13 July 2017

The regulatory road for driverless cars in Australia

This article is written by Alex Maschmedt and Louise Yun. 

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.

Continuing the current approach




This approach would continue the current regulatory system for managing new and imported vehicles, along with their operation on public roads. The governance of automated vehicles would be supported by the Australian Consumer Law. Minor reforms such as expanding the definition of ‘driver’ would be enacted.

  • Widely-known existing industry processes
  • No new changes, costs, time constraints or barriers to industry
  • Allows for influence of future international developments
  • Current Australian Design Rules (ADRs) for vehicles do not consider automated technology
  • Widespread vehicle exemptions from current ADRs would be burdensome and costly
  • No regulation for after-market modifications





This option would introduce voluntary or mandatory compliance with automated vehicle safety criteria to be established. Automated driving system entities (which could be the manufacturer, operator, designer or another entity) would voluntarily or mandatorily provide a government agency with a statement of compliance for new or major changes to automated driving systems. This regime would possibly be supported by a legislated primary safety duty for manufacturers, suppliers and automated driving system entities to provide safe automated vehicles.

  • Quick and cheap implementation
  • No delay to introduce automated vehicles
  • Supports innovation
  • Clearly identifies a legal entity responsible for the safety of automated vehicles
  • Voluntary compliance would be unenforceable and would rely on market pressure
  • No regulation for third-party modification or repairs
  • A primary safety duty may duplicate ACL consumer guarantees
  • Users may be exposed to other technology risks not covered in automated vehicle design standards

Pre-market approval




This approach involves a government agency approving automated driving systems before they are allowed to operate on public roads. Approvals would need to extend to safety-critical changes and significant changes to a vehicle’s operating design domain.

  • Highest certainty and confidence for consumer safety
  • Technical standards and tests would be widely known
  • Automated driving entity costs would be limited to a pre-market assessment and ongoing reporting of safety-critical events
  • Government must acquire significant knowledge around design standards and technology
  • Government may be liable for safety faults
  • Time-consuming and costly for Government
  • No regulation for third-party modification or repairs





This option involves a requirement for automated driving system entities (such as a manufacturer or technology provider) to obtain entity-level accreditation from an appropriate agency. The accreditation agency must satisfy itself that the party seeking accreditation has an established process to identity and manage safety risks. If satisfied, the accreditation agency will report the entity’s accreditation to government departments and road transport agencies.

  • Technology and application neutral
  • Supports innovation
  • Mechanism to support broader safety requirements including cybersecurity and data provision
  • Can reuse existing processes and lessons from rail, aviation and other industries
  • Complex and expensive
  • Difficult to administer if there are many automated driving system entities
  • High cost for Government
  • Government expertise in accreditation is crucial
  • Significant volume of work for an accreditation agency
  • No regulation for third-party modification or repairs

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.

Driverless cars - community risk appetite v regulatory options

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.

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