Operational Excellence through Leadership and Compliance

Maritime Compliance Report

Welcome. Staying in compliance takes dedication, diligence and strong leadership skills to stay on top of all the requirements which seem to keep coming at a rapid pace. With this blog I hope to provide visitors with content that will help them in their daily work of staying in compliance. I hope you find it a resource worthy of your time and I look forward to your feedback, questions, comments and concerns. Thanks for stopping by. To avoid missing critical updates, don’t forget to sign up by clicking the white envelope in the blue toolbar below.

RCP v. Subchapter M

The proposed rule containing regulations for the inspection of towing vessels, known as Subchapter M, is due to be published in a few months.  It is expected that these regulations will include a towing vessel safety management systems. Many towing vessel companies currently have a safety management system (SMS) in place known as the American Waterways Operators (AWO) Responsible Carrier Program (RCP).  Having been both a U.S. Coast Guard marine inspector and an AWO RCP auditor, I have noticed a different expectation regarding the level of implementation required between inspected vessel's SMS and RCP. I suspect that some RCP companies might have a difficult time with Subchapter M enforcement if they don't step up the level of implementation.


 


An interesting marine casualty report has been published by the Coast Guard regarding the unfortunate death of a U.S. merchant mariner. I recommend anyone involved in an SMS click on the link below, and/or if the link times out: go to Homeport, Investigations, & scroll down and open "S/R Wilmington Personnel Casualty," and take note of the emphasis placed on the SMS in this accident report, and how the Coast Guard intends to step up SMS enforcement.

http://homeport.uscg.mil/mycg/portal/ep/home.do?tabId=0&BV_SessionID=@@@@1323623537.1305732674@@@@&BV_EngineID=cccfad 

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New Safety Management System Workbook Available

A common practice throughout the maritime industry, despite elaborate safety management systems (SMS) which have been put in place, is to simply rely on the credentials and experience of mariners to operate safely. But the expectation with Safety Management Systems (SMS) is that written policies and procedures are to be followed by employees, both ashore and afloat.   Just ask anyone who has been involved in a serious accident investigation, or litigation. 

The hard truth is, best way to learn the company's policies and procedures is to "hit the books" and actually look up the information and apply it to real-life situations.  The best way to ensure this is done is to provide a tool to shipboard and shore-side employees which will help them do the work.

 


We have recently published an SMS workbook, based upon a qualification process used in the U.S. Coast Guard.  The workbook contains 90 different scenarios, each of which must be researched by the trainee in the company's own SMS. Space is provided to write down, not only the answer, but the section, page and paragraph number where the answer is found.  The workbook covers just about any scenario intended to be covered by any maritime SMS.  It can be issued to each individual employee as a personal qualification guide, or used during group training exercises.

Anyone who completes this workbook will be fully familiar with the company's SMS and will fare much better during inspections, audits, investigations, administrative hearings and trials. It can also serve as a required "management review" as it will bring to light any inadequacies in the SMS which require revision. Finally, auditors will find this workbook an excellent tool to determine if crews know the company policies and procedures, or if the issue is even addressed in the SMS.

Many companies have ordered these workbooks for their entire fleets and have found them to be extremely beneficial. To order the Safety Management System Workbook simply click here. You can pay by credit card through the website, or simply place an order and request an invoice. 

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What's the best way to get captains and crews to learn company policies and procedures?

These days there are many policies and procedures for crews to follow. As we have discussed in the past, many policies and procedures may be unreasonable or unrealistic, but once they have been customized and refined, what's the best way to get captains and crews to learn and follow them? Unfortunately, the answer is to "crack the books" which not too many people enjoy.  This is a true leadership challenge, but with the right skills and tools it can be done.

Please join us in New Orleans on April 29th for an important seminar on the proper implemenation of safety management systems.  Please follow the link below for further details:

http://www.marcomint.com/index.php?option=com_content&view=article&id=24&Itemid=16 

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EPA VGP Compliance – Do You Have All the Facts?

10Each vessel owner/operator I ask about EPA VGP compliance gives me a different response:  "Oh yeah, I heard about that…We've got it covered we just log how much graywater we discharge and try not to wash any oil over the side…I asked the Coast Guard and they don't know anything about it…Is that for real..?" 

This year I was selected to do a session on EPA VGP compliance at the International WorkBoat Show Professional Series being held in New Orleans from December 1-3.  In preparation for my presentation, I just concluded a meeting in Houston with EPA officials who are responsible for the EPA VGP in EPA Region 6.


Participating in the meeting were the person in charge of VGP enforcement for Region 6, the EPA attorney responsible for VGP issues, and the individual responsible for permitting. The purpose of the meeting was to make sure I had all the facts from the horse's mouth when it comes to my presentation, and to be able to answer the tough questions.  Some clients had also provided me with their nagging questions, and these EPA officials were very forthright in their answers.  I found their willingness to discuss the issues candidly quite refreshing and I am truly grateful for their taking the time to meet with me.

My approach to compliance has always been to prepare for the worst and hope for the best.  This comes from my experience both in and out of the Coast Guard, seeing frustrated industry people whose compliance efforts amount to doing what everyone else was doing, or doing whatever the last government inspector said was OK.  This can only result in problems or penalties.  Companies must be in compliance with all aspects of written regulations and policies to ensure compliance, because a new inspector can always show up to enforce what he knows about.  But sometimes when a worst case scenario approach is compared to actual enforcement levels, it can appear to be a "boy who cried wolf" scenario.  That is why I wanted to make my presentation to the EPA officials first, for a reality check.  I wanted to know if my compliance management ideas were "over the top" or not.  Not only did they not think my approach was "over the top" they added many interesting comments.  Here are a few of the highlights:


The EPA VGP is currently being enforced.

Anyone who has knowledge of the requirements of the EPA VGP and deliberately ignores them will be referred to the criminal division.
The EPA VGP was written to be general, but the response in the form of BMPs, etc. must be specific processes tailored to your specific vessel and operation.

The best management practices (BMPs) required are the industry BMPs, not what youthink are BMPs. You could be fined for not following the industry best practices regarding any particular discharge. Follow the permit closely on BMPs and you won't be far off.

Documentation is very important when it comes to enforcement.

Anyone who certifies that inspections and monitoring required by the permit have been done, and it is determined that the inspections and monitoring in fact have not been done, those certifying individuals who signed the log or report will be referred to the criminal division.


I hope these comments make you confident and not worried, but in either case, consider attending the WorkBoat Show Professional Series session to hear the rest of the information and get the answers to your questions.  It should be noted that the comments above are paraphrased and not direct quotes and that the EPA does not endorse me, my company or any of our products. They simply listened and provided factual feedback. See you at the show. 

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Regulators – Industry rejects or wannabes?

"Regulators are either industry rejects, or wannabes, neither of which makes for good regulators." At least that is the opinion of one law professor at a recent lecture series I attended regarding the BP/ Deepwater Horizon oil disaster in the Gulf of Mexico. The comment was made during a discussion about what the responsibility and liability of federal regulators should be, such as those regulators from the agency formerly known as MMS (Mineral Management Service), who may not have performed their duties to the fullest of their abilities. I found the comment both offensive and intriguing at the same time. Offensive perhaps, because I have served as a federal marine inspector in the past; intriguing, because on some level, it rings true.

 

The implication is that a wannabe is more likely to look the other way in hopes of gaining favor with industry and ultimately securing a comfortable position. When I started out as a U.S. Coast Guard marine inspector years ago, an old-timer and co-worker told me, as I was writing a long list of deficiencies for a vessel, "You're never going to get a job in this industry when you retire."

 


This perception is not limited to the oil and gas and maritime industries. A few years ago a major airline was fined $10 million dollars for not taking defective airplanes out of service as required by an FAA directive.The error the airline made was relying on a "friendly" FAA supervisor who agreed that they shouldn't have to take the planes out of service when he did not have the authority to make such a decision.Allegations made at the time were that there were many cozy relationships between the FAA and the airlines they regulate, with personnel making career moves between the two.

 

Part of the reason for the perception that a regulator with former industry experience is an "industry reject" is the disparity in salary between the government employee and his industry counterpart. A comparison given during the recent lecture was the government inspector's salary of approximately $85K while the oil industry engineer he is regulating is making $300K. I'm not sure this is a fair or accurate comparison, but there is probably some truth to the concept. There may be some industry professionals who realize they have gone as far as they will go in the private sector and choose government service for a more structured, secure and lower-stress career. This does not necessarily amount to incompetence as implied by the term "industry reject." People make career choices for many different reasons. With the proper leadership and management applied, actual "industry rejects" who do not measure up should quickly be made into "government rejects" as well.

 

So if regulators are either industry rejects or wannabes, the challenge for reformers is to figure out who, then, or what, makes a good regulator? A few year ago the U.S. Coast Guard instituted changes to its marine safety program in response to complaints from industry and Congress regarding a shift in focus toward security in the wake of 9/11, at the expense of the marine safety program. The jury is still out on whether the Coast Guard got to the root of its problems and only time will tell if the former MMS actually fixes its issues. But I'm not convinced that growing brand new, industry-free, regulators is a viable solution, or a wise one. 

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Brad Pitt on the Death Penalty for Oil Spillers

Years ago my psychology professor told us that in order for punishment to be effective, it must be swift, severe and consistent. The example he used was that if you want a child to stop playing with matches you should immediately hold his hand over a lit stove every time you catch him doing it. Of course, that was an extreme example used to make an important point. But based upon recently published reports, it seems that Hollywood actor Brad Pitt may be of the same mind. According to Mail Online, UK, Brad Pitt has weighed in on the Gulf oil spill controversy and said he would consider the death penalty for those to blame for the disaster which killed 11 men and spilled millions of gallons of oil into the Gulf of Mexico. When asked about the people responsible for the crisis, Pitt reportedly said: "I was never for the death penalty before - I am willing to look at it again." While Mr. Pitt's comments may seem over the top, and based upon emotion, they raise an important point about compliance.

 


The truth is no regulatory program can be effective without significant consequences being consistently imposed. As a Coast Guard inspector years ago a representative of a barge company admitted to me that the owner had made a conscious business decision to not bring barges in for inspection if they were on charter. The company had half of their fleet operating with expired Certificates of Inspection in violation of federal regulations. The owner's reasoning was that any fine that the Coast Guard might issue would be less money than he would lose by taking the barges off charter and bringing them in for inspection. In this case he was correct, and then some. Following an internal disagreement between two departments on how to address the issue, the barge company received no fine at all.

 

But even when a fine is issued, is it severe enough to compel compliance, or is it just seen as the cost of doing business? According to CBS 60 Minutes, BP was fined $108 million dollars for the disastrous 2005 Texas City refinery explosion. That seems like a great deal of money, but perhaps not to BP. Was it significant enough to inspire a cultural shift?

 

Surely we will see a number of changes as a result of the recent Gulf of Mexico oil disaster, and perhaps the process of assessing fines will be reviewed as well. Assessing fines based upon a percentage of a company's gross revenue might not be perceived as fair, but might be more effective in compelling compliance from companies with the greatest resources. Although a rational solution of any kind might not appease someone considering the death penalty.

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Optimizing your Facility Security Plan (FSP)

Port security funds are supposed to be allocated to projects that will have the greatest impact. So, why would scarce taxpayer dollars be spent on fences and cameras to protect non-threatening areas such as settling ponds far away from the nearest waterway? The answer, most likely, is human error. The International Ship and Port Security (ISPS) Code requires port facilities around the globe to comply with the maritime security requirements of the Code. For U.S. port facilities, the U.S. Coast Guard regulations derived from Maritime Transportation Security Act (MTSA) of 2002 provided a definition of the term "facility." However, many years later, there are still conflicting opinions regarding what portions of a facility must be included under the maritime security regulations. The definition of a facility, beyond the description of the waterfront portion, calls for "any contiguous or adjoining property" to be included. Despite this definition, some facilities simply fenced off their docks, called that their facility, and got away with it. Other similar facilities were required to spend tens of thousands of dollars on fencing and other access control issues for their entire property.To clarify "contiguous property," the Coast Guard published guidance which states that in a case where a public street (such as a river road) splits a facility property, the maritime security regulations may only apply to the water side of the road. The example used in the policy guidance is an oil or hazardous material transfer facility with a pipeline crossing over the road. Despite this guidance, there are many facilities where the regulations have been applied to both sides of the road. In addition to costing facilities a great deal of money having to implement a set of regulations where they shouldn't apply, port security grant money is allocated in some cases to secure areas that are no threat at all of a transportation security incident (TSI). It's important to get a facility's footprint correct, not only to save the facility money on implementation issues such as Transportation Worker Identification Credential (TWIC) requirements, but to ensure that the country's limited maritime security resources are spent where the threat is the greatest.   Some Coast Guard personnel may attribute this disparity to individual Captain of the Port (COTP) authority. But in reality, many of these mistakes were made initially due to a lack of understanding of the applicability and policy guidance. We have been successful in getting a number of these facility footprints corrected through the Coast Guard's formal appeals process, saving the facilities thousands of dollars and hopefully avoiding future misappropriation of port security grant money.   Industry should not shy away from questioning the opinions of enforcement personnel out of fear of retaliation. The Coast Guard's policy is that it encourages appeals from industry. Everyone benefits from a constructive dialogue. Going along with things that you know are incorrect usually just leaves you chasing your tail every time a new inspector shows up. 

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Is the Coast Guard “in bed” with BP?

Here in New Orleans much of the discussion on talk radio is centered on the Coast Guard's handling of the BP/ Deepwater Horizon oil disaster. Following the lackluster response to Katrina, the general public and local officials want swift and decisive action from federal responders. The problem is that the existing process set up by law makes the spiller responsible for the clean-up. The federal government requires operators to have response plans and contracts in place to clean up oil spills. The feds are responsible to make sure that the approved plans are followed. The general public and local officials have little understanding or tolerance for such processes during an emergency. In fact, some people seem to think that in a disaster all laws become suggestions commonly referred to as "red tape."

 

If we want to improve our response in the future we must look at the factors which make government respond the way it does: laws and regulations. If an agency charged with enforcing laws and regulations steps in to intervene on response activities, they are looked at as obstructionist bureaucrats. Nothing will make federal agencies respond differently the next time by declaring them "Stuck on stupid." Perhaps if the federal on-scene coordinator had waiver authority for all laws and regulations, and was shielded from all personal liability, the response would be smoother. Short of that, I suspect the general public will continue to be disappointed.


 

The Coast Guard is not perfect, and the disappointment of the public is understandable. However, the assertion that is being thrown about on talk radio and other media, that the Coast Guard and BP are in cahoots, is absurd. The latest accusation has resulted from a battle of letters between a parish president and a Coast Guard Admiral. According to NOLA.com, on July 22, St. Tammany Parish President Kevin Davis issued an executive order threatening arrest of anyone who tries to remove the barges protecting Lake Pontchartrain from encroaching oil. Davis issued that executive order after receiving a letter from Rear Adm. Paul Zukunft explaining that oil response assets would be repositioned due to an approaching storm. Rear Adm. Zukunft responded to Kevin Davis' executive order with a letter which, according to the local Fox 8 News affiliate, states, "I am concerned that the tone of this order is inconsistent with your avowed desire to be a contributing partner in this response. For these reasons, I respectfully ask that you either rescind this order or take all action necessary to ensure that there is no interference with the ongoing federal response. Interference with personnel acting at the direction of the federal on-scene coordinator is a federal offense." The letter was "cc'd" to the U.S. attorney. The resulting story being spun in the local media is that the Coast Guard has threatened to arrest the parish president, which provides more evidence that the Coast Guard is looking out for BP's interests and not the interest of the taxpayers.

 

The Coast Guard may be guilty of officiousness but certainly not conspiracy. It is difficult to win in the court of public opinion when local officials have the upper hand when dealing with the media. But the media spin must be considered on every action taken these days, even when drafting letters not intended for public disclosure. Who would have thought that five years after the Coast Guard performed heroically in the saving of over 24,000 lives during Hurricane Katrina, that they would be publically booed by the same citizens when their presence was announced at a minor league baseball game? 

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