Land Transport Rules - Questions & answers

Q&A for Operator Safety Rating 2008

(Rule 81002)

1. What is the Operator Safety Rating System?

The Operator Rating System (OSRS) aims to improve road safety by rating commercial road transport operators so that deficient operators can be more readily identified and targeted for advice and enforcement action, if needed, by Land Transport New Zealand and the NZ Police.

The OSRS will enable Land Transport NZ to pull together information, such as certificate of fitness (CoF) inspection results, crash data and offence data, and use it:

• to produce ratings for operators based on how well they are meeting or exceeding the requirements of transport regulations
• to target advice and assistance to where it is most needed
• as a targeting tool for enforcement action by NZ Police.

The OSRS will also provide an incentive for operators who have not previously complied with regulations (and are therefore a high safety risk) to improve their behaviour.

2. What is the purpose of the Operator Safety Rating Rule?

Land Transport Rule: Operator Safety Rating 2008 (the Rule) enables ratings to be made public and provides a process for operators to have their ratings reviewed.

3. What are the benefits of the OSRS?

The expected benefits of the OSRS include:

• a reduction in heavy vehicle crashes and associated social costs due to the improved compliance that will result from targeted enforcement
• fairer and more effective enforcement throughout the transport industry, which will lead to a level playing field for the industry
• operators improving their standards and allowing consumers to make informed choices, as a result of operators being encouraged to do so by the publication of ratings.

4. What is in the Rule?

The Rule covers:

• the high-level criteria for the Director’s approval of the rating methodology
• details of the star ratings to be assigned
• how an operator would be notified of their rating
• public notification of ratings
• the avenues for an operator to notify corrections, errors or omissions
• the review process available to an operator
• the appointment of a review panel
• the prohibition of an operator publishing a rating that is not accompanied by the date that the rating was finalised
• the requirement to make the rating method available.

5. What is the legal basis for the Rule?

Section 158(b)(vii) of the Land Transport Act 1998 provides for the Minister of Transport to make Land Transport Rules that set out categories of safety performance for transport service operators and approved taxi organisations, and provide the means for assessing (and re-assessing) and publishing levels of safety performance in relation to those categories.

6. Was the Rule consulted on?

Yes. The yellow (public consultation) draft of the Rule was released on 11 April 2007 and was made available to about 700 organisations and individuals who had registered their interest in the Rule. The availability of the yellow draft was published in metropolitan and selected regional daily newspapers, Tui Mai magazine and the New Zealand Gazette. The draft was made available, together with Questions and Answers, on the Land Transport NZ website. Land Transport NZ received 32 submissions on the draft Rule, which were taken into account in redrafting the Rule for government scrutiny and eventual signing.

7. Why is the OSRS being implemented?

Heavy vehicle numbers are growing at twice that of other vehicles in New Zealand, and as a result, are also contributing to a growing proportion of all road fatalities. Figures indicate that, for the year 2005, truck-related fatalities (including fatalities involving truck and non truck occupants) account for 20 percent of all road fatalities.

The commercial road transport sector is very competitive, and non-compliant operators can undermine regulatory and safety performance when they are making decisions about maximising loads, just-in-time delivery deadlines and maintenance costs. Without effective enforcement, those who operate within the law face unfair economic pressure from operators who do not comply.

The OSRS will help improve land transport safety by enabling better targeting of risky operators and encouraging all operators to lift their performance against transport standards and regulations.

8. Who will the OSRS apply to?

The Rule allows all transport service licence holders and approved taxi organisations to be assigned a safety rating, but the system will be implemented in stages. Approved taxi organisations will not be rated under the OSRS when it is initially introduced, but will be phased in at a later date.

9. When will the public rating system come into force?

At least six months' information needs to be rated in order to provide a meaningful rating. Accordingly, the first rating is expected in mid 2009. While the Rule has been signed, its implementation will occur once the system has been built and tested and to allow the collection and analysis of at least six months' worth of data.

Accordingly, an operator will not be able to receive a public rating until six months' data is obtained. However, new operators will receive assistance as how to comply from Land Transport NZ staff as part of the licence application process.

10. Is the Rule focused solely on safety?

Initially, yes. However, the Rule is one of a number of Rules designed to support the New Zealand Transport Strategy (NZTS), which is focused on producing an affordable, integrated, safe, responsive, and sustainable transport system by 2010. The Rule will support the development of a system that will contribute to the objectives of the NZTS by:

• assisting economic development
• improving access and mobility
• protecting and promoting public health, and
• ensuring environmental sustainability.

11. How will the OSRS work?

Land Transport NZ is working towards an environment where customers will be able to select transport providers with high safety standards, based on an operator’s rating. The OSRS is one of the tools that will be used to enable regulatory activity and roadside enforcement to be targeted to where it is most needed.

The OSRS will link a range of transport service events such as Certificate of Fitness (CoF) inspections and roadside audits to operators. Currently, events are only linked to commercial vehicles and drivers. The OSRS will allow the rating of operators according to their performance by using information, which is already being collected, in a way that hasn’t been possible to date, by linking it directly to operators.

12. Who will run the new system and who will use the ratings?

The Rule empowers the publication of ratings and the requirement to make these available on the Land Transport NZ website and ratings may also be made available via other channels.

Once ratings are published, customers of commercial transport services will be able to use the ratings to select providers who have shown higher levels of regulatory performance.

Good operators will be able to use it to market their organisations. Government agencies such as the Accident Compensation Commission and the Department of Labour, and finance and insurance companies, may also find it useful as a risk measure.

13. How will the OSRS directly affect operators?

Operators with above average ratings may receive less attention from compliance and enforcement staff, and greater interest from prospective purchasers of transport services. Conversely, operators with below average ratings will receive more attention and may suffer from a poorer public interest due to a low rating.

14. How will the OSRS affect heavy vehicle drivers?

Information will continue to be collected from CoF and roadside inspections of vehicles and will contribute towards an operator’s rating. Driver offending in respect of such things as speed limits, holding correct driver licence classes and non-compliance with work time and logbook requirements will also contribute to the OSRS rating of their operator. The ability to target non-compliant operators or drivers will be enhanced through the OSRS.

15. What do operators need to do to ensure a good rating?

Operators need to ensure they have effective management and maintenance systems in place – for example, for passing CoF and roadside inspections. Operators with effective systems and good patterns of behaviour will be well-positioned to receive a good rating when the system comes into effect. Note that the OSRS will not be based solely on CoF and roadside inspections, and that offences and crashes are likely to carry a heavier weighting within a rating.

Although rating information is already being collected, there is still time before the first ratings are calculated for operators to take action that will increase the likelihood of a higher rating. Reminding drivers about things like safe driving, logbooks requirements, loading limits and reinforcing the importance of driving to the speed limit will all help to ensure a good rating.

Operators can contact their nearest Land Transport NZ regional office and ask to speak to a Transport Regulatory Advisor (TRA). The TRA can provide can provide advice on how an operator’s OSRS performance may be improved. This may involve a self-assessment tool, the TRA assisting with information, or possibly a more detailed review of regulatory performance. The TRA can use the information from the review to provide advice and assistance on how an operator’s regulatory and safety performance can be improved.

16. What information will be used to make up the ratings?

Initially, the information that will make up the rating will include:

• crash information
• CoF information
• operator reviews
• roadside inspection information
• work-related driver and operator infringements.

17. Where will this information come from?

The information is already collected for Land Transport NZ by vehicle testing stations, the NZ Police and from working with operators and is stored in computer databases directly controlled by Land Transport NZ. The big difference is that the information will now be collated and used in a more orderly way to target enforcement.

18. How will Land Transport NZ ensure that the information used to rate operators is correct?

Land Transport NZ is undertaking a significant amount of work to ensure the integrity and accuracy of the information collected. The building blocks of the OSRS are similar to the system used in New South Wales, which has been in place and operating successfully for several years. The proposed TSL cards will help ensure that the correct operator is able to be identified and event information is accurately attributed to that operator. Correct use of the TSL card will minimise the incorrect recording of event information.

Operators can apply to Land Transport NZ to have any errors or omissions in their information reviewed and, if necessary, corrected.

Operators who have concerns about the accuracy of brake testing, roadside or CoF inspections should seek to have their concerns discussed as soon as possible with the person or organisation that carried out the inspection.

Information collected for the OSRS will assist Land Transport NZ to identify and address inconsistencies across the country.

19. How will the ratings be calculated?

The overall rating will be calculated using sets of information with different weightings. Vehicle inspection data and offence data will have different weightings based on the seriousness of the defect or infringement. For example, driver offences are likely to be considered as being more serious than minor roadside inspections, or CoF faults. The rating algorithm will assign a credit for positive events, ie a passed Roadside Inspection will improve an operator's overall rating. This positive effect will be based on statistical evidence of good compliance.

Each rating will be calculated by taking all the events that have occurred during the last two years and adding them up to produce an overall risk score. The score will then be divided by the number of events used to calculate an average rating for the operator. The relative weighting given to a specific event will diminish over time so older event information will have less impact on the overall rating than more recent events.

20. How will operators be rated?

Operators will receive a star rating of their performance as follows:

• Five stars or "" indicating an excellent level of compliance;
• Four stars or "" indicating a good level of compliance;
• Three stars or "" indicating an average level of compliance;
• Two stars or "" indicating a below average level of compliance;
• One star or "" indicating a poor level of compliance.

21. Some operators work in areas that are more likely to be policed than others. Will this affect their rating?

No. Scores will be adjusted to reflect an operator’s relative exposure. For example, an operator who works in an area where they are frequently stopped at a weigh station will have their information adjusted to reflect this fact.

22. How will operators know what their rating is?

Land Transport NZ will contact operators individually at least 20 days from when their first public rating has been calculated and prior to ratings first being published in mid-2009. Supporting material will be provided, in confidence, to explain what the rating means, how it has been calculated, and what information contributed to the rating.

23. Will ratings affect operators’ insurance premiums?

The ratings will be made public, therefore there may be potential for insurance companies and other third parties to use ratings as an indicator of risk when setting premiums.

24. Can operators have their rating reviewed?

An operator will have the opportunity to check their rating prior to each publication. They will have the opportunity to apply to the Director to have any errors corrected and to apply to an independent review panel to reconsider the validity of the data that has been used to calculate their rating. The independent review panel will include independent industry representatives and a lawyer. Operators will also have the right of review through the Courts system.

25. How will ratings be made publicly available?

The Rule empowers the publication of ratings. Land Transport NZ will make the ratings public on the Land Transport NZ website and may also make them available via other appropriate channels.

26. How can operators increase the likelihood of receiving a high OSRS rating before the system comes into force?

Operators should have management systems and processes in place to ensure that they comply with transport legislation at all times. Operators with such systems and processes will be well-positioned to receive a good rating when the rating system comes into effect.

27. What is the next stage of the process?

It is anticipated that the OSRS will be completed towards the middle of 2008. Land Transport NZ will test various scenarios to ensure that the ratings produced are an accurate and fair reflection of an operator’s safety performance. Industry will be closely involved in this process. It is anticipated that public ratings will begin to be assigned and published from mid 2009.

28. What are the likely costs of OSRS?

The ongoing operational costs of the OSRS will begin to be incurred from the 2010/2011 financial year. Although final costings have not been completed, it is tentatively estimated that it will result in an increase of between five and fifteen dollars in the annual licensing fee for each vehicle.

29. How can I obtain a copy of the Rule?

A printed copy of the Rule will be available for purchase from selected bookshops throughout New Zealand that sell government legislation. A copy can also be obtained by contacting the printers and distributors (Wickliffe), telephone (06) 358 8231. The Rule will also be available online here.

30. How can I obtain further information about the Rule?

To obtain further information about this Rule, telephone the Land Transport NZ Contact Centre on freephone 0800 699 000.

Page created: 28 April 2008