Rail Safety: Compliance and Enforcement Policy (September 2007)

1. Introduction

Transport Canada (TC), through the Railway Safety Act (RSA) and other applicable legislation, promotes and regulates the safety of railway operations by federally regulated railway companies and provincially regulated railway companies applying federal regulatory requirements (e.g., when operating on a federally regulated host railway or subject to federal-provincial Agreements, etc.). TC also regulates the activities of other relevant bodies (e.g., road authorities, municipalities, etc) to promote safe railway operations by federally regulated and relevant provincially regulated railway companies.

The purpose of the Rail Safety Compliance and Enforcement Policy (C & E Policy) is to provide guidance to Transport Canada officials involved in:

• promoting compliance with railway safety regulatory requirements developed under the RSA and other applicable legislation and the safety of railway operations,
• monitoring for compliance and safety, and,
• responding to non-compliance and threats to / concerns with respect to safe railway operations, to help them fulfill these tasks in a fair and consistent manner across the country.

For the purposes of this document, compliance is defined as: conforming to regulatory requirements including, but not limited to legislative provisions, regulations, rules, standards, orders and emergency directives established under the RSA; while enforcement is defined as: the measures that are taken to bring about compliance. Other relevant definitions can be found in Appendix A.

Objectives of the RSA:

The objectives of the RSA are a key part of the foundation on which the C & E Policy is built. Section 3 of the Act states:

The objectives of this Act are to:

1. promote and provide for the safety of the public and personnel, and the protection of property and the environment, in the operation of railways;
2. encourage the collaboration and participation of interested parties in improving railway safety;
3. recognize the responsibility of railway companies in ensuring the safety of their operations; and
4. facilitate a modern, flexible and efficient regulatory scheme that will ensure the continuing enhancement of railway safety.

Consistent with these objectives, this policy seeks to promote and provide for safety in the operation of railways by providing guidance on: developing clear and enforceable regulatory requirements in a collaborative manner; actively monitoring and evaluating railway operations and practices; promoting and enforcing compliance with regulatory requirements; and, responding to threats and safety concerns with respect to rail safety.

The policy is likewise consistent with and supports TC’s vision, mission, values and strategic objectives and values.

Smart Regulation and the “Continuum of Compliance Activities”:

This policy was developed in the context of the continuing, rapid change in the railway industry, and incorporates concepts derived from Smart Regulation – a government-wide initiative aimed at improving the Government of Canada’s regulatory system. Smart Regulation strives for a better-coordinated, more transparent system that remains forward-thinking, progressive, and accountable to the citizens it serves.1

Informed by Smart Regulation, the C & E Policy establishes the framework for a better-coordinated and more coherent compliance and enforcement program. For example, the policy recognizes that efforts to promote compliance must begin at the regulatory development stage, since compliance is facilitated by regulatory requirements that are clear, and enforceable.

This recognition of a continuum of compliance activities, from drafting to implementation to enforcement, helps to underpin the current policy and is expected to improve both the level of compliance by those regulated and railway safety official’s ability to promote, monitor and enforce compliance and safety.

Structure of Document:

After specifying the policy’s applicability (section 2), this document outlines the Policy’s objectives (section 3) and identifies and describes activities for promoting and enforcing compliance and safe railway operations (section 4 and 5, respectively). It then sets out the enforcement and corrective action tools available to Transport Canada when non-compliance or safety concerns/ threats are discovered and lists factors that are taken into consideration when determining which of these tools to use in response to either scenario (section 5). Finally, the document’s appendices contain: a list of relevant definitions (Appendix A); a flow-chart illustrating Rail Safety’s activities with respect to enforcing compliance with regulatory requirements and responding to safety concerns/threats (Appendix B); a list RSA offences (Appendix C); contact information for TC, Surface offices (Appendix D); and, a list of links to related documents and websites (Appendix E).

For further assistance and/or clarification concerning this policy, contact:

Director, Safety Policy and Regulatory Affairs,
Rail Safety Directorate,
Safety and Security Group
Transport Canada
Enterprise Building, 427 Laurier Ave West
Ottawa, On, K1A 0N5
Tel: 613-990-8690

2. Applicability

This policy applies to all TC rail safety officials, both in the Regions and Headquarters, involved in promoting, monitoring or enforcing safe rail operations and compliance with regulatory requirements under the RSA and other applicable legislation. The policy likewise applies to the actions such officials take (e.g., drafting clear regulatory requirements, conducting safety audits, issuing Notices) to promote, monitor or enforce safe railway operations and compliance with regulatory requirements.

3. Concepts and Objectives

Smart Regulation Concepts:

As indicated above, this policy incorporates concepts derived from the Government of Canada’s Smart Regulation Initiative. While these concepts are intended primarily to guide the regulatory process, they are also useful in the context of promoting compliance. Some of the Smart Regulation concepts applied to and adapted for this policy include the following:

• Effectiveness
• Efficiency
• Timeliness
• Transparency
• Accountability and Performance
• National and International Cooperation
• Risk Management
• Instrument of choice

For more information on Smart Regulation, including these concepts, please visit www.regulation.gc.ca.

Policy Objectives:

As a key component of TC’s national Integrated Rail Safety Program, the objectives of this policy are:

• To promote and provide for safety in the operation of railways;
• To promote regulated parties’ awareness of the regulatory requirements of the RSA;
• To facilitate and promote compliance with regulatory requirements under the RSA;
• To promote safe railway operations and facilitate the identification and resolution of safety concerns / threats to safe railway operations;
• To help ensure regulatory requirements are developed and applied in a fair, impartial, appropriate and consistent manner and in accordance with Government of Canada priorities and principles;
• To encourage effective consultations and communications with regulated parties and stakeholders;
• To raise awareness of redress mechanisms available to regulated parties, which give them a reasonable opportunity to respond to enforcement/threat response actions; and,
• To respect the confidentiality of information obtained through the administration of regulatory requirements and communicate such information only to those entitled to receive it.

4. Activities Contributing to Compliance and Safety

As mentioned above, TC seeks to encourage compliance and safe railway operations at all stages of the regulatory cycle, from development to implementation to monitoring and enforcement. TC’s compliance and enforcement activities are planned using accepted risk management practices, as appropriate, and are conducted by TC Rail Safety officials. This section provides a description of the activities TC rail safety officials undertake to promote, monitor and enforce both regulatory compliance and safe railway operations more generally.

4.1 Activities for Promoting Compliance and Safety:

Regulatory Development:

TC activities for promoting compliance and safety at the regulatory development stage include the following:

• Clear and enforceable requirements – When regulatory requirements are being developed TC officials strive to ensure they are both clear and enforceable. Clearly worded regulatory instruments promote compliance by making it easier for regulated parties to understand what the instrument requires. Enforceable requirements likewise encourage compliance through the deterrent effect of possible enforcement action.
• Consultations – TC is committed to the practice of consultation, which it considers to be a fundamental element of good governance. Interested parties are consulted whenever new legislation, regulations, or important policies are being planned or developed. To this end, a Railway Safety Consultative Committee (RSCC) was established. The RSCC enables interested parties, including railway companies, railway labour unions, other government bodies and representatives of the public, to provide input to government decision making in the interest of improving railway safety in Canada.

Implementation:

TC also promotes compliance and safety through the following activities aimed at facilitating the implementation of railway safety requirements:

• Safety Management Systems (SMS) – In 2001, TC issued regulations under s. 47.1(1) the RSA requiring railway companies to develop and implement SMS. An SMS is a formal framework for integrating safety into the day-to-day operations of a rail company. SMS encourages compliance by obliging railway companies to identify applicable regulatory requirements and the procedures for demonstrating compliance with them. SMS also promotes the development of a “safety culture”, which is intended to encourage railway companies to operate in a safe manner and comply with regulatory requirements under the RSA.
• Providing Information – While regulated parties are responsible for being aware of the regulatory requirements that apply to them, TC strives to ensure that all regulated parties are aware of and have access to all regulatory requirements to which they are subject. This is done, for example, by posting rail safety regulations, rules, standards, guidelines etc on the TC’s website and by sending copies of new rules and standards to affected stakeholders when they are approved by the Minister.
• Education and Awareness – TC seeks to inform relevant parties about, and help them to understand, the rail safety requirements set out in the RSA and its regulations, rules, standards, orders, etc. For example, Rail Safety officials provide information and advice to interested parties about the content and application of the RSA and its regulatory requirements. TC also provides information materials to stakeholder conferences or directly to individual railways or other relevant organizations. Finally TC contributes to public awareness campaigns and occasionally conducts seminars and workshops on particular issues (e.g., regarding the implementation of a new rule).
• Counselling – This tool is used prior to observing non-compliance or unsafe railway operations to promote compliance and safety and to encourage railway companies to correct potential non-compliance or unsafe operations voluntarily. When counselling, TC discusses general or specific compliance or safety concerns with regulated parties, and provides them with information regarding the reasons for the concerns, the rationale for the safety / regulatory requirements and the potential consequences of non-compliance or unsafe operations. Railway companies are then expected to take the necessary remedial action voluntarily. TC Railway Safety Inspectors (RSI) then monitor to ensure such action is taken.

4.2 Activities for Monitoring Compliance and Safety:

TC monitors for compliance with applicable regulatory requirements and for safe railway operations by railway companies via the national Integrated Rail Safety Program. Activities for monitoring regulatory compliance and safe railway operations include the following activities:

• Data collection & analysis – TC collects and analyses data to identify trends in railway safety (e.g., regarding safety awareness, railway practices and compliance with regulatory requirements) and to determine whether regulatory action is required to address any identified safety concerns. Data is collected in several ways. For example, TC’s SMS regulations require railway companies to submit data regarding accident rates and safety performance. In addition, RSIs collect information through inspections and investigations (see below for more information). This information is used to conduct risk assessments, which TC uses to set priorities and make decisions on regulatory matters.
• Inspections - Inspections are a key component of the compliance and safety monitoring process and are used to verify compliance with rail safety regulatory requirements (and in cases of non-compliance, inform decisions regarding possible enforcement action), collect data (see above), and identify possible safety concerns or threats to rail safety that require corrective action. Inspections may be stand-alone activities or may be conducted as part of the audit process (see below).
  
  Inspections can be conducted based on Risk Based Business Planning, at the discretion of TC or “for cause”. For example, upon receipt of a complaint regarding an alleged unsafe condition, or possible non-compliance with a regulatory requirement, an RSI may do an inspection “for cause” to verify if such a condition or situation exists, evaluate the possible risks, and determine whether enforcement or corrective action is required.
   
• Safety Audits - Audits are used to verify and promote compliance with regulatory requirements and the safety of railway operations. Audits are conducted to assess a railway company’s safety performance. SMS audits are conducted pursuant to a railway company’s SMS, or any component of its SMS, including whether the company’s actual operations conform to the procedures they developed to demonstrate compliance with applicable regulatory requirements.
• Accident/Incident Investigations – TC may investigate an occurrence (i.e., an accident or incident) for any purpose other than to make findings as to its causes and contributing factors, which are the responsibility of the Transportation Safety Board. For example, TC may wish to investigate an occurrence where it has reason to believe that non-compliance was involved or that a regulatory void may exist. The decision to attend a rail accident/incident and to investigate the occurrence will be at the discretion of a Rail Safety manager. Investigating incidents and accidents also provides TC an opportunity to collect valuable data for advancing rail safety. For further information, refer to subsections 14(3) and 14(4) of the Canadian Transportation Accident Investigation and Safety Board Act.2

4.3 Activities for Enforcing Compliance and Responding to Safety Threats / Concerns

As mentioned above, the term enforcement, for the purposes of this document, refers to “measures that are taken to bring about compliance”. This definition illustrates the fact that the enforcement aspect of the policy is concerned primarily with encouraging regulated parties to comply with regulatory requirements – thereby promoting railway safety.

In addition to enforcing compliance with regulatory requirements, TC responds to safety concerns and threats to safe railway operations, which might involve matters not subject to regulation. Under the RSA, “a threat is a hazard or condition that could reasonably be expected to develop into a situation in which a person could be injured or made to be ill or damage could be caused to the environment or property, and a threat is immediate if such a situation already exists.”

TC has a variety of tools available to it to enforce compliance and respond to safety concerns / threats to safe railway operations in a manner that is proportionate to the risk that the regulatory violation or threat poses to safe railway operations.

List of Tools for Enforcing Compliance and Responding to Safety Threats / Concerns:

• Letter of Non-Compliance – TC uses this tool to both promote compliance and respond to non-compliance. Letters of non-compliance identify the non-compliance and include a timeframe for the violator to detail their corrective action plan. Appropriate follow-up action is taken to verify corrective actions undertaken by the regulated party. Failure to correct the non-compliance may result in progression towards prosecution.
• Letter of Concern – This tool is used to identify and inform railway companies of safety concerns. The letters include a timeframe for the company to provide a corrective action plan to address the safety concerns. Appropriate follow-up action is taken to verify corrective actions undertaken by the regulated party. Failure to correct the safety concern could lead to regulatory action or ongoing monitoring / re-evaluation to determine if the concern poses or develops into a threat to safe railway operations.
• Notice or Notice and Order – These tools are used to respond to threats to safe railway operations; they are not tools for enforcing compliance with regulated requirements. A Notice is a formal written document, issued by an RSI under section 31 of the RSA, informing a regulated party that, in the opinion of the RSI, a threat to safe railway operations exists. A Notice and Order is a formal written document, issued by an RSI under Section 31 of the RSA, informing a regulated party that, in the opinion of the RSI, an immediate threat to safe railway operations exists and prescribing specific action to remove the immediate threat. Under subsection 41(2) of the RSA, contravention of an Order is an offence and can lead to prosecution. It should be noted that the Transportation Appeal Tribunal of Canada (TATC) can review a Notice and Order.3
• Ministerial Order – is a formal written document, issued by the Minister under Section 32 of the RSA, informing a regulated party of a particular rail safety problem and ordering them to address that problem. For example, such orders may be issued when, in the opinion of the Minister: a railway work is unauthorized or improperly constructed, altered or maintained; there is an immediate threat to safe railway operations as a result of a person contravening a regulation under Section 24 of the RSA; or, an SMS established by a railway company has deficiencies that risk compromising railway safety. Under subsection 41(2) of the RSA, contravention of an Order is an offence and can lead to prosecution. A Ministerial Order can also be reviewed by the TATC.
• Emergency Directive – Under Section 33 of the RSA, if the Minister is of the opinion that there is an immediate threat to safe railway operations, the Minister may issue an Emergency Directive ordering a railway company to cease a particular unsafe action, or take specific action set out in the Emergency Directive to mitigate the immediate threat identified. The Directive may remain in effect for up to six months and may be renewed for an additional period of six months. Under subsection 41(2) of the RSA, contravention of an Emergency Directive is an offence and can lead to prosecution.
• Order of the Court – Under Section 34 of the RSA, a Ministerial Order, Emergency Directive or Notice and Order may be made into an Order of the Court – in the case of a Notice and Order, it must be first confirmed by the Minister and thereby given the same effect as an order of the Minister – and enforced as such (e.g., via contempt of court proceedings, or by seeking an injunction). Should this option be pursued (e.g., in a case where a railway company fails to comply with an Order, Ministerial Order or Emergency Directive), it is imperative that TC Legal Services be advised as soon as possible to initiate appropriate action.
• Prosecution – The Attorney General of Canada is responsible for all litigation relating to the RSA, and its subordinate regulations, rules, orders, standards, etc. Transport Canada officials may recommend prosecution of a violation of the RSA or a regulatory requirement made under it and present information to the Attorney General of Canada. However, it is the Attorney General of Canada who decides whether or not a prosecution will be initiated or continued.
  
  Prosecution is more likely to be recommended in cases of serious, willful, uncorrected or continued non-compliance or of failure to obey Orders issued by RSIs or the Minister of Transport.

Factors for Selecting an Enforcement or Corrective Action Tool:

TC is committed to enforcing regulatory requirements and responding to safety issues / threats in a fair, objective and consistent manner. To help ensure this, the following factors are considered when deciding on the appropriate enforcement or corrective action for any given situation:

• the nature of the non-compliance or safety concern, including consideration of the seriousness of the non-compliance or concern (e.g., the resulting harm or potential harm to life, health, property and the environment – and in particular whether there is a threat to safe railway operations
• whether there are apparent attempts to conceal pertinent information, including the violation or safety concern/threat itself, or otherwise subvert the objectives and requirements of the Act;
• whether the violator attempted to comply with, or intentionally contravene the applicable requirement(s);
• whether the non-compliance or safety concern is correctable on-site;
• the regulated party’s previous compliance and safety record and whether the violation or safety concern is likely to recur;
• what corrective / remedial action may be necessary to achieve continuing compliance / safe railway operations by the regulated party;
• the attitude of the violator or regulated party (e.g., their willingness to co-operate with RSIs, evidence of corrective action already taken, etc);
• responsibilities under applicable federal/provincial administrative agreements; and,
• statutory conditions and obligations (e.g., with respect to the existence of a threat to safe railway operations).

Wide-spread non-compliance and safety concerns:

Where it is believed that an observed instance of non-compliance or safety concern goes beyond a single instance and may be wide-spread, including across more than one region, the RSI, in addition to responding to the non-compliance or safety concern as outlined above, should advise regional management, who will in turn inform headquarters (HQ) of the issue, as required. The appropriate HQ Functional Branch will then evaluate the issue to determine if is a pan-regional or nation-wide problem requiring national remedial action. If so, HQ (i.e., the appropriate Functional Branch and Safety Policy and Regulatory Affairs) will develop, in consultation with the region(s) and other relevant stakeholders, as necessary, the appropriate response.

5. Roles and Responsibilities:

Many Rail Safety officials contribute to the implementation of the C & E Policy. In accordance with departmental policy, TC seeks to ensure that all staff responsible for railway safety program activities covered by the C & E Policy, including those designated as RSIs, will be provided, as part of the Rail Safety Business Plan and in accordance with approved resources, the training and resources required to carry out their assigned mandate. This section provides a brief description of the responsibilities of several relevant groups (listed in alphabetical order).

Functional Branches, HQ:

HQ Functional Branches are responsible for providing expert advice on technical rail safety issues. For example, they are responsible for, or contribute to, the following activities under this Policy:

• participating in the development of regulatory requirements;
• evaluating, and helping to develop national responses to, possible wide-spread rail safety / non-compliance problems;
• helping to provide information and delivering education and awareness programming; and,
• evaluating and providing advice regarding enforcement programs.

Railway Safety Inspectors (RSIs):

RSIs conduct all on-site monitoring and have front-line responsibility for monitoring and enforcement activities. In addition, they provide information, perform education and awareness activities and conduct counselling. Under the RSA, RSIs are given extensive powers to enable them to fulfill their pivotal role in monitoring and enforcement.

Regional Directors – Surface:

In general, with respect to the C & E Policy, Regional Directors are responsible for overseeing:

• the development and delivery of monitoring and enforcement activities (e.g., audits and inspections);
• the development and delivery of regional education and awareness programs;
• the tracking of regional trends in non-compliance or safety concerns / threats to safe railway operations; and,
• the identification of possible wide-spread rail safety / non-compliance problems.

Safety Policy and Regulatory Affairs Branch, HQ:

This Branch is responsible for coordinating the development of regulatory requirements in consultation with TC regional offices and HQ Functional Branches, industry, relevant associations and organizations and other stakeholders. In the context of this Policy, the Branch is responsible for the compliance promotion activities during the regulatory development stage (see section 4.1, above). The Branch also contributes to the evaluation of, and the development of national responses to, wide-spread rail safety / non-compliance problems.

TC Legal Services:

As mentioned above, the Attorney General of Canada has responsibility for pursuing and conducting litigation under the RSA. In addition to that role, TC Legal Services provides advice to the Rail Safety Directorate on various issues – including issues related to enforcing compliance with regulatory requirements and responding to safety threats.

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Notes:

1. For more information on the Smart Regulation initiative, please visit www.regulation.gc.ca.

2.  http://laws.justice.gc.ca/en/C-23.4/index.html

3. More information on the TATC can be found on their website at: http://www.cat-tac.gc.ca/