Maritime Compliance Report

The ship security plan must be useful to the crew.  It should be specific enough to give guidance regarding what the owner/operator and approving authority have determined to be appropriate, without hindering the master who will inevitably arrive on board the ship with his own ideas of what is appropriate and what is not. 

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. 

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.

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. 

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? 

 As we wait for the results of the investigation into the BP/ Deepwater Horizon oil spill in the Gulf of Mexico, one thing appears fairly certain based upon currently published information, and that is that corners may have been cut and unnecessary risks may have been taken. This is not really surprising. We cut corners and take calculated risks every day, often with no negative consequences. Who has never exceeded the speed limit while driving? The natural reaction of politicians and bureaucrats is to make more laws and regulations to fix the problems before we know for sure what the problems are. We may find that the problem wasn't a lack of adequate laws and regulations, but perhaps it was the lack of enforcement, oversight and compliance with the existing laws and regulations. If so, why would the level of enforcement, oversight and compliance drop to a level where an accident like this might occur? Perhaps because they had not had a major accident with similar operations in the recent past to remind them of the threat. BP was reportedly celebrating a safety milestone at the time of the disastrous blowout. If people have not experienced a major accident in quite some time, their minds allow them to believe the threat has become diminished. In actuality the threat has not diminished with the passage of time, but still corners are cut and unnecessary risks are taken, because the precautions that once seemed necessary may now seem like overkill.  Following the attacks of 9/11, the international community passed the ISPS code. Ships, boats, ports and facilities around the world are required to implement security plans which address all relevant threat scenarios. As the years go by without major successful attacks, it is human nature to let our guard down because in our minds the threat has diminished. It has not. Even after six years of full implementation of maritime security plans, many do not understand the threat or the requirements. Do enforcement personnel understand their roles and give full attention to the security programs, or are they still focused mostly on signage and paperwork? Do industry members have good plans that address specific threat scenarios and give clear and concise guidance to those charged with implementing them? Are proper screening, monitoring and drilling conducted as intended by the regulations? We can't go back in time and make those involved in the BP/ Deepwater Horizon disaster make different decisions, but going forward we can ensure we do not lose sight of the threats to our security in the maritime industry. Imagine the answers that would be given to Anderson Cooper on CNN in the weeks following a terrorist attack involving your vessel or port facility. Would they be adequate? Or would it be déjà vu?

The latest trend in regulatory schemes is performance based regulations. This type of regulation usually requires the regulated entity to come up with a plan or system which will meet the performance based criteria in the regulations, such as International Safety Management (ISM) and the impending towing vessel inspection regulations. Some organizations also require member companies to implement a Safety Management System (SMS), such as the American Waterways Operators (AWO) Responsible Carrier Program (RCP). Regardless of the source, not fully implementing and complying with these plans can have serious consequences in the event of an accident.A conversation I had with an attorney after a serious accident really drove home the importance of "saying what you do, and doing what you say." I discussed my concerns with some SMSs which can never be complied with due to the way they are written. I explained that some companies seem to have brainstormed with a bunch of "old salts" and come up with every possible thing that could ever go wrong during any one evolution. While this is never a bad idea and produces excellent training material, it was how the information was incorporated into the SMS which created the problem. After the comprehensive list had been compiled, it was entered into the SMS and labeled, "The following items must be checked prior to conducting the following evolution…." I explained that the problem I have found as an auditor is, despite the SMS mandating that the entire extensive comprehensive list be completed every time, the crewmembers can only explain the two or three items they actually check. The attorney was well aware of this problem and explained that is why a company's SMS manual can serve as a "checklist for negligence" during litigation. 

 The U.S. Environmental Protection Agency (EPA) issued a Vessel General Permit (VGP) which went into effect in the U.S. in February of 2009. The purpose of the VGP is to regulate discharges into the water which are incidental to normal operations. In general, the VGP applies to all commercial vessels which are greater than 79 feet, U.S. or foreign flag, operating in U.S. waters. This includes otherwise unregulated deck and hopper barges as well. There hasn't been much enforcement of the EPA VGP to date, but, according to the EPA, they are developing a Memorandum of Agreement with the U.S. Coast Guard (USCG) regarding how the USCG will enforce this on behalf of the EPA. So, you may not see any enforcement for quite a while, but when they show up they will want to see documentation going back as far as February 2009 as evidence that the VGP has been followed.In developing a compliance management system for the VGP, we studied the permit and determined there were nine different logs and records that an inspector might ask for. A good compliance management system must be thorough as it also serves as a training tool and job aid for the vessel personnel who must understand the program and who will be expected to demonstrate their knowledge of the program to inspectors. In those nine different logs and records were 154 items (either explicitly required or implied) that an inspector might ask for as evidence that the requirements of the permit are being fulfilled. Don't be lulled into a false sense of security; this is a significant regulation which should not be taken lightly.   I heard some interesting comments at a conference a few weeks ago regarding the VGP which are worth repeating. There was a panel on the VGP which included the EPA representative, an attorney and a pollution insurance representative. The panel was in agreement that a vessel company is far more likely to get a fine under this program for improper record keeping than for discharging. The insurance representative added that his pollution insurance policy will not cover any fines for improper record keeping or failure to establish an adequate self-monitoring program. Of course, my favorite quote of the day, and one which shocked the audience, came from the same pollution insurance panelist who said, "You are much better off spending your money on compliance than on my insurance policy." I tend to agree.

The VGP identifies 28 types of incidental discharges which may occur from vessels, including: sacrificial anodes, gray water, elevator pit effluent, controllable pitch propellers hydraulic fluid, deck run-off, etc. Recognizing that totally eliminating discharges may be an unachievable goal, the EPA requires vessels to establish and follow best management practices (BMP) to minimize these discharges, such as wiping galley dishes free of oil and grease prior to placing them in the sink. The EPA has indicated during conversations that this kind of BMP may be verified by USCG or EPA inspectors who may ask an unsuspecting crewmember, "What do you do with that plate after you're done eating?" The VGP is another form of performance-based regulation such as ISM and ISPS. The same pitfalls are associated with this VGP as are found with other performance-based programs. The key to compliance with performance-based programs is in the implementation and training. Unfortunately, implementation and training levels are usually commensurate with the level of enforcement, which can be inconsistent. Since we do not yet know how the VGP will be enforced, the VGP best management practices may run the risk of becoming another "book on the shelf." Of course, there are requirements for record keeping and inspections which must be provided to enforcement personnel upon request in order to verify compliance.   In order to avoid that situation and the costly penalties associated with it, vessel operators should consider the following: Draft best management practices in accordance with the VGP which cover all applicable discharges. The best management practices should meet the requirements of the VGP, but be realistic and able to be implemented. Go through the VGP and produce a comprehensive system of logs and records which will cover every aspect of the VGP, including the corrective action. Don't wait until you have something to correct to look at the requirements. Train all vessel personnel on the requirements of the VGP on a regular basis. Finally, always keep in mind the intent of the regulation, because that is how the enforcement person will approach it. For example: If your vessel discharges gray water over the side, and an inspector asks a crewmember what he does with the dishes prior to putting them in the sink; if the crewmember starts explaining about separating garbage, but fails to mention that he wipes each plate free of oil and grease, you could be subject to a violation.