Regulation of autonomous vehicle safety systems - NTC recommends national legislative regime and a primary safety duty

By Kate Grutzner, Stuart Cosgriff

21 Jun 2018

The National Transport Commission has identified its preferred approach to regulating autonomous vehicle safety systems, for which it is seeking public input on it until 9 July 2018.

The National Transport Commission (NTC) is leading the national regulatory reform program for automated vehicles and recently released its "Safety Assurance for Automated Driving Systems Consultation Regulation Impact Statement" examining how regulation of “Automated Driving Systems” (ADSs) can and should help to ensure automated vehicle safety.

In this article we set out the key findings of the Statement, including the four regulatory options considered by the NTC.

Background to the Statement

The Statement builds on the NTC’s earlier papers, “Regulatory options to assure automated vehicle safety in Australia” (June 2017) and “Assuring the safety of automated vehicles” (November 2017). Following the release of the November 2017 paper, the Transport and Infrastructure Council agreed that a national safety assurance system for automated vehicles should be developed based on mandatory self-certification.

Since publication of the Statement, the NTC has also released a policy paper, "Changing driving laws to support automated vehicles". It makes recommendations for legislative reform aimed at clarifying when an ADS may drive a vehicle, the legal entity responsible for the ADS when it is operating and new legal obligations for users of automated vehicles. The paper then outlines the further work needed to transform agreed policy into legislation.

Key risks of automated vehicles

According to the Statement, the key risks to the safe commercial deployment of automated vehicles in Australia are a failure of ADSs to deliver reasonable safety outcomes, a delay or reduction in ADS uptake due to a lack of consumer confidence, and regulatory inconsistency and uncertainty for automated driving system entities (ADSEs) seeking to bring ADS technology to the Australian market.

Regulatory options to address automated vehicle risks

The Statement identifies and assesses the relative costs and benefits of four regulatory options to address the key risks:

Option 1: Current approach

This is the baseline option; it does not provide for an ADS safety assurance system and uses existing legislation and regulatory processes to manage autonomous vehicle safety. Relevant regulatory regimes are the national vehicle standards, road rules and the Australian Consumer Law. Because ADSs would not comply with current vehicle standards, this option relies on the introduction of a new Australian Design Rule for vehicle standards. Even then, ADSs would be “nonstandard” vehicles requiring an exemption from the standard (assuming that can be achieved).

Option 2: Administrative safety assurance system

A safety assurance system based on mandatory self-certification that uses existing legislation and regulatory instruments. As for Option 1, this option relies on the introduction of a new Australian Design Rule for vehicle standards, under which ADSs would be “nonstandard”. However, the criteria for an exemption would be clearer - compliance with the self-certified safety assurance system.

Option 3: Legislative safety assurance system

A safety assurance system based on mandatory self-certification that would incorporate new or amended legislation to include specific offences and compliance and enforcement options. A regulatory agency would be established to administer automated vehicle safety, ensure ADSE self-certifications are maintained, and collect safety data. This option enables the vehicle and the ADS to be regulated separately, ensuring that the ADS itself goes through a safety process. It also enables the appropriate party to be targeted if a vehicle is unsafe.

Option 4: Legislative safety assurance system and a primary safety duty.

A safety assurance system with all of the elements of Option 3, plus a primary safety duty on ADSEs (rather than, for example, on vehicle manufacturers or human drivers/occupants). The primary safety duty would support the mandatory self-certification approach, and by not being prescriptive it would capture significant advances in safety technology. It would also provide flexibility to adapt to the rapidly developing industry.

Requirements for a Statement of Compliance

In line with the approach agreed by transport ministers in November 2017, the NTC has proposed requirements for a “Statement of Compliance” as part of the self-certification under Options 2, 3 and 4:

  1. Safe design system and validation processes: explanation of why the design, validation and testing processes were chosen, and how these ensure a safe technology is developed.
  2. Operational design domain: identification of the operational design domain of the ADS and demonstration of how the ADSE will ensure the ADS is able to operate safely within that domain.
  3. Human-machine interface: how interaction between the ADS and parties inside and outside the vehicle will be safely facilitated.
  4. Compliance with relevant road traffic laws: demonstration of how the ADSE will ensure the vehicle operates in compliance with relevant road traffic laws when the ADS is engaged.
  5. Interaction with enforcement and other emergency services: demonstration of how the ADSE will ensure that police can access real-time, accurate information about whether and to what level the ADS is engaged at a given time.
  6. Minimal risk condition: demonstration of how the ADS will detect that it cannot operate safely and ensure a minimal risk condition is reached in such circumstances.
  7. On-road behavioural competency: demonstration of how the ADS will appropriately respond to conditions, both foreseeable and unusual, that may affect its safe operation.
  8. Installation of system upgrades: demonstration of how the ADSE will manage system upgrade risks.
  9. Testing for the Australian road environment: demonstration of how the ADSE has considered the Australian road environment in designing and developing the ADS.
  10. Cybersecurity: demonstration of how the ADSE has designed and developed an ADS that minimises the risks of cyber intrusion and how it will detect and minimise the consequences of intrusions.
  11. Education and training: outline of the education and training that will be provided to relevant parties and how this will minimise the safety risks of using and operating ADSs.
  12. The NTC has also outlined additional obligations to be fulfilled as part of the Statement of Compliance, including data recording and sharing obligations, corporate presence in Australia, financial position, and evidence of insurance.

Assessment of the options to address automated vehicle risk

Option 4 is the NTC's the preferred option, based on an assessment of five key categories - road safety, uptake of automated vehicles, regulatory costs to industry, regulatory costs to government, and flexibility and responsiveness. Road safety is considered to be the key category and the NTC’s assessment gives a heavier weighting towards greater delivery of road safety benefits.

In our view, while Option 4 will likely be the most resource-intensive and time consuming option, it will enable the highest level of safety and provide much greater certainty for ADSEs and other interested businesses than the alternatives. It will provide the clarity needed by ADSEs and increase consumer confidence in the safety of ADSs, which will be crucial in enabling take-up of autonomous vehicles.

The key advantage of Option 4 over Option 3 is the flexibility that it will provide for safety to be an overarching obligation as the technology and regulatory environment around autonomous vehicles develops. Options 1 and 2, by essentially maintaining the status quo, do not engage with the range of issues and changes that autonomous vehicles will bring across all spheres of governance and business.

Next steps for the NTC and interested parties

The Statement is open for public consultation until 9 July 2018. The NTC is seeking comment on 21 consultation questions relating to the Statement, the regulatory options it assesses and their potential impacts. Interested organisations should consider making submissions for the NTC's consideration.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.