Going around in circles

The latest amendments to the National Road Traffic Act regulations have been poorly drafted.

There was some commotion in the logistics industry when the minister of transport amended the National Road Traffic Regulations on October 31, 2014. Further amendments to these regulations were published on April 20.

In terms of the amended regulation 330(C)(f)(i)-(iii) only an “operator” whose vehicle’s gross mass (GVM) exceeds 3 500 kg will need to have a declaration in its possession, which must include a written agreement entered into between the “consignor” and “operator” in respect of the transportation of goods. Previously, this requirement applied to all operators irrespective of vehicle mass.

This agreement must set out the nature of the agreement, the loading instructions and the responsibilities of the parties (Regulation 330C(f)(i) – (iii)).

The amended regulations now define a “consignor” specifically for the purposes of regulation 330A to 330D. The main difference is that consignors of dangerous goods in terms of regulation 273 are now specifically included in the definition. Similar amendments have been made in respect of the definition of a “consignee” for purposes of regulation 330A to 330D.

The contents of the declaration under the amended regulation are more flexible. For example, it is only “if applicable” that the name of the consignee or consignor needs to be inserted into the declaration (regulation 330 C (d) and (e)).

Included in this declaration must be a schedule of insurance as contemplated in Regulation 330D, but only if such insurance “is applicable”.

Essentially the amended Regulation 330D prohibits a consignor or consignee from offering goods for transport – as opposed to merely transporting goods on a public road, or accepting the goods, unless such transportation is fully insured for damages as a result of an accident.

The original heading to Regulation 330D read: “Consignor and consignee to insure goods to be carried on a motor vehicle”. This has been amended to: “Consignor or consignee to make sure that the operator has insured the goods transported for damages that may occur due to the incident”.

It appears that the only instances in which Regulation 330D is “not applicable” is if the person does not fall within the definition of a “consignor” or “consignee”, or, arguably, the vehicle on which the goods will be carried has a GVM of less than 3 500 kg.

Although, reading the amended heading, the obligation to insure appears to be placed on the operator of the vehicle, one cannot be certain of this…

The rules of statutory interpretation expressly prohibit statutory obligations being set out in headings. The same criticism that was made against the original Regulation 330D can still be levelled.

It is still not known what is meant by “fully insured” for “any damage” that may occur as a result of “an incident”.

If the obligation to insure the goods now falls onto the operator, then, in accordance with the FSB Directive 2012, the operator could only insure the cargo as a bailee. The FSB directive expressly prohibits the operator from offering goods-in-transit insurance unless the operator is duly licensed under the FSB.

Road transporters of dangerous goods will now have to become familiar with Regulations 330A to 330D, as these now apply to them as well.

Underwriters are going to have to peruse the insurance arrangements envisaged in Regulation 330D, which, in our view, is void of any meaning.