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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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Suggested Citation:"1 Introduction." National Academies of Sciences, Engineering, and Medicine. 2021. Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program. Washington, DC: The National Academies Press. doi: 10.17226/26450.
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11 On February 12, 1983, the U.S.-flagged cargo ship Marine Electric capsized during a gale-force storm and sank off the coast of Virginia, costing the lives of 31 merchant mariners. An investigation by the U.S. Coast Guard’s (Coast Guard’s) Marine Board of Investigation concluded that the most probable cause of the casualty was deteriorated hatch covers and deck plates that permitted boarding seas to flood the vessel’s forward cargo hold.1 The deterioration had gone undetected in a Coast Guard biennial inspection 20 months earlier and by an inspection (load line survey) of the vessel’s hatch covers and other critical closures conducted on behalf of the Coast Guard by a third party (the American Bureau of Shipping [ABS] classification society) during the previous year. The casualty prompted the Coast Guard to increase training for marine inspectors and to issue new policy guidance for the conduct of inspections and for oversight of del- egated inspections. A little more than 30 years later, on October 1, 2015, the 40-year-old steam ship El Faro, a U.S.-flagged cargo ship, sank during a hurricane off the Bahama Islands en route to Puerto Rico from Florida, leading to the death of all 33 crew members. Following investigations, the Marine Board 1 USCG (U.S. Coast Guard). 1984. Marine Casualty Report: SS Marine Electric, O.N. 245675, Capsizing and Sinking in the Atlantic Ocean, on the 12 of February 1983, with Mul- tiple Loss of Life, U.S. Coast Guard Marine Investigation Report and Commandant’s Action, Report 16732/0001 HQS 83. https://www.dco.uscg.mil/Portals/9/DCO%20Documents/5p/ CG-5PC/INV/docs/boards/marineelectric.pdf. 1 Introduction

12 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs of Investigation2 and National Transportation Safety Board (NTSB)3 iden- tified many safety issues contributing to the casualty and its severity, most significantly the master’s insufficient action to avoid the hurricane, failure to use the most current weather information, and late decision to muster the crew. In reviewing the ship’s inspection history, investigators determined that Coast Guard marine inspectors had deviated from certain procedures for verifying regulatory compliance and that ABS auditors had not detected significant shortcomings in the quality and oversight of the owner’s safety management system (SMS). Notably, the SMS of the El Faro’s operator did not provide the officers and crew with the necessary procedures to ensure safe passage, watertight integrity, heavy-weather preparations, and emer- gency response during heavy-weather conditions. The El Faro had been enrolled in the Coast Guard’s Alternate Com- pliance Program (ACP) that delegated to ABS a number of compliance verification functions that had been traditionally performed by marine inspectors. Special inspections, conducted after the El Faro sinking, of a number of vessels enrolled in the ACP yielded evidence of substandard conditions, causing the Marine Board of Investigation and NTSB to ques- tion the consistency in the quality of the ABS inspections and the Coast Guard’s oversight of them. In identifying these issues, NTSB observed that they bore a resemblance to some of the concerns raised about inspection and oversight performance in the Marine Board of Investigation’s report on the Marine Electric. In its report from three decades earlier, the Marine Board of Investi- gation recommended that verifications of commercial vessel compliance with U.S. safety regulations be conducted by knowledgeable members of the Coast Guard (or other U.S. government agencies) and not delegated to private parties.4 In replying to the report, the Coast Guard Commandant agreed to study options for improving oversight of third-party delegations but strongly disagreed with the conclusion that that all third-party delega- tions were flawed and should be ended.5 At the time of the Marine Electric’s sinking, the Coast Guard (under 46 U.S.C. § 3316) was authorized to rely on reports, documents, and cer- tificates issued by ABS, including those from load line inspections and the review of vessel design and modification plans, as required for the issuance of a Certificate of Inspection (COI) that certifies that the vessel complies 2 See https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Prevention- Policy-CG-5P/Inspections-Compliance-CG-5PC-/Office-of-Investigations-Casualty-Analysis/ Marine-Casualty-Reports. 3 More detail about the probable cause of the El Faro casualty can be found at https://data. ntsb.gov/Docket/?NTSBNumber=DCA16MM001. 4 USCG. 1984. Marine Casualty Report: SS Marine Electric, p. 6 5 USCG. 1984. Marine Casualty Report: SS Marine Electric.

INTRODUCTION 13 with all applicable U.S. requirements. A COI is a Coast Guard–issued cer- tificate that certifies that upon the completion of the relevant inspections a vessel has been found fit for the service for which it is intended and complies with all applicable U.S. requirements. COIs are issued to non- passenger vessels for period of 5 years, but with requirements for annual and other periodic vessel inspections during the period. For ocean-going vessels that engage in international commerce, the U.S. requirements include those that derive from U.S. ratification of international maritime treaties such as the International Convention for the Safety of Life at Sea (SOLAS) and the International Convention on Load Lines. It has been a long-standing practice for companies that own and operate U.S. ocean-going vessels to routinely hire ABS to certify that the vessel met all applicable international requirements (thus satisfying U.S. requirements that derive from them), as well as any additional rules of the classification society.6 During the period when the Marine Electric was operating, Coast Guard marine inspectors were responsible for verifying that vessels complied with all other safety regulations specific to the United States and as necessary for the issuance and maintenance of the COI. In the years between the Marine Electric and El Faro casualties, the Coast Guard, encouraged by the marine industry, sought to take greater advantage of the services provided by ABS and other international classi- fication societies by delegating more functions to them in accordance with the authorities in 46 U.S.C. § 3316. Notably, in early 1995, the Coast Guard entered into an agreement with ABS to pilot a program that would authorize the classification society to inspect its classed cargo vessels for compliance with U.S.-specific regulations, or with alternative standards the Coast Guard believed would provide a level of safety equivalent to those regulations.7 The pilot was referred to as the Alternate Compliance Program because owners of ABS-classed cargo vessels could voluntarily enroll. Under the pilot program, ABS surveyors would examine the vessel to verify compliance with all applicable international treaties and agreements, ABS’s own class rules, and the U.S. Supplement prepared by ABS and ac- cepted by the Coast Guard. Upon review of ABS reports and certifications, coupled with an abbreviated inspection by Coast Guard marine inspectors, 6 Classification societies were created for underwriters of ship insurance to assess the quality of the ships and their masters. Individual classification societies will therefore have their own technical rules governing the soundness of the structure and design of the vessels they are hired to classify. While some of the rules governing ship design, construction, and maintenance may be unique to the classification society, many will align with the rules of other classification societies and the requirements of international conventions and individual flag states. 7 USCG. 1995. 46 CFR Chapter I (CGD 95–007): Alternate compliance for inspection and certification of certain U.S. flag commercial vessels, Federal Register 60:6687–6689. https:// www.govinfo.gov/content/pkg/FR-1995-02-03/pdf/95-2648.pdf.

14 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs the cognizant Coast Guard Officer in Charge, Marine Inspection (OCMI)8 could then issue a COI. In justifying the creation of the ACP pilot for cargo vessels, the Coast Guard pointed to an interest in reducing duplicative inspections and in- creasing the international competitiveness of the U.S. maritime industry by affording U.S. vessel operators more flexibility and time savings in the sched- uling of required tests and examinations. During the piloting of the ACP, the Coast Guard confirmed that many of the items regularly examined by the ABS surveyors were the same as those examined by Coast Guard marine inspectors, and hence that many U.S. regulatory requirements could be met, with some supplements, by compliance with ABS classification rules and the requirements of SOLAS and other international conventions. Satisfied by the results of the pilot, the Coast Guard made the program permanent in 1997,9 and it expanded eligibility to more classification societies.10 ABS and other classification societies were eligible for the delegations if they met minimum statutory standards for a recognized organization (RO) and had developed a Coast Guard–authorized supplement to their own classification society rules. Since its inception more than 25 years ago, the ACP has been modi- fied several times. For instance, offshore supply vessels (OSVs) (serving the offshore oil and gas industry) were not originally included in the program because they were not intended or needed for international service. As oil and gas production moved farther offshore, more of these supply and service vessels needed to comply with international requirements such as SOLAS. In 2001, the Coast Guard allowed certain OSVs to be eligible for enrollment in the ACP when constructed to international standards. In 2007 and 2009, passenger ships and oceanographic research vessels that operate internationally were likewise allowed to enroll. In addition, vessels under construction were made eligible, rather than existing vessels only. In the latter case, the design plan reviews (for stability, fire protection, struc- tural strength, etc.) for classed vessels that were traditionally conducted by the Coast Guard’s Marine Safety Center (MSC) would be handled by the classification society in accordance with its role as an authorized RO. As ROs were authorized to perform plan review and other technical work on 8 The OCMI is one of several federal authorities whose application usually rests with the Sector Commander. Today, the other authorities include Captain of the Port, Federal Maritime Security Coordinator, Search and Rescue Mission Coordinator, and maritime Federal On-Scene Coordinator. 9 USCG. 1997. 33 CFR Part 151; 46 CFR Parts 1, 8, 31, 69, 71, 91, 107, 153, and 154: Alternate compliance via recognized classification society and U.S. supplement to rules. Fed- eral Register 62:67526–67537. https://www.govinfo.gov/content/pkg/FR-1997-12-24/pdf/97- 33477.pdf. 10 The expansions of eligibility followed the passage of legislation allowing the Coast Guard to use classification societies other than ABS with conditions (46 U.S.C. §§ 3103, 3316).

INTRODUCTION 15 behalf of the Coast Guard, it became the responsibility of MSC to perform the technical support and oversight of ACP design plan reviews on new con- struction, modifications (including major conversions), and vessel re-flags.11 According to the program requirements, enrolled vessels continue to be subject to a Coast Guard inspection but one that is more abbreviated than a traditional inspection and referred to as an oversight examination.12 The annual oversight examination’s main objective is to ensure that the RO is meeting its obligations under the ACP.13 For this purpose the Coast Guard has developed ACP-specific vessel examination booklets that list items the marine inspector could check during the examination, which usually includes a general walk-though of the vessel, review of its certificates and crew documents, evaluation of crew member proficiency during emergency drills, and verification of the vessel’s security plan. Nonetheless, the Coast Guard still holds the authority and responsibility to issue a COI only to a vessel that is found fit for its intended route and service, whether the path to that determination involves Coast Guard inspections exclusively or Coast Guard inspections supplemented by those of ROs. The El Faro had been enrolled in the ACP since 2006 and was issued its latest COI in 2011. Accordingly, as part the program’s compliance scheme, the El Faro was required to satisfy all applicable SOLAS require- ments, ABS Steel Vessel Rules, and the U.S. Supplement to ABS Rules for Steel Vessels Certificated for International Voyages.14 As part of compliance with SOLAS, the El Faro, like all vessels enrolled in the ACP, was required to comply with the International Safety Management (ISM) Code, which requires that companies operating vessels establish an SMS manual that defines the safety-related roles and responsibilities of all personnel, outlines safe practices in ship operation, including safe navigation, and estab lishes safeguards against certain identified risks. According to this code (see Box 1-1), the authorized RO is responsible for verifying, by conducting audits, that the company responsible for day-to-day operations of an ACP- enrolled vessel has a compliant SMS (by issuing a “Document of Compli- ance” [DOC]) and that the enrolled vessel is operated in accordance with that SMS (by issuing a Safety Management Certificate [SMC]). In this case, 11 USCG. 2021. Marine Technical Note (MTN) 04-03, Technical Support and Oversight of Authorized Classification Societies. https://www.dco.uscg.mil/Portals/9/MSC/MTN/MTN.04- 03.CH-4.2021.04.06.Technical%20Support%20and%20Oversight%20of%20Authorized%20 Classification%20Societies.pdf. 12 The scope is comparable to that of annual foreign-flagged-vessel port-state control examinations. 13 USCG. 2017. Steam Ship El Faro—Marine Board’s Report, September 24, p. 45. https:// www.nhc.noaa.gov/pdf/coast-guard-el-faro.PDF. 14 USCG. 2017. Steam Ship El Faro—Marine Board’s Report, p. 65.

16 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs BOX 1-1 International Safety Management Code Chapter IX of the Convention for the International Safety of Life at Sea (SOLAS) mandates the International Safety Management (ISM) Code,a which was devel- oped under the auspices of the International Maritime Organization (IMO) of the United Nations. The ISM Code provides an international standard for the safe management and operation of ships and for pollution prevention. The code re- quires the company responsible for operations to establish safety objectives that ensure the safety of the vessels at sea and avoidance of damage to the environ- ment. The requirements apply to all commercial ships operating in international waters that are over 500 gross tons and subject to SOLAS. To comply with the ISM Code, the company operating the vessel must develop and submit a Safety Management System (SMS) Manual for approval by their relevant flag administration or recognized organization (RO). The company’s SMS Manual should contain the following elements: a commitment from top management to a top-tier policy manual; a procedures manual that documents what is done on board the ship during normal operations and in emergency situ- ations; procedures for conducting both internal and external audits to ensure that the ship is doing what is documented in the procedures manual; a designated person ashore to serve as the link between the ship and the shore staff and to verify the SMS implementation; a system for identifying where actual practices do not meet those that are documented and for implementing associated corrective action; and regular management reviews. Upon implementation of the SMS, the government of the state under which the ship is flagged (or an authorized organization acting on their behalf) must verify that the SMS complies with the requirements in the ISM Code. The com- pany that is successfully audited for compliance is issued a “Document of Compliance” valid for 5 years. The company is subject to auditing every year for verification of continued compliance. In addition, each ocean-going vessel oper- ated by the company must adhere to the company’s SMS. Vessels in compliance are issued a Safety Management Certificate valid for 5 years and also subject to verification audits during the period. There is an intermediate audit and one renewal audit during the 5-year period. a See https://www.imo.org/en/OurWork/HumanElement/Pages/ISMCode.aspx. an RO other than the RO authorized to perform most other ACP-delegated functions may issue the certificates to the company. Several months prior to its sinking, the El Faro’s COI had been en- dorsed by the Coast Guard on the basis of ABS reports and certifications and an oversight examination by Coast Guard inspectors. The endorse- ment meant that the cargo ship was believed to remain in compliance with all applicable requirements and was fit for its intended route and service. However, following its investigation of the sinking, NTSB raised concern

INTRODUCTION 17 about certain ACP procedures and the quality of the ABS and Coast Guard examinations.15 Similar concerns, including the effectiveness of the ACP, were raised during the Coast Guard’s investigation.16 They included the following: • Incomplete Access to Vessel Compliance and Condition Records by Coast Guard Inspectors and RO Surveyors: Investigators noted that when Coast Guard inspectors normally conduct vessel inspections, they record observed deficiencies (nonconformities with regulatory requirements) in reports that are logged into the Coast Guard’s Marine Information for Safety and Law Enforcement (MISLE) data- base and the data become part of the vessel’s history. However, in the case of ACP-enrolled vessels, the RO logs the details of the deficiency into its own database, thereby creating the potential for confusion and an incomplete review of a vessel’s compliance history by the Coast Guard inspectors performing an oversight examina- tion. Moreover, RO surveyors and auditors do not have full access to MISLE records because of concerns about data system security and the protection of sensitive information in the database.17 ROs can only access the public-facing elements of the database, which do not provide details on the deficiencies identified by Coast Guard in- spectors during their oversight examinations and other compliance verifications. Although Coast Guard inspectors are permitted access to the RO’s database, this additional required step can complicate the job of obtaining a complete picture of the vessel’s compliance record. • Limited Communication and Coordination Among RO Sur- veyors and Coast Guard Inspectors: According to Coast Guard policy, each Coast Guard unit was supposed to have an officer serving as a liaison with each RO in the ACP, thereby providing a centralized point of contact for the RO surveyors and Coast Guard inspectors within each local region. The liaison’s role was to facilitate data sharing and possibly joint inspections where circumstances warranted. At the time of the El Faro sinking, however, the investigators found that many Coast Guard units did not have such a liaison. In addition, vessel owners were provid- ing ABS with short notice when requesting surveys and audits, 15 NTSB (National Transportation Safety Board). 2016. Marine Investigation: Sinking of the Freight Vessel El Faro. DCA16MM001. https://data.ntsb.gov/Docket/?NTSBNumber=DCA16MM001. 16 USCG. 2017. Steam Ship El Faro—Marine Board’s Report. 17 MISLE contains information on vessels, facilities, Coast Guard activities, information on individuals and organizations, and adjudication records. Due to individual and law enforce- ment information in MISLE, its access is restricted for privacy and security concerns.

18 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs and therefore Coast Guard inspectors had little or no advance notice of the planned surveys, further reducing any potential for consultations before inspections and examinations or for the ar- rangement of joint inspections. • Data Shortcomings for Targeting Vessels for Enhanced Inspec- tions: Investigators noted that the Coast Guard maintained an “ACP Targeted Vessel List” that was updated annually. Vessels on the targeted list were subject to additional oversight during the annual examination or through additional inspections. To develop the list, point values were assigned for issues such as the vessel’s re- cord of casualties, deficiencies, and major nonconformities. Points were also assigned depending on vessel age and service type. The top 10 percent of ACP-enrolled vessels having the highest aggregate score were added to the target list. In reviewing the process for developing and using the list, however, investigators found that due to the incompatibility of the various RO databases and MISLE, the completeness of any vessel’s documented history was not verifiable. As a result, discrepancies and nonconformities were likely being missed during record reviews for risk-based targeting. • Limited Ability of Coast Guard Marine Inspectors to Accurately Assess Vessel Conditions During Annual Oversight Inspections: Investigators found that there were no qualification levels required for Coast Guard personnel for the conduct of ACP oversight ex- aminations, because the Coast Guard did not have a formal train- ing program associated with the ACP and the kinds of flag vessels it would attract among the older cargo fleet. NTSB noted, for instance, that the machinery inspector for the El Faro had not yet received a steam qualification and that due to the diminishing number of steam ships in the U.S. fleet, there were fewer oppor- tunities for inspectors to obtain experience with these vessels. In addition, the Coast Guard marine inspectors were found to be unfamiliar with the RO Supplements or to be using older versions, meaning that they could not readily identify gaps among different classification society rules, international conventions, and Coast Guard safety regulations. NTSB concluded that this combination of a lack of guidance and relevant experience and qualifications had degraded the inspection capability of Coast Guard field inspectors for the purpose of ACP oversight. • Questionable Performance by RO Surveyors: Investigators de- termined that several ACP-enrolled vessels that had successfully completed RO surveys and Coast Guard oversight examinations were later reviewed by highly experienced Coast Guard traveling

INTRODUCTION 19 inspectors who found serious safety deficiencies, including some that led to no-sail orders for the vessels. • Insufficient Coast Guard Oversight of RO Performance: Investiga- tors found that the Coast Guard had no formal procedures in place for reviewing and assessing the performance of the ROs carrying out delegated inspections and audits. For example, they found that during RO audits of companies for compliance with ISM Code requirements, the Coast Guard attended only as an observer and had no authority to make findings or identify nonconformities. The El Faro’s SMS inadequacies, which had gone undetected by the RO during audits, caused investigators to question this limited Coast Guard oversight role. On the basis of these concerns arising from its findings from the El Faro investigation, the NTSB and Marine Board of Investigation concluded that the ACP, as implemented, was not as effective as desirable for ensuring that vessels meet the safety standards required by regulations. The investiga- tors recommended that the Coast Guard conduct a complete review of the program to assess its adequacy and effectiveness. They recommended that the Coast Guard review and implement training of Coast Guard marine inspectors and RO surveyors to ensure that they are properly qualified and supported to perform effective, accurate, and transparent vessel inspections for compliance with all statutory and regulatory requirements. They further recommended that the Coast Guard update its guidance to marine inspec- tors that clarify those responsibilities that should be shared by the Coast Guard and the RO, including responsibility for assessing the adequacy of a vessel operator’s SMS.18 All of the NTSB and Marine Board of Investiga- tion’s recommendations relevant to the ACP and RO oversight generally are listed and discussed later in the report. In response to the NTSB and Marine Board of Investigation reports, the Coast Guard Commandant issued a final action memorandum in Decem ber 2017 that reported the actions the Coast Guard would take in response to the recommendations from the investigations.19 The actions agreed to include new guidance to improve the development, implementation, and verification of SMSs; updates and improvements to the Coast Guard’s management of the ACP and its oversight of authorized ROs; and new marine inspector training that includes alternative inspection programs 18 USCG. 2017. Steam Ship El Faro—Marine Board’s Report, p. 195. 19 Zukunft, P. F. 2017. Steam Ship El Faro (O.N. 561732) Sinking and Loss of the Vessel with 33 Persons Missing and Presumed Deceased Northeast of Acklins and Crooked Island, Bahamas, on October 1, 2015. U.S. Coast Guard, December 19. https://media.defense.gov/2017/ Dec/21/2001859858/-1/-1/0/EL%20FARO%20FINAL%20ACTION%20MEMO.PDF.

20 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs and auditing principles. More details on the specific actions agreed to, their implementation, and developments since are discussed in this report, the origins of which are discussed next along with the study charge. STUDY ORIGINS AND CHARGE In passing the Hamm Alert Maritime Safety Act of 2018 (as part of the Save Our Seas Act), Congress sought to further Coast Guard actions on many of the recommendation of the NTSB and the Marine Board of Investiga- tion. The act called on the Coast Guard to review the authorities that have been delegated to ROs and to revise or establish policies and procedures to ensure that the delegated authorities are being fully and appropriately implemented. Furthermore, the act called for related actions, including: • An audit by the U.S. Government Accountability Office of the implementation and effectiveness of the Coast Guard’s oversight and enforcement of SMSs; • Coast Guard public documentation of vessel compliance with ap- plicable requirements, including reporting of instances where a vessel was found to have a major nonconformity that an RO failed to identify in an inspection or survey; • Enhancements to Coast Guard inspector training programs and a review by the Coast Guard of other options for enhancing its inspection capabilities, such as using civilian marine inspectors, placing inspectors on board commercial vessels to gain experience and insight; and • Extending the tours of Coast Guard marine safety officers having inspection duties. In the same legislation, Congress called on the Coast Guard to commis- sion an independent study to assess the effectiveness of the Coast Guard’s oversight of ROs and its impact on compliance by, and the safety of, vessels inspected by such organizations. In September 2020, the Coast Guard contracted with the National Academies of Sciences, Engineering, and Medicine to appoint an expert committee to conduct the mandated study under the auspices of the Transportation Research Board and its Marine Board. Figure 1-1 shows the timeline of events and developments as dis- cussed above and leading up to the commissioning of this study. The study charge, or Statement of Task, that was developed to guide the study is contained in Box 1-2. The legislative mandate, as noted above, calls for an assessment of the effectiveness and impact of the Coast Guard’s oversight of ROs in ensuring compliance with applicable statutory and regulatory requirements. Although neither the study mandate nor the

INTRODUCTION 21 Statement of Task specifies that the study should focus on the ACP, the Coast Guard indicated to the committee that a close look at this program is warranted given the augmented roles and responsibilities for ROs. As discussed above, owners and operators of ocean-going vessels routinely hire classification societies to review vessel designs and major modifications and to conduct vessel surveys and company audits to verify compliance with all applicable international requirements. If the classification society is one of seven ROs currently recognized by the Coast Guard, its verifications and certificates of compliance with international requirements are accepted by the Coast Guard. In the case of ACP, however, only four of these seven ROs are currently authorized to participate. The processes and procedures for overseeing the performance of ROs in the ACP, therefore, can have dimen- sions that differ from those associated with overseeing RO performance more generally. In the Statement of Task, the committee is asked to not only review the Coast Guard’s planned and ongoing efforts to strengthen its RO oversight but also to identify additional opportunities for doing so. Several topics of interest are called out, including the needs with respect to the size, train- ing, competencies, and qualifications of the marine inspection workforce; the capacity for more data analysis and sharing among the Coast Guard and ROs; the increased functionality, usability, and utility of MISLE; and the introduction of more automated, risk-based approaches for compliance verification and RO performance oversight. The Statement of Task also FIGURE 1-1 Timeline of events leading up to the study request. NOTE: NTSB = National Transportation Safety Board. El Faro Sinking (Oct. 1, 2015) NTSB Investigation Report (Dec. 12, 2017) Coast Guard Marine Board of Investigation Report (Sept. 24, 2017) Coast Guard Commandant’s Final Action Memo (Dec. 19, 2017) Save Our Seas Act Public Law 115-265 (Oct. 11, 2018) National Academies contract with Coast Guard (Sept. 28, 2020)

22 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs BOX 1-2 Study Statement of Task To the extent that available data will allow, a study committee appointed by the National Academies of Sciences, Engineering, and Medicine will conduct an assessment of the effectiveness of the Coast Guard’s oversight of recognized organizations (ROs) and its impact on compliance and on the safety of vessels inspected by such organizations. As a key part of its review, the committee will examine the actions planned and/or taken by the Coast Guard since the October 1, 2015, sinking of the Steam Ship El Faro and the subsequent October 11, 2018, enactment of the Save Our Seas Act. Specifically, the committee will assess the Coast Guard’s actions to oversee, guide, monitor, assess, and otherwise strengthen the performance of ROs in carrying out their delegated statutory certifications and other services. Consideration will be given to changes that have been made, or that are planned, in areas such as institutional and organizational structures; roles and responsibili- ties, policies and procedures; guidance and compliance documents; data and analytic systems; training; communications; and performance reporting. The committee will also compare the main features of the Coast Guard’s oversight program with those of the oversight programs of other regulatory agen- cies that delegate regulatory or statutory authority to third parties from both the transportation and non-transportation domains. To the extent that sufficient data are available, the committee will benchmark the Coast Guard’s program with other programs. Informed by this review and comparison, the committee will consider the effectiveness of the Coast Guard’s RO oversight program and identify needs and potential opportunities to strengthen it. In identifying these needs and opportuni- ties, the committee will, as a minimum, consider: • The Coast Guard’s marine inspection workforce’s size, training, compe- tency levels, and qualifications for conducting RO oversight; • The degree of data analysis and sharing among the Coast Guard and ROs, including the integration of RO data into Coast Guard decision- making processes concerning the RO and/or the vessels the RO per- forms work on behalf of the Coast Guard; • The functionality, usability, and utility of the Coast Guard vessel inspec- tion database [Marine Information System for Safety and Law Enforce- ment (MISLE)]; and • The prospects for introducing a more automated risk-based program for the RO oversight program and associated vessels. Based on the findings from its review, the committee will make recommen- dations, as appropriate, on any additional steps the Coast Guard should consider to ensure the effective oversight and performance of ROs in carrying out their delegated statutory certifications and services and to further compliance by vessel owners and operators.

INTRODUCTION 23 calls for a comparison of Coast Guard third-party oversight methods with those of other maritime administrations and safety regulatory agencies, presumably for insights applicable to the Coast Guard’s oversight of ROs. Significantly, the study committee is not limited to considering only these topics as a basis for making recommendations. It merits noting that by virtue of the Statement of Task’s focus on ROs, the study scoping excludes the Coast Guard’s delegations to third parties in various other regulatory programs that cover different segments of the U.S. fleet. For example, the study does not consider the Coast Guard’s oversight of “accepted organizations”20 and “third-party organizations”21 that may perform inspections and certifications on the Coast Guard’s behalf for commercial fishing and towing vessels, respectively. Although some of the measures taken by the Coast Guard to improve oversight of ROs are relevant to these other programs, this report does not take these impacts into consideration. STUDY APPROACH AND REPORT ORGANIZATION In commencing its work in late 2020, the bulk of the study committee’s meetings were convened virtually. Although the virtual format had draw- backs, including constraints on interactive discussion, it allowed for a large number of meetings with briefings by the Coast Guard, ROs, representa- tives of owners and operators of inspected vessels, and other maritime administra tions and regulatory agencies that delegate compliance review and inspection functions to ROs and other third parties. The many indi- viduals and organizations that participated in these briefings, which were held in sessions open to the public, are listed in the Preface. The committee was able to make effective use of its many public meet- ings held virtually, as well as requests for additional detailed information in writing, to more fully understand and assess • The Coast Guard’s authorization process for ROs generally and in the ACP; • The Coast Guard’s approach—in accordance with the bulleted items in the Statement of Task—for (a) assigning and deploy- ing vessel inspection personnel, (b) communicating with ROs and sharing recorded vessel inspection data, (c) structuring and using 20 See https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Prevention- Policy-CG-5P/Inspections-Compliance-CG-5PC-/Commercial-Vessel-Compliance/Fishing-Vessel- Safety-Division/TPO. 21 See https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for-Prevention- Policy-CG-5P/Traveling-Inspector-Staff-CG-5P-TI/Towing-Vessel-National-Center-of-Expertise/ SubMTPOs/Coast-Guard-Approved-TPOs.

24 STRENGTHENING U.S. COAST GUARD OVERSIGHT AND SUPPORT OF ROs information management systems for vessel inspection processes, and (d) targeting inspections informed by risk; • The views of ROs about successes, issues, and challenges arising in their interactions and dealings with the Coast Guard; • The views of ship owners about the roles of the Coast Guard and ROs in the marine inspection process; and • The processes used by other maritime administrations to fulfill their flag-state control obligations. Informed by the briefings and other written reports and records, includ- ing the many committee questions answered by the Coast Guard in writing (and documented in the project files), the committee deliberated over its charge to identify where the Coast Guard should strengthen its oversight of ROs in carrying out their delegated functions, including those functions delegated as part of the ACP. The remainder of this report, which is organized into seven chapters, contains the results of the committee’s review and assessment, concluding with recommendations for the Coast Guard and Congress. Chapter 2 gives an overview of the types of vessels in the U.S. flag fleet and their regula- tory and inspection frameworks, provides additional background on the Coast Guard’s reliance on ROs and on the design and history of the ACP, and profiles the fleet of vessels enrolled in the ACP. Chapter 3 provides a more detailed accounting of the findings and recommendations made by the NTSB and the Marine Board of Investigation following the El Faro loss. The actions agreed to by the Coast Guard in response to these recom- mendations are explained and the steps taken so far to implement them are discussed, particularly in establishing an organizational structure and policies and procedures for RO oversight. The committee’s analyses and assessments are provided in Chapters 4, 5, and 6. Chapter 4 describes and examines the data, metrics, and analytic tools now available and used for monitoring, verifying, and improving RO performance and vessel regulatory compliance. Consideration is given to the needs and opportunities for more data sharing, integration, and analysis, and recommendations are offered to meet these needs to improve compliance and performance monitoring and oversight. Chapter 5 focuses on the Coast Guard’s marine safety inspection and compliance workforce. Consideration is given to the qualifications and competencies required of marine inspectors and other marine safety personnel, and recommendations are made with an eye to the Coast Guard’s need to attract and maintain an inspection and prevention workforce suited to RO oversight. Chapter 6 reviews approaches used by other maritime administrations to support and oversee the performance of ROs in carrying out their delegated func- tions and considers how third parties are used for compliance verification

INTRODUCTION 25 by other transportation safety and related regulatory agencies. Chapter 7 summarizes the findings and conclusions from the study, recaps the recom- mendations from earlier chapters, and provides an additional recommen- dation focused on the Coast Guard building and strengthening its safety partnership with ROs.

Next: 2 Background of the U.S. Flag Fleet and Alternate Compliance Program »
Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program Get This Book
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Partly in response to a 2015 cargo ship sinking, the U.S. Coast Guard has put in place and proceeded to implement a well-conceived organizational and procedural framework for supporting and overseeing “recognized organizations,” particularly those in the Coast Guard’s Alternative Compliance Program.

TRB Special Report 343: Strengthening U.S. Coast Guard Oversight and Support of Recognized Organizations: The Case of the Alternative Compliance Program recommends a series of steps the Coast Guard should take to strengthen its support for and monitoring of third-party organizations that conduct vessel inspections on its behalf. The study committee concluded that Coast Guard has made significant strides in introducing a comprehensive oversight framework, but that its long-term effectiveness will depend on more pronounced and sustained progress in improving data systems and communications and coordination among Coast Guard and third-party inspection personnel.

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