Rail Network Bill - Information Sheet Industry

This Info fact sheet is intended to provide a general overview of what the Bill will mean to the rail industry. For more detail, you can purchase copies of the Bill at most Bennetts bookshops.
 

Purpose and benefits of the Bill

The impetus for this Bill has come from changes in the rail industry - particularly the shift from a single network operator to a number of players - which have left gaps in safety accountability. The Railways Bill has also been developed to implement the recommendations made in the Ministerial Inquiry into Tranz Rail (the Wilson Report), which identified gaps in the current legislation relating to rail safety.

The Bill addresses gaps in the current legislation by extending rail safety legislation to cover a wider number of industry players, and ensuring a clear chain of accountability. It also proposes consolidating most existing rail safety legislation into a single Act.

It proposes a more proactive approach to identifying and managing critical safety issues by ensuring key rail participants are licensed, that key safety data are collected, that operators demonstrate they're managing safety risks, and that the Land Transport Safety Authority (LTSA) has more powers to audit, inspect and sanction operators.

Main features of the Bill

Acknowledging the changing nature of the New Zealand rail industry, the Bill proposes new provisions to allow appropriate greater flexibility in safety monitoring and safety enforcement. In particular, this would be done by:

• licensing additional participants
• having a "high level" document called the "safety case", which will be approved by the Land Transport Safety Authority
• requiring a rail licence holder to appoint a safety manager, who will be responsible for the safety of the operation
• clarifying the Director of Land Transport Safety's powers so they are appropriately tailored to the seriousness of a safety breach
• replacing the current audit system with a more generic "safety assessment", which is more flexible and comprehensive
• requiring those operators whose safety record is in need of, or could benefit from, improvement to develop a safety improvement plan
• introducing court-imposed penalties for non-compliance
• requiring operators to supply additional safety-related information to the Land Transport Safety Authority, which will allow the Authority to identify emerging trends and be proactive in safety regulation.

The Bill would apply to the rail industry as a whole (including voluntary operations), but allow the system to be tailored to suit the type of operation.

Contractors of rail operators would also be required to carry out their duties and functions in keeping with the standards of their employer's safety case through interoperability agreements.

Licensing

This Bill proposes that all rail operators and rail access providers be licensed. This means that all rail operators and all those who provide access to the track (access providers), would have to apply for a new licence, whether or not they already hold a rail service licence. While not all rail participants would need a licence, they must all be covered by the safety case of either a licensed operator or a licensed access provider.

Safety case

The safety case is the new, legislated requirement that will replace the current safety management system. To gain a rail licence, operators would have to submit a safety case for approval to the Director of Land Transport Safety. The safety case would contain key information relating to areas of an operation that are critical to safety (including identification and management of safety risks, safety training, and monitoring and reporting procedures), and would be publicly available. Details of what must be contained in a safety case are outlined in Part 2, subpart 3, cause 28 (1) of the Bill.

An operator will still need to have a safety system, which includes the development and maintenance of operational documents such as procedures and handbooks and manuals, although this is not explicitly required by legislation. While these documents are not taken into consideration in the proposed licensing application process, they would need to be made available for safety assessments.

This approach differs from the current regime in which a licence is granted on the basis of a rail participant's entire safety management system. While reducing the quantity of paperwork submitted for a licence application (that is, by providing a safety case of key information), the new regime would not cut back on the quality, as all documents for a rail participant's safety system would be considered during its regular assessments.

Reporting requirements

There would be increased reporting requirements for rail licence holders and these would be stated in the rail participant's approved safety case. In addition to the already required accident and incident reporting, key performance indicators may also be required at the reasonable discretion of the Director of Land Transport Safety. Clause 19(2)(e) outlines this in detail.

Safety assessments

The present system requires rail licence holders to be audited each year. The Bill proposes to replace this requirement with a safety assessment, which is conducted as regularly as considered necessary by the Director of Land Transport Safety to be sure that the operation is safe.

The assessments would ensure that a rail licence holder is operating in accordance with its approved safety case, and will be carried out by the LTSA or its appointed representative.

An assessment could include inspection, spot-checks, investigations or discussions with staff and would take into account trend analysis of incident and accident reporting. There would be two sorts of safety assessment - an "ordinary assessment" which would be undertaken routinely for continued assurance, and a "special assessment" which would look at a particular circumstance.

A good safety record would mean that the time between ordinary assessments may be extended (for example, to eighteen months or two years). This provides an incentive for rail licence holders to maintain a good safety record and also reduce their on-going regulatory costs.

Costs

At present, rail operators are required to pay an annual licensing fee to the LTSA, which is scaled to reflect the size and type of operation. Rail operators are also required to engage and pay safety auditors directly, contribute towards any special audits by the LTSA such as the Halliburton Report and the Wilson Report, and for LTSA approval of their safety systems and any variations.

The government is dedicated to ensuring that some non-commercial rail operators (particularly small, heritage operators) are not unduly penalised by costs that may be associated with implementing this new safety regime. Fees and charges are still being finalised, and ways to keep increased costs to a minimum are being considered. We are interested in knowing what you consider the compliance costs may be, and encourage you to make a submission to the Select Committee.

At this stage, we believe that there will be some initial compliance costs that will be met by the industry. These include the cost of having a new safety case approved by the LTSA, in addition to an internal cost to develop a safety case. As is with the current regime, there will be a number of on-going regulatory costs associated with an annual licence fee, having regular assessments, reporting incidents and accidents, and developing safety assurance processes and/or measures. If a licence holder has a poor safety record, a safety improvement plan may also be required as part of the licensing process so that the LTSA can have greater surety that a rail provider is actively managing its safety risk. The licence holder would have to pay the costs of this requirement.

The changes proposed in the Bill include reviewing the current fees and charges structure so that a safe rail licence holder is rewarded by fewer compliance costs and a licence holder with a safety risk pays directly for any intervention required by the LTSA.

This review would take into consideration the rail participants' type of operation, in particular operators of heritage rail services, and would aim to ensure that the new regime does not impose any unnecessary costs.

During the next few months, government officials will be consulting industry as part of a review of the fees and charges structures for the Bill.

Implementation

Operators would be able to continue operating once the Bill is passed as transitional arrangements have been included to allow for the licensing and approval of safety cases during a phase-in period. To minimise paperwork for smaller operators, they might be able to submit their existing safety management system as a safety case, where appropriate.
To assist in the implementation of the Bill, the LTSA will also develop processes and guidelines. A new fees and charges system would also be developed and introduced when the Bill comes into force. Details will be provided as they come to hand.

The timing for when the Bill will come into effect is dependent on its passage through the House. At this stage, it is anticipated that this will be in the next 12 months.

Media Release:

Railways Bill delivers promised safety regime

 
Downloads:

Information Sheet - Industry (PDF v7.0, 62kb)