs; and
  • ensures that safety standards increase over time as technology changes.
  • Scope and requirements of the primary safety duty currently uncertain.
  • Government must acquire significant knowledge around design standards and technology.
  • Higher cost and significant volume of work for government.

Key contacts

The Future Project

With the rapid pace of change in our markets and the emerging challenges and opportunities facing our clients, we’re diving into key issues that our clients may face in the future.

overaching image

Digital Intelligence

Digital innovation will be a game changer across a wide variety of industries globally. Our Digital Intelligence hub contains a number of resources to help you embrace and face digital disruption head on.

Digital Intelligence
Share on LinkedIn Share on Facebook Share on Twitter Share on Google+
    You might also be interested in

    The Federal Government have published a draft bill to help national security and law enforcement agencies address challenges that the increasing use of encrypted communications and devices presents...

    17 August 2018

    New developments and considerations when Arbitrating ISDA master agreements

    16 August 2018

    The energy sector will be part of the first wave of the Consumer Data Right roll out, which will give consumers access to data about themselves in a readily usable form

    16 August 2018

    The release of the exposure draft of laws for the Consumer Data Right is the next important step in starting Open Banking in Australia

    15 August 2018