Did you know that vessel owners are required to manage rain run-off? That crewmembers are required to screen their shore-side bosses if they come aboard a vessel? That push-boats are required to have a bell of a certain size in case they anchor or run aground in the fog? This is only the tip of the regulatory iceberg. Some regulations seem so ridiculous that vessel owners have a hard time believing that they could be true, or that they will ever be enforced, or that someone won’t come to their senses and make them go away. A common strategy used once a vessel owner becomes aware of a regulation is to call around to some friendly competitors to see what they are doing. They may end up convincing each other to adopt a “wait and see” approach. After all, the Coast Guard always gives 30 days to correct a deficiency, right? Some companies call the Coast Guard to ask about a particular issue, and because the Coast Guard person who answers the phone isn’t familiar with the particular requirement, the company may say, “The Coast Guard doesn’t even know about this,” and use that as an excuse to do little or nothing to comply. This is not good.

 

I got a ticket within the past year for “running a red light.” I never saw the light turn red as I drove through the yellow light traveling under the speed limit. However, the officer issuing me the ticket explained that if any portion of my vehicle remained in the intersection when the light turned red, then that constituted running a red light. I paid the ticket and then did a little research. I now know the legal definition of running a red light in my town. But, why didn’t I research that before? Because, I have a general knowledge of traffic rules, I don’t have a history of violations, and if I ever get a ticket, I’ll just pay it and move on. It’s all a matter of risk assessment. What is the risk to my peace of mind and my wallet? The answer is: minimal. There is no reason to proactively manage my compliance with traffic laws. However, when it comes to running my business, the risk is much greater and therefore, I make sure that I am compliant with whatever applicable laws and regulations I become aware of.

 

A properly implemented safety management system (SMS) can be a tool for operational excellence, and companies should not be steered away from adopting one. More than one person have expressed some confusion about why I would write a four part blog that appears to discourage the adoption of a Towing Safety Management System (TSMS), since producing safety management systems is a large part of our consulting business. The answer is simple; we’re in the business of helping clients by giving them all the facts, both good and bad, and helping them arrive at the decisions which will be best for their business, not ours. We are just explaining the implications and potential consequences of adopting an SMS and not fully implementing it. In future blogs I will outline the steps required to develop and implement an excellent safety management system. 

Subchapter M makes a distinction between surveys and audits. A very simple explanation I like to use is: a survey is an inspection of the vessel, while an audit is an inspection of the people. Under the TSMS option, third party auditors will verify compliance with the TSMS on behalf of the government. Third party auditors will be managed by a third party organization. It remains to be seen how this process will work.  Will vessel operators be able to use the auditor of their choice, or will an auditor be assigned by the third party organization, with no input from the company? Will third party auditors be paid directly by the towing company, creating a potential conflict of interest, or will auditor fees be passed through the third party organization?  These are critical issues which may be resolved in the final rule or through guidance documents.

 

If you have read the first two parts of this series you understand that during litigation, when there is a violation of a Subchapter M regulation or TSMS policy or procedure, that the burden of proof may be shifted against you, or that it may be more difficult to use the defense of contributory negligence, but you may be thinking at least you can still limit your liability… maybe not.

 

In Part 1 of the series we discussed the implications of choosing the Subchapter M Towing Safety Management System (TSMS) third-party compliance option in regards to inspection procedures, as well as the legal implications in regards to the “Pennsylvania Rule” under maritime law. Another legal issue raised in the previously referenced paper by attorneys Marc Hebert and Barret Rice,  “Subchapter M from a Defense Lawyer’s Perspective,” is the legal principle of “negligence per se.”

 

Perhaps the most controversial section of the Subchapter M Notice of Proposed Rule Making (NPRM) is 46 CFR part 136.130, “Options for obtaining certification of a towing vessel.” This part allows for an owner/operator to choose between traditional Coast Guard inspections for compliance, or to implement a Towing Safety Management System (TSMS) with third party surveyors and auditors verifying compliance on behalf of the Coast Guard. The latter may seem like an attractive option, that is, until you study the implications.

 

Most commercial vessels, including uninspected vessels, are required to conduct fire drills. A fire drill is more than testing the general alarm and the fire pump. The purpose of a drill is to understand the best possible procedure and to have a predictable response in a real emergency.

 

On May 3^rd Coast Guard Headquarters released an update on the Coast Guard Towing Vessel Bridging Program. Phase 1 of the Bridging Program began in June of 2009. The purpose of the program was to prepare the towing industry for the impending inspection regulations contained in Subchapter M, and at the same time familiarize Coast Guard personnel with towing vessels and their operations. The Coast Guard estimates there is a total of approximately 5,800 towing vessels. Since the beginning of Phase 1 of the Bridging Program the Coast Guard has conducted 4,200 industry initiated examinations and issued 3,200 decals to towing vessels.

 

There is an age-old quandary in the maritime industry when it comes to dealing with the U.S. Coast Guard: to just do whatever they say, or challenge their decision? Many choose to go along with whatever a Coast Guard inspector says, even when a decision may have been made in error, or the impact to the company may be great. This is mostly due to a misconception that the Coast Guard is likely to retaliate if challenged. Another common reason for going along with whatever the Coast Guard inspector says is simply to “keep them happy and make them go away.” Sometimes this can backfire and have serious consequences for a vessel owner when they realize the impact of what they have agreed to, and if they don’t follow through in the future.

 

On March 23, 2012 the U.S. Coast Guard published the new ballast water regulations which will go into effect on June 21, 2012. It is a complicated regulation, but here are just some of the high-lights:

Preamble – The Coast Guard explains that ballast water exchange method “is not well suited” as the basis for the program required by the National Invasive Species Act, in part because studies have shown that in some vessels a large number of invasive species may remain after ballast water exchange. Further justification is provided for the Coast Guard’s requiring approved Ballast Water Management Systems (BWMS) to be installed on vessels.

 

While there are plenty of examples of how safety management can be implemented incorrectly, I’d like to share with you an example of how to do it right, from scratch.

Last fall we contracted with American Tugs, Inc. in Puerto Rico, to develop and implement a safety management system.  Not just any safety management system, but a Towing Safety Management System (TSMS) which would meet the requirements laid out in the Notice of Proposed Rule Making (NPRM) for 46 CFR Subchapter M. Here’s how we did it:

 

While we don’t know when the towing vessel inspection regulations contained in Subchapter M will officially come into force, we do know it could be as soon as within the next year, and if published as proposed, it will drastically change the industry forever. Whether a company is dreading the day, or is confident in their readiness, it is interesting to take a look at what we know about the recent Costa Concordia cruise ship disaster and draw some parallels, which may provide some insight into the future.

 

My associate, Capt. Tom O’Farrell, and I just completed a week long OSHA Maritime Outreach Training with the University of Texas. OSHA, the Occupational Safety and Health Administration has regulations which apply to Marine Terminals, Shipyard Employment and Longshoring, as well as regulations which apply to uninspected vessels.