67492 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 96

46 CFR Parts 2, 31, 71, 91, 107, 115,

126, 175, 176, and 189

[CGD 95–073]

RIN 2115–AF44

International Management Code for the

Safe Operation of Ships and for

Pollution Prevention (International

Safety Management (ISM) Code)

AGENCY: Coast Guard, DOT.

ACTION: Final rule.

SUMMARY: In a Notice of Proposed

Rulemaking (NPRM) published on May

1, 1997, the Coast Guard proposed

national regulations for responsible

persons and their vessel(s) engaged on

international and domestic voyages, to

develop safety management systems to

enhance vessel operating safety at sea,

prevent human injury or loss of life, and

avoid damage to the environment, in

particular to the marine environment,

and to property. Section 602 of the

Coast Guard Authorization Act of 1996

(Pub. L. 104–324) requires this action.

This final rule completes those

standards which will allow U.S. vessels

that are certificated to engage on

international voyages to meet the

mandatory certification requirements, or

voluntarily meet these safety standards

for domestic voyages. It also provides

standards to permit recognized

organizations to apply for authorization

from the U.S. to complete external

audits and issue international

convention certificates for U.S. vessels

on behalf of the U.S.

DATES: This final rule is effective on

January 23, 1998. The incorporation by

reference of certain publications listed

in the rule are approved by the Director

of the Federal Register on January 23,

1998.

ADDRESSES: Unless indicated,

documents referred to in this preamble

are available for inspection or copying

at the office of the Executive Secretary,

Marine Safety Council (G–LRA/3406),

U.S. Coast Guard Headquarters, 2100

Second Street SW., Washington, DC

20593–0001, between 9:30 a.m. and 2

p.m., Monday through Friday, except

Federal holidays. The telephone number

is (202) 267–1477.

FOR FURTHER INFORMATION CONTACT: Mr.

Robert M. Gauvin, Project Manager,

Vessel and Facility Operating Standards

Division (G–MSO–2), U.S. Coast Guard,

2100 Second Street SW., Washington,

DC 20593–0001, telephone (202) 267–

1053, or fax (202) 267–4570.

SUPPLEMENTARY INFORMATION:

Regulatory History

In May of 1994, the ISM Code was

adopted as Chapter IX of the

International Convention for the Safety

of Life at Sea (SOLAS) 1974, as

amended. The ISM Code’s adoption

occurred at the International Maritime

Organization’s (IMO’s) Conference of

Contracting Governments to SOLAS in

London at IMO’s Headquarters.

On October 19, 1996, the President

signed into law the Coast Guard

Authorization Act of 1996 as Pub. L.

104–324, 110 Stat. 3901. Section 602 of

the Act added Chapter 32 to Title 46

U.S. Code, ‘‘Management of Vessels.’’ 46

U.S.C. 3203 mandated the Secretary of

Transportation to develop regulations

for the implementation of safety

management systems which are

consistent with the International Safety

Management (ISM) Code, for vessels and

their companies which are engaged on

foreign voyages.

On April 24, 1997, the Secretary of

Transportation delegated to the

Commandant of the Coast Guard the

responsibilities under 46 U.S.C. Chapter

32 and 46 U.S.C. 3103 for the

implementation and enforcement of

safety management systems on U.S.

vessels engaged on foreign voyages. This

delegation was published as a final rule

in the Federal Register (62 FR 19935)

and codified in 49 CFR 1.46 (fff) and

(ggg).

On May 1, 1997, the Coast Guard

published a NPRM (62 FR 23705) in the

Federal Register on implementation

standards for safety management

systems for vessels and their companies

that are certificated to engage on

international voyages. These proposed

regulations provided standards for:

• The development and compliance of

safety management systems for U.S.

vessels and their companies;

• Mandatory certification of safety

management systems to international

levels;

• Voluntary certification of safety

management systems for U.S. domestic

trading vessels; and

• Authorization by the U.S. to

organizations to complete external

audits and certification of U.S. vessels

required to meet the U.S. and

international safety management system

standards.

The NPRM comment period closed on

July 30, 1997. During the 90 day

comment period, 51 documents were

received that contained 118 comments.

Seventeen comments requested public

hearings but none were held. Reasons

for not holding public hearings before

the publishing of this rule are explained

in the ‘‘Discussion of Comments and

Changes’’ section of this rule.

Background and Purpose

This rule is necessary to fulfill the

mandates of 46 U.S.C. 3203, as added by

section 602 of the Coast Guard

Authorization Act of 1996 (Pub. L. 104–

324, 110 Stat. 3901). The purpose of this

rule is to establish national safety

management system standards and

requirements for the development,

documentation, auditing, and

completion of certification by vessel

owners or responsible persons. These

vessel safety management system

regulations are consistent with the

international regulations of Chapter IX

of the International Convention for the

Safety of Life at Sea (SOLAS) 1974, as

amended. Chapter IX of SOLAS requires

that all vessels to which SOLAS is

applicable, and their companies, have

effective safety management systems

developed to meet the performance

elements of the International Safety

Management (ISM) Code (International

Maritime Organization (IMO) Resolution

A.741(18)).

The development of these

requirements has been fueled by the

continued occurrences of significant

marine casualties despite engineering

and technological innovations to stop

such casualties over the last two

decades. In an effort to further reduce

these casualties, the Coast Guard

evaluated the role of the ‘‘human

element’’ in the maritime safety

equation. Recent casualty studies

concluded that in excess of 80 percent

of all high consequence marine

casualties may be directly or indirectly

attributable to the ‘‘human element.’’

Consequently, the international

maritime community saw the need to

emphasize shipboard safety

management practices to minimize

human errors or omissions. These types

of errors play a part in virtually every

casualty, including those where

structural or equipment failure may be

the direct cause.

The U.S. has been at the forefront

providing input, analysis and direction

for the IMO’s development of these

international regulations. The U.S.

recognized that the human element

needed to be addressed and initiated the

Prevention Through People (PTP)

program which examines and defines

the critical role that the human element

plays in maritime safety. The PTP

concept asserts that safe and profitable

operations require a systematic

approach toward the constant and
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67493

balanced interaction between the

elements of management, the work

environment, individual behavior, and

appropriate technology. The ISM Code

offers a systematic approach to mariners

with the policy and procedures needed

to understand their duties and address

the human element issues and risks that

can prevent casualties from occurring.

The voluntary certification of safety

management systems by U.S. vessels in

domestic trade supports the PTP

strategies to bring government and

industry together in making cultural

change and partnerships to address the

human element in maritime operations

and pollution prevention.

Accordingly, the Coast Guard

endorsed the guidance provided by the

ISM Code in IMO Resolution A.741(18),

and provided it as a reference in

Navigation and Vessel Inspection

Circular No. 2–94 (NVIC 2–94)

published March 15, 1994, ‘‘Guidance

Regarding Voluntary Compliance with

the International Management Code for

the Safe Operation of Ships and for

Pollution Prevention.’’

In May 1994, Chapter IX of SOLAS,

‘‘Management for the Safe Operation of

Ships,’’ was adopted by the U.S. at the

IMO’s Conference of Contracting

Governments to SOLAS, 1974. Chapter

IX of SOLAS mandates that all vessels

subject to SOLAS, and their companies,

have effective safety management

systems developed and in use that

conform to the performance elements of

the ISM Code (IMO Resolution

A.741(18)). Companies whose U.S. flag

vessels trade internationally (engaged

on a foreign voyage) and are subject to

SOLAS, must have their safety

management system externally audited

and must receive the appropriate

international certificates from the U.S.

or from an organization authorized to

act on behalf of the U.S.

The ISM Code marks a significant

philosophical shift in the maritime

community’s approach to safety by

recognizing the human element’s role in

preventing marine casualties and

ensuring vessels are operated

responsibly in accordance with

domestic and international standards.

The ISM Code is seen as a major

contributor to industry’s self-evaluation

and actions to address the human

element concerns. It is intended to

change the current approach of

regulatory compliance from industry’s

passive defect notification and

correction response mode to an

aggressive approach to safety and

environmental protection. Under this

proactive approach, potential

discrepancies are resolved by the

companies themselves before casualties

or incidents that can adversely impact

the marine environment can occur.

The ISM Code performance elements

require the development of safety

management systems which document

and communicate the owner’s operation

policy, chain of authority, and

operational and emergency procedures.

It also requires management reviews,

internal audits and correction(s) of nonconformities as directed by company’s

management procedures. The

documentation of a safety management

system provides the basis for auditing

an employee’s knowledge, ashore and

afloat, of the company’s procedures and

policies. It illustrates owner, manager

and Master responsibilities specifically

and ensures awareness of national and

international standards in the system’s

procedures.

The ISM Code performance standards

are broad based to allow flexibility for

the differences that each responsible

person has to work with in managing a

variety of vessels or just one. A safety

management system is seen as a living

system that will change and grow as the

responsible person, his or her managers

and shore-based and vessel-based

personnel see the need for change, or as

technology and vessel operations

change. The best safety management

system is one where there is

commitment from the top management

of the company and its personnel to act

safely and in an environmentally

responsible manner at all times. The

accessibility of senior management

throughout the development of the

safety management system and

throughout the systems life, is also a key

factor to its success.

To ensure that the U.S. public and

maritime industry understood the

mandatory requirements of the ISM

Code, the Coast Guard published a

notice in the Federal Register on

October 5, 1995 (60 FR 52143). This

notice explained the adoption of the

ISM Code by the Contracting Parties of

SOLAS, and scheduled four public

meetings held at the following times

and locations:

October 30, 1995, Federal Building,

Seattle, Washington;

November 1, 1995, Port Authority

Building, Long Beach, California;

November 13, 1995, Holiday Inn

Downtown, New Orleans, Louisiana;

and

November 16, 1995, Port Authority

Building, New York City, New York.

At these public meetings, the Coast

Guard received comments on

implementation of the international

requirements and provide a presentation

on the U.S.’s voluntary safety

management system guidelines in NVIC

2–94. Comments received at these

meetings were audiotaped and are a part

of this docket.

Discussion of Comments and Changes

The Coast Guard received a total of 51

documents containing 118 comments to

the public docket. This section of the

preamble discusses the comments

received and the Coast Guard’s

responses and changes to the proposed

rule. This section is divided into three

parts. First, we discuss the comments

that request public hearings. Second, we

discuss the comments on specific CFR

cites. Third, we discuss the general

comments concerning other issues

relating to this rulemaking and the

implementation of safety management

system requirements.

Comments Requesting Public Hearings

Sixteen comments requested a public

hearing to discuss the requirements in

33 CFR 96.250(f)(4), involving the

determination of medical fitness for

seafarers. The concern expressed was

that this section permitted amendments

to the standards that determined the

medical fitness of mariners. The Coast

Guard is not amending any regulations

or standards regarding the

determination of medical fitness for

mariners as part of this rulemaking. This

rulemaking only requires that the

responsible person provide procedures

or policies in the safety management

system on how these existing

requirements are managed by the

company. We do not intend to hold

public hearings due to these requests, as

they would require actions on

regulations outside the scope of this

rulemaking. We understand the

importance of these requests and asked

the Executive Director of the Merchant

Marine Personnel Advisory Committee

(MERPAC) to place these comments and

concerns on the Committee’s working

agenda to discuss in its public meetings

with the Coast Guard. The Executive

Director of MERPAC and the

Committee’s Chairperson agreed to

place it on MERPAC’s working agenda.

MERPAC is a federal advisory

committee appointed by the Secretary of

the Department of Transportation under

the Federal Advisory Committee Act (5

U.S.C. App. 2). MERPAC is composed of

marine industry personnel appointed to

advise the Coast Guard on merchant

marine issues. The Committee offers an

open forum to hear individuals, groups

or industry specific concerns, then

works to provide the Coast Guard with

recommendations as to what actions

may be needed. MERPAC has addressed

the issue of mariner’s physical fitness
67494 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

standards in the past and will, when

changes are proposed, address it in the

future. MERPAC’s next meeting is

scheduled for May 1, 1998. A notice

announcing the Committee’s working

agenda, schedule and place of meeting

will be published in the Federal

Register.

One comment requested a public

hearing if the Coast Guard does not plan

to include specific protections for the

Northern Right Whale in the final rule.

The focus of the proposed rule is to

implement safety management systems

consistent with the ISM Code. The Coast

Guard does not intend to hold a public

hearing in response to this request.

Comments about protection of the

Northern Right Whale and the ISM Code

are addressed in detail in the final

section of these comment responses.

Comments Relating to Specific CFR

Sections

All changes to each section of the rule

are discussed within the following

paragraphs.

1. 33 CFR 96.110, 96.210, and 96.310.

Four comments were received on these

sections which discussed who these

subparts apply to. Two comments found

the use of the terminology ‘‘trades in

U.S. waters,’’ or ‘‘on an international

voyage,’’ or ‘‘engaged on a foreign

voyage’’ to be confusing in determining

which vessels and persons must comply

with the proposed regulations. One

comment requested that ‘‘vessel engaged

on a foreign voyage,’’ be used

throughout the rulemaking as it

conforms to the statutory requirements

of 46 U.S.C. 3201. We agree and amend

proposed §§ 96.110, 96.210 and 96.310,

to use the phrase, ‘‘vessel engaged on a

foreign voyage,’’ as defined in § 96.120.

For purposes of clarification regarding

foreign vessel voyages that come under

U.S. jurisdiction, the Coast Guard

amends §§ 96.110(c), 96.210(a)(3) and

96.310(c), by adding the words, ‘‘bound

for ports or places under the jurisdiction

of the U.S.’’ This will ensure that a

foreign vessel or self-propelled mobile

offshore drilling unit (MODU) are held

accountable to the requirements and

certification of safety management

systems when navigating in U.S. waters.

A foreign vessel engaged on a foreign

voyage, involving innocent passage

through waters subject to the

jurisdiction of the U.S. will not be

boarded under these regulations.

The second and third of these

comments also discussed the use of the

phrase, ‘‘on an international voyage’’ in

46 CFR 31.40–30(a), 71.75–13(a), 91.60–

30(a), 107.415(a), 115.925(a), 126.480(a),

176.925(a), and 189.60–30(a). The Coast

Guard does not agree with a need to

change this phrase. ‘‘On an international

voyage’’ is described in 46 CFR 2.01–8,

entitled ‘‘Application of regulations to

vessels or tankships on an international

voyage.’’ For consistency throughout

title 46 CFR, we have not changed the

final rule.

The fourth comment on these sections

recommends that a specific subpart be

developed for foreign vessel

requirements, separate from regulations

for U.S. vessels in subparts A, B and C.

The comment suggested that this new

subpart include requirements for foreign

vessels whose countries are parties to

SOLAS and those vessels whose

countries are not, similar to 33 CFR

96.370. The Coast Guard disagrees that

a separate subpart is needed, but has

added language in § 96.390(a) to ensure

that it is understood that actions for

safety management system certification

by vessels whose countries are a party

to SOLAS are acceptable as an

equivalent to the requirements of 33

CFR part 96, subparts B and C. Further

discussions of this matter are found in

paragraph 27 of this comment reply

section of the final rule preamble.

The Coast Guard amended

§ 96.210(a)(2)(I) by removing the word

‘‘passenger’’ in that sentence. Under 46

U.S.C. 3202(a)(1)(A) ‘‘a vessel

transporting more than 12 passengers

* * *’’ must comply with these

regulations, not just a passenger vessel.

The Coast Guard removed this word to

ensure the meaning that all vessels

carrying more than 12 passengers, not

just passenger vessels, must comply

with these regulations.

The Coast Guard amended

§§ 96.210(a)(2)(i) and (d)(1)(i), 96.330(a)

and (d), 96.340(a) and (d), 96.370(a), and

96.390(a)(2) as the statements were to

require that these sections applied to

vessels transporting or carrying ‘‘more

than 12 passengers’’ as stated in 46

U.S.C. 3202(a)(1)(A), and not ‘‘12 or

more passengers.’’

2. 33 CFR 96.120. Five comments

were received on definitions in this

section. One comment requested that a

definition for ‘‘designated person’’ be

added to this section to ensure that this

person’s responsibilities for overseeing

the safety management system is not

confused with the responsibilities of the

‘‘responsible person.’’ It should also be

understood that a responsible person

with a large fleet of vessels can assign

the responsibility of the designated

person to more than one employee, or

that a designated person could be

responsible for more than one vessel.

The Coast Guard agrees with the

comment and has added a definition for

designated person to this section.

One comment requested that the term

‘‘responsible person’’ be replaced by the

term ‘‘owner’’ because of possible

confusion with the term ‘‘responsible

party,’’ which is defined in the Oil

Pollution Act of 1990 (OPA 90). The

Coast Guard does not agree with this

comment and has not changed the

definition of the ‘‘responsible person.’’

Responsible party is defined in section

1001(32) of OPA 90 to clarify liability of

the owners and operators of vessels,

onshore facilities, offshore facilities,

deepwater ports, and pipelines in the

event of an oil spill. The Coast Guard’s

definition of responsible person in this

rulemaking clearly relates to

responsbility surrounding the

development and use of safety

management systems ashore and aboard

vessels.

One comment suggested redefining

the term ‘‘company’’ to include the

definition of an ‘‘operator’’ as defined in

30 CFR 250.2 of the Mineral and

Management Service’s regulations for

offshore oil and gas exploration. The

Coast Guard does not agree. There are

times when a lessee or operator of an

offshore oil or gas exploration vessel

becomes responsible by contract with

the owner of the vessel to assume the

duties imposed by these rules. When

this occurs, a written designation of that

responsibility must be provided by the

owner to the lessee or operator of the

contracted vessel and placed in the

documentation of the safety

management system as required by the

ISM Code. This is part of the safety

management system’s documents and

reports required by § 96.250(b)(2), and

there is no need to expand on the

definition of ‘‘company’’.

One comment requested that the term

‘‘recognized organization’’ be changed

to a ‘‘member of the International

Association of Classification Societies

(IACS).’’ The Coast Guard does not agree

with this comment. Other organizations,

outside the membership of IACS, may

apply and be recognized if they meet the

requirements of 46 CFR part 8. The

regulations of that part do not limit the

application or recognition of any

organization because they are or are not,

members of IACS. The Coast Guard has

amended the definition of a recognized

organization in this section to be clear

on which requirements of 46 CFR part

8, an organization must meet to be

accepted. As subparts C and D of 46

CFR part 8 provides requirements for

other international certificate

authorizations and the U.S. Alternate

Compliance Program, which have no

effect on U.S. ISM Code certification

authorization, these subparts are

removed from the definition. This
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67495

change of definition has also required

changes to the language in the definition

of an ‘‘Authorized Organization Acting

on behalf of the U.S.’’ and §§ 96.400(a),

96.410 and 96.430(b) (formerly

§ 96.430(a)(5)). Also, we have removed

the phrase ‘‘national or international’’

from the recognized organization

definition for consistency with subpart

D.

One comment inquired whether the

phrase, ‘‘vessel engaged on a foreign

voyage’’ includes the operation of U.S.

flag oilfield crewboats to and from

foreign ports during operations

supporting oil exploration programs

internationally. Such vessels that are

offshore supply vessels (OSVs) of 500

gross tons or more, or are carrying more

than 12 passengers, would be

considered engaged on a foreign voyage

under paragraph (b) of the term’s

definition. This definition states that a

vessel is considered to be on a foreign

voyage when, ‘‘making a voyage

between places outside the United

States’’ (§ 96.120). These crewboats

must meet the requirements of 33 CFR

part 96 and the ISM Code for safety

management systems, when certificated

for such voyages. No changes were

made to the final rules in response to

this comment.

In November 1997, the SOLAS

Conference on the Safety of Bulk

Carriers was held at IMO’s headquarters

in London. During this conference, a

new Chapter XII of SOLAS was adopted,

entitled ‘‘Additional Safety Measures for

Bulk Carriers.’’ During deliberations on

this new chapter of SOLAS an

interpretation was adopted regarding

the definition of a bulk carrier. This

interpretation is found in Resolution 6

of the resolutions adopted by the

conference. This interpretation pertains

to the definition of bulk carrier in

Regulation 1.6 of Chapter IX of SOLAS

on the ISM Code, as well as the new

Chapter XII on Bulk Carrier Safety. The

definition in Chapter IX is, ‘‘Bulk carrier

means a ship which is constructed

generally with single deck, top-side

tanks and hopper side tanks in cargo

spaces, and is intended primarily to

carry dry cargo in bulk, and includes

such types as ore carriers and

combination carriers.’’ The

interpretation removes the ambiguity of

the term ‘‘constructed generally.’’

Specifically, the resolution ‘‘Urges

SOLAS Contracting Governments to

interpret the definition of the term

‘‘bulk carrier’’ given in regulation IX/

1.6, for the purpose of the application of

SOLAS regulation IX/2.1.2 * * * to

mean: ships constructed with a single

deck, top-side tanks and hopper side

tanks in cargo spaces and intended

primarily to carry dry cargo in bulk; or

ore carriers; or combination carriers.’’

Bulk carriers that meet this

interpretation are required to meet the

first effective date of the ISM Code, July

1, 1998. Other vessels, which carry bulk

cargoes, but do not meet this

interpretation, must meet the second

effective date of the ISM Code (July 1,

2002), as required by § 96.210. The U.S.

has decided to accept this IMO

interpretation to SOLAS. This

rulemaking has not defined bulk

carriers, but intends to use all vessel

type definitions as provided by

Regulation 1 of Chapter IX of SOLAS.

For clarity, we added a new paragraph

(a) to the definition section to explain

that we will use the definitions

provided by Chapter IX of SOLAS, and

not the definitions in Title 46 of the U.S.

Code.

3. 33 CFR 96.230(a). Four comments

were received on this paragraph. Two

requested clarification whether these

practices have to be in writing. One

comment noted that requiring written

practices would impose requirements

on U.S. vessels that are not required on

foreign vessels. We agree. Requiring

these objectives in writing would extend

U.S. vessel requirements beyond

requirements for a foreign vessel under

the ISM Code. This change would also

require a foreign vessel that operates in

the U.S. to complete further work on

their safety management system that

exceeds the requirements of the ISM

Code. We amend the rule to remove the

term ‘‘written’’ and have reworded the

paragraph to ensure that the objectives

required by this section are consistent

with the ISM Code.

The third comment requested

clarification of the term ‘‘type’’ of

vessel, and suggested that this definition

would have the same meaning as vessel

‘‘category.’’ This terminology is required

to be used on the Document of

Compliance certificate to illustrate what

type of vessel(s) a company’s safety

management system is developed to

manage. If the type of vessel(s) a

responsible person owns changes, then

the safety management system must be

amended to include the specifics of

managing the new or different vessel

type. Vessel types are: passenger ship;

passenger high-speed craft; cargo highspeed craft; bulk carrier; oil tanker;

chemical tanker; gas carrier; MODU; and

other cargo ship. The term ‘‘cargo ship’’

used to describe a vessel type under

SOLAS has the same meaning as

‘‘freight vessel’’ for these regulations.

The final comment on this paragraph

noted that, as drafted, the meaning of

this paragraph could be interpreted to

require the safety management system to

provide a safe work environment ‘‘for’’

the vessel. The intent of the ISM Code

is to require a safe working environment

‘‘on board’’ the vessel. The Coast Guard

agrees with the comment and has

reworded the paragraph to clarify its

meaning and be consistent with the ISM

Code.

4. 33 CFR 96.230(b) and 96.230(c).

Five comments requested that we

amend these paragraphs because the

‘‘listing’’ of safeguards and continuous

improvement methods is not the same

as ‘‘establishing or implementing’’ those

safeguards. The Coast Guard agrees with

the comments and amends paragraphs

(b) and (c) accordingly.

5. 33 CFR 96.230(d). One comment

requested that this paragraph be struck

from the final rule because ensuring

compliance with the many

international, national, industry

standards and codes is unworkable and

a second comment requested that the

term ‘‘industry guidelines’’ be expanded

to ‘‘maritime industry guidelines.’’ We

disagree that this paragraph is

unworkable or should be struck, but

have amended it to include maritime

regulations and standards in the safety

management system. It does not require

any more actions than those already

completed by foreign vessels under their

ISM Code compliance responsibilities.

The Coast Guard agrees with the

comment recommending the use of the

phrase, ‘‘maritime industry guidelines’’

and amends this paragraph in the final

rule. To ensure clarity, we amended this

paragraph to use the word ‘‘relevant.’’

6. 33 CFR 96.240(b). One comment

discussed that this paragraph was

unclear, because as drafted, it appeared

that foreign vessels would be required to

comply with U.S. national standards

and U.S. regulations for ship

construction and operation not normally

applicable to foreign flag vessels. The

comment pointed out that this is

inconsistent with the ISM Code. This

was not the intent of the proposed

requirements. We have amended this

paragraph to make it clear that foreign

vessels need to follow U.S. regulations

applicable to them when they operate in

U.S. waters.

7. 33 CFR 96.240(c). One comment

discussed that the documentation which

describes the levels of communication

was not a functional requirement of

safety management systems. The

comment suggests that requiring this

documentation would be an arduous

task with respect to the operation of a

self-propelled MODU, because the

organizational makeup of the vessel

changes depending on whether the

vessel is navigating, or is anchored in

oil exploration operations. The Coast
67496 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

Guard disagrees. The directions and

management needed for this type of

operation between the responsible

person, the navigating crew, whomever

manages the operational drilling crew

and the supervising staff of the drilling

crew aboard the MODU itself, is exactly

the situation that this requirement

addresses. No change has been made to

this requirement in the final rule.

8. 33 CFR 96.240(d). One comment

questioned the Coast Guard’s authority

to require ‘‘near accident reporting’’ in

this paragraph, arguing that this was

inconsistent with the ISM Code. We

disagree. Section 9.1 of the ISM Code

requires that, ‘‘The safety management

system should include procedures

ensuring that non-conformities,

accidents and hazardous situations are

reported to the company, investigated

and analyzed with the objective of

improving safety and pollution

prevention.’’ The Coast Guard interprets

that near-accident reporting is

hazardous situation reporting. The Coast

Guard has also reinforced the meaning

of this requirement in the standards

provided by § 96.250(i).

The comment also suggests amending

this paragraph to conform to the ISM

Code. Specifically, the comment

suggests revising the language to say

‘‘procedures for reporting * * * nonconformities with the ISM Code,’’ as

opposed to ‘‘non-conformities with the

safety management system.’’ The Coast

Guard disagrees that only nonconformities with the ISM Code should

be included here. The functional

requirements of a safety management

system must ensure the continuous

evaluation and appropriate

improvement of the safety management

system by the company’s management.

However, to ensure clarity this

paragraph is amended.

One comment supported § 96.240(d)

as drafted, and emphasized the

importance of near-miss reporting and

follow-up to establish lessons learned.

We agree. The Coast Guard, in

partnership with the Federal Maritime

Administration (MARAD), is developing

a nationwide voluntary near-miss

accident reporting program to compile

lessons learned for the education of

mariners and maritime industry. When

completed, the Coast Guard will publish

policy on the use of the national nearmiss accident reporting program and a

responsible person’s ability to use the

U.S. national program to conform with

the requirements of near-accident or

hazardous situation reporting required

by the ISM Code. The Coast Guard’s

program manager for this project is the

Chief, Office of Investigations and

Analysis (G-MOA), at Coast Guard

Headquarters.

9. 33 CFR 96.240(e). One comment

objected to the use of the word

‘‘procedures’’ in this paragraph stating

that the functional requirements should

define a ‘‘process’’ for ensuring an

appropriate response to emergency

situations. The Coast Guard disagrees

because the paragraph, as drafted, is

interpreted broadly and will define a

process for response as required by the

ISM Code. Multiple levels of

management, such as on a MODU and

third party managed vessel, need to

define their ‘‘processes’’ in terms of

procedures in a safety management

system for it to work. Procedures that

define these processes can be used as

training tools, tracking tools, and action

tools. This requirement does not require

a new process to be developed if they

are already in hand or developed under

current regulation or management

procedures. No change is made in

response to this comment.

10. 33 CFR 96.240(g). Two comments

discussed expanding this paragraph to

include the use of objective internal

safety assessments in place of internal

auditing, and stated that safety

management systems should be

reviewed to evaluate their efficiency

against established industry evaluation

procedures. Both comments contain

merit, and the Coast Guard agrees that

the efficiency and measurement of

safety management system impacts and

their effectiveness should be

determined. However, the Coast Guard

disagrees with the need for such

requirements in the final rule. The

suggested requirements would extend

managerial responsibility past the

minimum requirements of the ISM

Code. Therefore, no changes are made in

response to this comment.

11. 33 CFR 96.250. Five comments

were received on this section. One

comment noted that both functional and

documentary requirements are included

in the table within § 96.250. The

comment recommended referencing the

documentary requirements of § 96.240

to the table within § 96.250. The Coast

Guard does not agree that there is a need

to cross reference the requirements of

§ 96.240, as the requirements for

performance objectives documentation

are already covered within the

requirements of the table in § 96.250.

Four comments suggested that these

regulations should contain provisions to

protect records that are maintained as

part of a safety management system. The

comments request that the regulations

be amended to prohibit use of these

records in civil or administrative

proceedings. Specific concerns were

that the documentation and reporting

requirements will contain sensitive

company information that, while

essential for purposes of company

personnel use, should not be made

publicly available for use in civil

proceedings. The Coast Guard agrees

that for a safety management system to

work correctly and to be continuously

self-improving, it requires the proactive

actions of the responsible person to

have reports completed on nonconformities and hazardous situations,

no matter how minor or major, so that

management reviews can be completed

and corrections made to the safety

management system accordingly.

However, the Coast Guard cannot

provide any protection for these records

because to do so would exceed its

authority granted in 46 U.S.C. Chapter

32. To clarify our intent, a note has been

added at the end of the table in § 96.250,

in the final rule.

12. 33 CFR 96.250(b). Three

comments were received on this

paragraph. The first comment requested

clarification whether the requirement

for the company’s responsibility and

authority statement should extend to all

vessels owned by the responsible

person, or just the vessels of the

company that must comply with this

part. The Coast Guard contends that it

would be to the responsible person’s

benefit to have all vessels that he or she

owns meet the safety management

system requirements of this part.

However, only vessels required to meet

33 CFR part 96, are required to be

covered by this requirement.

The second comment discussed the

possibility of confusion regarding the

determination of the responsible person

on a self-propelled MODU, between the

owner, operator, lessee, or drilling

contractor. The delineation of the

relationships of these persons or

companies involved in a MODU’s

operation should be explained by the

company’s policies and procedures.

Proper explanation of these

relationships in the safety management

system ensures that personnel

responsible for specific duties involving

safe operation, and the services

provided to the vessel by contracted

personnel, will understand their

responsibilities correctly thereby

reducing human element errors which

can cause accidents. It will also enhance

the vessel’s response to casualties and

accidents, resulting in mitigation

damages to the vessel and the

environment, or injury to vessel

personnel.

The third comment on this paragraph

discussed subparagraph (b)(4), which

requires the safety management system
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67497

to contain a statement that describes the

company’s responsibilities to ensure

adequate resources. The comment

further states that describing this

responsibility in the safety management

system does not necessarily mean that

the company bears responsibility. We

understand that vessel resources can be

provided by a myriad of contract

companies and personnel not under the

direct control of the responsible person.

Safe management does not point fingers

but ensures communications so when

problems develop, there are clear

policies that employees can follow to

make decisions. The reasoning that the

performance objectives of these safety

management system standards are so

general is to allow them to be

customized to specific type vessel

operation for ease of the user. No

changes have been made to the final

rule due to these comments.

13. 33 CFR 96.250(c). One comment

requested that the term ‘‘oversee’’ used

in this paragraph, be changed to the

word ‘‘monitor’’ to describe the actions

required of the designated person. The

Coast Guard agrees with this comment

and amends this paragraph in the final

rule.

14. 33 CFR 96.250(d). Three

comments were received on this

paragraph. One comment stated that not

all vessels are certificated or required by

the provisions of national regulations to

have Masters, but instead may have

Persons-In-Charge. The Coast Guard

agrees with this comment, but has not

amended the regulation. The Coast

Guard uses the term Master to be

consistent with the ISM Code.

Additionally, all U.S. vessels

mandatorily required to meet the safety

management system requirements of

this part are certificated to have Masters

on board. The Coast Guard understands

that there are vessels which can

voluntarily meet these standards, such

as non self-propelled MODUs, which

are not required to have a Master but a

Person-In-Charge as senior manager of

the vessel. The Coast Guard is

developing a new chapter in Volume II

of it’s Marine Safety Manual (MSM), on

the U.S. safety management system

compliance and enforcement policies

which will be used by the Coast Guard

and organizations authorized, to audit

and certificate safety management

systems. The Coast Guard has not

amended this paragraph because the

MSM guidance will clarify that the term

‘‘Master’’ includes a Person-In-Charge in

this situation.

The other two comments questioned

whether a vessel’s Master is capable of

having responsibility and authority over

shore-based resources, and asked that

such contentions be deleted from this

paragraph. During some duties, the

Master of the vessel will be the

responsible person’s representative

contracting and supervising vessel

support from shore-based resources, as

well as directing resources from the

vessel managing company. The safety

management system should clearly

describe these duties to allow the

Master to understand his or her

responsibilities and decision-making

policies. This will also help shore-based

resources understand their duties, their

importance to the vessel, and their

responsibilities to the vessel Master as

a manager. The Coast Guard does not

agree with these comments and has not

amended this paragraph of the final

rule.

15. 33 CFR 96.250(e). Two comments

were received on this paragraph. One

discussed that the Master of a vessel

does not have overall authority for

vessel operation because the Master’s

authority is overridden by flag state,

coastal state, and numerous other

governmental authorities. We respond

that the Master is the responsible

person’s representative on the vessel

and all authorities that can be expected

of the Master should be supported by

the safety management system. The

Master has overriding responsibility and

authority to ensure that the vessel is

operated safely, and consistently with

all applicable laws. When the Master is

not specified, it is impossible to expect

the individual employed as the Master

to provide proper leadership or decision

making clarity. Where the Master

follows international, national, coastal,

or local regulations or directions,

regarding management of a vessel, he/

she is making decisions on how to use

these factors in the efficient and safe

operation of the vessel taking into

account the policies provided by the

safety management system.

The second comment encouraged the

Coast Guard to amend this paragraph by

adding a subparagraph (3) which states,

‘‘Responsibility with the bridge team

and officers on watch to monitor

navigation, collision avoidance, and

communications while the ship is

piloted.’’ The Coast Guard does not

agree that this statement needs to be

added to this paragraph because this

requirement for providing procedures

for shipboard operations is covered by

paragraphs (f) and (g) of the table in

§ 96.250. The Coast Guard has made no

changes to the final rule due to either of

these comments.

16. 33 CFR 96.250(f). Four comments

were received on this paragraph. One

comment discussed that the statement

in § 96.250(f)(6) required knowledge of

the relevant rules, regulations, codes

and guidelines, which was a subtle

difference from than ‘‘an adequate

understanding’’ required by the ISM

Code. We agree that this statement may

be misinterpreted to require more than

what would be consistent with the ISM

Code and have changed the language

accordingly.

One comment discussed that there

should be an understanding that the

documentation of training identified

and required by other national

regulations or international

conventions, can be documented under

the safety management system in

compliance with these requirements

and also meet the requirements for

training and documentation of the

International Convention on Standards

of Training, Certification and

Watchkeeping for Seafarers, 1978, as

amended in 1995 (STCW). The Coast

Guard agrees with this comment, and

this understanding is stated in NVIC 4–

97 (Guidance on Company Rules and

Responsibilities under the 1995

Amendments to the STCW). NVIC 4–97

states, ‘‘If you operate your vessel under

a safety management system (SMS) in

compliance with the International

Safety Management (ISM) Code and

hold a valid Safety Management

Certificate (SMC) and Document of

Compliance issued by the Coast Guard

under 46 U.S.C. 3205, you are presumed

to be in compliance with STCW

Regulation I/14.’’ On the other hand,

NVIC 7–97 (Guidance on the STCW

Quality Standard System (QSS) for

Merchant Mariner Courses or Training

Programs), explains that, ‘‘* * * In

order for shipping companies that are

ISM Code certified to have their training

meet the STCW QSS requirement, their

training program must meet the criteria

in 46 CFR 10.309.

It should be remembered that

documentation and training

requirement programs developed by a

company can cover a magnitude of

different vessel type specific

requirements. Each vessel type, under

the umbrella of a company’s safety

management system, may only need to

use those portions of the training and

documentation program of the total

company system that are applicable due

to the vessel type, area of operation, or

specific requirements under other

conventions, laws or regulations. No

changes were made to this section in

response to this comment.

One comment discussed the need to

reevaluate federal manning levels

required on U.S. vessels, suggesting that

current manning levels do not reflect

the additional personnel which will be

needed to satisfy the requirements of the
67498 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

ISM Code. The comment stated that the

ISM Code places more duties on vessel

personnel than were expected when

manning levels were established. The

Coast Guard disagrees with this

comment. We received comments from

companies that have safety management

systems in operation. They developed

those safety management systems by

initially reviewing existing company

management policies and procedures.

By doing this, they found numerous

antiquated, unnecessary or duplicative

management procedures and

documentation which could be

eliminated. Thus, they reduced the

management overhead that they had

been experiencing before placing the

safety management system in operation.

If policies are not needed due to

changes in the company, management,

regulations, policies, or for a number of

other different reasons, then they should

be removed or amended. By doing this

the management system and oversight

reporting is reduced in size, which does

not increase the personnel needed to

operate a vessel safely. No changes have

been made to the final rules due to this

comment.

The final comment on this paragraph

recommends that all personnel should

receive general safety management

system familiarization when joining a

vessel and also six further specific

levels of training. These include: three

support level training programs; two

operational level training programs; and

one level of management training

programs. The Coast Guard supports a

company’s use of training, at whatever

level necessary to ensure that policies

and procedures of the management

system are understood by their staffs

aboard a vessel or working ashore in

support of a vessel. We agree that if a

company evaluates its safety

management system and finds a need to

develop training to ensure the proper

understanding and use of the system,

then the training should be initiated by

that company. In NVIC 4–97, the Coast

Guard recommended that ship-specific

familiarization include directing a new

crew member’s attention to the vessel’s

safety management system. However,

the Coast Guard has not made changes

to this section of the final rule, as the

comment requests additional training

which exceeds the requirements of the

ISM Code.

17. 33 CFR 96.250(j). Three comments

were received on this paragraph. One

comment requested that the format of

the paragraph and subparagraphs be

changed to mirror the ISM Code, and

two comments requested that

subparagraph (2) have the word ‘‘nonconformity,’’ changed to ‘‘deficiency.’’

The Coast Guard disagrees with the first

comment and has not altered the format

of this section or table in the final rule.

The Coast Guard agrees that there may

be confusion understanding

subparagraph (2) and has added the

words ‘‘and deficiency’’ after ‘‘nonconformity’’ to ensure that the

requirement is understood.

18. 33 CFR 96.250(k). Two comments

were received on the control of

documentation required by this

paragraph. One comment requested that

the word ‘‘destroyed’’ be changed to

‘‘removed’’ in subparagraph (4). We

agree with this request and amend the

word in the final rule. The second

comment stated that the meaning of data

maintenance is unclear and that the

complete paragraph does not provide

specific direction on data control. The

requirements for safety management

systems were written in general

performance element style to allow

different types of companies to tailor

their systems to their specific needs.

Some companies may use paper based

systems, other computer based, a third

company a mixture of both. No matter

how this data is displayed or

communicated, it will be controlled

equally and in compliance with these

standards. The Coast Guard disagrees

that further amendments are needed,

because these standards allow flexibility

for development of systems

documentation. Consequently, we have

not made any changes to the final rule

due to this comment.

19. 33 CFR 96.250(l). Two comments

were received on this paragraph. One

comment requested the word

‘‘deficiencies,’’ in subparagraph (4) be

changed to ‘‘non-conformities,’’ to

conform with the ISM Code. In this

case, the Coast Guard agrees that

confusion could occur on what requires

timely action for the system and has

added the words ‘‘non-conformities or’’

before the word ‘‘deficiencies’’ in

subparagraph (4) in the final rule.

The second comment stated that

proposed section § 96.240 of the

regulations should include the

requirements of section 12 of the ISM

Code that require evaluating the

efficiency of the system and reviewing

the safety management system with

established procedures. The Coast

Guard agrees and notes that these

requirements are already included in

§ 96.250(l)(1). Critical management

review of the system, as well as nonconformity and deficiency reports, are

necessary to evaluate whether the

system is running properly. No changes

to the text of the final regulations were

made due to this comment.

20. 33 CFR 96.320(f). Three comments

were received on this section regarding

the reporting of non-conformities to the

company’s owner or vessel’s Master at

completion of a safety management

audit. The comments requested that this

paragraph be amended to require

auditors to issue reports of nonconformities to the company’s owner

and vessel’s Master. It was also

recommended that the safety

management system’s designated person

receive copies of this reports as well.

The Coast Guard agrees in part and

amends this section to require auditors

to provide these reports to a company’s

owner when the company is audited,

and to a vessel’s owners and Master

when a vessel is audited. If a company

wants its designated person to receive a

copy of this non-conformity report, it is

recommended that this request be made

to the auditors prior to the audit being

completed on behalf of the company.

21. 33 CFR 96.330. One comment

expressed concern that this section

would require multiple Document of

Compliance certificates to be issued by

each flag state for a multi-flagged fleet

under one responsible person’s

ownership. Multiple certificates may

not be required as the international

interpretation for their issuance allows

flag states to agree to accept each others

certificates for safety management

system compliance. Each situation may

be different and to verify the U.S.

acceptance of other flag state certificates

contact Commandant (G–MOC–2),

Vessel Compliance Division, 2100

Second Street SW., Washington DC

20593–0001 in writing, by telephone

(202) 267–1464, or by facsimile (202)

267–0506. No changes were made to

this section of the final rule due to this

comment.

22. 33 CFR 96.330(f). One comment

requested that this paragraph be

amended because it requires the

Document of Compliance certificate to

be verified annually, instead of the

company’s safety management system.

The Coast Guard agrees and amends this

paragraph to ensure the verification of

the system and not the certificate in the

final rule.

23. 33 CFR 96.330(g)(1), 96.340(g)(1),

and 96.340(f). Four comments were

received on these paragraphs. Two

comments requested that the revocation

of a Document of Compliance certificate

or Safety Management Certificate not be

based on the failure of the responsible

person to request an audit, but rather on

the failure to complete an audit. The

Coast Guard agrees with this comment

and amends these paragraphs in the

final rule.
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67499

The next comment pointed out that

when a vessel is laid up or taken out of

service for a period of time the Safety

Management Certificate may lapse, if

the vessel is unmanned for long periods

of time. Because there are no personnel

working under a safety management

system when a vessel is laid up, the

certificate cannot be validated or

endorsed. When brought back into

service, the responsible person can

request that an initial audit of the vessel

be completed when the vessel is

remanned, and a new Safety

Management Certificate can be issued.

No change to the final rule was made

due to this comment.

The last comment stated that

§ 96.340(f) should be amended as it

requires foreign vessels to meet U.S.

requirements for safety management

system audits. A foreign vessel which is

certificated by its flag state or by an

organization who acting on behalf of the

flag state, completes a safety

management system audit following the

guidelines of IMO Resolution A.788(19),

meeting the same requirements found in

these regulations. The Coast Guard will

accept such a determination as required

by the articles of SOLAS. No changes

have been made to this section of the

final rule due to this comment.

The Coast Guard has added wording

to § 96.330(g), with a new subparagraph

(3), to ensure that their personnel and

auditors of an authorized organization

acting on their behalf, can complete

audits and reviews of safety

management systems properly and

effectively. A Document of Compliance

certificate may be revoked if the Coast

Guard or an authorized organization is

denied or restricted access to the vessel,

records, or personnel necessary to

ensure compliance with 33 CFR part 96.

Neither the Coast Guard, nor an

authorized organization acting on its

behalf, should be expected to certificate

compliance with any international

convention regulation, unless all needed

information and records for that review

are provided by the vessel’s or

company’s personnel.

24. 33 CFR 96.340(e)(2). One

comment requested that the wording in

this section regarding the ‘‘anniversary

date’’ of the intermediate verification

audit be amended for clarity. The Coast

Guard agrees and amended the final rule

with the words ‘‘period of validity’’

rather than the ‘‘anniversary date.’’

25. 33 CFR 96.360(a)(2). One

comment was received on this section

which requested a determination of

‘‘* * * a U.S. vessel which is new to

the responsible person or their

company.’’ For an interim Safety

Management Certificate to be issued,

this vessel would be considered an

individual vessel that was just

purchased by or just brought under the

management of a responsible person. No

change to the final rule was made due

to this comment.

26. 33 CFR 96.380. Two comments

were received on this section. One

comment stated that the use of a civil

penalty under 46 USC 3318 is not

consistent with the law for violations of

compliance with documentation

responsibilities under these regulations.

The comment went further to state that

a suitable grace period for the

production of certificate copies, or a

grace period to bring the vessel into

compliance, along the line of a formal

requirement (CG Form 835) be issued

prior to actions to assess a civil penalty.

The requirement as written states that

the ‘‘* * * vessel owner, charterer,

managing operator, agent, Master, or any

other individual in charge of the vessel

that is subject to this part, may be liable

for a civil penalty * * *.’’ The proposed

regulations do not say that the Coast

Guard must pursue a civil penalty.

Traditionally, the Coast Guard has

considered all possible administrative

actions in dealing with incidents of noncompliance. The Coast Guard wrote this

section to ensure that affected

companies and individuals were aware

that civil penalties were a possible

sanction for violations of these

regulations. It is the Coast Guard’s

opinion that civil penalties authorized

under 46 U.S.C. 3318 apply to violations

of these regulations because these

penalty provisions are applicable to

violations of laws and regulations

issued under the authority of 46 U.S.C.

Part B, which includes 46 U.S.C.

Chapter 32.

The second comment discussed

concerns surrounding § 96.380(a)(2),

which allows the Coast Guard to board

a vessel to verify that the vessel’s crew

or shore-based personnel are following

the procedures and policies of the safety

management system while operating the

vessel or transferring cargoes. The

comment concluded that this action

would go well beyond the authority

internationally recognized for port state

control examinations found in SOLAS:

Chapter I, regulation 19; Chapter IX,

regulation 6; Chapter XI, regulation 4; as

well as the IMO Procedures for Port

State Control. The comment also

requested that we modify this

subparagraph to conform with

internationally recognized port state

control guidelines. The comment further

requested that we draft Coast Guard

policy on these actions and distribute

them for comment to the maritime

industry prior to their implementation.

The Coast Guard is working to

complete policy development which

falls into line with this request. A port

state control NVIC is being developed

which describes the Coast Guard

boarding policy for foreign vessels

including examination of the vessel

safety management system and

certificates. This NVIC will discuss

normal actions during a port state

control examination of a foreign vessel

by the U.S., and what clear grounds

must be found of observed noncompliance with a safety management

system before an expanded Coast Guard

examination will be completed. The

Coast Guard expects to have this NVIC

published in the same time frame as this

final rule. However, we disagree that

this policy requires review and

comment by the maritime industry.

These procedures for safety

management system evaluation fall inline with the U.S. port state control

program already in existence and meets

the port state control regulations of

SOLAS and the IMO Procedures for Port

State Control. No changes have been

made to this section of the final rule due

to this comment.

27. 33 CFR 96.390(a). One comment

stated that this subparagraph would

prohibit Coast Guard acceptance of

foreign issued international

management certificates which met

SOLAS guidelines, unless they would

attest to full compliance with U.S.

regulations. The Coast Guard agrees that

as written, this requirement provides a

limitation of acceptance of foreign

issued certificates which is not

consistent with SOLAS. This

subparagraph has been amended in the

final rule to ensure that such certificates

would be acceptable when issued in

accordance with Chapter IX of SOLAS

and the IMO Guidelines for Contracting

Parties to SOLAS.

28. 33 CFR 96, Part D. Two comments

were received regarding organizations

who have applied to be recognized and

are authorized to complete external

audits and certification of safety

management systems for U.S. vessels

and their companies. One comment

questioned the use of the term

‘‘expertise,’’ and whether that term

encompassed the marine field, quality

systems, or both, and whether this

authorization should be limited to

classification societies. The comment

further stated that anyone with an

appropriate marine business and

academic background is qualified to act

on behalf of the U.S. in ISM Code

auditing and certification.

These requirements are based in part,

on the guidelines provided by IMO

Resolution A.739(18), which are
67500 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

incorporated by reference in § 96.130.

These international guidelines provide

minimum standards to ensure

organizations authorized by any flag

state, worldwide, will provide uniform

actions and oversight when their

personnel complete actions regarding

vessel surveying and auditing in the

marine field. This is important to the

owner of a vessel and the flag state,

because as it ensures that the

international certificates issued by

authorized organizations acting on

behalf of a flag state, will be accepted

worldwide, on face value, for

compliance with international

conventions. The Coast Guard disagrees

that ‘‘just anyone’’ can meet these

requirements. Coast Guard requirements

for recognition of organizations are

rigorous and conform to the IMO

guidelines. The Coast Guard expects

and will ensure that actions by an

organization acting on its behalf are

incontestable under any port state

scrutiny. Any organization, with a

proven history of marine experience

working with and making decisions

based on maritime industry standards,

national standards and regulations, and

international guidelines and

conventions, may meet these

requirements. The organization, due to

the auditing expertise needed for ISM

Code certification, must also provide a

certified level of standards that it can

meet for its personnel to complete

audits. The requirements are restrictive

because the Coast Guard must ensure

that the U.S. marine transportation

industry is able to operate,

uninterrupted, worldwide.

The second comment on this part

recommended that organizations

already accepted by the Coast Guard to

issue voluntary certificates, under NVIC

2–94, should be automatically

authorized to issue mandatory ISM

Code certificates on behalf of the U.S.

without having to reapply under these

regulations. The Coast Guard disagrees

and expects these organizations will

apply under this part. No changes were

made to this section of the final rule due

to these comments.

29. 33 CFR 96.410. One comment was

received on this section which stated

that the term ‘‘safety management

certificates’’ should not be used in this

section because it has a specific

meaning, and should not be used to

refer to these certificates in a general

way. The Coast Guard agrees with this

comment and has changed this section

to eliminate confusion. The Coast Guard

has also edited this section to make it

easier to read by removing the words

‘‘wish to’’ from this section.

30. 33 CFR 96.430. Four comments

were received on this section. One

comment discussed the reciprocity

requirement of 46 U.S.C. 3316 for a

foreign classification society to be

authorized to act on behalf of the U.S.

to complete external audits and

certification of safety management

systems. The comment stated

reciprocity with ABS should not be

required because a subsidiary corporate

entity of ABS is providing these

functions, not ABS, thus there is no

need for the documentation of

reciprocity by a foreign classification

society. The Coast Guard does not agree.

Currently, ABS certification comes

under the voluntary system of NVIC 2–

94 which is not subject to the provisions

of 46 U.S.C. 3316. Under these

regulations, all future written

agreements for authorization to act on

behalf of the U.S. regarding the

mandatory certification of safety

management systems will be made with

ABS under the provisions of 46 U.S.C.

3316. Under this agreement, ABS will

not be able to use subsidiary group

offices to complete these actions for the

U.S. No change was made in the final

rule due to this comment.

The second comment recommended

that the Coast Guard also accept the

quality standards of ASQC Q9002 and

quality management standards of ASQC

C9001 and C9002. The Coast Guard

disagrees. Under 46 CFR 8.230(a)(15), an

organization must meet ANSI/ASQC

Q9001 or an equivalent quality standard

to be recognized. No other quality

standard is incorporated in 46 CFR part

8. For purposes of consistency, no

others will be incorporated here either.

Quality management standards (ASQC

C9001 and C9002) are not required for

recognition of an organization, so none

will be required here. No changes have

been made to this section of the final

rule due to this comment.

The third and fourth comments on

this section questioned the terminology

used in § 96.430(a)(3), and inquired

whether a recognized organization

could use subsidiary organizations and

their auditors to carry out audits and

certification in accordance with the IMO

guidelines and the ISM Code. The Coast

Guard disagrees and has explicitly

written this subparagraph to ensure that

only exclusive auditors of organizations

authorized to act on behalf of the U.S.

are used by these organizations to

complete audits under this

authorization. When the Coast Guard

reviews an organization’s application

for authorization authority under this

subpart, quality standards must: (1)

Demonstrate how the organization

selected individuals as auditors; (2)

explain training and recertification

methods; and (3) describe the code of

ethics the auditors must follow. An

organization’s auditor standards will be

approved as part of the organization’s

application package to be authorized to

act on behalf of the U.S., and will be

part of the U.S. written agreement with

the organization as required by

§ 96.440(c). No change was made to this

section of the final rule due to these

comments.

As the reciprocity requirement effects

only foreign classification societies

which can be authorized to act on behalf

of the Coast Guard under this section,

old paragraph (a)(5) of this section has

become a new paragraph (b) for clarity.

Old paragraph (b) is now paragraph (c).

31. 33 CFR 96.480. One comment

cautioned that the termination of

authority from an organization acting on

behalf of the U.S. could have extreme

consequences on vessel operation for

vessels certificated by that organization.

Specific concern was expressed for

situations in which the vessel’s Safety

Management Certificate is near

expiration when the authorization is

terminated. Also, the comment

questioned the obligatory notification

requirements of companies and vessels

certificated by the terminated

organization. In all cases, the Coast

Guard will request information from the

administrative files of the organization

being terminated to understand the

effect of termination on the companies

and vessels certificated by the

organization. The Coast Guard will

assist any company and vessel to

maintain certification while transferring

to another authorized organization. The

original certificates of the terminated

organization will remain valid until

expiration or periodic audit which will

allow continuity with a new authorized

organization. There should be no extra

cost for the company or vessel as the

audit actions required by the new

organization are the same actions that

would have been completed by the

original certifying organization. This

paragraph was also edited to ensure

clarity.

The Coast Guard will enter into a

written agreement with all organizations

receiving authorization under this part,

as stated in § 96.460. Failure to notify

affected companies or vessels upon

termination of authority for safety

management system certification, will

result in a review by the Coast Guard of

the ability of the organization to

complete any actions on behalf of the

Coast Guard. Additionally, this

termination could affect any or all other

delegated authorities, in such a
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67501

situation. The final rule was not

changed due to these comments.

32. 46 CFR 126.480(a). Three

comments were received on this section.

Two comments discussed the use of the

phrase ‘‘offshore supply vessels (OSVs)

engaged on foreign voyages’’ and

questioned the applicability of the 33

CFR part 96 on OSVs and ocean-going

towing vessels certificated for

international voyages. The applicability

of those regulations to OSVs and towing

vessels on international voyages is

determined by whether these vessels are

over 500 gross tons and are ‘‘vessel(s)

engaged on a foreign voyage’’ as that

term is defined in 46 U.S.C. 3201 and

this part. No change was made to the

final rule due to these comments.

The final comment sought

clarification when the ISM Code applied

to OSVs and ocean-going towing vessels

under the vessel admeasurement

system. The ISM Code applies to vessels

engaged on a foreign voyage. In the case

of OSVs and ocean-going towing

vessels, the ISM Code applies only if the

vessel is 500 gross tons or greater, as

OSVs and towing vessels are considered

freight (cargo) vessels for purposes of

SOLAS. Because the applicability of the

statue implementing the ISM Code

provisions is based on tonnage (see 46

U.S.C. 3202) and this statute was

enacted after July 18, 1994, its

applicability to vessels is based on their

international convention tonnage

because of 46 U.S.C. 14302(b). However,

under 46 U.S.C. 14305, a vessel owner

may request that a vessel be measured

under the regulatory tonnage system

and under those circumstances the

applicability of SOLAS, as well as the

other enumerated statutes, would be

based on the vessel’s regulatory tonnage.

This means that the owner of an OSV or

towing vessel that has a convention

tonnage greater than 500 gross tons

could elect to have the vessel

admeasured under the regulatory

tonnage system, and if the vessel had a

regulatory tonnage of less than 500 gross

tons, these regulations would not apply.

However, the applicability of all other

laws enumerated in 46 U.S.C. 14305

would also be determined based on the

optional regulatory tonnage (see 46

U.S.C. 14305(b)). NVIC 11–93, Change 2,

discusses when regulatory tonnages may

be used by a vessel owner to determine

the applicability of SOLAS

requirements. No changes in the final

rule have been made as a result of these

comments.

33. 46 CFR 175.540(d). Four

comments were received on this section.

One comment stated that the

applicability of the requirements of 33

CFR part 96 are mitigated by the

addition of paragraph (d) to this section

of the regulations for small passenger

vessels. This amendment does not

mitigate or soften the applicability. This

paragraph provides an equivalent means

for these small vessel owners to meet

the safety management system

requirements. An equivalence is not an

exemption. The Coast Guard developed

a job aid with the assistance of a marine

industry working group. This job aid

can be used as an example of what an

owner of a small passenger vessel may

do to establish an equivalent safety

management system. Section 175.540(d)

does not reduce the effectiveness of the

safety management system, but instead

provides direction to these small

passenger vessel owners to help them

develop their systems so they can be

certificated by the cognizant Coast

Guard OCMI.

Two comments did not support an

exemption for small passenger vessels

due to their limited operation or

company sizes. The Coast Guard

disagrees. These vessels are not being

exempted from the requirements, but

are offered a cost-effective course of

action to implement the regulations due

to their size, limitation of operation, and

historical low risk with proven safety

records. The Coast Guard job aid

developed for these vessels provides a

customized safety management system

program, which will support small

passenger vessels with limited

international routes. It does not remove

any of the requirements of 33 CFR part

96. A small passenger vessel owner can

request a job aid at no charge from the

local cognizant OCMI.

The final comment requested

clarification whether the Coast Guard

would allow a small passenger vessel

approved and actively using the

Streamlined Inspection Program (SIP) to

use that program as an equivalent to the

safety management system

requirements. The SIP program is based

on performance elements similar to the

safety management system

requirements. The Coast Guard may

allow this if an owner developed a

program that included all the

requirements of 33 CFR part 96. This

program would be provided to the

cognizant OCMI for review and

acceptance after discussion and

recommendations are received from the

authorized organization certificating the

safety management system. However,

the Coast Guard made no changes or

amendments to this section due to these

comments.

General Comments (Non-CFR Specific)

34. Four general comments were

received which supported the proposed

rules as written. One comment also

requested confirmation that operation of

large passenger vessels around the

islands of Hawaii constituted coastal

trade and would not require mandatory

development and certification of a

safety management system. A U.S.

vessel certificated to a limited route of

coastal operations within the Hawaiian

island chain is not required to meet this

part. However, if the vessel involved in

this operation holds an international

registry and a Certificate of Inspection

authorizing international voyages, even

though the owner of the vessel limits its

operations, this vessel would have to

meet all SOLAS requirements and be

certificated to the ISM Code.

One comment requested that the

safety management system requirements

be placed in each part of title 46 of the

CFR to correspond to each type of vessel

required to meet the ISM Code. The

Coast Guard does not agree that this

should be done as the agency has

actively reduced the number of

regulations where possible, including

elimination of redundant parallel

regulations in the CFR. The limited

reference in each part of Title 46

affected by the final rules in 33 CFR part

96 will allow ease of reference and

continuity of using the regulations for

all vessels affected by these

requirements. No change to the final

rule has been completed due to these

comments.

35. Two general comments supported

the use of plain English in the

development of these regulations by the

Coast Guard. Each described the use of

the question and answer format as

useful, but both felt that the style did

not provide enough detail to really

answer the questions posed. One

comment stated that the questions did

not appear to be answered. The other

comment felt that the standards of plain

English were not followed adequately.

The Coast Guard’s authority for

developing these regulations required

consistency with the ISM Code. The

ISM Code’s standards are general in

nature to allow flexibility for different

types of vessel companies to meet them

without restricting their creativity or

mandating a specific management style.

Other international or U.S. quality

standards and management standards

are written following the same logic. No

change to the final rule has been made

due to these comments.

36. Two general comments discussed

the need to carefully oversee safety

management system development and

certification programs for U.S. and

foreign vessels. The comments pointed

out that Coast Guard personnel should
67502 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

be specifically trained to oversee these

new requirements. We agree.

U.S. Coast Guard marine inspectors

and program managers have been

trained to meet national auditing

standards. Since 1995, approximately

120 Coast Guard marine inspectors

completed a course which is specifically

based on the auditor standards of ANSI

ASQC Q 9001 and the ISM Code. The

Coast Guard also reviewed its in-house

training programs for marine safety

responsibilities and included

compliance and enforcement of the ISM

Code in each basic marine safety

training course. No changes have been

made to the final rule due to these

comments.

37. One general comment stated that

there are numerous organizations

worldwide, who may be authorized by

an Administration to complete ISM

Code audits and certification, whose

abilities to act on behalf of an

Administration may be questionable.

Two other general comments alluded to

the same problem, and provided

suggestions on how these organizations

should be rated for performance and

how port state targeting schemes could

be modified when a specific

organization fails to complete its

authorized responsibilities.

The Coast Guard agrees. Coast Guard

program managers will monitor and

compare compliance with the ISM Code

for all flag states, authorized

organizations, companies and foreign

flagged vessels. Because this

information will be monitored centrally

by Coast Guard Headquarters program

managers, compliance infractions will

be tailed and may affect the targeting

scheme for specific foreign vessels, flag

states, and vessel owners or authorized

organizations. This information will

enable the Coast Guard to modify its

targeting scheme, if necessary, to ensure

that vessels with continuous

noncompliance issues receive a higher

level of oversight and boardings when

in U.S. ports.

The Coast Guard will use the

information collected to provide IMO

and flag states with reports on port state

interventions, detentions and denials of

U.S. port entries required by the port

state reporting requirements of SOLAS.

If a specific authorized organization

continuously fails to complete its

assigned duties, such reports will

illustrate these failures to all SOLAS

Contracting Parties, who can increase

their port state control requirements on

vessels certificated by this organization

on behalf of any flag state. This will

help flag states recognize the need for

extended oversight when continuous

problems are documented, and promote

revocation of authorizations by the flag

state when necessary. In the event that

these actions do not appropriately

address non-compliance, the Coast

Guard will continue to heighten its

oversight and boardings of vessels

certificated by these organizations. This

may lead to interventions, detentions

and denial of entry into U.S. ports and

places. No change has been made to the

final rule due to these comments.

38. One general comment

recommended that a Master’s or crew’s

unfamiliarity with the company’s safety

management system and training

requirements of a safety management

system should be clear grounds to

perform a more extensive examination

of a foreign flag vessel during a routine

boarding by the Coast Guard. The Coast

Guard agrees with the comment and

developed its port state control boarding

procedures to allow for an expanded

examination of a foreign vessel’s safety

management system when this situation

is found during a routine Coast Guard

boarding. As the policy for Coast Guard

actions required during port state

examinations of foreign vessels are

covered in the NVIC on ISM Code

compliance for foreign vessels, the final

rule has not been changed due to this

comment.

39. Two general comments

recommended the Coast Guard require

foreign vessels to provide information in

advance of their U.S. port arrivals to

ensure their compliance with the ISM

Code. The Coast Guard agrees with

these comments and on December 11,

1997, published an Interim Rule in a

separate rulemaking (CGD 97–067) to

require this advance notice of arrival

requirement (62 FR 65203). No change

has been made to this rulemaking due

to these comments.

40. One general comment requested

the Coast Guard review all current

regulations that place the responsibility

for the safe operation of a vessel on the

vessel’s Master, and where appropriate,

share some of that responsibility with

the designated person. The Coast Guard

disagrees. As defined in § 96.120, the

designated person does not have a

responsibility for operation of the

vessel. The designated person’s

responsibility is to monitor the safety

management system of the company and

the vessel(s), as directed by the

responsible person. If problems arise

with the policies and procedures for the

safe operations of the vessel which the

Master does not believe he or she has

the right tools to manage, those

problems should be communicated to

the vessel’s owner. The Master can

communicate through the safety

management system, or directly to the

vessel owner, or through the designated

person to the vessel’s owner. By

documenting these circumstances in the

safety management system, a critical

review by the vessel management will

be performed and new or corrected

policies or procedures placed into the

safety management system to assist the

Master. The Coast Guard has made no

change to the final rule due to this

comment.

41. Two general comments

recommended that the final rule provide

a list of administrative requirements or

detailed guidance on the issues of

revocation of a Document of

Compliance certificate or a Safety

Management Certificate. The Coast

Guard will provide guidance for such

actions in the new chapter of Volume II

of the Coast Guard Marine Safety

Manual on the compliance and

enforcement of safety management

systems for U.S. vessels. The Coast

Guard determined that placing this

policy in regulations would limit its

ability to consider all necessary

circumstances and make decisions on a

case-by-case basis.

All Coast Guard actions to enforce

safety management system requirements

on U.S. vessels and their companies can

be appealed to the Coast Guard under 46

CFR 1.03, ‘‘Rights to Appeal.’’ This

section provides time frames and

procedures for use by the maritime

industry to effectively question actions

taken by the Coast Guard in enforcing

revocations on these certificates, as

needed. No change has been made to the

final rule due to these comments.

42. One comment stated that the

proposed regulations do not fully

anticipate problems and provide

direction necessary to manage important

day-to-day operations with regard to the

endangered Northern Right Whale. In

particular, the comment expressed

concern that the ISM Code regulations

were too narrowly focused and sought

various clarifications regarding the

application of the regulations to

protected species and their critical

habitats. It suggested that the language

in proposed § 96.250(g) be amended to

specifically include operation plans and

instructions with respect to protected

species in their critical habitats.

The ISM Code does not define

specific operating procedures or

practices, but instead provides broad,

general performance elements as

guidelines to be applied by ship owners

and their companies to shoreside

operations and to their vessels.

Shipping is a varied industry with

numerous types of companies operating

under a large range of different

conditions. The ISM Code guidelines
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67503

are based on general principles and

objectives to promote the development

of sound management and operating

practices within the industry as a

whole. Its purpose is to require

companies to establish operating

practices and policies so that company

management will be in a position to

ensure that their vessels comply with all

applicable international and U.S. laws

for purposes of safety and

environmental protection. It does not

seek to define or incorporate detailed

regulatory requirements, but instead to

establish the management structure that

will ensure that requirements applicable

to vessels are communicated to

shoreside and vessel personnel, and

complied with. Thus, the requirements

in this regulation are expressed in broad

terms so they may have widespread

application. As expressed in the

comment, the suggestions applicable to

protected species are too narrow to be

addressed in this rulemaking.

This does not mean that these

regulations will not beneficially effect

endangered species or their critical

habitats. Besides the beneficial effect

that company policies and management

structures promoting safe,

environmentally sound vessel

operations will have on the marine

environment in general, including

protected species, the management

structure and policies put in place

through the ISM Code will promote

compliance with all applicable laws,

including environmental efforts. Under

these regulations, company management

would establish an operational and

management structure that would

ensure that vessel Masters and crews

within their fleets would be provided

with the applicable safety and

environmental requirements for

operations in U.S. waters. Additionally,

the system would ensure that necessary

training would be conducted. The

system would then be audited

periodically to determine whether the

system is working and compliance is

occurring.

An example of how this would work

involves the Northern Right Whale. The

Coast Guard is working closely with the

National Marine Fisheries Service and

its charter agency, the National

Oceanographic and Atmospheric

Administration (NOAA), to develop

national programs to assist in protection

of the Northern Right Whale by

providing mariners operating directions

for the whale’s critical habitat areas on

the east coast of the United States. Part

of this effort is the publication of

navigation warnings for the Northern

Right Whale in Coast Guard Notices to

Mariners and in the U.S. Coast Pilot

publications covering critical habitat

areas of the Northern Right Whale.

These warnings include the

requirements of 50 CFR parts 217 and

222 that establish Northern Right Whale

avoidance measures for vessels and

reporting criteria for whale strikes.

Coast Guard navigation safety

requirements for foreign and U.S.

vessels are established in 33 CFR part

164. These regulations include

requirements for vessels to have aboard

the current edition of the U.S. Coast

Pilot for the area in which vessels are

operating. In addition, other regulations

require vessels to have aboard proper

operating radiotelephone equipment

that will allow vessels to monitor

frequencies over which Notices to

Mariners are broadcast. Compliance

with the ISM Code requirements in this

part means that companies that own and

operate vessels will have in place the

means to ensure that vessel Master are

aware of these requirements, that they

comply and that corporate officers are

aware of, and correct, instances of

noncompliance. For these reasons, no

change has been made to the final rule

due to these comments.

43. One comment focused on the

introduction of injurious exotic species

into U.S. coastal and riparian waters

through ballast water discharges by

vessels engaged on foreign voyages to

ports or places in the U.S. The Coast

Guard is currently developing new

regulations to address vessel discharges

of ballast water into U.S. waters. The

Coast Guard is also monitoring actions

at IMO which involve these vessel

operations. No change has been made to

the final rule due to this comment.

44. One general comment requested

that an interim rule be published by the

Coast Guard for review and comment on

this rulemaking prior to the final rule

being published. We disagree. As

written comments on the proposed

rulemaking did not point to any

significant problems nor any problems

that have not been addressed in the final

rule, the Coast Guard does not expect

that publishing an interim rule would

markedly improve the regulations nor

assist vessel owners in complying with

the ISM Code by its first effective date

of July 1, 1998. Therefore, the Coast

Guard has completed this rulemaking

process by publishing this final rule.

45. Two general comments were made

by one commentor on: (1) Mandatory

requirements for safety management

systems on U.S. domestic vessels; and

(2) the benefits that would be reaped by

these domestic vessels compliance with

these regulations.

The Coast Guard contends that the

use of safety management systems by all

U.S. commercial vessels would result in

significant benefits and we will support

the development of such programs. 46

U.S.C. 3202 states that U.S. domestic

vessels may voluntarily meet the

requirements of that Chapter, but does

not provide the Coast Guard with the

authority to require such safety

management systems on these U.S.

domestic vessels. Thus, the final rule

has not been changed due to these

comments.

46. Editorial changes. 46 CFR

§§ 33.40–30 (a) & (b), 71.75–13 (a) & (b),

91.60–30 (a) & (b), 107.415 (a) & (b),

126.480 (a) & (b), and 186.60–30 (a) &

(b). In these sections, paragraphs (a) and

(b) have been combined to make it clear

that only those vessels to which 33 CFR

part 96 applies must have the ISM

certificates.

33 CFR 96.100. The public law cite

was removed and replaced with 46

U.S.C. Chapter 32, which is the

authority for this subparts purpose.

33 CFR 96.400(a). In the last sentence

of this paragraph, the term ‘‘delegated

to’’ is replaced with the term ‘‘delegated

by’’. This will correctly reflect that

audits and certification functions are

not delegated ‘‘to’’ the Coast Guard.

They are delegated to the recognized

organization ‘‘by’’ the Coast Guard.

33 CFR 96.470. In this section, the

terms ‘‘of recognized organizations’’ is

added to clarify which Commandant’s

list the removal may be from.

Incorporation by Reference

The Director of the Federal Register

has approved the material in § 96.130

for incorporation by reference under 5

U.S.C. 552 and 1 CFR part 51. Copies of

the material are available from the

sources listed in that section.

Regulatory Evaluation

This final rule is not a significant

regulatory action under section 3(f) of

Executive Order 12866 and does not

require an assessment of potential costs

and benefits under section 6(a)(3) of that

Order. It has not been reviewed by the

Office of Management and Budget under

that Order. It is not significant under the

regulatory policies and procedures of

the Department of Transportation (DOT)

(44 FR 11040; February 26, 1979).

The basis for the number of vessels

effected by this rulemaking was

developed from the Coast Guard’s

Marine Safety Management System

(MSMS) database on vessel inspection,

documentation and certification files.

From this source it was determined that

there are 415 vessels with 163-discreet

owners that hold Safety of Life at Sea

(SOLAS) certificates and are considered

to be subject to the mandatory
67504 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

application of the ISM Code. There are

186 vessels that must comply with this

regulation by July 1, 1998, and 229

vessels that must comply by July 1,

2002.

Costs

Three distinct processes were used to

derive the costs to implement and

maintain the ISM Code. They include

developing a safety management system,

certification and audit fees, and training

Coast Guard and authorized

organization personnel to conduct

management system audits.

The following cost estimates are a

result of one set of choices made by an

organization managing relevant U.S.

vessels in a normal and prudent

manner, but not having a safety

management program that meets the

ISM Code. This scenario and

maintenance of a safety management

system assumes the employment of a

separate staff person with fleet-wide

responsibility for safety, environmental

protection, and general quality control.

On-going distribution of updated safety

and technical documents is a normal

company practice. The operator

routinely maintains data-processing and

communication capability adequate to

handle the ship-to-shore information

flow required by the ISM Code. It was

assumed that the owner or operator is

responsible for more than one vessel.

The start-up costs for initiating a

safety management system is calculated

at approximately $150K per company

and $2K per vessel, with recurring

expenses estimated to be $10K per

vessel for system maintenance.

To clearly describe the effected

population and improve the regulatory

analysis, shipping concerns were

separated into three categories of large,

medium and small sized companies. For

all companies, the cost is compiled for

a 10-year period (1998–2007 inclusive).

For large companies, which is estimated

to be 71 of the total 163 companies

effected, the start-up cost is

approximately $38.5 million. The

average cost for these 71 companies per

year is estimated to be $3.8 million. For

medium companies, the total cost for

the 27 companies is approximately $7.8

million. The average cost for these

medium companies is estimated to be

$780,000 per year. Out of a total of 65

small companies, only 12 companies

face these costs, and the total cost is

approximately $3.2 million. The average

cost per year for these 12 small

companies is estimated to be $320,000.

Total Costs

• Small Companies: $3.2 million.

• Medium Companies: $7.8 million.

• Large Companies: $38.5 million.

• Total: $49.5 million (1998–2007

inclusive).

• The average cost per year: $5.0

million.

Benefits

A study was conducted to identify the

significant types and circumstances of

U.S. vessel accidents potentially

preventable due to ISM Code

compliance. The data used to support

the analysis of ISM Code benefits was

drawn from the MSMS Marine

Investigation Module (MINMOD) and

vessel information files. Marine

Casualty Investigation Reports (MCIR’s)

were included in the study if they

involved either currently-registered U.S.

vessels, that would be subject to the ISM

Code or if a Human Factors Supplement

was filed in the case. A Human Factors

Supplement contains a standardized

‘‘class’’ or ‘‘subclass’’ designation of a

particular human factor or factors

considered by the investigating officer

to have contributed to the accident.

Only MCIR with problems considered

by the Coast Guard to be preventable

through ISM Code procedures were

retained. There were 214 such cases

over the three year period (1993–1995).

These benefits needed to be quantified.

Five factors were used to estimate the

cost of the 214 relevant casualties. The

five factors are listed below: (The dollar

figures below reflect a 1997 dollar

value.)

1. Vessel and property damage: The

total dollar damage value per casualty

has been estimated to be $10,000.

2. Injuries: The total dollar damage

value per injury has been estimated to

be $424,174.

3. Deaths: The number of deaths or

missing persons shown in the MCIR

record multiplied by $2,700,000. This

factor is currently recommended by

DOT for use in regulatory impact

estimation.

4. Vessel Downtime: An average

vessel downtime cost of $224,337 was

arrived at by averaging all vessel

damage evaluations shown in the MICR

records other than for vessels evaluated

as either seaworthy or as a total loss.

This is the same factor that was used in

the study completed for the

International Convention on Standards

of Training, Certification and

Watchkeeping for Seafarers (STCW)

rulemaking, implementation benefits.

5. Environmental Damage: Any

spillage recorded in the MCIR record is

converted to 42-gallon barrel terms and

multiplied by $15,810. This is the

average cost used in the benefit study

done for STCW to represent per-barrel

costs of natural resource damage, loss of

beneficial use of shoreline and cleanup

for ‘‘small’’ spills.

We identified relevant accidents that

occurred between 1993–1995 and

developed factors to estimate their cost

to society. The following steps were

used to estimate the annual reduction in

future marine casualty costs that may be

expected from ISM Code

implementation:

1. The projected costs were divided

into three categories depending on the

cause of the casualty. The three

categories were personnel nature, any

primary nature other than pollution,

and pollution casualties.

2. Based on the study’s findings, a

percentage range was created. This

range expressed the expectation of

future casualties with the

implementation of the ISM Code final

rule.

3. The STCW rulemaking creates

some of the same benefits as

implementation of the ISM Code. The

average annual cost reduction from the

implementation of STCW were taken

into account to avoid double counting of

benefits.

4. The expected percentage impact of

ISM Code implementation was then

applied to produce the expected cost

reduction.

After all of these procedures were

followed an estimated benefit range was

determined. The range for the economic

benefit of expected avoided costs of all

relevant accident types combined was

estimated to be $6.9 to $12.8 million per

year, dominated by the $6.4 to $12.2

million estimated for reduction in the

costs of personnel casualties.

Cost-Benefit

The total average cost for this final

rule (1998–2007) has been estimated at

$49.5 million. This is approximately

$5.0 million per year. The range for the

economic benefit of expected avoided

costs of all relevant accident types

combined was estimated to be $6.9 to

$12.8 million per year.

The estimated cost-benefit for this

final rule was calculated by dividing the

measure’s present value cost by the

measure’s present value benefit. The

estimated cost-benefit range for this rule

is 0.39 to 0.72. A rule with a cost-benefit

factor of less than 1.0 implies that

efficient standards have been set by

balancing the costs of anticipated

abatement against the benefits of

expected avoided costs. Therefore, this

rulemaking can be deemed as cost

effective.

Small Entities

Under the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.), the Coast Guard
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67505

considered whether this rule will have

a significant economic impact on a

substantial number of small entities.

‘‘Small entities’’ include small

businesses, not-for-profit organizations

that are independently owned and

operated and are not dominant in their

fields, and governmental jurisdictions

with populations of less than 50,000.

Our initial evaluation was that this

rule would effect approximately 72

small entities, whose U.S. small

passenger vessels operate on

international voyages. For purposes of

the ‘‘small entity’’ analysis, the Coast

Guard considered the 72 vessels owned

by 65 companies as small entities. To

ease the burden on small entities 54 of

these are allowed to apply for an

equivalence to these requirements to

significantly reduce their cost to

develop and certify their safety

management systems, if they opt to do

so. No comments or statements were

received during the NPRM on the

impact of this rulemaking on small

entities. No change or amendment to the

final rule was completed that would

alter the effect already stated in the

NPRM on small entities. Therefore, the

Coast Guard certifies under section

605(b) of the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.) that this final rule

will not have a significant economic

impact on a substantial number of small

entities.

Assistance for Small Entities

In accordance with section 213(a) of

the Small Business Regulatory

Enforcement Fairness Act of 1996 (Pub.

L. 104–121), the Coast Guard offered to

assist small entities in understanding

the rule so that they could better

evaluate its effects on them and

participate in the rulemaking process.

No written requests were received by

the Coast Guard to provided assistance

for the development of safety

management systems by small entities.

One comment stated that the

equivalence option provided for small

passenger vessels as unnecessary, if the

limiting factor is the cost incurred to be

certificated by an organization acting on

behalf of the U.S. The Coast Guard

disagrees.

This final rule offers an option for

small entities to develop an equivalent

safety management system in concert

with the cognizant Coast Guard OCMI.

This option will significantly reduce the

cost for the safety management system

and will allow direct auditing and

certification by the Coast Guard. No

extra fee will be required for these

owners who elect to take advantage of

this option.

When developing the small passenger

vessel equivalence, the Coast Guard

considered cost issues. Cost was not the

only reason used by the Coast Guard to

determine that small passenger vessel

operations could benefit equally by an

equivalence to the requirements

provided in these regulations. Their

historical operational risk was

evaluated, the traditional policies that

are used to regulate international

conventions on these vessels, and the

small number of vessels within this type

of vessels which would be impacted.

The Coast Guard is also required by the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.), and the Small Business

Regulatory Enforcement Fairness Act of

1996 (Pub. L. 104–121), to evaluate the

impact of new federal regulations and

the ability to assist these businesses.

Also, what played a factor was verbal

comments received from operators of

such vessels at the public meetings held

at four ports in the October and

November 1995 time frame at the

initiation of this rulemaking process.

The Coast Guard has seen great success

with using an equivalence option with

these vessel types and agreed that no

reduction of safety would be incurred

by using this option in the enforcement

of these new regulations. No change has

been made to the final rule due to this

comment.

The Coast Guard is also providing

these small entity owners with a job aid

on safety management system

development which will help them

meet these standards and will cut the

cost of their having to go to a third party

source for support and training. These

small passenger vessel owners will be

provided with continued support by the

local cognizant OCMI to ensure that

their vessels have a properly operating

safety management system which is

certificated prior to the effective date of

these requirements.

Collection of Information

This final rule provides for a

collection of information under the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501 et seq.).

Information is collected to show the

compliance status of responsible

persons and their U.S. vessels to the

Coast Guard by recognized

organizations authorized by the Coast

Guard to act on behalf of the U.S. A

responsible person must establish a

safety management system and prepare

internal audit reports for the responsible

person’s company and vessel(s) which

demonstrate compliance with the ISM

Code. Preparation of these reports

required a new information collection

request submittal to OMB.

Title 46, chapter 32 also requires that

a responsible person’s company and

U.S. vessel(s) possess Document of

Compliance certificates and Safety

Management Certificates, respectively,

as evidence of compliance with the ISM

Code. Recognized organizations

authorized to act on behalf of the U.S.

and the Coast Guard will issue these

certificates. To prepare and issue these

international management certificates,

an amendment to existing information

collection request 2115–0056 was

submitted to OMB.

Safety management systems will be

externally audited and reported on by

an authorized organization through a

review of the internal audit reports

prepared by a company. Since the Coast

Guard reviews this information that

documents the ISM Code compliance,

existing collection request 2115–0626

also requires amendment and was

submitted to OMB for approval.

As described above, the Coast Guard

submitted new and amended

information collection requests

pursuant to the estimates described in

the NPRM. No comments were received

to the NPRM docket regarding these

estimates. No change was made to the

proposed regulatory text which would

require new information collection

requests. Also, no change was made to

the final rule which would affect those

estimates.

As required by 5 U.S.C. 3507(d), the

Coast Guard submitted a copy of this

rule to the Office of Management and

Budget (OMB) for its review of the

collection of information. OMB has

approved the collection. The section

numbers are: 33 CFR 96.250, 96.320,

96.330, 96.340, 96.350, 96.360, and 46

CFR 2.01–25, 31.40–30, 71.75–13,

71.75–20, 91.60–30, 91.60–40, 107.417,

115.925, 126.480, 175.540, 176.925,

176.930,189.60–30, 189.60–40; and the

corresponding approval numbers from

OMB are OMB Control Number(s),

2115–0056; 2115–0057, and 2115–0626,

which expire on August 31, 2000.

Persons are not required to respond to

a collection of information unless it

displays a currently valid OMB control

number.

Federalism

The Coast Guard completed an

analysis of this final rule under the

principles and criteria contained in

Executive Order 12612 and has

determined that this rule does not have

sufficient implications for federalism to

warrant the preparation of a Federalism

Assessment.
67506 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

Federal Preemption

Historically, the Coast Guard has

inspected vessels for their compliance

with Federal regulations and

international standards to which the

United States is a party that address the

safety of vessels and protection of the

marine environment. These regulations

implement the provisions of the

International Convention for the Safety

of Life at Sea, 1974, (SOLAS) as

amended, to which the United States is

a party. As a party to this Convention,

the United States has agreed to

implement its provisions for vessels

flying the flag of the United States and

to apply these provisions to foreign

vessels in accordance with the

enforcement regime established within

the Convention. In addition, actions by

state and local governments that seek to

impose different standards than those

imposed by these regulations would

frustrate the desire of Congress to

impose uniform, international standards

relating to the implementation of safety

management systems for vessels when it

enacted 46 U.S.C. Chapter 32. It is the

Coast Guard’s opinion that the

Supremacy Clause of the Constitution

would preempt state and local

regulations that seek to impose different

or higher standards than those

established in these regulations.

Environment

The Coast Guard considered the

environmental impact of this final rule

and concluded during the rulemaking

stage that under paragraph 2.B.2.e(34) of

Commandant Instruction M16475.1B,

this rule is categorically excluded from

further environmental documentation.

Paragraph 2.B.2.e(34)(d) categorically

excludes regulations concerning

manning, documentation, measurement,

inspection and equipping of vessels. A

‘‘Categorical Exclusion Determination’’

is available in the docket for inspection

or copying where indicated under

ADDRESSES.

List of Subjects

33 CFR Part 96

Administrative practice and

procedure, Incorporation by reference,

Marine safety, Reporting and

recordkeeping requirements, Safety

management systems, Vessels.

46 CFR Part 2

Marine safety, Reporting and

recordkeeping requirements, Vessels.

46 CFR Part 31

Cargo vessels, Marine safety,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 71

Marine safety, Passenger vessels,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 91

Cargo vessels, Marine safety,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 107

Marine safety, Oil and gas

exploration, Reporting and

recordkeeping requirements, Safety

management systems, Vessels.

46 CFR Part 115

Marine safety, Passenger vessels,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 126

Marine safety, Offshore supply

vessels, Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 175

Marine safety, Passenger vessels,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 176

Marine safety, Passenger vessels,

Reporting and recordkeeping

requirements, Safety management

systems.

46 CFR Part 189

Marine safety, Oceanographic

research vessels, Reporting and

recordkeeping requirements, Safety

management systems.

For the reasons discussed in the

preamble, the Coast Guard amends 33

CFR Chapter I and 46 CFR Chapter I as

follows:

TITLE 33—NAVIGATION AND

NAVIGABLE WATERS

1. Add part 96 to read as follows:

PART 96—RULES FOR THE SAFE

OPERATION OF VESSELS AND

SAFETY MANAGEMENT SYSTEMS

Subpart A—General

Sec.

96.100 Purpose.

96.110 Who does this subpart apply to?

96.120 Definitions.

96.130 Incorporation by reference.

Subpart B—Company and Vessel Safety

Management Systems

96.200 Purpose.

96.210 Who does this subpart apply to?

96.220 What makes up a safety management

system?

96.230 What objectives must a safety

management system meet?

96.240 What functional requirements must

a safety management system meet?

96.250 What documents and reports must a

safety management system have?

Subpart C—How Will Safety Management

Systems Be Certificated and Enforced?

96.300 Purpose.

96.310 Who does this subpart apply to?

96.320 What is involved to complete a

safety management audit and when is it

required to be completed?

96.330 Document of Compliance certificate:

what is it and when is it needed?

96.340 Safety Management Certificate: what

is it and when is it needed?

96.350 Interim Document of Compliance

certificate: what is it and when can it be

used?

96.360 Interim Safety Management

Certificate: what is it and when can it be

used?

96.370 What are the requirements for

vessels of countries not party to Chapter

IX of SOLAS?

96.380 How will the Coast Guard handle

compliance and enforcement of these

regulations?

96.390 When will the Coast Guard deny

entry into a U.S. port?

Subpart D—Authorization of Recognized

Organizations To Act on Behalf of the U.S.

96.400 Purpose.

96.410 Who does this subpart apply to?

96.420 What authority may an organization

ask for under this regulation?

96.430 How does an organization submit a

request to be authorized?

96.440 How will the Coast Guard decide

whether to approve an organization’s

request to be authorized?

96.450 What happens if the Coast Guard

disapproves an organization’s request to

be authorized?

96.460 How will I know what the Coast

Guard requires of my organization if my

organization receives authorization?

96.470 How does the Coast Guard terminate

an organization’s authorization?

96.480 What is the status of a certificate if

the issuing organization has its authority

terminated?

96.490 What further obligations exist for my

organization if the Coast Guard

terminates its authorization?

96.495 How can I appeal a decision made

by an authorized organization?

Authority: 46 U.S.C. 3201 et. seq.; 46

U.S.C. 3103; 46 U.S.C. 3316, 33 U.S.C. 1231;

49 CFR 1.45, 49 CFR 1.46.

Subpart A—General

§ 96.100 Purpose.

This subpart implements Chapter IX

of the International Convention for the

Safety of Life at Sea (SOLAS), 1974,
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67507

International Management Code for the

Safe Operation of Ships and for

Pollution Prevention (International

Safety Management (ISM) Code), as

required by 46 U.S.C. Chapter 32.

Note: Chapter IX of SOLAS is available

from the International Maritime

Organization, Publication Section, 4 Albert

Embankment, London, SE1 75R, United

Kingdom, Telex 23588. Please include

document reference number ‘‘IMO–190E’’ in

your request.

§ 96.110 Who does this subpart apply to?

This subpart applies to you if—

(a) You are a responsible person who

owns a U.S. vessel(s) and must comply

with Chapter IX of SOLAS;

(b) You are a responsible person who

owns a U.S. vessel(s) that is not required

to comply with Chapter IX of SOLAS,

but requests application of this subpart;

(c) You are a responsible person who

owns a foreign vessel(s) engaged on a

foreign voyage, bound for ports or

places under the jurisdiction of the U.S.,

which must comply with Chapter IX of

SOLAS; or

(d) You are a recognized organization

applying for authorization to act on

behalf of the U.S. to conduct safety

management audits and issue

international convention certificates.

§ 96.120 Definitions.

(a) Unless otherwise stated in this

section, the definitions in Chapter IX,

Regulation 1 of the International

Convention for the Safety of Life at Sea

(SOLAS) apply to this part.

(b) As used in this part—

Administration means the

Government of the State whose flag the

ship is entitled to fly.

Authorized Organization Acting on

behalf of the U.S. means an organization

that is recognized by the Commandant

of the U.S. Coast Guard under the

minimum standards of subparts A and

B of 46 CFR part 8, and has been

authorized under this section to conduct

certain actions and certifications on

behalf of the United States.

Captain of the Port (COTP) means the

U.S. Coast Guard officer as described in

33 CFR 6.01–3, commanding a Captain

of the Port zone described in 33 CFR

part 3, or that person’s authorized

representative.

Commandant means the

Commandant, U.S. Coast Guard.

Company means the owner of a

vessel, or any other organization or

person such as the manager or the

bareboat charterer of a vessel, who has

assumed the responsibility for operation

of the vessel from the shipowner and

who on assuming responsibility has

agreed to take over all the duties and

responsibilities imposed by this part or

the ISM Code.

Designated person means a person or

persons designated in writing by the

responsible person who monitors the

safety management system of the

company and vessel and has:

(1) Direct access to communicate with

the highest levels of the company and

with all management levels ashore and

aboard the company’s vessel(s);

(2) Responsibility to monitor the

safety and environmental aspects of the

operation of each vessel; and

(3) Responsibility to ensure there are

adequate support and shore-based

resources for vessel(s) operations.

Document of Compliance means a

certificate issued to a company or

responsible person that complies with

the requirements of this part or the ISM

Code.

International Safety Management

(ISM) Code means the International

Management Code for the Safe

Operation of Ships and Pollution

Prevention, Chapter IX of the Annex to

the International Convention for the

Safety of Life at Sea (SOLAS), 1974.

Non-conformity means an observed

situation where objective evidence

indicates the non-fulfillment of a

specified requirement.

Major non-conformity means an

identifiable deviation which poses a

serious threat to personnel or vessel

safety or a serious risk to the

environment and requires immediate

corrective action; in addition, the lack of

effective and systematic implementation

of a requirement of the ISM Code is also

considered a major non-conformity.

Objective Evidence means

quantitative or qualitative information,

records or statements of fact pertaining

to safety or to the existence and

implementation of a safety management

system element, which is based on

observation, measurement or test and

which can be verified.

Officer In Charge, Marine Inspection

(OCMI) means the U.S. Coast Guard

officer as described in 46 CFR 1.01–

15(b), in charge of an inspection zone

described in 33 CFR part 3, or that

person’s authorized representative.

Recognized organization means an

organization which has applied and

been recognized by the Commandant of

the Coast Guard to meet the minimum

standards of 46 CFR part 8, subparts A

and B.

Responsible person means—

(1) The owner of a vessel to whom

this part applies, or

(2) Any other person that—

(i) has assumed the responsibility

from the owner for operation of the

vessel to which this part applies; and

(ii) agreed to assume, with respect to

the vessel, responsibility for complying

with all the requirements of this part.

(3) A responsible person may be a

company, firm, corporation, association,

partnership or individual.

Safety management audit means a

systematic and independent

examination to determine whether the

safety management system activities and

related results comply with planned

arrangements and whether these

arrangements are implemented

effectively and are suitable to achieve

objectives.

Safety Management Certificate means

a document issued to a vessel which

signifies that the responsible person or

its company, and the vessel’s shipboard

management operate in accordance with

the approved safety management

system.

Safety Management System means a

structured and documented system

enabling Company and vessel personnel

to effectively implement the responsible

person’s safety and environmental

protection policies.

SOLAS means the International

Convention for the Safety of Life at Sea,

1974, as amended.

Vessel engaged on a foreign voyage

means a vessel to which this part

applies that is—

(1) Arriving at a place under the

jurisdiction of the United States from a

place in a foreign country;

(2) Making a voyage between places

outside the United States; or

(3) Departing from a place under the

jurisdiction of the United States for a

place in a foreign country.

§ 96.130 Incorporation by reference.

(a) The Director of the Federal

Register approves certain material that

is incorporated by reference into this

subpart under 5 U.S.C. 552(a) and 1 CFR

part 51. To enforce any edition other

than that specified in paragraph (b) of

this section, the Coast Guard must

publish notice of the change in the

Federal Register and the material must

be available to the public. You may

inspect all material at the Office of the

Federal Register, 800 North Capitol St.,

NW., Suite 700, Washington, DC and at

the U.S. Coast Guard, Office of Design

and Engineering Standards (G–MSE),

2100 Second St., SW., Washington, DC

20593–0001, and receive it from the

source listed in paragraph (b) of this

section.

(b) The material approved for

incorporation by reference in this

subpart and the sections affected are as

follows:
67508 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

American National Standards

Institute (ANSI)—11 West 42nd St., New

York, NY 10036.

ANSI/ASQC Q9001–1994, Quality

Systems—Model for Quality

Assurance in Design, Development,

Production, Installation, and

Servicing, 1994—96.430

International Maritime Organization

IMO—4 Albert Embankment, London,

SE1 7SR, United Kingdom.

Resolution A.741(18), International

Management Code for the Safe

Operation of Ships and for Pollution

Prevention, November 4, 1993—

96.220, 96.370

Resolution A.788 (19), Guidelines on

Implementation of the International

Safety Management (ISM) Code by

Administrations, November 23,

1995—96.320, 96.440

Resolution A.739(18), Guidelines for the

Authorization of Organizations Acting

on Behalf of the Administration,

November 4, 1993—96.440

Subpart B—Company and Vessel

Safety Management Systems

§ 96.200 Purpose.

This subpart establishes the minimum

standards that the safety management

system of a company and its U.S. flag

vessel(s) must meet for certification to

comply with the requirements of 46

U.S.C. 3201–3205 and Chapter IX of

SOLAS, 1974. It also permits companies

with U.S. flag vessels that are not

required to comply with this part to

voluntarily develop safety management

systems which can be certificated to

standards consistent with Chapter IX of

SOLAS.

§ 96.210 Who does this subpart apply to?

(a) This subpart applies—

(1) To a responsible person who owns

or operates a U.S. vessel(s) engaged on

a foreign voyage which meet the

conditions of paragraph (a)(2) of this

section;

(2) To all U.S. vessels engaged on a

foreign voyage that are—

(i) A vessel transporting more than 12

passengers; or

(ii) A tanker, a bulk freight vessel, a

freight vessel or a self-propelled mobile

offshore drilling unit (MODU) of 500

gross tons or more; and

(3) To all foreign vessels engaged on

a foreign voyage, bound for ports or

places under the jurisdiction of the U.S.,

and subject to Chapter IX of SOLAS.

(b) This subpart does not apply to—

(1) A barge;

(2) A recreational vessel not engaged

in commercial service;

(3) A fishing vessel;

(4) A vessel operating only on the

Great Lakes or its tributary and

connecting waters; or

(5) A public vessel, which includes a

U.S. vessel of the National Defense

Reserve Fleet owned by the U.S.

Maritime Administration and operated

in non-commercial service.

(c) Any responsible person and their

company who owns and operates a U.S.

flag vessel(s) which does not meet the

conditions of paragraph (a), may

voluntarily meet the standards of this

part and Chapter IX of SOLAS and have

their safety management systems

certificated.

(d) The compliance date for the

requirements of this part are—

(1) On or after July 1, 1998, for—

(i) Vessels transporting more than 12

passengers engaged on a foreign voyage;

or

(ii) Tankers, bulk freight vessels, or

high speed freight vessels of at least 500

gross tons or more, engaged on a foreign

voyage.

(2) On or after July 1, 2002, for other

freight vessels and self-propelled mobile

offshore drilling units (MODUs) of at

least 500 gross tons or more, engaged on

a foreign voyage.

§ 96.220 What makes up a safety

management system?

(a) The safety management system

must document the responsible

person’s—

(1) Safety and pollution prevention

policy;

(2) Functional safety and operational

requirements;

(3) Recordkeeping responsibilities;

and

(4) Reporting responsibilities.

(b) A safety management system must

also be consistent with the functional

standards and performance elements of

IMO Resolution A.741(18).

§ 96.230 What objectives must a safety

management system meet?

The safety management system must:

(a) Provide for safe practices in vessel

operation and a safe work environment

onboard the type of vessel the system is

developed for;

(b) Establish and implement

safeguards against all identified risks;

(c) Establish and implement actions to

continuously improve safety

management skills of personnel ashore

and aboard vessels, including

preparation for emergencies related to

both safety and environmental

protection; and

(d) Ensure compliance with

mandatory rules and regulations, taking

into account relevant national and

international regulations, standards,

codes and maritime industry guidelines,

when developing procedures and

policies for the safety management

system.

§ 96.240 What functional requirements

must a safety management system meet?

The functional requirements of a

safety management system must

include—

(a) A written statement from the

responsible person stating the

company’s safety and environmental

protection policy;

(b) Instructions and procedures to

provide direction for the safe operation

of the vessel and protection of the

environment in compliance with the

applicable U.S. Code of Federal

Regulations, and international

conventions to which the U.S. is a party

(SOLAS, MARPOL, etc.);

(c) Documents showing the levels of

authority and lines of communication

between shoreside and shipboard

personnel;

(d) Procedures for reporting accidents,

near accidents, and non-conformities

with provisions of the company’s and

vessel’s safety management system, and

the ISM Code;

(e) Procedures to prepare for and

respond to emergency situations by

shoreside and shipboard personnel;

(f) Procedures for internal audits on

the operation of the company and

vessel(s) safety management system; and

(g) Procedures and processes for

management review of company

internal audit reports and correction of

non-conformities that are reported by

these or other reports.

§ 96.250 What documents and reports

must a safety management system have?

The documents and reports required

for a safety management system under

§ 96.330 or § 96.340 must include the

written documents and reports itemized

in Table 96.250. These documents and

reports must be available to the

company’s shore-based and vessel(s)-

based personnel:
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67509

TABLE 96.250.—SAFETY MANAGEMENT SYSTEM DOCUMENTS AND REPORTS

Type of documents and reports Specific requirements

(a) Safety and environmental policy statements ...................................... (1) Meet the objectives of § 96.230; and

(2) Are carried out and kept current at all levels of the company;

(b) Company responsibilities and authority statements ........................... (1) The owners name and details of responsibility for operation of the

company and vessel(s);

(2) Name of the person responsible for operation of the company and

vessel(s), if not the owner;

(3) Responsibility, authority and interrelations of all personnel who

manage, perform, and verify work relating to and affecting the safety

and pollution prevention operations of the company and vessel(s);

and

(4) A statement describing the company’s responsibility to ensure adequate resources and shore-based support are provided to enable the

designated person or persons to carry out the responsibilities of this

subpart.

(c) Designation in writing of a person or persons to monitor the safety

management system for the company and vessel(s).

(1) Have direct access to communicate with the highest levels of the

company and with all management levels ashore and aboard the

company’s vessel(s);

(2) Have the written responsibility to monitor the safety and environmental aspects of the operation of each vessel; and

(3) Have the written responsibility to ensure there are adequate support and shore-based resources for vessel(s) operations.

(d) Written statements that define the Master’s responsibilities and authorities.(1) Carry out the company’s safety and environmental policies;

(2) Motivate the vessel’s crew to observe the safety management system policies;

(3) Issue orders and instructions in a clear and simple manner;

(4) Make sure that specific requirements are carried out by the vessel’s

crew and shore-based resources; and

(5) Review the safety management system and report non-conformities

to shore-based management.

(e) Written statements that the Master has overriding responsibility and

authority to make vessel decisions.

(1) Ability to make decisions about safety and environmental pollution;

and

(2) Ability to request the company’s help when necessary.

(f) Personnel procedures and resources which are available ashore and

aboard ship..

(1) Masters of vessels are properly qualified for command;

(2) Masters of vessels know the company’s safety management system;

(3) Owners or companies provide the necessary support so that the

Master’s duties can be safely performed;

(4) Each vessel is properly crewed with qualified, certificated and medically fit seafarers complying with national and international requirements;

(5) New personnel and personnel transferred to new assignments involving safety and protection of the environment are properly introduced to their duties;

(6) Personnel involved with the company’s safety management system

have an adequate understanding of the relevant rules, regulations,

codes and guidelines;

(7) Needed training is identified to support the safety management system and ensure that the training is provided for all personnel concerned;

(8) Communication of relevant procedures for the vessel’s personnel

involved with the safety management system is in the language(s)

understood by them; and

(9) Personnel are able to communicate effectively when carrying out

their duties as related to the safety management system.

(g) Vessel safety and pollution prevention operation plans and instructions for key shipboard operations..(1) Define tasks; and

(2) Assign qualified personnel to specific tasks.

(h) Emergency preparedness procedures. ............................................... (1) Identify, describe and direct response to potential emergency shipboard situations;

(2) Set up programs for drills and exercises to prepare for emergency

actions; and

(3) Make sure that the company’s organization can respond at anytime, to hazards, accidents and emergency situations involving their

vessel(s).

(i) Reporting procedures on required actions. .......................................... (1) Report non-conformities of the safety management system;

(2) Report accidents;

(3) Report hazardous situations to the owner or company; and

(4) Make sure reported items are investigated and analyzed with the

objective of improving safety and pollution prevention.
67510 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

TABLE 96.250.—SAFETY MANAGEMENT SYSTEM DOCUMENTS AND REPORTS—Continued

Type of documents and reports Specific requirements

(j) Vessel maintenance procedures. (These procedures verify that a

company’s vessel(s) is maintained in conformity with the provisions

of relevant rules and regulations, with any additional requirements

which may be established by the company.).

(1) Inspect vessel’s equipment, hull, and machinery at appropriate intervals;

(2) Report any non-conformity or deficiency with its possible cause, if

known;

(3) Take appropriate corrective actions;

(4) Keep records of these activities;

(5) Identify specific equipment and technical systems that may result in

a hazardous situation if a sudden operational failure occurs;

(6) Identify measures that promote the reliability of the equipment and

technical systems identified in paragraph (j)(5), and regularly test

standby arrangements and equipment or technical systems not in

continuous use; and

(7) Include the inspections required by this section into the vessel’s

operational maintenance routine.

(k) Safety management system document and data maintenance ......... (1) Procedures which establish and maintain control of all documents

and data relevant to the safety management system.

(2) Documents are available at all relevant locations, i.e., each vessel

carries on board all documents relevant to that vessels operation;

(3) Changes to documents are reviewed and approved by authorized

personnel; and

(4) Outdated documents are promptly removed.

(l) Safety management system internal audits which verify the safety

and pollution prevention activities.

(1) Periodic evaluation of the safety management system’s efficiency

and review of the system in accordance with the established procedures of the company, when needed;

(2) Types and frequency of internal audits, when they are required,

how they are reported, and possible corrective actions, if necessary;

(3) Determining factors for the selection of personnel, independent of

the area being audited, to complete internal company and vessel audits; and

(4) Communication and reporting of internal audit findings for critical

management review and to ensure management personnel of the

area audited take timely and corrective action on non-conformities or

deficiencies found.

Note: The documents and reports required by this part are for the purpose of promoting safety of life and property at sea, as well as protection

of the environment. The documents and reports are intended to ensure the communication and understanding of company and vessel safety

management systems, which will allow a measure of the systems effectiveness and its responsible person to continuously improve the system

and safety the system provides.

Subpart C—How Will Safety

Management Systems Be Certificated

and Enforced?

§ 96.300 Purpose.

This subpart establishes the standards

for the responsible person of a company

and its vessel(s) to obtain the required

and voluntary, national and

international certification for the

company’s and vessel’s safety

management system.

§ 96.310 Who does this subpart apply to?

This subpart applies:

(a) If you are a responsible person

who owns a vessel(s) registered in the

U.S. and engaged on a foreign voyage(s),

or holds certificates or endorsement of

such voyages;

(b) If you are a responsible person

who owns a vessel(s) registered in the

U.S. and volunteer to meet the

standards of this part and Chapter IX of

SOLAS;

(c) To all foreign vessels engaged on

a foreign voyage, bound for ports or

places under the jurisdiction of the U.S.,

and subject to Chapter IX of SOLAS; or

(d) If you are a recognized

organization authorized by the U.S. to

complete safety management audits and

certification required by this part.

§ 96.320 What is involved to complete a

safety management audit and when is it

required to be completed?

(a) A safety management audit is any

of the following:

(1) An initial audit which is carried

out before a Document of Compliance

certificate or a Safety Management

Certificate is issued;

(2) A renewal audit which is carried

out before the renewal of a Document of

Compliance certificate or a Safety

Management Certificate;

(3) Periodic audits including—

(i) An annual verification audit, as

described in § 96.330(f) of this part, and

(ii) An intermediate verification audit,

as described in § 96.340(e)(2) of this

part.

(b) A satisfactory audit means that the

auditor(s) agrees that the requirements

of this part are met, based on review and

verification of the procedures and

documents that make up the safety

management system.

(c) Actions required during safety

management audits for a company and

their U.S. vessel(s) are—

(1) Review and verify the procedures

and documents that make up a safety

management system, as defined in

subpart B of this part.

(2) Make sure the audit complies with

this subpart and is consistent with IMO

Resolution A.788(19), Guidelines on

Implementation of the International

Safety Management (ISM) Code by

Administrations.

(3) Make sure the audit is carried out

by a team of Coast Guard auditors or

auditors assigned by a recognized

organization authorized to complete

such actions by subpart D of this part.

(d) Safety management audits for a

company and their U.S. vessel(s) are

required—

(1) Before issuing or renewing a

Document of Compliance certificate,

and to keep a Document of Compliance

certificate valid, as described in

§§ 96.330 and 96.340 of this part.

(2) Before issuing or renewing a Safety

Management Certificate, and to

maintain the validity of a Safety
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67511

Management Certificate, as described in

§ 96.340 of this part.

However, any safety management audit

for the purpose of verifying a vessel’s

safety management system will not be

scheduled or conducted for a company’s

U.S. vessel unless the company first has

undergone a safety management audit of

the company’s safety management

system, and has received its Document

of Compliance certificate.

(e) Requests for all safety management

audits for a company and its U.S.

vessel(s) must be communicated—

(1) By a responsible person directly to

a recognized organization authorized by

the U.S.

(2) By a responsible person within the

time limits for an annual verification

audit, described in § 96.330(f) of this

part, and for an intermediate

verification audit, described in

§ 96.340(e)(2) of this part. If he or she

does not make a request for a safety

management annual or verification

audit for a valid Document of

Compliance certificate issued to a

company or a valid Safety Management

Certificate issued to a vessel, this is

cause for the Coast Guard to revoke the

certificate as described in §§ 96.330 and

96.340 of this part.

(f) If a non-conformity with a safety

management system is found during an

audit, it must be reported in writing by

the auditor:

(1) For a company’s safety

management system audit, to the

company’s owner; and

(2) For a vessel’s safety management

system audit, to the company’s owner

and vessel’s Master.

§ 96.330 Document of Compliance

certificate: what is it and when is it needed?

(a) You must hold a valid Document

of Compliance certificate if you are the

responsible person who, or company

which, owns a U.S. vessel engaged on

foreign voyages, carrying more than 12

passengers, or is a tanker, bulk freight

vessel, freight vessel, or a self-propelled

mobile offshore drilling unit of 500

gross tons or more.

(b) You may voluntarily hold a valid

Document of Compliance certificate, if

you are a responsible person who, or a

company which, owns a U.S. vessel not

included in paragraph (a) of this section.

(c) You will be issued a Document of

Compliance certificate only after you

complete a satisfactory safety

management audit as described in

§ 96.320 of this part.

(d) All U.S. and foreign vessels that

carry more than 12 passengers or a

tanker, bulk freight vessel, freight

vessel, or a self-propelled mobile

offshore drilling unit of 500 gross tons

or more, must carry a valid copy of the

company’s Document of Compliance

certificate onboard when on a foreign

voyage.

(e) A valid Document of Compliance

certificate covers the type of vessel(s) on

which a company’s safety management

system initial safety management audit

was based. The validity of the

Document of Compliance certificate

may be extended to cover additional

types of vessels after a satisfactory safety

management audit is completed on the

company’s safety management system

which includes those additional vessel

types.

(f) A Document of Compliance

certificate is valid for 60 months. The

company’s safety management system

must be verified annually by the Coast

Guard or by an authorized organization

acting on behalf of the U.S. through a

safety management verification audit,

within three months before or after the

certificate’s anniversary date.

(g) Only the Coast Guard may revoke

a Document of Compliance certificate

from a company which owns a U.S.

vessel. The Document of Compliance

certificate may be revoked if—

(1) The annual safety management

audit and system verification required

by paragraph (f) of this section is not

completed by the responsible person; or

(2) Major non-conformities are found

in the company’s safety management

system during a safety management

audit or other related survey or

inspection being completed by the Coast

Guard or the recognized organization

chosen by the company or responsible

person.

(3) The Coast Guard or an authorized

organization acting on its behalf is

denied, or restricted access to, any

vessel, record or personnel of the

company, at any time necessary to

evaluate the safety management system.

(h) When a company’s valid

Document of Compliance certificate is

revoked by the Coast Guard, a

satisfactory safety management audit

must be completed before a new

Document of Compliance certificate for

the company’s safety management

system can be reissued.

§ 96.340 Safety Management Certificate:

what is it and when is it needed?

(a) Your U.S. vessel engaged on a

foreign voyage must hold a valid Safety

Management Certificate if it carries

more than 12 passengers, or if it is a

tanker, bulk freight vessel, freight

vessel, or a self-propelled mobile

offshore drilling unit of 500 gross tons

or more.

(b) Your U.S. vessel may voluntarily

hold a valid Safety Management

Certificate even if your vessel is not

required to by paragraph (a) of this

section.

(c) Your U.S. vessel may only be

issued a Safety Management Certificate

or have it renewed when your company

holds a valid Document of Compliance

certificate issued under § 96.330 of this

part and the vessel has completed a

satisfactory safety management audit of

the vessel’s safety management system

set out in § 96.320 of this part.

(d) A copy of your company’s valid

Document of Compliance certificate

must be on board all U.S. and foreign

vessels which carry more than 12

passengers, and must be onboard a

tanker, bulk freight vessel, freight

vessel, or a self-propelled mobile

offshore drilling unit of 500 gross tons

or more, when engaged on foreign

voyages or within U.S. waters.

(e) A Safety Management Certificate is

valid for 60 months. The validity of the

Safety Management Certificate is based

on—

(1) A satisfactory initial safety

management audit;

(2) A satisfactory intermediate

verification audit requested by the

vessel’s responsible person, completed

between the 24th and 36th month of the

certificate’s period of validity; and

(3) A vessel’s company holding a

valid Document of Compliance

certificate. When a company’s

Document of Compliance certificate

expires or is revoked, the Safety

Management Certificate for the

company-owned vessel(s) is invalid.

(f) Renewal of a Safety Management

Certificate requires the completion of a

satisfactory safety management system

audit which meets all of the

requirements of subpart B in this part.

A renewal of a Safety Management

Certificate cannot be started unless the

company which owns the vessel holds

a valid Document of Compliance

certificate.

(g) Only the Coast Guard may revoke

a Safety Management Certificate from a

U.S. vessel. The Safety Management

Certificate will be revoked if—

(1) The vessel’s responsible person

has not completed an intermediate

safety management audit required by

paragraph (e)(2) of this section; or

(2) Major non-conformities are found

in the vessel’s safety management

system during a safety management

audit or other related survey or

inspection being completed by the Coast

Guard or the recognized organization

chosen by the vessel’s responsible

person.
67512 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

§ 96.350 Interim Document of Compliance

certificate: what is it and when can it be

used?

(a) An Interim Document of

Compliance certificate may be issued to

help set up a company’s safety

management system when—

(1) A company is newly set up or in

transition from an existing company

into a new company; or

(2) A new type of vessel is added to

an existing safety management system

and Document of Compliance certificate

for a company.

(b) A responsible person for a

company operating a U.S. vessel(s) that

meets the requirements of paragraph (a)

of this section, may send a request to a

recognized organization authorized to

act on behalf of the U.S. to receive an

Interim Document of Compliance

certificate that is valid for a period up

to 12 months. To be issued the Interim

Document of Compliance certificate the

vessel’s company must—

(1) Demonstrate to an auditor that the

company has a safety management

system that meets § 96.230 of this part;

and

(2) Provide a plan for full

implementation of a safety management

system within the period that the

Interim Document of Compliance

certificate is valid.

§ 96.360 Interim Safety Management

Certificate: what is it and when can it be

used?

(a) A responsible person may apply

for an Interim Safety Management

Certificate when—

(1) A responsible person takes

delivery of a new U.S. vessel; or

(2) Takes responsibility for the

management of a U.S. vessel which is

new to the responsible person or their

company.

(b) An Interim Safety Management

Certificate is valid for 6 months. It may

be issued to a U.S. vessel which meets

the conditions of paragraph (a) of this

section, when—

(1) The company’s valid Document of

Compliance certificate or Interim

Document of Compliance certificate

applies to that vessel type;

(2) The company’s safety management

system for the vessel includes the key

elements of a safety management

system, set out in § 96.220, applicable to

this new type of vessel;

(3) The company’s safety management

system has been assessed during the

safety management audit to issue the

Document of Compliance certificate or

demonstrated for the issuance of the

Interim Document of Compliance

certificate;

(4) The Master and senior officers of

the vessel are familiar with the safety

management system and the planned set

up arrangements;

(5) Written documented instructions

have been extracted from the safety

management system and given to the

vessel prior to sailing;

(6) The company plans an internal

audit of the vessel within three months;

and

(7) The relevant information from the

safety management system is written in

English, and in any other language

understood by the vessel’s personnel.

§ 96.370 What are the requirements for

vessels of countries not party to Chapter IX

of SOLAS?

(a) Each foreign vessel which carries

more than 12 passengers, or is a tanker,

bulk freight vessel, freight vessel, or

self-propelled mobile offshore drilling

unit of 500 gross tons or more, operated

in U.S. waters, under the authority of a

country not a party to Chapter IX of

SOLAS must—

(1) Have on board valid

documentation showing that the vessel’s

company has a safety management

system which was audited and assessed,

consistent with the International Safety

Management Code of IMO Resolution

A.741(18);

(2) Have on board valid

documentation from a vessel’s Flag

Administration showing that the

vessel’s safety management system was

audited and assessed to be consistent

with the International Safety

Management Code of IMO Resolution

A.741(18); or

(3) Show that evidence of compliance

was issued by either a government that

is party to SOLAS or an organization

recognized to act on behalf of the

vessel’s Flag Administration.

(b) Evidence of compliance must

contain all of the information in, and

have substantially the same format as

a—

(1) Document of Compliance

certificate; and

(2) Safety Management Certificate.

(c) Failure to comply with this section

will subject the vessel to the compliance

and enforcement procedures of § 96.380

of this part.

§ 96.380 How will the Coast Guard handle

compliance and enforcement of these

regulations?

(a) While operating in waters under

the jurisdiction of the United States, the

Coast Guard may board a vessel to

determine that—

(1) Valid copies of the company’s

Document of Compliance certificate and

Safety Management Certificate are on

board, or evidence of the same for

vessels from countries not party to

Chapter IX of SOLAS; and

(2) The vessel’s crew or shore-based

personnel are following the procedures

and policies of the safety management

system while operating the vessel or

transferring cargoes.

(b) A foreign vessel that does not

comply with these regulations, or one

on which the vessel’s condition or use

of its safety management system do not

substantially agree with the particulars

of the Document of Compliance

certificate, Safety Management

Certificate or other required evidence of

compliance, may be detained by order

of the COTP or OCMI. This may occur

at the port or terminal where the

violation is found until, in the opinion

of the detaining authority, the vessel can

go to sea without presenting an

unreasonable threat of harm to the port,

the marine environment, the vessel or

its crew. The detention order may allow

the vessel to go to another area of the

port, if needed, rather than stay at the

place where the violation was found.

(c) If any vessel that must comply

with this part or with the ISM Code

does not have a Safety Management

Certificate and a copy of its company’s

Document of Compliance certificate on

board, a vessel owner, charterer,

managing operator, agent, Master, or any

other individual in charge of the vessel

that is subject to this part, may be liable

for a civil penalty under 46 U.S.C. 3318.

For foreign vessels, the Coast Guard may

request the Secretary of the Treasury to

withhold or revoke the clearance

required by 46 U.S.C. App. 91. The

Coast Guard may ask the Secretary to

permit the vessel’s departure after the

bond or other surety is filed.

§ 96.390 When will the Coast Guard deny

entry into a U.S. port?

(a) Except for a foreign vessel entering

U.S. waters under force majeure, no

vessel shall enter any port or terminal

of the U.S. without a safety management

system that has been properly

certificated to this subpart or to the

requirements of Chapter IX of SOLAS

if—

(1) It is engaged on a foreign voyage;

and

(2) It is carrying more than 12

passengers, or a tanker, bulk freight

vessel, freight vessel, or self-propelled

mobile offshore drilling unit of 500

gross tons or more.

(b) The cognizant COTP will deny

entry of a vessel into a port or terminal

under the authority of 46 U.S.C. 3204(c),

to any vessel that does not meet the

requirements of paragraph (a) of this

section.
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67513

Subpart D—Authorization of

Recognized Organizations To Act on

Behalf of the U.S.

§ 96.400 Purpose.

(a) This subpart establishes criteria

and procedures for organizations

recognized under 46 CFR part 8,

subparts A and B, to be authorized by

the Coast Guard to act on behalf of the

U.S. The authorization is necessary in

order for a recognized organization to

perform safety management audits and

certification functions delegated by the

Coast Guard as described in this part.

(b) To receive an up-to-date list of

recognized organizations authorized to

act under this subpart, send a selfaddressed, stamped envelope and

written request to the Commandant (G–

MSE), 2100 Second Street SW.,

Washington, DC 20593–0001.

§ 96.410 Who does this regulation apply

to?

This subpart applies to all

organizations recognized by the U.S.

under 46 CFR part 8, subpart A and B,

who wish to seek authorization to

conduct safety management audits and

issue relevant international safety

certificates under the provisions of the

ISM Code and voluntary certificates on

behalf of the U.S.

§ 96.420 What authority may an

organization ask for under this regulation?

(a) An organization may request

authorization to conduct safety

management audits and to issue the

following certificates:

(1) Safety Management Certificate;

(2) Document of Compliance

certificate;

(3) Interim Safety Management

Certificate; and

(4) Interim Document of Compliance

certificate.

(b) [Reserved]

§ 96.430 How does an organization submit

a request to be authorized?

(a) A recognized organization must

send a written request for authorization

to the Commandant (G–MSE), Office of

Design and Engineering Standards, 2100

Second Street SW, Washington, DC

20593–0001. The request must include

the following:

(1) A statement describing what type

of authorization the organization seeks;

(2) Documents showing that—

(i) The organization has an internal

quality system with written policies,

procedures and processes that meet the

requirements in § 96.440 of this part for

safety management auditing and

certification; or

(ii) The organization has an internal

quality system based on ANSI/ASQC

C9001 for safety management auditing

and certification; or

(iii) The organization has an

equivalent internal quality standard

system recognized by the Coast Guard to

complete safety management audits and

certification.

(3) A list of the organization’s

exclusive auditors qualified to complete

safety management audits and their

operational area; and

(4) A written statement that the

procedures and records of the

recognized organization regarding its

actions involving safety management

system audits and certification are

available for review annually and at any

time deemed necessary by the Coast

Guard.

(b) If the organization is a foreign

classification society that has been

recognized under 46 CFR part 8,

subparts A and B, and wishes to apply

for authorization under this part, it must

demonstrate the reciprocity required by

46 U.S.C. 3316 for ISM Code

certification. The organization must

provide, with its request for

authorization an affidavit from the

government of the country in which the

classification society is headquartered.

This affidavit must provide a list of

authorized delegations by the flag state

of the administration of the foreign

classification society’s country to the

American Bureau of Shipping, and

indicate any conditions related to the

delegated authority. If this affidavit is

not received with a request for

authorization from a foreign

classification society, the request for

authorization will be disapproved and

returned by the Coast Guard.

(c) Upon the satisfactory completion

of the Coast Guard’s evaluation of a

request for authorization, the

organization will be visited for an

evaluation as described in § 96.440(b) of

this part.

§ 96.440 How will the Coast Guard decide

whether to approve an organization’s

request to be authorized?

(a) First, the Coast Guard will evaluate

the organization’s request for

authorization and supporting written

materials, looking for evidence of the

following—

(1) The organization’s clear

assignment of management duties;

(2) Ethical standards for managers and

auditors;

(3) Procedures for auditor training,

qualification, certification, and

requalification that are consistent with

recognized industry standards;

(4) Procedures for auditing safety

management systems that are consistent

with recognized industry standards and

IMO Resolution A.788(19);

(5) Acceptable standards for internal

auditing and management review;

(6) Record-keeping standards for

safety management auditing and

certification;

(7) Methods for reporting nonconformities and recording completion

of remedial actions;

(8) Methods for certifying safety

management systems;

(9) Methods for periodic and

intermediate audits of safety

management systems;

(10) Methods for renewal audits of

safety management systems;

(11) Methods for handling appeals;

and

(12) Overall procedures consistent

with IMO Resolution A.739(18),

‘‘Guidelines for the Authorization of

Organizations Acting on Behalf of the

Administration.’’

(b) After a favorable evaluation of the

organization’s written request, the Coast

Guard will arrange to visit the

organization’s corporate offices and port

offices for an on-site evaluation of

operations.

(c) When a request is approved, the

recognized organization and the Coast

Guard will enter into a written

agreement. This agreement will define

the scope, terms, conditions and

requirements of the authorization.

Conditions of this agreement are found

in § 96.460 of this part.

§ 96.450 What happens if the Coast Guard

disapproves an organization’s request to be

authorized?

(a) The Coast Guard will write to the

organization explaining why it did not

meet the criteria for authorization.

(b) The organization may then correct

the deficiencies and reapply.

§ 96.460 How will I know what the Coast

Guard requires of my organization if my

organization receives authorization?

(a) Your organization will enter into a

written agreement with the Coast Guard.

This written agreement will specify—

(1) How long the authorization is

valid;

(2) Which duties and responsibilities

the organization may perform, and

which certificates it may issue on behalf

of the U.S.;

(3) Reports and information the

organization must send to the

Commandant (G–MOC);

(4) Actions the organization must take

to renew the agreement when it expires;

and

(5) Actions the organization must take

if the Coast Guard should revoke its

authorization or recognition under 46

CFR part 8.
67514 Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations

(b) [Reserved]

§ 96.470 How does the Coast Guard

terminate an organization’s authorization?

At least every 12 months, the Coast

Guard evaluates organizations

authorized under this subpart. If an

organization fails to maintain acceptable

standards, the Coast Guard may

terminate that organization’s

authorization, remove the organization

from the Commandant’s list of

recognized organizations, and further

evaluate the organization’s recognition

under 46 CFR part 8.

§ 96.480 What is the status of a certificate

if the issuing organization has its authority

terminated?

Any certificate issued by an

organization authorized by the Coast

Guard whose authorization is later

terminated remains valid until—

(a) Its original expiration date,

(b) The date of the next periodic audit

required to maintain the certificate’s

validity, or

(c) Whichever of paragraphs (a) or (b)

occurs first.

§ 96.490 What further obligations exist for

an organization if the Coast Guard

terminates its authorization?

The written agreement by which an

organization receives authorization from

the Coast Guard places it under certain

obligations if the Coast Guard revokes

that authorization. The organization

agrees to send written notice of its

termination to all responsible persons,

companies and vessels that have

received certificates from the

organization. In that notice, the

organization must include—

(a) A written statement explaining

why the organization’s authorization

was terminated by the Coast Guard;

(b) An explanation of the status of

issued certificates;

(c) A current list of organizations

authorized by the Coast Guard to

conduct safety management audits; and

(d) A statement of what the

companies and vessels must do to have

their safety management systems

transferred to another organization

authorized to act on behalf of the U.S.

§ 96.495 How can I appeal a decision made

by an authorized organization?

(a) A responsible person may appeal

a decision made by an authorized

organization by mailing or delivering to

the organization a written request for

reconsideration. Within 30 days of

receiving your request, the authorized

organization must rule on it and send

you a written response. They must also

send a copy of their response to the

Commandant (G–MOC).

(b) If you are not satisfied with the

organization’s decision, you may appeal

directly to the Commandant (G–MOC).

You must make your appeal in writing,

including any documentation and

evidence you wish to be considered.

You may ask the Commandant (G–MOC)

to stay the effect of the appealed

decision while it is under review.

(c) The Commandant (G–MOC) will

make a decision on your appeal and

send you a response in writing. That

decision will be the final Coast Guard

action on your request.

TITLE 46—SHIPPING

PART 2—VESSEL INSPECTIONS

2. Revise the authority citation for

part 2 to read as follows:

Authority: 33 U.S.C. 1903; 43 U.S.C. 1333;

46 U.S.C. 3103, 3205, 3306, 3703; E.O. 12234,

45 FR 58801, 3 CFR, 1980 Comp., p. 277; 49

CFR 1.46; Subpart 2.45 also issued under the

authority of Act Dec. 27, 1950, Ch. 1155,

secs. 1, 2, 64 Stat 1120 (see 46 U.S.C. App.

note prec.1).

3. In § 2.01–25, add paragraph

(a)(1)(ix) and revise paragraph (a)(2) to

read as follows:

§ 2.01–25 International Convention for

Safety of Life at Sea, 1974.

(a) * * *

(1) * * *

(ix) Safety Management Certificate.

(2) The U.S. Coast Guard will issue

through the Officer In Charge, Marine

Inspection, the following certificates

after performing an inspection or safety

management audit of the vessel’s

systems and determining the vessel

meets the applicable requirements:

(i) Passenger Ship Safety Certificate.

(ii) Cargo Ship Safety Construction

Certificate, except when issued to cargo

ships by a Coast Guard recognized

classification society at the option of the

owner or agent.

(iii) Cargo Ships Safety Equipment

Certificate.

(iv) Exemption Certificate.

(v) Nuclear Passenger Ship Safety

Certificate.

(vi) Nuclear Cargo Ship Safety

Certificate.

(vii) Safety Management Certificate,

except when issued by a recognized

organization authorized by the Coast

Guard.

* * * * *

PART 31—INSPECTION AND

CERTIFICATION

4. Revise the authority citation for

part 31 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

2103, 3205, 3306, 3703; 49 U.S.C. 5103, 5106;

E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp.,

p. 277; E.O. 12777, 56 FR 54757, 3 CFR, 1991

Comp., p. 351; 49 CFR 1.46. Section 31.10–

21 also issued under the authority of Sect.

4109, Pub. L. 101–380, 104 Stat. 515.

5. Add § 31.40–30 to read as follows:

§ 31.40–30 Safety Management

Certificate—T/ALL.

All tankships to which 33 CFR part 96

applies on an international voyage must

have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

6. In § 31.40–40, revise paragraph (b)

to read as follows:

§ 31.40–40 Duration of Convention

certificates—T/ALL.

* * * * *

(b) A Cargo Ship Safety Construction

Certificate and a Safety Management

Certificate shall be issued for a period

of not more than 60 months.

* * * * *

PART 71—INSPECTION AND

CERTIFICATION

7. Revise the authority citation for

part 71 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

2113, 3205, 3306; E.O. 12234, 45 FR 58801;

3 CFR, 1980 Comp., p. 277; E.O. 12777, 56

FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR

1.46.

8. Add § 71.75–13 to read as follows:

§ 71.75–13 Safety Management Certificate.

All vessels to which 33 CFR part 96

applies on an international voyage must

have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

9. In § 71.75–20, revise paragraph (a)

to read as follows:

§ 71.75–20 Duration of certificates.

(a) The certificates are issued for a

period of not more than 12 months, with

exception to a Safety Management

Certificate which is issued for a period

of not more than 60 months.

* * * * *

PART 91—INSPECTION AND

CERTIFICATION

10. Revise the authority citation for

part 91 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

3205, 3306; E.O. 12234; 45 FR 58801; 3 CFR,

1980 Comp., p. 277; E.O. 12777, 56 FR 54757,

3 CFR, 1991 Comp., p. 351; 49 CFR 1.46.

11. Add § 91.60–30 to read as follows:

§ 91.60–30 Safety Management Certificate.

All vessels to which 33 CFR part 96

applies on an international voyage must
Federal Register / Vol. 62, No. 247 / Wednesday, December 24, 1997 / Rules and Regulations 67515

have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

12. In § 91.60–40, revise paragraph (b)

to read as follows:

§ 91.60–40 Duration of certificates.

* * * * *

(b) A Cargo Ship Safety Construction

Certificate and a Safety Management

Certificate are issued for a period of not

more than 60 months.

* * * * *

PART 107—INSPECTION AND

CERTIFICATION

13. Revise the authority citation for

part 107 to read as follows:

Authority: 43 U.S.C. 1333; 46 U.S.C. 3205,

3306, 5115; 49 CFR 1.45, 1.46; § 107.05 also

issued under the authority of 44 U.S.C. 3507.

14. Add § 107.415 to read as follows:

§ 107.415 Safety Management Certificate.

(a) All self-propelled mobile offshore

drilling units of 500 gross tons or over

to which 33 CFR part 96 applies, on an

international voyage must have a valid

Safety Management Certificate and a

copy of their company’s valid Document

of Compliance certificate on board.

(b) A Safety Management Certificate is

issued for a period of not more than 60

months.

PART 115—INSPECTION AND

CERTIFICATION

15. Revise the authority citation for

part 115 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

2103, 3205, 3306; 49 U.S.C. App. 1804; E.O.

11735, 38 FR 21243, 3 CFR, 1971–1975

Comp., p. 743; E.O. 12234, 45 FR 58801, 3

CFR, 1980 Comp., p. 277; 49 CFR 1.46.

16. Add § 115.925 to read as follows:

§ 115.925 Safety Management Certificate.

(a) All vessels that carry more than 12

passengers on an international voyage

must have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

(b) All such vessels must meet the

applicable requirements of 33 CFR part

96.

(c) A Safety Management Certificate is

issued for a period of not more than 60

months.

PART 126—INSPECTION AND

CERTIFICATION

17. Revise the authority citation for

part 126 to read as follows:

Authority: 46 U.S.C. 3205, 3306; 33 U.S.C.

1321(j); E.O. 11735, 38 FR 21243, 3 CFR,

1971–1975 Comp., p. 793; 49 CFR 1.46.

18. Add § 126.480 to read as follows:

§ 126.480 Safety Management Certificate.

(a) All offshore supply vessels of 500

gross tons or over to which 33 CFR part

96 applies, on an international voyage

must have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

(b) A Safety Management Certificate is

issued for a period of not more than 60

months.

PART 175—GENERAL PROVISIONS

19. Revise the authority citation for

part 175 to read as follows:

Authority: 46 U.S.C. 2103, 3205, 3306,

3703; 49 U.S.C. App. 1804; 49 CFR 1.45, 1.46;

175.900 also issued under authority of 44

U.S.C. 3507.

20. In § 175.540, add paragraph (d) to

read as follows:

§ 175.540 Equivalents.

* * * * *

(d) The Commandant may accept

alternative compliance arrangements in

lieu of specific provisions of the

International Safety Management (ISM)

Code (IMO Resolution A.741(18)) for the

purpose of determining that an

equivalent safety management system is

in place on board a vessel. The

Commandant will consider the size and

corporate structure of a vessel’s

company when determining the

acceptability of an equivalent system.

Requests for determination of

equivalency must be submitted to

Commandant (G–MOC) via the

cognizant OCMI.

PART 176—INSPECTION AND

CERTIFICATION

21. Revise the authority citation for

part 176 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

2103, 3205, 3306; 49 U.S.C. App. 1804; E.O.

11735, 38 FR 21243, 3 CFR, 1971–1975

Comp., p. 793; E.O. 12234, 45 FR 58801, 3

CFR, 1980 Comp., p. 277; 49 CFR 1.46.

22. Add § 176.925 to read as follows:

§ 176.925 Safety Management Certificate.

(a) All vessels that carry more than 12

passengers on an international voyage

must have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

(b) All such vessels must meet the

applicable requirements of 33 CFR part

96.

(c) A Safety Management Certificate is

issued for a period of not more than 60

months.

23. Revise § 176.930 to read as

follows:

§ 176.930 Equivalents.

As outlined in Chapter I (General

Provisions) Regulation 5, of SOLAS, the

Commandant may accept an equivalent

to a particular fitting, material,

apparatus, or any particular provision

required by SOLAS regulations if

satisfied that such equivalent is at least

as effective as that required by the

regulations. An owner or managing

operator of a vessel may submit a

request for the acceptance of an

equivalent following the procedures in

§ 175.540 of this chapter. The

Commandant will indicate the

acceptance of an equivalent on the

vessel’s SOLAS Passenger Ship Safety

Certificate or Safety Management

Certificate, as appropriate.

PART 189—INSPECTION AND

CERTIFICATION

24. Revise the authority citation for

part 189 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C.

2113, 3205, 3306; E.O. 12234, 45 FR 58801,

3 CFR, 1980 Comp., p. 277; E.O. 12777, 56

FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR

1.46.

25. Add § 189.60–30 to read as

follows:

§ 189.60–30 Safety Management

Certificate.

All vessels to which 33 CFR part 96

applies on an international voyage must

have a valid Safety Management

Certificate and a copy of their

company’s valid Document of

Compliance certificate on board.

26. In § 189.60–40, revise paragraph

(b) to read as follows:

§ 189.60–40 Duration of certificates.

* * * * *

(b) A Cargo Ship Safety Construction

Certificate and a Safety Management

Certificate are issued for a period of not

more than 60 months.

* * * * *

Dated: December 16, 1997.

R.C. North,

Rear Admiral, U.S. Coast Guard, Assistant

Commandant for Marine Safety and

Environmental Protection.

[FR Doc. 97–33528 Filed 12–19–97; 3:32 pm]

BILLING CODE 4910–14–M