Part 7: Changes in the land transport sector

Effectiveness of controls over the taxi industry.

In this Part, we discuss:

Changes in the transport sector

A Government review of the transport sector, completed in June 2004, found that:

… significant changes were needed in [the Government’s] transport sector to achieve the Government’s goal of implementing the New Zealand Transport Strategy (NZTS), and to enhance the overall performance of the sector.

The overall vision for transport, described in the NZTS, is –

By 2010, New Zealand will have an affordable, integrated, safe, responsive, and sustainable transport system.

The NZTS also defines the Government’s 5 objectives for transport as:

  • assisting economic development;
  • assisting safety and personal security;
  • improving access and mobility;
  • protecting and promoting public health; and
  • ensuring environmental sustainability.

One of the significant changes resulting from the transport sector review was the Land Transport Management Amendment Act 2004. This Act dissolved the Authority and another Crown entity in the transport sector, Transfund. In their place, it established Land Transport New Zealand.

According to the Minister of Transport–

Establishing Land Transport New Zealand is a positive step towards re-focusing the sector on the NZTS, improving performance and recognising that transport decisions need to reflect the wider Government commitment to sustainability.

Land Transport New Zealand includes most of the staff of the Authority, and the staff of Transfund. The Strategy Division and some positions from the Policy Division were transferred to the Ministry of Transport soon after the creation of Land Transport New Zealand on 1 December 2004. The other divisions will remain in operation until the Board and Director create a new structure for Land Transport New Zealand.

While the purpose and objectives have altered and broadened, the work programme and activities of Transfund and the Authority currently continue as if the entities remain separate.

Objective and purpose of Land Transport New Zealand

Section 68 of the Land Transport Management Act 2003 sets out the objective of Land Transport New Zealand –

(1) The objective of [Land Transport New Zealand] is to allocate resources and to undertake its functions in a way that contributes to an integrated, safe, responsive, and sustainable land transport system.

(2) In meeting its objective, [Land Transport New Zealand] must exhibit a sense of social and environmental responsibility, which includes–

(a) avoiding, to the extent reasonable in the circumstances, adverse effects on the environment; and

(b) ensuring, to the extent practicable, that persons or organisations preparing land transport programmes –

(i) take into account the views of affected communities; and

(ii) give early and full consideration to land transport options and alternatives in a manner that contributes to the matters in paragraph (a) and subparagraph (i); and

(iii) provide early and full opportunities for the persons and organisations listed in section 15 to contribute to the development of land transport programmes.

When preparing land transport rules, section 5 of the Land Transport Amendment Act 2004 requires the Minister of Transport, or the Director of Land Transport New Zealand, to consider:

  • the need to maintain and improve land transport safety and security, including (but not limited to) personal security;
  • whether a proposed rule assists economic development, improves access and mobility, protects and promotes public health, and ensures environmental sustainability; and
  • the costs of implementing measures for which a rule is being proposed.

These considerations are in addition to those set out in section 164(2) of the Land Transport Act 1998, and help align the Land Transport Act 1998 with the NZTS. Safety remains an important consideration for the new organisation.

The creation of Land Transport New Zealand, with its mandate extended beyond “safety”, represents an opportunity to review priorities and resource allocations. Such a review is timely, given Land Transport New Zealand’s inheritance of the Authority’s procedures in relation to licensing, monitoring, and enforcing compliance of the taxi industry, which we consider inadequate.

Recommendation 59
We recommend that Land Transport New Zealand:
  • review where monitoring and enforcing compliance of the taxi industry fits in with its other priorities;
  • consider how that priority relates to its objective, set out in section 68 of the Land Transport Management Act 2003;
  • review its monitoring of the industry, and consider how much monitoring is needed to foster a culture of “willing compliance”; and
  • assign sufficient resources accordingly.

Changes resulting from the creation of Land Transport New Zealand

The then General Manager of Operations at the Authority believed that the creation of Land Transport New Zealand would not significantly change the way compliance activities are conducted. Other staff were uncertain how the introduction of objectives other than “safety” would affect compliance activities.

Proposed changes to the Authority’s Compliance Section

Before the merger of Transfund and the Authority, the Authority planned to reorganise the functions carried out by its Compliance Section. The merger placed these changes on hold, although approval was being sought from the Authority’s Board for the implementation of the new structure. Broadly, the reorganisation would separate the administration (handling endorsement applications) and compliance (monitoring and audit) functions that are currently conducted by the Compliance Section.

The Authority’s proposal is to centralise the administrative function to separate administration from compliance, assist with the consistency of decisions (to grant, decline, suspend, or revoke), and establish an investigative function to target audit effort, thereby making better use of resources.

The reorganisation would create several new national positions to provide leadership in monitoring and audit practice, stakeholder liaison, and relationship building. These new positions are intended to address a lack of centralised leadership and direction in the areas of national regulatory management, investigation, monitoring, and auditing. In general, the planned reorganisation is designed to address the inconsistency in the decision-making process between regional offices – an inconsistency that the Authority acknowledges.

The Authority’s National Regulatory Advisor noted that, before the merger, the Authority had aimed to implement the new roles and functions during December 2004. It is now likely that changes will happen towards the end of 2004-05, once Land Transport New Zealand’s management has defined the direction of the new organisation.

The proposed new structure is a positive move and goes some way to addressing our concerns with the regional approach to the decision-making process. It also separates what are largely rubber-stamping administrative tasks from the important function of compliance monitoring, which is currently overshadowed by administrative tasks.

Proposed changes to legislation

In 2001, the Authority undertook a review of the transport service licensing system. The review identified a number of weaknesses in the system, including a lack of effective penalties for unlicensed and unsafe drivers, and a lack of accountability among taxi organisations. The result of the review was a document titled Draft LTSA Preferred Policy Proposals. Many of the proposed amendments to licensing in the Land Transport Amendment Bill arise from this document.

The purpose of the Bill is to enhance existing land transport safety legislation to support more efficient and effective enforcement, operation, and administration. It also attempts to address aspects of the current licensing regime that passenger service users perceive as safety risks. However, we are concerned that present weaknesses in the licensing regime will remain if the Bill is passed22, unless Land Transport New Zealand increases the amount of monitoring it conducts.

The Bill proposes to make several amendments to the Transport Services Licensing Act 1989, with “approximately 40% of the Bill’s amendments [being] termed as ‘housekeeping’ aimed at clarifying and simplifying current legislation.” Accordingly, the Bill would transfer and amend a number of the taxi driver licensing provisions from the Transport Services Licensing Act 1989 to the Land Transport Act 1998.

The Bill’s ‘Statement of problem and need for action’ states that–

Although passenger service and vehicle recovery service vehicles are not over-represented in crashes, the nature of the interaction between drivers of these services and their passengers provides support for government intervention. Licensing provides the public with an assurance of safety, given the potential risk for inappropriate driver behaviour toward passengers. Recent media reports have highlighted that some people who have serious convictions are working in the passenger service industry. There is a perceived public safety risk of allowing certain convicted offenders, such as sex offenders, serious violent offenders, and people convicted of murder, to be in a one-on-one situation with a passenger.

In relation to entry requirements for passenger service drivers (including taxi drivers), the Bill would prohibit people convicted of certain serious violent and sexual offences from being a passenger service driver, which would remove compliance staff members’ discretion to assess the fitness and propriety of people who have such convictions.

Compliance staff we spoke to thought that this part of the Bill was too blunt, given there were some cases where there were extenuating circumstances, or the offence was committed so long ago as to not warrant consideration in assessing a person’s fitness and propriety. While we understand that view, the inclusion of such a clause in the Bill reflects a real concern by the public and Parliament, that drivers with such convictions are currently able to enter and operate in the taxi industry, with the Authority’s approval.

We note that the Bill covers offences committed in New Zealand and equivalent overseas offences. We expect few, if any, immigrants would be permitted to enter New Zealand having committed such offences outside New Zealand. We note that those who enter New Zealand on temporary permits are not required to supply their criminal record. The challenge for the Authority will be to ensure that no person on a temporary permit with a prohibited overseas conviction is able to obtain a passenger endorsement. The Authority may require those on temporary permits to supply a criminal conviction check for countries where they have previously lived.

The increased penalties for operating an unlicensed transport service, proposed in the Land Transport Amendment Bill, require greater clarity among Enforcement Officers about when a passenger service licence is required. The Bill would require Enforcement Officers to impound vehicles used in a transport service, for a second or subsequent offence of operating without a transport licence, when a notice forbidding operation of the service has previously been issued.

The Bill would increase the ongoing obligations placed on the industry. In particular, the Bill would:

  • increase the accountability of taxi organisations for their drivers’ logbooks, their level of area knowledge, and English language ability;
  • introduce additional requirements for keeping time records, wage records, other employment records, and fuel records and receipts for the relevant transport service vehicles;
  • introduce a “chain of responsibility” concept to hold a person or organisation responsible for knowingly using or requiring an operator of a vehicle to provide a transport service that may place the operator at risk of breaking the law; and
  • require taxis to have information identifying the taxi in Braille.

We note that the Authority is already able, under existing legislation, to revoke a taxi organisation’s approvals if its drivers and operators failed to maintain area knowledge or appropriate English language ability.

The Bill would amend and transfer to the Land Transport Act 1998 the provisions in the Transport Act 1962 relating to logbooks, to simplify the obligations on drivers.

The Bill would strengthen powers of enforcement by:

  • increasing the penalties for certain offences, including empowering Land Transport New Zealand to disqualify from holding a transport service licence for up to 10 years, individuals whose licence has been revoked;
  • empowering the courts to order the immediate impoundment of vehicles used in a transport service by repeat offenders;
  • empowering Enforcement Officers to issue “forbidden to operate” notices to people operating a transport service without a licence;
  • requiring Enforcement Officers to immediately impound vehicles being used in a transport service for certain breaches of legislation; and
  • strengthening and clarifying Enforcement Officers’ existing powers.

In terms of record-keeping and risk-targeting, the Bill would also:

  • align the format and requirements of the register of transport service licences with the Driver Licence Register, clarifying the information that will be held on the national register about transport service licence holders and taxi organisations; and
  • provide for an operator safety rating to be included in the register of transport service licences for an operator.

The Land Transport (Driver Licensing) Rule 1999, which currently provides the detail behind the Transport Services Licensing Act 1989, would also be amended and a new rule, the Land Transport (Operator Licensing) Rule, would provide the details behind the amended Land Transport Act. A draft of the proposed new Operator Licensing Rule is due for public consultation in June or July 2005. The Authority advised us that other rules being drafted will provide further details behind the Land Transport Act.

The Land Transport (Operator Licensing) Rule would impose additional obligations on the taxi industry. In particular, the draft Rule proposes:

  • requiring taxi drivers in major metropolitan areas to hold Area Knowledge Certificates for the entire metropolitan area where they operate;
  • imposing additional obligations on taxi organisations in relation to the:
    • maintenance of drivers’ area knowledge (taxi organisations may be required to conduct regular refresher area knowledge training courses for their drivers);
    • maintenance of drivers’ English language skills;
    • management of driver fatigue;
    • management of complaint resolution; and
  • incorporating, in amended form, the Passenger Service Rules contained in the Third Schedule of the Transport Services Licensing Act 1989.

The level of English language competency expected of drivers in the Operator Licensing Rule would be that they are able to receive and understand direction given by passengers, and be able to communicate with passengers about the fare. The Authority states that it will conduct compliance audits to enforce these additional requirements.

The proposed tightening of penalties and offences will make little difference without a change in the amount of monitoring conducted by the Authority. The Authority already has significant powers to monitor and enforce the taxi industry’s compliance.

For example, section 23 of the Transport Services Licensing Act 1989 allows the Authority to revoke a taxi organisation’s approval where the Authority is satisfied that the organisation cannot adequately maintain proper control over the activities of its members and their drivers. Section 23 also allows an approval to be revoked if the operators and drivers fail to maintain area knowledge, or an appropriate ability to communicate in English.

The Authority can already use section 22(4D) of the same Act, which requires a taxi organisation to ensure that its members comply with the organisation’s operating rules, to effectively improve industry compliance. This section of the Act places a responsibility for ensuring driver compliance on the taxi organisations for whom the drivers work.

The operating rules we obtained from several taxi organisations were quite prescriptive, and we consider that the taxi organisations that use their own operating rules are more likely to comply with requirements. We saw no evidence that the Authority uses section 22(4D) during monitoring. However, we consider that using this power to ensure that taxi organisations are enforcing their own operating rules would be an effective way of achieving wider industry compliance.

22: The Bill received its third reading on 15 June 2005.

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