By Alex Maschmedt, Louise Yun King & Wood Mallesons

The National Transport Commission (NTC) has released a discussion paper outlining four regulatory options to govern the safety of driverless cars and other autonomous vehicles in Australia. These include:

  1. Continuing the current approach
  2. Self-certification
  3. Pre-market approval
  4. Accreditation

These proposals mark an important step in developing a complete regulatory framework to support the large-scale roll-out of automated vehicles in the near future. The NTC is currently seeking feedback on each of the options proposed, along with any other issues that may arise in the regulation of driverless car technology. Subsequently, the NTC will formulate recommendations to submit to Australian transport ministers in November 2017.

This article evaluates the four regulatory options in light of current Australian practices surrounding vehicle safety and governance.

With tech companies, telcos, infrastructure providers and car manufacturers rapidly advancing driverless vehicle technology, we are at the dawn of the era of driverless cars and other autonomous vehicles. But despite steady advances in the technology behind driverless cars, there is currently little regulation concerning safety standards to be imposed upon these vehicles.

For the past few years, the NTC has worked with federal and local governments, Austroads, industry and consumer groups to identify and address regulatory barriers and policy issues concerning automated vehicles. The NTC’s objectives as an independent statutory body includes improving the productivity, safety and environmental performance of Australia’s road, rail and intermodal transport systems.

In early June, the NTC released a discussion paper identifying four regulatory options for a safety assurance system for automated vehicle technology in Australia. As identified in the NTC’s November 2016 policy paper and discussed in our previous alert, the development of a safety assurance regime is a medium-term reform which will form part of a complete regulatory framework to support the large-scale roll-out of automated vehicles predicted to occur by 2020.

Although the paper does not conclude which option is the most feasible, it provides a valuable starting point for supporting the development of Australia’s regulatory framework to embrace driverless technology.

International context
In the United States, the National Highway Transport Safety Administration (NHTSA) has already considered various tools to regulate automated vehicle safety, such as pre-market approval and expanded exemptions for driverless cars. Other countries such as Germany, Korea and Singapore have enacted legislative reforms to introduce testing standards and safety assessments for automated vehicles. However, there is no clear harmonised global practice, and although it wishes to encourage legislative change in this area, the NTC is wary of introducing legislation that may be incompatible with future international standards.

The four regulatory options
After a number of years collaborating with governments and industry stakeholders, the NTC identified the need for a national performance-based assurance regime to ensure the safe operation of driverless cars. The NTC then commissioned Nova Systems, a provider of engineering services, to prepare an independent report on options for developing an integrated national safety assurance system.

The NTC has now canvassed four regulatory options based on Nova Systems’ recommendations, developed after considering both international regulatory advancements for automated vehicles and existing national governance regimes of rail and aviation industries. These options are:

  1. Continuing the current approach
  2. Self-certification
  3. Pre-market approval
  4. Accreditation.

The pros and cons of each approach have been outlined in the tables below.

Which proposal is the most viable?
It may be that mandatory self-certification provides the fastest and most effective option to regulating safety assurance for driverless vehicles.

Mandatory reporting could also allow the Government to implement a compliance check regime similar to random safety checks carried out by health and safety regulators. This may require the establishment of a body to conduct compliance checks, but could ensure safety risks are adequately managed and driving system entities are incentivised to follow reporting standards. If an entity is found to have breached certification requirements or their statement of compliance does not align with their automated driving systems, they may be subject to civil penalties.

Self-certification would also require issues around the determination of liability to be further explored. Where an automated driving system covered by self-certification causes an accident, liability may be shifted onto self-certifying entities where a collision is deemed to be caused by a vehicle defect.

Given driverless technology is predicted to be on public roads as early as 2020, this proposal provides enough regulatory flexibility to allow automated vehicles to commence entry into the Australian market in the near future. Over the longer term, and once international and (possibly) uniform standards are developed, this regime can be easily adapted or renewed to allow for stricter or more comprehensive regulation.

Is a prominent government role desirable?
The NTC has stated that the most appropriate regulatory response to automated vehicle safety will depend on an assessment of the safety risk and community confidence in the industry to provide safe vehicles and services. Where the community exhibits a lower risk appetite towards driverless car technology, the role of government may be more prominent and a proposal such as pre-market approval would be ideal.

However, given the early development stages of the industry, along with community attitudes that are still evolving, any current proposed regulatory option should remain flexible and allow for the further innovation of driverless technology.
What now?

There is no doubt that regulators will continue to keep a close eye on the changes in technology, people’s attitudes, and international developments to inform the implementation of a legal framework that adequately addresses the risks and reaps the rewards of driverless car technology in Australia.

Based on feedback received, the NTC will submit recommendations to transport ministers in November 2017 as to the preferred approach and the next regulatory steps to take. Subsequently, a policy paper will be released for the agreed regulatory option and implementation actions can be commenced from November.

The NTC is currently accepting submissions which are due on the 28th July 2017. The discussion paper contains comprehensive detail about all aspects of the regulatory proposals. If you would like assistance in digesting the paper and making a submission, please do not hesitate to contact us.