67492federal register /vol. 62, no. 247/wednesday ... 23, 1998. the ... in may of 1994, the ism code...

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 theSafe Operation of Ships and forPollution Prevention (InternationalSafety Management (ISM) Code)

AGENCY: Coast Guard, DOT.ACTION: Final rule.

SUMMARY: In a Notice of ProposedRulemaking (NPRM) published on May1, 1997, the Coast Guard proposednational regulations for responsiblepersons and their vessel(s) engaged oninternational and domestic voyages, todevelop safety management systems toenhance vessel operating safety at sea,prevent human injury or loss of life, andavoid damage to the environment, inparticular to the marine environment,and to property. Section 602 of theCoast Guard Authorization Act of 1996(Pub. L. 104–324) requires this action.This final rule completes thosestandards which will allow U.S. vesselsthat are certificated to engage oninternational voyages to meet themandatory certification requirements, orvoluntarily meet these safety standardsfor domestic voyages. It also providesstandards to permit recognizedorganizations to apply for authorizationfrom the U.S. to complete externalaudits and issue internationalconvention certificates for U.S. vesselson behalf of the U.S.DATES: This final rule is effective onJanuary 23, 1998. The incorporation byreference of certain publications listedin the rule are approved by the Directorof the Federal Register on January 23,1998.ADDRESSES: Unless indicated,documents referred to in this preambleare available for inspection or copyingat the office of the Executive Secretary,Marine Safety Council (G–LRA/3406),U.S. Coast Guard Headquarters, 2100Second Street SW., Washington, DC20593–0001, between 9:30 a.m. and 2p.m., Monday through Friday, exceptFederal holidays. The telephone numberis (202) 267–1477.FOR FURTHER INFORMATION CONTACT: Mr.Robert M. Gauvin, Project Manager,Vessel and Facility Operating StandardsDivision (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 wasadopted as Chapter IX of theInternational Convention for the Safetyof Life at Sea (SOLAS) 1974, asamended. The ISM Code’s adoptionoccurred at the International MaritimeOrganization’s (IMO’s) Conference ofContracting Governments to SOLAS inLondon at IMO’s Headquarters.

On October 19, 1996, the Presidentsigned into law the Coast GuardAuthorization Act of 1996 as Pub. L.104–324, 110 Stat. 3901. Section 602 ofthe Act added Chapter 32 to Title 46U.S. Code, ‘‘Management of Vessels.’’ 46U.S.C. 3203 mandated the Secretary ofTransportation to develop regulationsfor the implementation of safetymanagement systems which areconsistent with the International SafetyManagement (ISM) Code, for vessels andtheir companies which are engaged onforeign voyages.

On April 24, 1997, the Secretary ofTransportation delegated to theCommandant of the Coast Guard theresponsibilities under 46 U.S.C. Chapter32 and 46 U.S.C. 3103 for theimplementation and enforcement ofsafety management systems on U.S.vessels engaged on foreign voyages. Thisdelegation was published as a final rulein the Federal Register (62 FR 19935)and codified in 49 CFR 1.46 (fff) and(ggg).

On May 1, 1997, the Coast Guardpublished a NPRM (62 FR 23705) in theFederal Register on implementationstandards for safety managementsystems for vessels and their companiesthat are certificated to engage oninternational voyages. These proposedregulations provided standards for:

• The development and compliance ofsafety management systems for U.S.vessels and their companies;

• Mandatory certification of safetymanagement systems to internationallevels;

• Voluntary certification of safetymanagement systems for U.S. domestictrading vessels; and

• Authorization by the U.S. toorganizations to complete externalaudits and certification of U.S. vesselsrequired to meet the U.S. andinternational safety management systemstandards.

The NPRM comment period closed onJuly 30, 1997. During the 90 daycomment period, 51 documents werereceived that contained 118 comments.Seventeen comments requested public

hearings but none were held. Reasonsfor not holding public hearings beforethe publishing of this rule are explainedin the ‘‘Discussion of Comments andChanges’’ section of this rule.

Background and PurposeThis rule is necessary to fulfill the

mandates of 46 U.S.C. 3203, as added bysection 602 of the Coast GuardAuthorization Act of 1996 (Pub. L. 104–324, 110 Stat. 3901). The purpose of thisrule is to establish national safetymanagement system standards andrequirements for the development,documentation, auditing, andcompletion of certification by vesselowners or responsible persons. Thesevessel safety management systemregulations are consistent with theinternational regulations of Chapter IXof the International Convention for theSafety of Life at Sea (SOLAS) 1974, asamended. Chapter IX of SOLAS requiresthat all vessels to which SOLAS isapplicable, and their companies, haveeffective safety management systemsdeveloped to meet the performanceelements of the International SafetyManagement (ISM) Code (InternationalMaritime Organization (IMO) ResolutionA.741(18)).

The development of theserequirements has been fueled by thecontinued occurrences of significantmarine casualties despite engineeringand technological innovations to stopsuch casualties over the last twodecades. In an effort to further reducethese casualties, the Coast Guardevaluated the role of the ‘‘humanelement’’ in the maritime safetyequation. Recent casualty studiesconcluded that in excess of 80 percentof all high consequence marinecasualties may be directly or indirectlyattributable to the ‘‘human element.’’Consequently, the internationalmaritime community saw the need toemphasize shipboard safetymanagement practices to minimizehuman errors or omissions. These typesof errors play a part in virtually everycasualty, including those wherestructural or equipment failure may bethe direct cause.

The U.S. has been at the forefrontproviding input, analysis and directionfor the IMO’s development of theseinternational regulations. The U.S.recognized that the human elementneeded to be addressed and initiated thePrevention Through People (PTP)program which examines and definesthe critical role that the human elementplays in maritime safety. The PTPconcept asserts that safe and profitableoperations require a systematicapproach toward the constant and

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

balanced interaction between theelements of management, the workenvironment, individual behavior, andappropriate technology. The ISM Codeoffers a systematic approach to marinerswith the policy and procedures neededto understand their duties and addressthe human element issues and risks thatcan prevent casualties from occurring.The voluntary certification of safetymanagement systems by U.S. vessels indomestic trade supports the PTPstrategies to bring government andindustry together in making culturalchange and partnerships to address thehuman element in maritime operationsand pollution prevention.

Accordingly, the Coast Guardendorsed the guidance provided by theISM Code in IMO Resolution A.741(18),and provided it as a reference inNavigation and Vessel InspectionCircular No. 2–94 (NVIC 2–94)published March 15, 1994, ‘‘GuidanceRegarding Voluntary Compliance withthe International Management Code forthe Safe Operation of Ships and forPollution Prevention.’’

In May 1994, Chapter IX of SOLAS,‘‘Management for the Safe Operation ofShips,’’ was adopted by the U.S. at theIMO’s Conference of ContractingGovernments to SOLAS, 1974. ChapterIX of SOLAS mandates that all vesselssubject to SOLAS, and their companies,have effective safety managementsystems developed and in use thatconform to the performance elements ofthe ISM Code (IMO ResolutionA.741(18)). Companies whose U.S. flagvessels trade internationally (engagedon a foreign voyage) and are subject toSOLAS, must have their safetymanagement system externally auditedand must receive the appropriateinternational certificates from the U.S.or from an organization authorized toact on behalf of the U.S.

The ISM Code marks a significantphilosophical shift in the maritimecommunity’s approach to safety byrecognizing the human element’s role inpreventing marine casualties andensuring vessels are operatedresponsibly in accordance withdomestic and international standards.The ISM Code is seen as a majorcontributor to industry’s self-evaluationand actions to address the humanelement concerns. It is intended tochange the current approach ofregulatory compliance from industry’spassive defect notification andcorrection response mode to anaggressive approach to safety andenvironmental protection. Under thisproactive approach, potentialdiscrepancies are resolved by thecompanies themselves before casualties

or incidents that can adversely impactthe marine environment can occur.

The ISM Code performance elementsrequire the development of safetymanagement systems which documentand communicate the owner’s operationpolicy, chain of authority, andoperational and emergency procedures.It also requires management reviews,internal audits and correction(s) of non-conformities as directed by company’smanagement procedures. Thedocumentation of a safety managementsystem provides the basis for auditingan employee’s knowledge, ashore andafloat, of the company’s procedures andpolicies. It illustrates owner, managerand Master responsibilities specificallyand ensures awareness of national andinternational standards in the system’sprocedures.

The ISM Code performance standardsare broad based to allow flexibility forthe differences that each responsibleperson has to work with in managing avariety of vessels or just one. A safetymanagement system is seen as a livingsystem that will change and grow as theresponsible person, his or her managersand shore-based and vessel-basedpersonnel see the need for change, or astechnology and vessel operationschange. The best safety managementsystem is one where there iscommitment from the top managementof the company and its personnel to actsafely and in an environmentallyresponsible manner at all times. Theaccessibility of senior managementthroughout the development of thesafety management system andthroughout the systems life, is also a keyfactor to its success.

To ensure that the U.S. public andmaritime industry understood themandatory requirements of the ISMCode, the Coast Guard published anotice in the Federal Register onOctober 5, 1995 (60 FR 52143). Thisnotice explained the adoption of theISM Code by the Contracting Parties ofSOLAS, and scheduled four publicmeetings held at the following timesand 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 AuthorityBuilding, New York City, New York.

At these public meetings, the CoastGuard received comments onimplementation of the internationalrequirements and provide a presentationon the U.S.’s voluntary safety

management system guidelines in NVIC2–94. Comments received at thesemeetings were audiotaped and are a partof this docket.

Discussion of Comments and ChangesThe Coast Guard received a total of 51

documents containing 118 comments tothe public docket. This section of thepreamble discusses the commentsreceived and the Coast Guard’sresponses and changes to the proposedrule. This section is divided into threeparts. First, we discuss the commentsthat request public hearings. Second, wediscuss the comments on specific CFRcites. Third, we discuss the generalcomments concerning other issuesrelating to this rulemaking and theimplementation of safety managementsystem requirements.

Comments Requesting Public HearingsSixteen comments requested a public

hearing to discuss the requirements in33 CFR 96.250(f)(4), involving thedetermination of medical fitness forseafarers. The concern expressed wasthat this section permitted amendmentsto the standards that determined themedical fitness of mariners. The CoastGuard is not amending any regulationsor standards regarding thedetermination of medical fitness formariners as part of this rulemaking. Thisrulemaking only requires that theresponsible person provide proceduresor policies in the safety managementsystem on how these existingrequirements are managed by thecompany. We do not intend to holdpublic hearings due to these requests, asthey would require actions onregulations outside the scope of thisrulemaking. We understand theimportance of these requests and askedthe Executive Director of the MerchantMarine Personnel Advisory Committee(MERPAC) to place these comments andconcerns on the Committee’s workingagenda to discuss in its public meetingswith the Coast Guard. The ExecutiveDirector of MERPAC and theCommittee’s Chairperson agreed toplace it on MERPAC’s working agenda.

MERPAC is a federal advisorycommittee appointed by the Secretary ofthe Department of Transportation underthe Federal Advisory Committee Act (5U.S.C. App. 2). MERPAC is composed ofmarine industry personnel appointed toadvise the Coast Guard on merchantmarine issues. The Committee offers anopen forum to hear individuals, groupsor industry specific concerns, thenworks to provide the Coast Guard withrecommendations as to what actionsmay be needed. MERPAC has addressedthe issue of mariner’s physical fitness


standards in the past and will, whenchanges are proposed, address it in thefuture. MERPAC’s next meeting isscheduled for May 1, 1998. A noticeannouncing the Committee’s workingagenda, schedule and place of meetingwill be published in the FederalRegister.

One comment requested a publichearing if the Coast Guard does not planto include specific protections for theNorthern Right Whale in the final rule.The focus of the proposed rule is toimplement safety management systemsconsistent with the ISM Code. The CoastGuard does not intend to hold a publichearing in response to this request.Comments about protection of theNorthern Right Whale and the ISM Codeare addressed in detail in the finalsection of these comment responses.

Comments Relating to Specific CFRSections

All changes to each section of the ruleare discussed within the followingparagraphs.

1. 33 CFR 96.110, 96.210, and 96.310.Four comments were received on thesesections which discussed who thesesubparts apply to. Two comments foundthe use of the terminology ‘‘trades inU.S. waters,’’ or ‘‘on an internationalvoyage,’’ or ‘‘engaged on a foreignvoyage’’ to be confusing in determiningwhich vessels and persons must complywith the proposed regulations. Onecomment requested that ‘‘vessel engagedon a foreign voyage,’’ be usedthroughout the rulemaking as itconforms to the statutory requirementsof 46 U.S.C. 3201. We agree and amendproposed §§ 96.110, 96.210 and 96.310,to use the phrase, ‘‘vessel engaged on aforeign voyage,’’ as defined in § 96.120.

For purposes of clarification regardingforeign vessel voyages that come underU.S. jurisdiction, the Coast Guardamends §§ 96.110(c), 96.210(a)(3) and96.310(c), by adding the words, ‘‘boundfor ports or places under the jurisdictionof the U.S.’’ This will ensure that aforeign vessel or self-propelled mobileoffshore drilling unit (MODU) are heldaccountable to the requirements andcertification of safety managementsystems when navigating in U.S. waters.A foreign vessel engaged on a foreignvoyage, involving innocent passagethrough waters subject to thejurisdiction of the U.S. will not beboarded under these regulations.

The second and third of thesecomments also discussed the use of thephrase, ‘‘on an international voyage’’ in46 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 CoastGuard does not agree with a need to

change this phrase. ‘‘On an internationalvoyage’’ is described in 46 CFR 2.01–8,entitled ‘‘Application of regulations tovessels or tankships on an internationalvoyage.’’ For consistency throughouttitle 46 CFR, we have not changed thefinal rule.

The fourth comment on these sectionsrecommends that a specific subpart bedeveloped for foreign vesselrequirements, separate from regulationsfor U.S. vessels in subparts A, B and C.The comment suggested that this newsubpart include requirements for foreignvessels whose countries are parties toSOLAS and those vessels whosecountries are not, similar to 33 CFR96.370. The Coast Guard disagrees thata separate subpart is needed, but hasadded language in § 96.390(a) to ensurethat it is understood that actions forsafety management system certificationby vessels whose countries are a partyto SOLAS are acceptable as anequivalent to the requirements of 33CFR part 96, subparts B and C. Furtherdiscussions of this matter are found inparagraph 27 of this comment replysection of the final rule preamble.

The Coast Guard amended§ 96.210(a)(2)(I) by removing the word‘‘passenger’’ in that sentence. Under 46U.S.C. 3202(a)(1)(A) ‘‘a vesseltransporting more than 12 passengers* * *’’ must comply with theseregulations, not just a passenger vessel.The Coast Guard removed this word toensure the meaning that all vesselscarrying more than 12 passengers, notjust passenger vessels, must complywith 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), and96.390(a)(2) as the statements were torequire that these sections applied tovessels transporting or carrying ‘‘morethan 12 passengers’’ as stated in 46U.S.C. 3202(a)(1)(A), and not ‘‘12 ormore passengers.’’

2. 33 CFR 96.120. Five commentswere received on definitions in thissection. One comment requested that adefinition for ‘‘designated person’’ beadded to this section to ensure that thisperson’s responsibilities for overseeingthe safety management system is notconfused with the responsibilities of the‘‘responsible person.’’ It should also beunderstood that a responsible personwith a large fleet of vessels can assignthe responsibility of the designatedperson to more than one employee, orthat a designated person could beresponsible for more than one vessel.The Coast Guard agrees with thecomment and has added a definition fordesignated person to this section.

One comment requested that the term‘‘responsible person’’ be replaced by theterm ‘‘owner’’ because of possibleconfusion with the term ‘‘responsibleparty,’’ which is defined in the OilPollution Act of 1990 (OPA 90). TheCoast Guard does not agree with thiscomment and has not changed thedefinition of the ‘‘responsible person.’’Responsible party is defined in section1001(32) of OPA 90 to clarify liability ofthe owners and operators of vessels,onshore facilities, offshore facilities,deepwater ports, and pipelines in theevent of an oil spill. The Coast Guard’sdefinition of responsible person in thisrulemaking clearly relates toresponsbility surrounding thedevelopment and use of safetymanagement systems ashore and aboardvessels.

One comment suggested redefiningthe term ‘‘company’’ to include thedefinition of an ‘‘operator’’ as defined in30 CFR 250.2 of the Mineral andManagement Service’s regulations foroffshore oil and gas exploration. TheCoast Guard does not agree. There aretimes when a lessee or operator of anoffshore oil or gas exploration vesselbecomes responsible by contract withthe owner of the vessel to assume theduties imposed by these rules. Whenthis occurs, a written designation of thatresponsibility must be provided by theowner to the lessee or operator of thecontracted vessel and placed in thedocumentation of the safetymanagement system as required by theISM Code. This is part of the safetymanagement system’s documents andreports required by § 96.250(b)(2), andthere is no need to expand on thedefinition of ‘‘company’’.

One comment requested that the term‘‘recognized organization’’ be changedto a ‘‘member of the InternationalAssociation of Classification Societies(IACS).’’ The Coast Guard does not agreewith this comment. Other organizations,outside the membership of IACS, mayapply and be recognized if they meet therequirements of 46 CFR part 8. Theregulations of that part do not limit theapplication or recognition of anyorganization because they are or are not,members of IACS. The Coast Guard hasamended the definition of a recognizedorganization in this section to be clearon which requirements of 46 CFR part8, an organization must meet to beaccepted. As subparts C and D of 46CFR part 8 provides requirements forother international certificateauthorizations and the U.S. AlternateCompliance Program, which have noeffect on U.S. ISM Code certificationauthorization, these subparts areremoved from the definition. This


change of definition has also requiredchanges to the language in the definitionof an ‘‘Authorized Organization Actingon behalf of the U.S.’’ and §§ 96.400(a),96.410 and 96.430(b) (formerly§ 96.430(a)(5)). Also, we have removedthe phrase ‘‘national or international’’from the recognized organizationdefinition for consistency with subpartD.

One comment inquired whether thephrase, ‘‘vessel engaged on a foreignvoyage’’ includes the operation of U.S.flag oilfield crewboats to and fromforeign ports during operationssupporting oil exploration programsinternationally. Such vessels that areoffshore supply vessels (OSVs) of 500gross tons or more, or are carrying morethan 12 passengers, would beconsidered engaged on a foreign voyageunder paragraph (b) of the term’sdefinition. This definition states that avessel is considered to be on a foreignvoyage when, ‘‘making a voyagebetween places outside the UnitedStates’’ (§ 96.120). These crewboatsmust meet the requirements of 33 CFRpart 96 and the ISM Code for safetymanagement systems, when certificatedfor such voyages. No changes weremade to the final rules in response tothis comment.

In November 1997, the SOLASConference on the Safety of BulkCarriers was held at IMO’s headquartersin London. During this conference, anew Chapter XII of SOLAS was adopted,entitled ‘‘Additional Safety Measures forBulk Carriers.’’ During deliberations onthis new chapter of SOLAS aninterpretation was adopted regardingthe definition of a bulk carrier. Thisinterpretation is found in Resolution 6of the resolutions adopted by theconference. This interpretation pertainsto the definition of bulk carrier inRegulation 1.6 of Chapter IX of SOLASon the ISM Code, as well as the newChapter XII on Bulk Carrier Safety. Thedefinition in Chapter IX is, ‘‘Bulk carriermeans a ship which is constructedgenerally with single deck, top-sidetanks and hopper side tanks in cargospaces, and is intended primarily tocarry dry cargo in bulk, and includessuch types as ore carriers andcombination carriers.’’ Theinterpretation removes the ambiguity ofthe term ‘‘constructed generally.’’Specifically, the resolution ‘‘UrgesSOLAS Contracting Governments tointerpret the definition of the term‘‘bulk carrier’’ given in regulation IX/1.6, for the purpose of the application ofSOLAS regulation IX/2.1.2 * * * tomean: ships constructed with a singledeck, top-side tanks and hopper sidetanks in cargo spaces and intended

primarily to carry dry cargo in bulk; orore carriers; or combination carriers.’’Bulk carriers that meet thisinterpretation are required to meet thefirst effective date of the ISM Code, July1, 1998. Other vessels, which carry bulkcargoes, but do not meet thisinterpretation, must meet the secondeffective date of the ISM Code (July 1,2002), as required by § 96.210. The U.S.has decided to accept this IMOinterpretation to SOLAS. Thisrulemaking has not defined bulkcarriers, but intends to use all vesseltype definitions as provided byRegulation 1 of Chapter IX of SOLAS.For clarity, we added a new paragraph(a) to the definition section to explainthat we will use the definitionsprovided by Chapter IX of SOLAS, andnot the definitions in Title 46 of the U.S.Code.

3. 33 CFR 96.230(a). Four commentswere received on this paragraph. Tworequested clarification whether thesepractices have to be in writing. Onecomment noted that requiring writtenpractices would impose requirementson U.S. vessels that are not required onforeign vessels. We agree. Requiringthese objectives in writing would extendU.S. vessel requirements beyondrequirements for a foreign vessel underthe ISM Code. This change would alsorequire a foreign vessel that operates inthe U.S. to complete further work ontheir safety management system thatexceeds the requirements of the ISMCode. We amend the rule to remove theterm ‘‘written’’ and have reworded theparagraph to ensure that the objectivesrequired by this section are consistentwith the ISM Code.

The third comment requestedclarification of the term ‘‘type’’ ofvessel, and suggested that this definitionwould have the same meaning as vessel‘‘category.’’ This terminology is requiredto be used on the Document ofCompliance certificate to illustrate whattype of vessel(s) a company’s safetymanagement system is developed tomanage. If the type of vessel(s) aresponsible person owns changes, thenthe safety management system must beamended to include the specifics ofmanaging the new or different vesseltype. Vessel types are: passenger ship;passenger high-speed craft; cargo high-speed craft; bulk carrier; oil tanker;chemical tanker; gas carrier; MODU; andother cargo ship. The term ‘‘cargo ship’’used to describe a vessel type underSOLAS has the same meaning as‘‘freight vessel’’ for these regulations.

The final comment on this paragraphnoted that, as drafted, the meaning ofthis paragraph could be interpreted torequire the safety management system to

provide a safe work environment ‘‘for’’the vessel. The intent of the ISM Codeis to require a safe working environment‘‘on board’’ the vessel. The Coast Guardagrees with the comment and hasreworded the paragraph to clarify itsmeaning and be consistent with the ISMCode.

4. 33 CFR 96.230(b) and 96.230(c).Five comments requested that weamend these paragraphs because the‘‘listing’’ of safeguards and continuousimprovement methods is not the sameas ‘‘establishing or implementing’’ thosesafeguards. The Coast Guard agrees withthe comments and amends paragraphs(b) and (c) accordingly.

5. 33 CFR 96.230(d). One commentrequested that this paragraph be struckfrom the final rule because ensuringcompliance with the manyinternational, national, industrystandards and codes is unworkable anda second comment requested that theterm ‘‘industry guidelines’’ be expandedto ‘‘maritime industry guidelines.’’ Wedisagree that this paragraph isunworkable or should be struck, buthave amended it to include maritimeregulations and standards in the safetymanagement system. It does not requireany more actions than those alreadycompleted by foreign vessels under theirISM Code compliance responsibilities.The Coast Guard agrees with thecomment recommending the use of thephrase, ‘‘maritime industry guidelines’’and amends this paragraph in the finalrule. To ensure clarity, we amended thisparagraph to use the word ‘‘relevant.’’

6. 33 CFR 96.240(b). One commentdiscussed that this paragraph wasunclear, because as drafted, it appearedthat foreign vessels would be required tocomply with U.S. national standardsand U.S. regulations for shipconstruction and operation not normallyapplicable to foreign flag vessels. Thecomment pointed out that this isinconsistent with the ISM Code. Thiswas not the intent of the proposedrequirements. We have amended thisparagraph to make it clear that foreignvessels need to follow U.S. regulationsapplicable to them when they operate inU.S. waters.

7. 33 CFR 96.240(c). One commentdiscussed that the documentation whichdescribes the levels of communicationwas not a functional requirement ofsafety management systems. Thecomment suggests that requiring thisdocumentation would be an arduoustask with respect to the operation of aself-propelled MODU, because theorganizational makeup of the vesselchanges depending on whether thevessel is navigating, or is anchored inoil exploration operations. The Coast


Guard disagrees. The directions andmanagement needed for this type ofoperation between the responsibleperson, the navigating crew, whomevermanages the operational drilling crewand the supervising staff of the drillingcrew aboard the MODU itself, is exactlythe situation that this requirementaddresses. No change has been made tothis requirement in the final rule.

8. 33 CFR 96.240(d). One commentquestioned the Coast Guard’s authorityto require ‘‘near accident reporting’’ inthis paragraph, arguing that this wasinconsistent with the ISM Code. Wedisagree. Section 9.1 of the ISM Coderequires that, ‘‘The safety managementsystem should include proceduresensuring that non-conformities,accidents and hazardous situations arereported to the company, investigatedand analyzed with the objective ofimproving safety and pollutionprevention.’’ The Coast Guard interpretsthat near-accident reporting ishazardous situation reporting. The CoastGuard has also reinforced the meaningof this requirement in the standardsprovided by § 96.250(i).

The comment also suggests amendingthis paragraph to conform to the ISMCode. Specifically, the commentsuggests revising the language to say‘‘procedures for reporting * * * non-conformities with the ISM Code,’’ asopposed to ‘‘non-conformities with thesafety management system.’’ The CoastGuard disagrees that only non-conformities with the ISM Code shouldbe included here. The functionalrequirements of a safety managementsystem must ensure the continuousevaluation and appropriateimprovement of the safety managementsystem by the company’s management.However, to ensure clarity thisparagraph is amended.

One comment supported § 96.240(d)as drafted, and emphasized theimportance of near-miss reporting andfollow-up to establish lessons learned.We agree. The Coast Guard, inpartnership with the Federal MaritimeAdministration (MARAD), is developinga nationwide voluntary near-missaccident reporting program to compilelessons learned for the education ofmariners and maritime industry. Whencompleted, the Coast Guard will publishpolicy on the use of the national near-miss accident reporting program and aresponsible person’s ability to use theU.S. national program to conform withthe requirements of near-accident orhazardous situation reporting requiredby the ISM Code. The Coast Guard’sprogram manager for this project is theChief, Office of Investigations and

Analysis (G-MOA), at Coast GuardHeadquarters.

9. 33 CFR 96.240(e). One commentobjected to the use of the word‘‘procedures’’ in this paragraph statingthat the functional requirements shoulddefine a ‘‘process’’ for ensuring anappropriate response to emergencysituations. The Coast Guard disagreesbecause the paragraph, as drafted, isinterpreted broadly and will define aprocess for response as required by theISM Code. Multiple levels ofmanagement, such as on a MODU andthird party managed vessel, need todefine their ‘‘processes’’ in terms ofprocedures in a safety managementsystem for it to work. Procedures thatdefine these processes can be used astraining tools, tracking tools, and actiontools. This requirement does not requirea new process to be developed if theyare already in hand or developed undercurrent regulation or managementprocedures. No change is made inresponse to this comment.

10. 33 CFR 96.240(g). Two commentsdiscussed expanding this paragraph toinclude the use of objective internalsafety assessments in place of internalauditing, and stated that safetymanagement systems should bereviewed to evaluate their efficiencyagainst established industry evaluationprocedures. Both comments containmerit, and the Coast Guard agrees thatthe efficiency and measurement ofsafety management system impacts andtheir effectiveness should bedetermined. However, the Coast Guarddisagrees with the need for suchrequirements in the final rule. Thesuggested requirements would extendmanagerial responsibility past theminimum requirements of the ISMCode. Therefore, no changes are made inresponse to this comment.

11. 33 CFR 96.250. Five commentswere received on this section. Onecomment noted that both functional anddocumentary requirements are includedin the table within § 96.250. Thecomment recommended referencing thedocumentary requirements of § 96.240to the table within § 96.250. The CoastGuard does not agree that there is a needto cross reference the requirements of§ 96.240, as the requirements forperformance objectives documentationare already covered within therequirements of the table in § 96.250.

Four comments suggested that theseregulations should contain provisions toprotect records that are maintained aspart of a safety management system. Thecomments request that the regulationsbe amended to prohibit use of theserecords in civil or administrativeproceedings. Specific concerns were

that the documentation and reportingrequirements will contain sensitivecompany information that, whileessential for purposes of companypersonnel use, should not be madepublicly available for use in civilproceedings. The Coast Guard agreesthat for a safety management system towork correctly and to be continuouslyself-improving, it requires the proactiveactions of the responsible person tohave reports completed on non-conformities and hazardous situations,no matter how minor or major, so thatmanagement reviews can be completedand corrections made to the safetymanagement system accordingly.However, the Coast Guard cannotprovide any protection for these recordsbecause to do so would exceed itsauthority granted in 46 U.S.C. Chapter32. To clarify our intent, a note has beenadded at the end of the table in § 96.250,in the final rule.

12. 33 CFR 96.250(b). Threecomments were received on thisparagraph. The first comment requestedclarification whether the requirementfor the company’s responsibility andauthority statement should extend to allvessels owned by the responsibleperson, or just the vessels of thecompany that must comply with thispart. The Coast Guard contends that itwould be to the responsible person’sbenefit to have all vessels that he or sheowns meet the safety managementsystem requirements of this part.However, only vessels required to meet33 CFR part 96, are required to becovered by this requirement.

The second comment discussed thepossibility of confusion regarding thedetermination of the responsible personon a self-propelled MODU, between theowner, operator, lessee, or drillingcontractor. The delineation of therelationships of these persons orcompanies involved in a MODU’soperation should be explained by thecompany’s policies and procedures.Proper explanation of theserelationships in the safety managementsystem ensures that personnelresponsible for specific duties involvingsafe operation, and the servicesprovided to the vessel by contractedpersonnel, will understand theirresponsibilities correctly therebyreducing human element errors whichcan cause accidents. It will also enhancethe vessel’s response to casualties andaccidents, resulting in mitigationdamages to the vessel and theenvironment, or injury to vesselpersonnel.

The third comment on this paragraphdiscussed subparagraph (b)(4), whichrequires the safety management system


to contain a statement that describes thecompany’s responsibilities to ensureadequate resources. The commentfurther states that describing thisresponsibility in the safety managementsystem does not necessarily mean thatthe company bears responsibility. Weunderstand that vessel resources can beprovided by a myriad of contractcompanies and personnel not under thedirect control of the responsible person.Safe management does not point fingersbut ensures communications so whenproblems develop, there are clearpolicies that employees can follow tomake decisions. The reasoning that theperformance objectives of these safetymanagement system standards are sogeneral is to allow them to becustomized to specific type vesseloperation for ease of the user. Nochanges have been made to the finalrule due to these comments.

13. 33 CFR 96.250(c). One commentrequested that the term ‘‘oversee’’ usedin this paragraph, be changed to theword ‘‘monitor’’ to describe the actionsrequired of the designated person. TheCoast Guard agrees with this commentand amends this paragraph in the finalrule.

14. 33 CFR 96.250(d). Threecomments were received on thisparagraph. One comment stated that notall vessels are certificated or required bythe provisions of national regulations tohave Masters, but instead may havePersons-In-Charge. The Coast Guardagrees with this comment, but has notamended the regulation. The CoastGuard uses the term Master to beconsistent with the ISM Code.Additionally, all U.S. vesselsmandatorily required to meet the safetymanagement system requirements ofthis part are certificated to have Masterson board. The Coast Guard understandsthat there are vessels which canvoluntarily meet these standards, suchas non self-propelled MODUs, whichare not required to have a Master but aPerson-In-Charge as senior manager ofthe vessel. The Coast Guard isdeveloping a new chapter in Volume IIof it’s Marine Safety Manual (MSM), onthe U.S. safety management systemcompliance and enforcement policieswhich will be used by the Coast Guardand organizations authorized, to auditand certificate safety managementsystems. The Coast Guard has notamended this paragraph because theMSM guidance will clarify that the term‘‘Master’’ includes a Person-In-Charge inthis situation.

The other two comments questionedwhether a vessel’s Master is capable ofhaving responsibility and authority overshore-based resources, and asked that

such contentions be deleted from thisparagraph. During some duties, theMaster of the vessel will be theresponsible person’s representativecontracting and supervising vesselsupport from shore-based resources, aswell as directing resources from thevessel managing company. The safetymanagement system should clearlydescribe these duties to allow theMaster to understand his or herresponsibilities and decision-makingpolicies. This will also help shore-basedresources understand their duties, theirimportance to the vessel, and theirresponsibilities to the vessel Master asa manager. The Coast Guard does notagree with these comments and has notamended this paragraph of the finalrule.

15. 33 CFR 96.250(e). Two commentswere received on this paragraph. Onediscussed that the Master of a vesseldoes not have overall authority forvessel operation because the Master’sauthority is overridden by flag state,coastal state, and numerous othergovernmental authorities. We respondthat the Master is the responsibleperson’s representative on the vesseland all authorities that can be expectedof the Master should be supported bythe safety management system. TheMaster has overriding responsibility andauthority to ensure that the vessel isoperated safely, and consistently withall applicable laws. When the Master isnot specified, it is impossible to expectthe individual employed as the Masterto provide proper leadership or decisionmaking clarity. Where the Masterfollows international, national, coastal,or local regulations or directions,regarding management of a vessel, he/she is making decisions on how to usethese factors in the efficient and safeoperation of the vessel taking intoaccount the policies provided by thesafety management system.

The second comment encouraged theCoast Guard to amend this paragraph byadding a subparagraph (3) which states,‘‘Responsibility with the bridge teamand officers on watch to monitornavigation, collision avoidance, andcommunications while the ship ispiloted.’’ The Coast Guard does notagree that this statement needs to beadded to this paragraph because thisrequirement for providing proceduresfor shipboard operations is covered byparagraphs (f) and (g) of the table in§ 96.250. The Coast Guard has made nochanges to the final rule due to either ofthese comments.

16. 33 CFR 96.250(f). Four commentswere received on this paragraph. Onecomment discussed that the statementin § 96.250(f)(6) required knowledge of

the relevant rules, regulations, codesand guidelines, which was a subtledifference from than ‘‘an adequateunderstanding’’ required by the ISMCode. We agree that this statement maybe misinterpreted to require more thanwhat would be consistent with the ISMCode and have changed the languageaccordingly.

One comment discussed that thereshould be an understanding that thedocumentation of training identifiedand required by other nationalregulations or internationalconventions, can be documented underthe safety management system incompliance with these requirementsand also meet the requirements fortraining and documentation of theInternational Convention on Standardsof Training, Certification andWatchkeeping for Seafarers, 1978, asamended in 1995 (STCW). The CoastGuard agrees with this comment, andthis understanding is stated in NVIC 4–97 (Guidance on Company Rules andResponsibilities under the 1995Amendments to the STCW). NVIC 4–97states, ‘‘If you operate your vessel undera safety management system (SMS) incompliance with the InternationalSafety Management (ISM) Code andhold a valid Safety ManagementCertificate (SMC) and Document ofCompliance issued by the Coast Guardunder 46 U.S.C. 3205, you are presumedto be in compliance with STCWRegulation I/14.’’ On the other hand,NVIC 7–97 (Guidance on the STCWQuality Standard System (QSS) forMerchant Mariner Courses or TrainingPrograms), explains that, ‘‘* * * Inorder for shipping companies that areISM Code certified to have their trainingmeet the STCW QSS requirement, theirtraining program must meet the criteriain 46 CFR 10.309.

It should be remembered thatdocumentation and trainingrequirement programs developed by acompany can cover a magnitude ofdifferent vessel type specificrequirements. Each vessel type, underthe umbrella of a company’s safetymanagement system, may only need touse those portions of the training anddocumentation program of the totalcompany system that are applicable dueto the vessel type, area of operation, orspecific requirements under otherconventions, laws or regulations. Nochanges were made to this section inresponse to this comment.

One comment discussed the need toreevaluate federal manning levelsrequired on U.S. vessels, suggesting thatcurrent manning levels do not reflectthe additional personnel which will beneeded to satisfy the requirements of the


ISM Code. The comment stated that theISM Code places more duties on vesselpersonnel than were expected whenmanning levels were established. TheCoast Guard disagrees with thiscomment. We received comments fromcompanies that have safety managementsystems in operation. They developedthose safety management systems byinitially reviewing existing companymanagement policies and procedures.By doing this, they found numerousantiquated, unnecessary or duplicativemanagement procedures anddocumentation which could beeliminated. Thus, they reduced themanagement overhead that they hadbeen experiencing before placing thesafety management system in operation.If policies are not needed due tochanges in the company, management,regulations, policies, or for a number ofother different reasons, then they shouldbe removed or amended. By doing thisthe management system and oversightreporting is reduced in size, which doesnot increase the personnel needed tooperate a vessel safely. No changes havebeen made to the final rules due to thiscomment.

The final comment on this paragraphrecommends that all personnel shouldreceive general safety managementsystem familiarization when joining avessel and also six further specificlevels of training. These include: threesupport level training programs; twooperational level training programs; andone level of management trainingprograms. The Coast Guard supports acompany’s use of training, at whateverlevel necessary to ensure that policiesand procedures of the managementsystem are understood by their staffsaboard a vessel or working ashore insupport of a vessel. We agree that if acompany evaluates its safetymanagement system and finds a need todevelop training to ensure the properunderstanding and use of the system,then the training should be initiated bythat company. In NVIC 4–97, the CoastGuard recommended that ship-specificfamiliarization include directing a newcrew member’s attention to the vessel’ssafety management system. However,the Coast Guard has not made changesto this section of the final rule, as thecomment requests additional trainingwhich exceeds the requirements of theISM Code.

17. 33 CFR 96.250(j). Three commentswere received on this paragraph. Onecomment requested that the format ofthe paragraph and subparagraphs bechanged to mirror the ISM Code, andtwo comments requested thatsubparagraph (2) have the word ‘‘non-conformity,’’ changed to ‘‘deficiency.’’

The Coast Guard disagrees with the firstcomment and has not altered the formatof this section or table in the final rule.The Coast Guard agrees that there maybe confusion understandingsubparagraph (2) and has added thewords ‘‘and deficiency’’ after ‘‘non-conformity’’ to ensure that therequirement is understood.

18. 33 CFR 96.250(k). Two commentswere received on the control ofdocumentation required by thisparagraph. One comment requested thatthe word ‘‘destroyed’’ be changed to‘‘removed’’ in subparagraph (4). Weagree with this request and amend theword in the final rule. The secondcomment stated that the meaning of datamaintenance is unclear and that thecomplete paragraph does not providespecific direction on data control. Therequirements for safety managementsystems were written in generalperformance element style to allowdifferent types of companies to tailortheir systems to their specific needs.Some companies may use paper basedsystems, other computer based, a thirdcompany a mixture of both. No matterhow this data is displayed orcommunicated, it will be controlledequally and in compliance with thesestandards. The Coast Guard disagreesthat further amendments are needed,because these standards allow flexibilityfor development of systemsdocumentation. Consequently, we havenot made any changes to the final ruledue to this comment.

19. 33 CFR 96.250(l). Two commentswere received on this paragraph. Onecomment requested the word‘‘deficiencies,’’ in subparagraph (4) bechanged to ‘‘non-conformities,’’ toconform with the ISM Code. In thiscase, the Coast Guard agrees thatconfusion could occur on what requirestimely action for the system and hasadded the words ‘‘non-conformities or’’before the word ‘‘deficiencies’’ insubparagraph (4) in the final rule.

The second comment stated thatproposed section § 96.240 of theregulations should include therequirements of section 12 of the ISMCode that require evaluating theefficiency of the system and reviewingthe safety management system withestablished procedures. The CoastGuard agrees and notes that theserequirements are already included in§ 96.250(l)(1). Critical managementreview of the system, as well as non-conformity and deficiency reports, arenecessary to evaluate whether thesystem is running properly. No changesto the text of the final regulations weremade due to this comment.

20. 33 CFR 96.320(f). Three commentswere received on this section regardingthe reporting of non-conformities to thecompany’s owner or vessel’s Master atcompletion of a safety managementaudit. The comments requested that thisparagraph be amended to requireauditors to issue reports of non-conformities to the company’s ownerand vessel’s Master. It was alsorecommended that the safetymanagement system’s designated personreceive copies of this reports as well.The Coast Guard agrees in part andamends this section to require auditorsto provide these reports to a company’sowner when the company is audited,and to a vessel’s owners and Masterwhen a vessel is audited. If a companywants its designated person to receive acopy of this non-conformity report, it isrecommended that this request be madeto the auditors prior to the audit beingcompleted on behalf of the company.

21. 33 CFR 96.330. One commentexpressed concern that this sectionwould require multiple Document ofCompliance certificates to be issued byeach flag state for a multi-flagged fleetunder one responsible person’sownership. Multiple certificates maynot be required as the internationalinterpretation for their issuance allowsflag states to agree to accept each otherscertificates for safety managementsystem compliance. Each situation maybe different and to verify the U.S.acceptance of other flag state certificatescontact Commandant (G–MOC–2),Vessel Compliance Division, 2100Second Street SW., Washington DC20593–0001 in writing, by telephone(202) 267–1464, or by facsimile (202)267–0506. No changes were made tothis section of the final rule due to thiscomment.

22. 33 CFR 96.330(f). One commentrequested that this paragraph beamended because it requires theDocument of Compliance certificate tobe verified annually, instead of thecompany’s safety management system.The Coast Guard agrees and amends thisparagraph to ensure the verification ofthe system and not the certificate in thefinal rule.

23. 33 CFR 96.330(g)(1), 96.340(g)(1),and 96.340(f). Four comments werereceived on these paragraphs. Twocomments requested that the revocationof a Document of Compliance certificateor Safety Management Certificate not bebased on the failure of the responsibleperson to request an audit, but rather onthe failure to complete an audit. TheCoast Guard agrees with this commentand amends these paragraphs in thefinal rule.


The next comment pointed out thatwhen a vessel is laid up or taken out ofservice for a period of time the SafetyManagement Certificate may lapse, ifthe vessel is unmanned for long periodsof time. Because there are no personnelworking under a safety managementsystem when a vessel is laid up, thecertificate cannot be validated orendorsed. When brought back intoservice, the responsible person canrequest that an initial audit of the vesselbe completed when the vessel isremanned, and a new SafetyManagement Certificate can be issued.No change to the final rule was madedue to this comment.

The last comment stated that§ 96.340(f) should be amended as itrequires foreign vessels to meet U.S.requirements for safety managementsystem audits. A foreign vessel which iscertificated by its flag state or by anorganization who acting on behalf of theflag state, completes a safetymanagement system audit following theguidelines of IMO Resolution A.788(19),meeting the same requirements found inthese regulations. The Coast Guard willaccept such a determination as requiredby the articles of SOLAS. No changeshave been made to this section of thefinal rule due to this comment.

The Coast Guard has added wordingto § 96.330(g), with a new subparagraph(3), to ensure that their personnel andauditors of an authorized organizationacting on their behalf, can completeaudits and reviews of safetymanagement systems properly andeffectively. A Document of Compliancecertificate may be revoked if the CoastGuard or an authorized organization isdenied or restricted access to the vessel,records, or personnel necessary toensure compliance with 33 CFR part 96.Neither the Coast Guard, nor anauthorized organization acting on itsbehalf, should be expected to certificatecompliance with any internationalconvention regulation, unless all neededinformation and records for that revieware provided by the vessel’s orcompany’s personnel.

24. 33 CFR 96.340(e)(2). Onecomment requested that the wording inthis section regarding the ‘‘anniversarydate’’ of the intermediate verificationaudit be amended for clarity. The CoastGuard agrees and amended the final rulewith the words ‘‘period of validity’’rather than the ‘‘anniversary date.’’

25. 33 CFR 96.360(a)(2). Onecomment was received on this sectionwhich requested a determination of‘‘* * * a U.S. vessel which is new tothe responsible person or theircompany.’’ For an interim SafetyManagement Certificate to be issued,

this vessel would be considered anindividual vessel that was justpurchased by or just brought under themanagement of a responsible person. Nochange to the final rule was made dueto this comment.

26. 33 CFR 96.380. Two commentswere received on this section. Onecomment stated that the use of a civilpenalty under 46 USC 3318 is notconsistent with the law for violations ofcompliance with documentationresponsibilities under these regulations.The comment went further to state thata suitable grace period for theproduction of certificate copies, or agrace period to bring the vessel intocompliance, along the line of a formalrequirement (CG Form 835) be issuedprior to actions to assess a civil penalty.The requirement as written states thatthe ‘‘* * * vessel owner, charterer,managing operator, agent, Master, or anyother individual in charge of the vesselthat is subject to this part, may be liablefor a civil penalty * * *.’’ The proposedregulations do not say that the CoastGuard must pursue a civil penalty.

Traditionally, the Coast Guard hasconsidered all possible administrativeactions in dealing with incidents of non-compliance. The Coast Guard wrote thissection to ensure that affectedcompanies and individuals were awarethat civil penalties were a possiblesanction for violations of theseregulations. It is the Coast Guard’sopinion that civil penalties authorizedunder 46 U.S.C. 3318 apply to violationsof these regulations because thesepenalty provisions are applicable toviolations of laws and regulationsissued under the authority of 46 U.S.C.Part B, which includes 46 U.S.C.Chapter 32.

The second comment discussedconcerns surrounding § 96.380(a)(2),which allows the Coast Guard to boarda vessel to verify that the vessel’s crewor shore-based personnel are followingthe procedures and policies of the safetymanagement system while operating thevessel or transferring cargoes. Thecomment concluded that this actionwould go well beyond the authorityinternationally recognized for port statecontrol examinations found in SOLAS:Chapter I, regulation 19; Chapter IX,regulation 6; Chapter XI, regulation 4; aswell as the IMO Procedures for PortState Control. The comment alsorequested that we modify thissubparagraph to conform withinternationally recognized port statecontrol guidelines. The comment furtherrequested that we draft Coast Guardpolicy on these actions and distributethem for comment to the maritimeindustry prior to their implementation.

The Coast Guard is working tocomplete policy development whichfalls into line with this request. A portstate control NVIC is being developedwhich describes the Coast Guardboarding policy for foreign vesselsincluding examination of the vesselsafety management system andcertificates. This NVIC will discussnormal actions during a port statecontrol examination of a foreign vesselby the U.S., and what clear groundsmust be found of observed non-compliance with a safety managementsystem before an expanded Coast Guardexamination will be completed. TheCoast Guard expects to have this NVICpublished in the same time frame as thisfinal rule. However, we disagree thatthis policy requires review andcomment by the maritime industry.These procedures for safetymanagement system evaluation fall in-line with the U.S. port state controlprogram already in existence and meetsthe port state control regulations ofSOLAS and the IMO Procedures for PortState Control. No changes have beenmade to this section of the final rule dueto this comment.

27. 33 CFR 96.390(a). One commentstated that this subparagraph wouldprohibit Coast Guard acceptance offoreign issued internationalmanagement certificates which metSOLAS guidelines, unless they wouldattest to full compliance with U.S.regulations. The Coast Guard agrees thatas written, this requirement provides alimitation of acceptance of foreignissued certificates which is notconsistent with SOLAS. Thissubparagraph has been amended in thefinal rule to ensure that such certificateswould be acceptable when issued inaccordance with Chapter IX of SOLASand the IMO Guidelines for ContractingParties to SOLAS.

28. 33 CFR 96, Part D. Two commentswere received regarding organizationswho have applied to be recognized andare authorized to complete externalaudits and certification of safetymanagement systems for U.S. vesselsand their companies. One commentquestioned the use of the term‘‘expertise,’’ and whether that termencompassed the marine field, qualitysystems, or both, and whether thisauthorization should be limited toclassification societies. The commentfurther stated that anyone with anappropriate marine business andacademic background is qualified to acton behalf of the U.S. in ISM Codeauditing and certification.

These requirements are based in part,on the guidelines provided by IMOResolution A.739(18), which are


incorporated by reference in § 96.130.These international guidelines provideminimum standards to ensureorganizations authorized by any flagstate, worldwide, will provide uniformactions and oversight when theirpersonnel complete actions regardingvessel surveying and auditing in themarine field. This is important to theowner of a vessel and the flag state,because as it ensures that theinternational certificates issued byauthorized organizations acting onbehalf of a flag state, will be acceptedworldwide, on face value, forcompliance with internationalconventions. The Coast Guard disagreesthat ‘‘just anyone’’ can meet theserequirements. Coast Guard requirementsfor recognition of organizations arerigorous and conform to the IMOguidelines. The Coast Guard expectsand will ensure that actions by anorganization acting on its behalf areincontestable under any port statescrutiny. Any organization, with aproven history of marine experienceworking with and making decisionsbased on maritime industry standards,national standards and regulations, andinternational guidelines andconventions, may meet theserequirements. The organization, due tothe auditing expertise needed for ISMCode certification, must also provide acertified level of standards that it canmeet for its personnel to completeaudits. The requirements are restrictivebecause the Coast Guard must ensurethat the U.S. marine transportationindustry is able to operate,uninterrupted, worldwide.

The second comment on this partrecommended that organizationsalready accepted by the Coast Guard toissue voluntary certificates, under NVIC2–94, should be automaticallyauthorized to issue mandatory ISMCode certificates on behalf of the U.S.without having to reapply under theseregulations. The Coast Guard disagreesand expects these organizations willapply under this part. No changes weremade to this section of the final rule dueto these comments.

29. 33 CFR 96.410. One comment wasreceived on this section which statedthat the term ‘‘safety managementcertificates’’ should not be used in thissection because it has a specificmeaning, and should not be used torefer to these certificates in a generalway. The Coast Guard agrees with thiscomment and has changed this sectionto eliminate confusion. The Coast Guardhas also edited this section to make iteasier to read by removing the words‘‘wish to’’ from this section.

30. 33 CFR 96.430. Four commentswere received on this section. Onecomment discussed the reciprocityrequirement of 46 U.S.C. 3316 for aforeign classification society to beauthorized to act on behalf of the U.S.to complete external audits andcertification of safety managementsystems. The comment statedreciprocity with ABS should not berequired because a subsidiary corporateentity of ABS is providing thesefunctions, not ABS, thus there is noneed for the documentation ofreciprocity by a foreign classificationsociety. The Coast Guard does not agree.Currently, ABS certification comesunder the voluntary system of NVIC 2–94 which is not subject to the provisionsof 46 U.S.C. 3316. Under theseregulations, all future writtenagreements for authorization to act onbehalf of the U.S. regarding themandatory certification of safetymanagement systems will be made withABS under the provisions of 46 U.S.C.3316. Under this agreement, ABS willnot be able to use subsidiary groupoffices to complete these actions for theU.S. No change was made in the finalrule due to this comment.

The second comment recommendedthat the Coast Guard also accept thequality standards of ASQC Q9002 andquality management standards of ASQCC9001 and C9002. The Coast Guarddisagrees. Under 46 CFR 8.230(a)(15), anorganization must meet ANSI/ASQCQ9001 or an equivalent quality standardto be recognized. No other qualitystandard is incorporated in 46 CFR part8. For purposes of consistency, noothers will be incorporated here either.Quality management standards (ASQCC9001 and C9002) are not required forrecognition of an organization, so nonewill be required here. No changes havebeen made to this section of the finalrule due to this comment.

The third and fourth comments onthis section questioned the terminologyused in § 96.430(a)(3), and inquiredwhether a recognized organizationcould use subsidiary organizations andtheir auditors to carry out audits andcertification in accordance with the IMOguidelines and the ISM Code. The CoastGuard disagrees and has explicitlywritten this subparagraph to ensure thatonly exclusive auditors of organizationsauthorized to act on behalf of the U.S.are used by these organizations tocomplete audits under thisauthorization. When the Coast Guardreviews an organization’s applicationfor authorization authority under thissubpart, quality standards must: (1)Demonstrate how the organizationselected individuals as auditors; (2)

explain training and recertificationmethods; and (3) describe the code ofethics the auditors must follow. Anorganization’s auditor standards will beapproved as part of the organization’sapplication package to be authorized toact on behalf of the U.S., and will bepart of the U.S. written agreement withthe organization as required by§ 96.440(c). No change was made to thissection of the final rule due to thesecomments.

As the reciprocity requirement effectsonly foreign classification societieswhich can be authorized to act on behalfof the Coast Guard under this section,old paragraph (a)(5) of this section hasbecome a new paragraph (b) for clarity.Old paragraph (b) is now paragraph (c).

31. 33 CFR 96.480. One commentcautioned that the termination ofauthority from an organization acting onbehalf of the U.S. could have extremeconsequences on vessel operation forvessels certificated by that organization.Specific concern was expressed forsituations in which the vessel’s SafetyManagement Certificate is nearexpiration when the authorization isterminated. Also, the commentquestioned the obligatory notificationrequirements of companies and vesselscertificated by the terminatedorganization. In all cases, the CoastGuard will request information from theadministrative files of the organizationbeing terminated to understand theeffect of termination on the companiesand vessels certificated by theorganization. The Coast Guard willassist any company and vessel tomaintain certification while transferringto another authorized organization. Theoriginal certificates of the terminatedorganization will remain valid untilexpiration or periodic audit which willallow continuity with a new authorizedorganization. There should be no extracost for the company or vessel as theaudit actions required by the neworganization are the same actions thatwould have been completed by theoriginal certifying organization. Thisparagraph was also edited to ensureclarity.

The Coast Guard will enter into awritten agreement with all organizationsreceiving authorization under this part,as stated in § 96.460. Failure to notifyaffected companies or vessels upontermination of authority for safetymanagement system certification, willresult in a review by the Coast Guard ofthe ability of the organization tocomplete any actions on behalf of theCoast Guard. Additionally, thistermination could affect any or all otherdelegated authorities, in such a


situation. The final rule was notchanged due to these comments.

32. 46 CFR 126.480(a). Threecomments were received on this section.Two comments discussed the use of thephrase ‘‘offshore supply vessels (OSVs)engaged on foreign voyages’’ andquestioned the applicability of the 33CFR part 96 on OSVs and ocean-goingtowing vessels certificated forinternational voyages. The applicabilityof those regulations to OSVs and towingvessels on international voyages isdetermined by whether these vessels areover 500 gross tons and are ‘‘vessel(s)engaged on a foreign voyage’’ as thatterm is defined in 46 U.S.C. 3201 andthis part. No change was made to thefinal rule due to these comments.

The final comment soughtclarification when the ISM Code appliedto OSVs and ocean-going towing vesselsunder the vessel admeasurementsystem. The ISM Code applies to vesselsengaged on a foreign voyage. In the caseof OSVs and ocean-going towingvessels, the ISM Code applies only if thevessel is 500 gross tons or greater, asOSVs and towing vessels are consideredfreight (cargo) vessels for purposes ofSOLAS. Because the applicability of thestatue implementing the ISM Codeprovisions is based on tonnage (see 46U.S.C. 3202) and this statute wasenacted after July 18, 1994, itsapplicability to vessels is based on theirinternational convention tonnagebecause of 46 U.S.C. 14302(b). However,under 46 U.S.C. 14305, a vessel ownermay request that a vessel be measuredunder the regulatory tonnage systemand under those circumstances theapplicability of SOLAS, as well as theother enumerated statutes, would bebased on the vessel’s regulatory tonnage.This means that the owner of an OSV ortowing vessel that has a conventiontonnage greater than 500 gross tonscould elect to have the vesseladmeasured under the regulatorytonnage system, and if the vessel had aregulatory tonnage of less than 500 grosstons, these regulations would not apply.However, the applicability of all otherlaws enumerated in 46 U.S.C. 14305would also be determined based on theoptional regulatory tonnage (see 46U.S.C. 14305(b)). NVIC 11–93, Change 2,discusses when regulatory tonnages maybe used by a vessel owner to determinethe applicability of SOLASrequirements. No changes in the finalrule have been made as a result of thesecomments.

33. 46 CFR 175.540(d). Fourcomments were received on this section.One comment stated that theapplicability of the requirements of 33CFR part 96 are mitigated by the

addition of paragraph (d) to this sectionof the regulations for small passengervessels. This amendment does notmitigate or soften the applicability. Thisparagraph provides an equivalent meansfor these small vessel owners to meetthe safety management systemrequirements. An equivalence is not anexemption. The Coast Guard developeda job aid with the assistance of a marineindustry working group. This job aidcan be used as an example of what anowner of a small passenger vessel maydo to establish an equivalent safetymanagement system. Section 175.540(d)does not reduce the effectiveness of thesafety management system, but insteadprovides direction to these smallpassenger vessel owners to help themdevelop their systems so they can becertificated by the cognizant CoastGuard OCMI.

Two comments did not support anexemption for small passenger vesselsdue to their limited operation orcompany sizes. The Coast Guarddisagrees. These vessels are not beingexempted from the requirements, butare offered a cost-effective course ofaction to implement the regulations dueto their size, limitation of operation, andhistorical low risk with proven safetyrecords. The Coast Guard job aiddeveloped for these vessels provides acustomized safety management systemprogram, which will support smallpassenger vessels with limitedinternational routes. It does not removeany of the requirements of 33 CFR part96. A small passenger vessel owner canrequest a job aid at no charge from thelocal cognizant OCMI.

The final comment requestedclarification whether the Coast Guardwould allow a small passenger vesselapproved and actively using theStreamlined Inspection Program (SIP) touse that program as an equivalent to thesafety management systemrequirements. The SIP program is basedon performance elements similar to thesafety management systemrequirements. The Coast Guard mayallow this if an owner developed aprogram that included all therequirements of 33 CFR part 96. Thisprogram would be provided to thecognizant OCMI for review andacceptance after discussion andrecommendations are received from theauthorized organization certificating thesafety management system. However,the Coast Guard made no changes oramendments to this section due to thesecomments.

General Comments (Non-CFR Specific)34. Four general comments were

received which supported the proposed

rules as written. One comment alsorequested confirmation that operation oflarge passenger vessels around theislands of Hawaii constituted coastaltrade and would not require mandatorydevelopment and certification of asafety management system. A U.S.vessel certificated to a limited route ofcoastal operations within the Hawaiianisland chain is not required to meet thispart. However, if the vessel involved inthis operation holds an internationalregistry and a Certificate of Inspectionauthorizing international voyages, eventhough the owner of the vessel limits itsoperations, this vessel would have tomeet all SOLAS requirements and becertificated to the ISM Code.

One comment requested that thesafety management system requirementsbe placed in each part of title 46 of theCFR to correspond to each type of vesselrequired to meet the ISM Code. TheCoast Guard does not agree that thisshould be done as the agency hasactively reduced the number ofregulations where possible, includingelimination of redundant parallelregulations in the CFR. The limitedreference in each part of Title 46affected by the final rules in 33 CFR part96 will allow ease of reference andcontinuity of using the regulations forall vessels affected by theserequirements. No change to the finalrule has been completed due to thesecomments.

35. Two general comments supportedthe use of plain English in thedevelopment of these regulations by theCoast Guard. Each described the use ofthe question and answer format asuseful, but both felt that the style didnot provide enough detail to reallyanswer the questions posed. Onecomment stated that the questions didnot appear to be answered. The othercomment felt that the standards of plainEnglish were not followed adequately.

The Coast Guard’s authority fordeveloping these regulations requiredconsistency with the ISM Code. TheISM Code’s standards are general innature to allow flexibility for differenttypes of vessel companies to meet themwithout restricting their creativity ormandating a specific management style.Other international or U.S. qualitystandards and management standardsare written following the same logic. Nochange to the final rule has been madedue to these comments.

36. Two general comments discussedthe need to carefully oversee safetymanagement system development andcertification programs for U.S. andforeign vessels. The comments pointedout that Coast Guard personnel should


be specifically trained to oversee thesenew requirements. We agree.

U.S. Coast Guard marine inspectorsand program managers have beentrained to meet national auditingstandards. Since 1995, approximately120 Coast Guard marine inspectorscompleted a course which is specificallybased on the auditor standards of ANSIASQC Q 9001 and the ISM Code. TheCoast Guard also reviewed its in-housetraining programs for marine safetyresponsibilities and includedcompliance and enforcement of the ISMCode in each basic marine safetytraining course. No changes have beenmade to the final rule due to thesecomments.

37. One general comment stated thatthere are numerous organizationsworldwide, who may be authorized byan Administration to complete ISMCode audits and certification, whoseabilities to act on behalf of anAdministration may be questionable.Two other general comments alluded tothe same problem, and providedsuggestions on how these organizationsshould be rated for performance andhow port state targeting schemes couldbe modified when a specificorganization fails to complete itsauthorized responsibilities.

The Coast Guard agrees. Coast Guardprogram managers will monitor andcompare compliance with the ISM Codefor all flag states, authorizedorganizations, companies and foreignflagged vessels. Because thisinformation will be monitored centrallyby Coast Guard Headquarters programmanagers, compliance infractions willbe tailed and may affect the targetingscheme for specific foreign vessels, flagstates, and vessel owners or authorizedorganizations. This information willenable the Coast Guard to modify itstargeting scheme, if necessary, to ensurethat vessels with continuousnoncompliance issues receive a higherlevel of oversight and boardings whenin U.S. ports.

The Coast Guard will use theinformation collected to provide IMOand flag states with reports on port stateinterventions, detentions and denials ofU.S. port entries required by the portstate reporting requirements of SOLAS.If a specific authorized organizationcontinuously fails to complete itsassigned duties, such reports willillustrate these failures to all SOLASContracting Parties, who can increasetheir port state control requirements onvessels certificated by this organizationon behalf of any flag state. This willhelp flag states recognize the need forextended oversight when continuousproblems are documented, and promote

revocation of authorizations by the flagstate when necessary. In the event thatthese actions do not appropriatelyaddress non-compliance, the CoastGuard will continue to heighten itsoversight and boardings of vesselscertificated by these organizations. Thismay lead to interventions, detentionsand denial of entry into U.S. ports andplaces. No change has been made to thefinal rule due to these comments.

38. One general commentrecommended that a Master’s or crew’sunfamiliarity with the company’s safetymanagement system and trainingrequirements of a safety managementsystem should be clear grounds toperform a more extensive examinationof a foreign flag vessel during a routineboarding by the Coast Guard. The CoastGuard agrees with the comment anddeveloped its port state control boardingprocedures to allow for an expandedexamination of a foreign vessel’s safetymanagement system when this situationis found during a routine Coast Guardboarding. As the policy for Coast Guardactions required during port stateexaminations of foreign vessels arecovered in the NVIC on ISM Codecompliance for foreign vessels, the finalrule has not been changed due to thiscomment.

39. Two general commentsrecommended the Coast Guard requireforeign vessels to provide information inadvance of their U.S. port arrivals toensure their compliance with the ISMCode. The Coast Guard agrees withthese comments and on December 11,1997, published an Interim Rule in aseparate rulemaking (CGD 97–067) torequire this advance notice of arrivalrequirement (62 FR 65203). No changehas been made to this rulemaking dueto these comments.

40. One general comment requestedthe Coast Guard review all currentregulations that place the responsibilityfor the safe operation of a vessel on thevessel’s Master, and where appropriate,share some of that responsibility withthe designated person. The Coast Guarddisagrees. As defined in § 96.120, thedesignated person does not have aresponsibility for operation of thevessel. The designated person’sresponsibility is to monitor the safetymanagement system of the company andthe vessel(s), as directed by theresponsible person. If problems arisewith the policies and procedures for thesafe operations of the vessel which theMaster does not believe he or she hasthe right tools to manage, thoseproblems should be communicated tothe vessel’s owner. The Master cancommunicate through the safetymanagement system, or directly to the

vessel owner, or through the designatedperson to the vessel’s owner. Bydocumenting these circumstances in thesafety management system, a criticalreview by the vessel management willbe performed and new or correctedpolicies or procedures placed into thesafety management system to assist theMaster. The Coast Guard has made nochange to the final rule due to thiscomment.

41. Two general commentsrecommended that the final rule providea list of administrative requirements ordetailed guidance on the issues ofrevocation of a Document ofCompliance certificate or a SafetyManagement Certificate. The CoastGuard will provide guidance for suchactions in the new chapter of Volume IIof the Coast Guard Marine SafetyManual on the compliance andenforcement of safety managementsystems for U.S. vessels. The CoastGuard determined that placing thispolicy in regulations would limit itsability to consider all necessarycircumstances and make decisions on acase-by-case basis.

All Coast Guard actions to enforcesafety management system requirementson U.S. vessels and their companies canbe appealed to the Coast Guard under 46CFR 1.03, ‘‘Rights to Appeal.’’ Thissection provides time frames andprocedures for use by the maritimeindustry to effectively question actionstaken by the Coast Guard in enforcingrevocations on these certificates, asneeded. No change has been made to thefinal rule due to these comments.

42. One comment stated that theproposed regulations do not fullyanticipate problems and providedirection necessary to manage importantday-to-day operations with regard to theendangered Northern Right Whale. Inparticular, the comment expressedconcern that the ISM Code regulationswere too narrowly focused and soughtvarious clarifications regarding theapplication of the regulations toprotected species and their criticalhabitats. It suggested that the languagein proposed § 96.250(g) be amended tospecifically include operation plans andinstructions with respect to protectedspecies in their critical habitats.

The ISM Code does not definespecific operating procedures orpractices, but instead provides broad,general performance elements asguidelines to be applied by ship ownersand their companies to shoresideoperations and to their vessels.Shipping is a varied industry withnumerous types of companies operatingunder a large range of differentconditions. The ISM Code guidelines


are based on general principles andobjectives to promote the developmentof sound management and operatingpractices within the industry as awhole. Its purpose is to requirecompanies to establish operatingpractices and policies so that companymanagement will be in a position toensure that their vessels comply with allapplicable international and U.S. lawsfor purposes of safety andenvironmental protection. It does notseek to define or incorporate detailedregulatory requirements, but instead toestablish the management structure thatwill ensure that requirements applicableto vessels are communicated toshoreside and vessel personnel, andcomplied with. Thus, the requirementsin this regulation are expressed in broadterms so they may have widespreadapplication. As expressed in thecomment, the suggestions applicable toprotected species are too narrow to beaddressed in this rulemaking.

This does not mean that theseregulations will not beneficially effectendangered species or their criticalhabitats. Besides the beneficial effectthat company policies and managementstructures promoting safe,environmentally sound vesseloperations will have on the marineenvironment in general, includingprotected species, the managementstructure and policies put in placethrough the ISM Code will promotecompliance with all applicable laws,including environmental efforts. Underthese regulations, company managementwould establish an operational andmanagement structure that wouldensure that vessel Masters and crewswithin their fleets would be providedwith the applicable safety andenvironmental requirements foroperations in U.S. waters. Additionally,the system would ensure that necessarytraining would be conducted. Thesystem would then be auditedperiodically to determine whether thesystem is working and compliance isoccurring.

An example of how this would workinvolves the Northern Right Whale. TheCoast Guard is working closely with theNational Marine Fisheries Service andits charter agency, the NationalOceanographic and AtmosphericAdministration (NOAA), to developnational programs to assist in protectionof the Northern Right Whale byproviding mariners operating directionsfor the whale’s critical habitat areas onthe east coast of the United States. Partof this effort is the publication ofnavigation warnings for the NorthernRight Whale in Coast Guard Notices toMariners and in the U.S. Coast Pilot

publications covering critical habitatareas of the Northern Right Whale.These warnings include therequirements of 50 CFR parts 217 and222 that establish Northern Right Whaleavoidance measures for vessels andreporting criteria for whale strikes.Coast Guard navigation safetyrequirements for foreign and U.S.vessels are established in 33 CFR part164. These regulations includerequirements for vessels to have aboardthe current edition of the U.S. CoastPilot for the area in which vessels areoperating. In addition, other regulationsrequire vessels to have aboard properoperating radiotelephone equipmentthat will allow vessels to monitorfrequencies over which Notices toMariners are broadcast. Compliancewith the ISM Code requirements in thispart means that companies that own andoperate vessels will have in place themeans to ensure that vessel Master areaware of these requirements, that theycomply and that corporate officers areaware of, and correct, instances ofnoncompliance. For these reasons, nochange has been made to the final ruledue to these comments.

43. One comment focused on theintroduction of injurious exotic speciesinto U.S. coastal and riparian watersthrough ballast water discharges byvessels engaged on foreign voyages toports or places in the U.S. The CoastGuard is currently developing newregulations to address vessel dischargesof ballast water into U.S. waters. TheCoast Guard is also monitoring actionsat IMO which involve these vesseloperations. No change has been made tothe final rule due to this comment.

44. One general comment requestedthat an interim rule be published by theCoast Guard for review and comment onthis rulemaking prior to the final rulebeing published. We disagree. Aswritten comments on the proposedrulemaking did not point to anysignificant problems nor any problemsthat have not been addressed in the finalrule, the Coast Guard does not expectthat publishing an interim rule wouldmarkedly improve the regulations norassist vessel owners in complying withthe ISM Code by its first effective dateof July 1, 1998. Therefore, the CoastGuard has completed this rulemakingprocess by publishing this final rule.

45. Two general comments were madeby one commentor on: (1) Mandatoryrequirements for safety managementsystems on U.S. domestic vessels; and(2) the benefits that would be reaped bythese domestic vessels compliance withthese regulations.

The Coast Guard contends that theuse of safety management systems by all

U.S. commercial vessels would result insignificant benefits and we will supportthe development of such programs. 46U.S.C. 3202 states that U.S. domesticvessels may voluntarily meet therequirements of that Chapter, but doesnot provide the Coast Guard with theauthority to require such safetymanagement systems on these U.S.domestic vessels. Thus, the final rulehas not been changed due to thesecomments.

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 clearthat only those vessels to which 33 CFRpart 96 applies must have the ISMcertificates.

33 CFR 96.100. The public law citewas removed and replaced with 46U.S.C. Chapter 32, which is theauthority for this subparts purpose.

33 CFR 96.400(a). In the last sentenceof this paragraph, the term ‘‘delegatedto’’ is replaced with the term ‘‘delegatedby’’. This will correctly reflect thataudits and certification functions arenot delegated ‘‘to’’ the Coast Guard.They are delegated to the recognizedorganization ‘‘by’’ the Coast Guard.

33 CFR 96.470. In this section, theterms ‘‘of recognized organizations’’ isadded to clarify which Commandant’slist the removal may be from.

Incorporation by ReferenceThe Director of the Federal Register

has approved the material in § 96.130for incorporation by reference under 5U.S.C. 552 and 1 CFR part 51. Copies ofthe material are available from thesources listed in that section.

Regulatory EvaluationThis final rule is not a significant

regulatory action under section 3(f) ofExecutive Order 12866 and does notrequire an assessment of potential costsand benefits under section 6(a)(3) of thatOrder. It has not been reviewed by theOffice of Management and Budget underthat Order. It is not significant under theregulatory policies and procedures ofthe Department of Transportation (DOT)(44 FR 11040; February 26, 1979).

The basis for the number of vesselseffected by this rulemaking wasdeveloped from the Coast Guard’sMarine Safety Management System(MSMS) database on vessel inspection,documentation and certification files.From this source it was determined thatthere are 415 vessels with 163-discreetowners that hold Safety of Life at Sea(SOLAS) certificates and are consideredto be subject to the mandatory


application of the ISM Code. There are186 vessels that must comply with thisregulation by July 1, 1998, and 229vessels that must comply by July 1,2002.

CostsThree distinct processes were used to

derive the costs to implement andmaintain the ISM Code. They includedeveloping a safety management system,certification and audit fees, and trainingCoast Guard and authorizedorganization personnel to conductmanagement system audits.

The following cost estimates are aresult of one set of choices made by anorganization managing relevant U.S.vessels in a normal and prudentmanner, but not having a safetymanagement program that meets theISM Code. This scenario andmaintenance of a safety managementsystem assumes the employment of aseparate staff person with fleet-wideresponsibility for safety, environmentalprotection, and general quality control.On-going distribution of updated safetyand technical documents is a normalcompany practice. The operatorroutinely maintains data-processing andcommunication capability adequate tohandle the ship-to-shore informationflow required by the ISM Code. It wasassumed that the owner or operator isresponsible for more than one vessel.

The start-up costs for initiating asafety management system is calculatedat approximately $150K per companyand $2K per vessel, with recurringexpenses estimated to be $10K pervessel for system maintenance.

To clearly describe the effectedpopulation and improve the regulatoryanalysis, shipping concerns wereseparated into three categories of large,medium and small sized companies. Forall companies, the cost is compiled fora 10-year period (1998–2007 inclusive).For large companies, which is estimatedto be 71 of the total 163 companieseffected, the start-up cost isapproximately $38.5 million. Theaverage cost for these 71 companies peryear is estimated to be $3.8 million. Formedium companies, the total cost forthe 27 companies is approximately $7.8million. The average cost for thesemedium companies is estimated to be$780,000 per year. Out of a total of 65small companies, only 12 companiesface these costs, and the total cost isapproximately $3.2 million. The averagecost per year for these 12 smallcompanies 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.

BenefitsA study was conducted to identify the

significant types and circumstances ofU.S. vessel accidents potentiallypreventable due to ISM Codecompliance. The data used to supportthe analysis of ISM Code benefits wasdrawn from the MSMS MarineInvestigation Module (MINMOD) andvessel information files. MarineCasualty Investigation Reports (MCIR’s)were included in the study if theyinvolved either currently-registered U.S.vessels, that would be subject to the ISMCode or if a Human Factors Supplementwas filed in the case. A Human FactorsSupplement contains a standardized‘‘class’’ or ‘‘subclass’’ designation of aparticular human factor or factorsconsidered by the investigating officerto have contributed to the accident.Only MCIR with problems consideredby the Coast Guard to be preventablethrough ISM Code procedures wereretained. There were 214 such casesover the three year period (1993–1995).These benefits needed to be quantified.Five factors were used to estimate thecost of the 214 relevant casualties. Thefive factors are listed below: (The dollarfigures below reflect a 1997 dollarvalue.)

1. Vessel and property damage: Thetotal dollar damage value per casualtyhas been estimated to be $10,000.

2. Injuries: The total dollar damagevalue per injury has been estimated tobe $424,174.

3. Deaths: The number of deaths ormissing persons shown in the MCIRrecord multiplied by $2,700,000. Thisfactor is currently recommended byDOT for use in regulatory impactestimation.

4. Vessel Downtime: An averagevessel downtime cost of $224,337 wasarrived at by averaging all vesseldamage evaluations shown in the MICRrecords other than for vessels evaluatedas either seaworthy or as a total loss.This is the same factor that was used inthe study completed for theInternational Convention on Standardsof Training, Certification andWatchkeeping for Seafarers (STCW)rulemaking, implementation benefits.

5. Environmental Damage: Anyspillage recorded in the MCIR record isconverted to 42-gallon barrel terms andmultiplied by $15,810. This is theaverage cost used in the benefit studydone for STCW to represent per-barrelcosts of natural resource damage, loss of

beneficial use of shoreline and cleanupfor ‘‘small’’ spills.

We identified relevant accidents thatoccurred between 1993–1995 anddeveloped factors to estimate their costto society. The following steps wereused to estimate the annual reduction infuture marine casualty costs that may beexpected from ISM Codeimplementation:

1. The projected costs were dividedinto three categories depending on thecause of the casualty. The threecategories were personnel nature, anyprimary nature other than pollution,and pollution casualties.

2. Based on the study’s findings, apercentage range was created. Thisrange expressed the expectation offuture casualties with theimplementation of the ISM Code finalrule.

3. The STCW rulemaking createssome of the same benefits asimplementation of the ISM Code. Theaverage annual cost reduction from theimplementation of STCW were takeninto account to avoid double counting ofbenefits.

4. The expected percentage impact ofISM Code implementation was thenapplied to produce the expected costreduction.

After all of these procedures werefollowed an estimated benefit range wasdetermined. The range for the economicbenefit of expected avoided costs of allrelevant accident types combined wasestimated to be $6.9 to $12.8 million peryear, dominated by the $6.4 to $12.2million estimated for reduction in thecosts of personnel casualties.

Cost-Benefit

The total average cost for this finalrule (1998–2007) has been estimated at$49.5 million. This is approximately$5.0 million per year. The range for theeconomic benefit of expected avoidedcosts of all relevant accident typescombined was estimated to be $6.9 to$12.8 million per year.

The estimated cost-benefit for thisfinal rule was calculated by dividing themeasure’s present value cost by themeasure’s present value benefit. Theestimated cost-benefit range for this ruleis 0.39 to 0.72. A rule with a cost-benefitfactor of less than 1.0 implies thatefficient standards have been set bybalancing the costs of anticipatedabatement against the benefits ofexpected avoided costs. Therefore, thisrulemaking can be deemed as costeffective.

Small EntitiesUnder the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.), the Coast Guard


considered whether this rule will havea significant economic impact on asubstantial number of small entities.‘‘Small entities’’ include smallbusinesses, not-for-profit organizationsthat are independently owned andoperated and are not dominant in theirfields, and governmental jurisdictionswith populations of less than 50,000.

Our initial evaluation was that thisrule would effect approximately 72small entities, whose U.S. smallpassenger vessels operate oninternational voyages. For purposes ofthe ‘‘small entity’’ analysis, the CoastGuard considered the 72 vessels ownedby 65 companies as small entities. Toease the burden on small entities 54 ofthese are allowed to apply for anequivalence to these requirements tosignificantly reduce their cost todevelop and certify their safetymanagement systems, if they opt to doso. No comments or statements werereceived during the NPRM on theimpact of this rulemaking on smallentities. No change or amendment to thefinal rule was completed that wouldalter the effect already stated in theNPRM on small entities. Therefore, theCoast Guard certifies under section605(b) of the Regulatory Flexibility Act(5 U.S.C. 601 et seq.) that this final rulewill not have a significant economicimpact on a substantial number of smallentities.

Assistance for Small Entities

In accordance with section 213(a) ofthe Small Business RegulatoryEnforcement Fairness Act of 1996 (Pub.L. 104–121), the Coast Guard offered toassist small entities in understandingthe rule so that they could betterevaluate its effects on them andparticipate in the rulemaking process.No written requests were received bythe Coast Guard to provided assistancefor the development of safetymanagement systems by small entities.One comment stated that theequivalence option provided for smallpassenger vessels as unnecessary, if thelimiting factor is the cost incurred to becertificated by an organization acting onbehalf of the U.S. The Coast Guarddisagrees.

This final rule offers an option forsmall entities to develop an equivalentsafety management system in concertwith the cognizant Coast Guard OCMI.This option will significantly reduce thecost for the safety management systemand will allow direct auditing andcertification by the Coast Guard. Noextra fee will be required for theseowners who elect to take advantage ofthis option.

When developing the small passengervessel equivalence, the Coast Guardconsidered cost issues. Cost was not theonly reason used by the Coast Guard todetermine that small passenger vesseloperations could benefit equally by anequivalence to the requirementsprovided in these regulations. Theirhistorical operational risk wasevaluated, the traditional policies thatare used to regulate internationalconventions on these vessels, and thesmall number of vessels within this typeof vessels which would be impacted.The Coast Guard is also required by theRegulatory Flexibility Act (5 U.S.C. 601et seq.), and the Small BusinessRegulatory Enforcement Fairness Act of1996 (Pub. L. 104–121), to evaluate theimpact of new federal regulations andthe ability to assist these businesses.Also, what played a factor was verbalcomments received from operators ofsuch vessels at the public meetings heldat four ports in the October andNovember 1995 time frame at theinitiation of this rulemaking process.The Coast Guard has seen great successwith using an equivalence option withthese vessel types and agreed that noreduction of safety would be incurredby using this option in the enforcementof these new regulations. No change hasbeen made to the final rule due to thiscomment.

The Coast Guard is also providingthese small entity owners with a job aidon safety management systemdevelopment which will help themmeet these standards and will cut thecost of their having to go to a third partysource for support and training. Thesesmall passenger vessel owners will beprovided with continued support by thelocal cognizant OCMI to ensure thattheir vessels have a properly operatingsafety management system which iscertificated prior to the effective date ofthese requirements.

Collection of InformationThis final rule provides for a

collection of information under thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

Information is collected to show thecompliance status of responsiblepersons and their U.S. vessels to theCoast Guard by recognizedorganizations authorized by the CoastGuard to act on behalf of the U.S. Aresponsible person must establish asafety management system and prepareinternal audit reports for the responsibleperson’s company and vessel(s) whichdemonstrate compliance with the ISMCode. Preparation of these reportsrequired a new information collectionrequest submittal to OMB.

Title 46, chapter 32 also requires thata responsible person’s company andU.S. vessel(s) possess Document ofCompliance certificates and SafetyManagement Certificates, respectively,as evidence of compliance with the ISMCode. Recognized organizationsauthorized to act on behalf of the U.S.and the Coast Guard will issue thesecertificates. To prepare and issue theseinternational management certificates,an amendment to existing informationcollection request 2115–0056 wassubmitted to OMB.

Safety management systems will beexternally audited and reported on byan authorized organization through areview of the internal audit reportsprepared by a company. Since the CoastGuard reviews this information thatdocuments the ISM Code compliance,existing collection request 2115–0626also requires amendment and wassubmitted to OMB for approval.

As described above, the Coast Guardsubmitted new and amendedinformation collection requestspursuant to the estimates described inthe NPRM. No comments were receivedto the NPRM docket regarding theseestimates. No change was made to theproposed regulatory text which wouldrequire new information collectionrequests. Also, no change was made tothe final rule which would affect thoseestimates.

As required by 5 U.S.C. 3507(d), theCoast Guard submitted a copy of thisrule to the Office of Management andBudget (OMB) for its review of thecollection of information. OMB hasapproved the collection. The sectionnumbers are: 33 CFR 96.250, 96.320,96.330, 96.340, 96.350, 96.360, and 46CFR 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 thecorresponding approval numbers fromOMB are OMB Control Number(s),2115–0056; 2115–0057, and 2115–0626,which expire on August 31, 2000.

Persons are not required to respond toa collection of information unless itdisplays a currently valid OMB controlnumber.

Federalism

The Coast Guard completed ananalysis of this final rule under theprinciples and criteria contained inExecutive Order 12612 and hasdetermined that this rule does not havesufficient implications for federalism towarrant the preparation of a FederalismAssessment.


Federal Preemption

Historically, the Coast Guard hasinspected vessels for their compliancewith Federal regulations andinternational standards to which theUnited States is a party that address thesafety of vessels and protection of themarine environment. These regulationsimplement the provisions of theInternational Convention for the Safetyof Life at Sea, 1974, (SOLAS) asamended, to which the United States isa party. As a party to this Convention,the United States has agreed toimplement its provisions for vesselsflying the flag of the United States andto apply these provisions to foreignvessels in accordance with theenforcement regime established withinthe Convention. In addition, actions bystate and local governments that seek toimpose different standards than thoseimposed by these regulations wouldfrustrate the desire of Congress toimpose uniform, international standardsrelating to the implementation of safetymanagement systems for vessels when itenacted 46 U.S.C. Chapter 32. It is theCoast Guard’s opinion that theSupremacy Clause of the Constitutionwould preempt state and localregulations that seek to impose differentor higher standards than thoseestablished in these regulations.

Environment

The Coast Guard considered theenvironmental impact of this final ruleand concluded during the rulemakingstage that under paragraph 2.B.2.e(34) ofCommandant Instruction M16475.1B,this rule is categorically excluded fromfurther environmental documentation.Paragraph 2.B.2.e(34)(d) categoricallyexcludes regulations concerningmanning, documentation, measurement,inspection and equipping of vessels. A‘‘Categorical Exclusion Determination’’is available in the docket for inspectionor copying where indicated underADDRESSES.

List of Subjects

33 CFR Part 96

Administrative practice andprocedure, Incorporation by reference,Marine safety, Reporting andrecordkeeping requirements, Safetymanagement systems, Vessels.

46 CFR Part 2

Marine safety, Reporting andrecordkeeping requirements, Vessels.

46 CFR Part 31

Cargo vessels, Marine safety,Reporting and recordkeeping

requirements, Safety managementsystems.

46 CFR Part 71

Marine safety, Passenger vessels,Reporting and recordkeepingrequirements, Safety managementsystems.

46 CFR Part 91

Cargo vessels, Marine safety,Reporting and recordkeepingrequirements, Safety managementsystems.

46 CFR Part 107

Marine safety, Oil and gasexploration, Reporting andrecordkeeping requirements, Safetymanagement systems, Vessels.

46 CFR Part 115


46 CFR Part 126

Marine safety, Offshore supplyvessels, Reporting and recordkeepingrequirements, Safety managementsystems.

46 CFR Part 175


46 CFR Part 176


46 CFR Part 189

Marine safety, Oceanographicresearch vessels, Reporting andrecordkeeping requirements, Safetymanagement systems.

For the reasons discussed in thepreamble, the Coast Guard amends 33CFR Chapter I and 46 CFR Chapter I asfollows:

TITLE 33—NAVIGATION ANDNAVIGABLE WATERS

1. Add part 96 to read as follows:

PART 96—RULES FOR THE SAFEOPERATION OF VESSELS ANDSAFETY 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 SafetyManagement Systems96.200 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 ManagementSystems 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 itrequired to be completed?

96.330 Document of Compliance certificate:what is it and when is it needed?

96.340 Safety Management Certificate: whatis it and when is it needed?

96.350 Interim Document of Compliancecertificate: what is it and when can it beused?

96.360 Interim Safety ManagementCertificate: what is it and when can it beused?

96.370 What are the requirements forvessels of countries not party to ChapterIX of SOLAS?

96.380 How will the Coast Guard handlecompliance and enforcement of theseregulations?

96.390 When will the Coast Guard denyentry into a U.S. port?

Subpart D—Authorization of RecognizedOrganizations 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’srequest to be authorized?

96.450 What happens if the Coast Guarddisapproves an organization’s request tobe authorized?

96.460 How will I know what the CoastGuard requires of my organization if myorganization receives authorization?

96.470 How does the Coast Guard terminatean organization’s authorization?

96.480 What is the status of a certificate ifthe issuing organization has its authorityterminated?

96.490 What further obligations exist for myorganization if the Coast Guardterminates its authorization?

96.495 How can I appeal a decision madeby an authorized organization?

Authority: 46 U.S.C. 3201 et. seq.; 46U.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 theSafety of Life at Sea (SOLAS), 1974,


International Management Code for theSafe Operation of Ships and forPollution Prevention (InternationalSafety Management (ISM) Code), asrequired by 46 U.S.C. Chapter 32.

Note: Chapter IX of SOLAS is availablefrom the International MaritimeOrganization, Publication Section, 4 AlbertEmbankment, London, SE1 75R, UnitedKingdom, Telex 23588. Please includedocument reference number ‘‘IMO–190E’’ inyour 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 complywith Chapter IX of SOLAS;

(b) You are a responsible person whoowns a U.S. vessel(s) that is not requiredto comply with Chapter IX of SOLAS,but requests application of this subpart;

(c) You are a responsible person whoowns a foreign vessel(s) engaged on aforeign voyage, bound for ports orplaces under the jurisdiction of the U.S.,which must comply with Chapter IX ofSOLAS; or

(d) You are a recognized organizationapplying for authorization to act onbehalf of the U.S. to conduct safetymanagement audits and issueinternational convention certificates.

§ 96.120 Definitions.(a) Unless otherwise stated in this

section, the definitions in Chapter IX,Regulation 1 of the InternationalConvention 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 theship is entitled to fly.

Authorized Organization Acting onbehalf of the U.S. means an organizationthat is recognized by the Commandantof the U.S. Coast Guard under theminimum standards of subparts A andB of 46 CFR part 8, and has beenauthorized under this section to conductcertain actions and certifications onbehalf of the United States.

Captain of the Port (COTP) means theU.S. Coast Guard officer as described in33 CFR 6.01–3, commanding a Captainof the Port zone described in 33 CFRpart 3, or that person’s authorizedrepresentative.

Commandant means theCommandant, U.S. Coast Guard.

Company means the owner of avessel, or any other organization orperson such as the manager or thebareboat charterer of a vessel, who hasassumed the responsibility for operationof the vessel from the shipowner andwho on assuming responsibility hasagreed to take over all the duties and

responsibilities imposed by this part orthe ISM Code.

Designated person means a person orpersons designated in writing by theresponsible person who monitors thesafety management system of thecompany and vessel and has:

(1) Direct access to communicate withthe highest levels of the company andwith all management levels ashore andaboard the company’s vessel(s);

(2) Responsibility to monitor thesafety and environmental aspects of theoperation of each vessel; and

(3) Responsibility to ensure there areadequate support and shore-basedresources for vessel(s) operations.

Document of Compliance means acertificate issued to a company orresponsible person that complies withthe requirements of this part or the ISMCode.

International Safety Management(ISM) Code means the InternationalManagement Code for the SafeOperation of Ships and PollutionPrevention, Chapter IX of the Annex tothe International Convention for theSafety of Life at Sea (SOLAS), 1974.

Non-conformity means an observedsituation where objective evidenceindicates the non-fulfillment of aspecified requirement.

Major non-conformity means anidentifiable deviation which poses aserious threat to personnel or vesselsafety or a serious risk to theenvironment and requires immediatecorrective action; in addition, the lack ofeffective and systematic implementationof a requirement of the ISM Code is alsoconsidered a major non-conformity.

Objective Evidence meansquantitative or qualitative information,records or statements of fact pertainingto safety or to the existence andimplementation of a safety managementsystem element, which is based onobservation, measurement or test andwhich can be verified.

Officer In Charge, Marine Inspection(OCMI) means the U.S. Coast Guardofficer as described in 46 CFR 1.01–15(b), in charge of an inspection zonedescribed in 33 CFR part 3, or thatperson’s authorized representative.

Recognized organization means anorganization which has applied andbeen recognized by the Commandant ofthe Coast Guard to meet the minimumstandards of 46 CFR part 8, subparts Aand 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 thevessel to which this part applies; and

(ii) agreed to assume, with respect tothe vessel, responsibility for complyingwith all the requirements of this part.

(3) A responsible person may be acompany, firm, corporation, association,partnership or individual.

Safety management audit means asystematic and independentexamination to determine whether thesafety management system activities andrelated results comply with plannedarrangements and whether thesearrangements are implementedeffectively and are suitable to achieveobjectives.

Safety Management Certificate meansa document issued to a vessel whichsignifies that the responsible person orits company, and the vessel’s shipboardmanagement operate in accordance withthe approved safety managementsystem.

Safety Management System means astructured and documented systemenabling Company and vessel personnelto effectively implement the responsibleperson’s safety and environmentalprotection policies.

SOLAS means the InternationalConvention for the Safety of Life at Sea,1974, as amended.

Vessel engaged on a foreign voyagemeans a vessel to which this partapplies that is—

(1) Arriving at a place under thejurisdiction of the United States from aplace in a foreign country;

(2) Making a voyage between placesoutside the United States; or

(3) Departing from a place under thejurisdiction of the United States for aplace in a foreign country.

§ 96.130 Incorporation by reference.

(a) The Director of the FederalRegister approves certain material thatis incorporated by reference into thissubpart under 5 U.S.C. 552(a) and 1 CFRpart 51. To enforce any edition otherthan that specified in paragraph (b) ofthis section, the Coast Guard mustpublish notice of the change in theFederal Register and the material mustbe available to the public. You mayinspect all material at the Office of theFederal Register, 800 North Capitol St.,NW., Suite 700, Washington, DC and atthe U.S. Coast Guard, Office of Designand Engineering Standards (G–MSE),2100 Second St., SW., Washington, DC20593–0001, and receive it from thesource listed in paragraph (b) of thissection.

(b) The material approved forincorporation by reference in thissubpart and the sections affected are asfollows:


American National StandardsInstitute (ANSI)—11 West 42nd St., NewYork, NY 10036.ANSI/ASQC Q9001–1994, Quality

Systems—Model for QualityAssurance in Design, Development,Production, Installation, andServicing, 1994—96.430International Maritime Organization

IMO—4 Albert Embankment, London,SE1 7SR, United Kingdom.Resolution A.741(18), International

Management Code for the SafeOperation of Ships and for PollutionPrevention, November 4, 1993—96.220, 96.370

Resolution A.788 (19), Guidelines onImplementation of the InternationalSafety Management (ISM) Code byAdministrations, November 23,1995—96.320, 96.440

Resolution A.739(18), Guidelines for theAuthorization of Organizations Actingon Behalf of the Administration,November 4, 1993—96.440

Subpart B—Company and VesselSafety Management Systems

§ 96.200 Purpose.

This subpart establishes the minimumstandards that the safety managementsystem of a company and its U.S. flagvessel(s) must meet for certification tocomply with the requirements of 46U.S.C. 3201–3205 and Chapter IX ofSOLAS, 1974. It also permits companieswith U.S. flag vessels that are notrequired to comply with this part tovoluntarily develop safety managementsystems which can be certificated tostandards consistent with Chapter IX ofSOLAS.


(a) This subpart applies—(1) To a responsible person who owns

or operates a U.S. vessel(s) engaged ona foreign voyage which meet theconditions of paragraph (a)(2) of thissection;

(2) To all U.S. vessels engaged on aforeign voyage that are—

(i) A vessel transporting more than 12passengers; or

(ii) A tanker, a bulk freight vessel, afreight vessel or a self-propelled mobileoffshore drilling unit (MODU) of 500gross tons or more; and

(3) To all foreign vessels engaged ona foreign voyage, bound for ports orplaces 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 andconnecting waters; or

(5) A public vessel, which includes aU.S. vessel of the National DefenseReserve Fleet owned by the U.S.Maritime Administration and operatedin non-commercial service.

(c) Any responsible person and theircompany who owns and operates a U.S.flag vessel(s) which does not meet theconditions of paragraph (a), mayvoluntarily meet the standards of thispart and Chapter IX of SOLAS and havetheir safety management systemscertificated.

(d) The compliance date for therequirements 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, orhigh speed freight vessels of at least 500gross tons or more, engaged on a foreignvoyage.

(2) On or after July 1, 2002, for otherfreight vessels and self-propelled mobileoffshore drilling units (MODUs) of atleast 500 gross tons or more, engaged ona foreign voyage.

§ 96.220 What makes up a safetymanagement system?

(a) The safety management systemmust document the responsibleperson’s—

(1) Safety and pollution preventionpolicy;

(2) Functional safety and operationalrequirements;

(3) Recordkeeping responsibilities;and

(4) Reporting responsibilities.(b) A safety management system must

also be consistent with the functionalstandards and performance elements ofIMO Resolution A.741(18).

§ 96.230 What objectives must a safetymanagement system meet?

The safety management system must:(a) Provide for safe practices in vessel

operation and a safe work environmentonboard the type of vessel the system isdeveloped for;

(b) Establish and implementsafeguards against all identified risks;

(c) Establish and implement actions tocontinuously improve safety

management skills of personnel ashoreand aboard vessels, includingpreparation for emergencies related toboth safety and environmentalprotection; and

(d) Ensure compliance withmandatory rules and regulations, takinginto account relevant national andinternational regulations, standards,codes and maritime industry guidelines,when developing procedures andpolicies for the safety managementsystem.

§ 96.240 What functional requirementsmust a safety management system meet?

The functional requirements of asafety management system mustinclude—

(a) A written statement from theresponsible person stating thecompany’s safety and environmentalprotection policy;

(b) Instructions and procedures toprovide direction for the safe operationof the vessel and protection of theenvironment in compliance with theapplicable U.S. Code of FederalRegulations, and internationalconventions to which the U.S. is a party(SOLAS, MARPOL, etc.);

(c) Documents showing the levels ofauthority and lines of communicationbetween shoreside and shipboardpersonnel;

(d) Procedures for reporting accidents,near accidents, and non-conformitieswith provisions of the company’s andvessel’s safety management system, andthe ISM Code;

(e) Procedures to prepare for andrespond to emergency situations byshoreside and shipboard personnel;

(f) Procedures for internal audits onthe operation of the company andvessel(s) safety management system; and

(g) Procedures and processes formanagement review of companyinternal audit reports and correction ofnon-conformities that are reported bythese or other reports.

§ 96.250 What documents and reportsmust a safety management system have?

The documents and reports requiredfor a safety management system under§ 96.330 or § 96.340 must include thewritten documents and reports itemizedin Table 96.250. These documents andreports must be available to thecompany’s shore-based and vessel(s)-based personnel:


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 thecompany and vessel(s);

(2) Name of the person responsible for operation of the company andvessel(s), if not the owner;

(3) Responsibility, authority and interrelations of all personnel whomanage, perform, and verify work relating to and affecting the safetyand pollution prevention operations of the company and vessel(s);and

(4) A statement describing the company’s responsibility to ensure ade-quate resources and shore-based support are provided to enable thedesignated person or persons to carry out the responsibilities of thissubpart.

(c) Designation in writing of a person or persons to monitor the safetymanagement system for the company and vessel(s).

(1) Have direct access to communicate with the highest levels of thecompany and with all management levels ashore and aboard thecompany’s vessel(s);

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

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

(d) Written statements that define the Master’s responsibilities and au-thorities.

(1) Carry out the company’s safety and environmental policies;(2) Motivate the vessel’s crew to observe the safety management sys-

tem 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 andaboard ship..

(1) Masters of vessels are properly qualified for command;(2) Masters of vessels know the company’s safety management sys-

tem;(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 medi-

cally fit seafarers complying with national and international require-ments;

(5) New personnel and personnel transferred to new assignments in-volving safety and protection of the environment are properly intro-duced to their duties;

(6) Personnel involved with the company’s safety management systemhave an adequate understanding of the relevant rules, regulations,codes and guidelines;

(7) Needed training is identified to support the safety management sys-tem and ensure that the training is provided for all personnel con-cerned;

(8) Communication of relevant procedures for the vessel’s personnelinvolved with the safety management system is in the language(s)understood by them; and

(9) Personnel are able to communicate effectively when carrying outtheir duties as related to the safety management system.

(g) Vessel safety and pollution prevention operation plans and instruc-tions 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 ship-board situations;

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

(3) Make sure that the company’s organization can respond at any-time, to hazards, accidents and emergency situations involving theirvessel(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.


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 acompany’s vessel(s) is maintained in conformity with the provisionsof relevant rules and regulations, with any additional requirementswhich may be established by the company.).

(1) Inspect vessel’s equipment, hull, and machinery at appropriate in-tervals;

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

(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 teststandby arrangements and equipment or technical systems not incontinuous use; and

(7) Include the inspections required by this section into the vessel’soperational maintenance routine.

(k) Safety management system document and data maintenance ......... (1) Procedures which establish and maintain control of all documentsand data relevant to the safety management system.

(2) Documents are available at all relevant locations, i.e., each vesselcarries on board all documents relevant to that vessels operation;

(3) Changes to documents are reviewed and approved by authorizedpersonnel; 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 proce-dures 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 ofthe area being audited, to complete internal company and vessel au-dits; and

(4) Communication and reporting of internal audit findings for criticalmanagement review and to ensure management personnel of thearea audited take timely and corrective action on non-conformities ordeficiencies 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 protectionof the environment. The documents and reports are intended to ensure the communication and understanding of company and vessel safetymanagement systems, which will allow a measure of the systems effectiveness and its responsible person to continuously improve the systemand safety the system provides.

Subpart C—How Will SafetyManagement Systems Be Certificatedand Enforced?

§ 96.300 Purpose.

This subpart establishes the standardsfor the responsible person of a companyand its vessel(s) to obtain the requiredand voluntary, national andinternational certification for thecompany’s and vessel’s safetymanagement system.


This subpart applies:(a) If you are a responsible person

who owns a vessel(s) registered in theU.S. and engaged on a foreign voyage(s),or holds certificates or endorsement ofsuch voyages;

(b) If you are a responsible personwho owns a vessel(s) registered in theU.S. and volunteer to meet thestandards of this part and Chapter IX ofSOLAS;

(c) To all foreign vessels engaged ona foreign voyage, bound for ports orplaces under the jurisdiction of the U.S.,and subject to Chapter IX of SOLAS; or

(d) If you are a recognizedorganization authorized by the U.S. tocomplete safety management audits andcertification required by this part.

§ 96.320 What is involved to complete asafety management audit and when is itrequired to be completed?

(a) A safety management audit is anyof the following:

(1) An initial audit which is carriedout before a Document of Compliancecertificate or a Safety ManagementCertificate is issued;

(2) A renewal audit which is carriedout before the renewal of a Document ofCompliance certificate or a SafetyManagement 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 thispart.

(b) A satisfactory audit means that theauditor(s) agrees that the requirementsof this part are met, based on review andverification of the procedures anddocuments that make up the safetymanagement system.

(c) Actions required during safetymanagement audits for a company andtheir U.S. vessel(s) are—

(1) Review and verify the proceduresand documents that make up a safetymanagement system, as defined insubpart B of this part.

(2) Make sure the audit complies withthis subpart and is consistent with IMOResolution A.788(19), Guidelines onImplementation of the InternationalSafety Management (ISM) Code byAdministrations.

(3) Make sure the audit is carried outby a team of Coast Guard auditors orauditors assigned by a recognizedorganization authorized to completesuch actions by subpart D of this part.

(d) Safety management audits for acompany and their U.S. vessel(s) arerequired—

(1) Before issuing or renewing aDocument of Compliance certificate,and to keep a Document of Compliancecertificate valid, as described in§§ 96.330 and 96.340 of this part.

(2) Before issuing or renewing a SafetyManagement Certificate, and tomaintain the validity of a Safety


Management Certificate, as described in§ 96.340 of this part.However, any safety management auditfor the purpose of verifying a vessel’ssafety management system will not bescheduled or conducted for a company’sU.S. vessel unless the company first hasundergone a safety management audit ofthe company’s safety managementsystem, and has received its Documentof Compliance certificate.

(e) Requests for all safety managementaudits for a company and its U.S.vessel(s) must be communicated—

(1) By a responsible person directly toa recognized organization authorized bythe U.S.

(2) By a responsible person within thetime limits for an annual verificationaudit, described in § 96.330(f) of thispart, and for an intermediateverification audit, described in§ 96.340(e)(2) of this part. If he or shedoes not make a request for a safetymanagement annual or verificationaudit for a valid Document ofCompliance certificate issued to acompany or a valid Safety ManagementCertificate issued to a vessel, this iscause for the Coast Guard to revoke thecertificate as described in §§ 96.330 and96.340 of this part.

(f) If a non-conformity with a safetymanagement system is found during anaudit, it must be reported in writing bythe auditor:

(1) For a company’s safetymanagement system audit, to thecompany’s owner; and

(2) For a vessel’s safety managementsystem audit, to the company’s ownerand vessel’s Master.

§ 96.330 Document of Compliancecertificate: what is it and when is it needed?

(a) You must hold a valid Documentof Compliance certificate if you are theresponsible person who, or companywhich, owns a U.S. vessel engaged onforeign voyages, carrying more than 12passengers, or is a tanker, bulk freightvessel, freight vessel, or a self-propelledmobile offshore drilling unit of 500gross tons or more.

(b) You may voluntarily hold a validDocument of Compliance certificate, ifyou are a responsible person who, or acompany which, owns a U.S. vessel notincluded in paragraph (a) of this section.

(c) You will be issued a Document ofCompliance certificate only after youcomplete a satisfactory safetymanagement audit as described in§ 96.320 of this part.

(d) All U.S. and foreign vessels thatcarry more than 12 passengers or atanker, bulk freight vessel, freightvessel, or a self-propelled mobileoffshore drilling unit of 500 gross tons

or more, must carry a valid copy of thecompany’s Document of Compliancecertificate onboard when on a foreignvoyage.

(e) A valid Document of Compliancecertificate covers the type of vessel(s) onwhich a company’s safety managementsystem initial safety management auditwas based. The validity of theDocument of Compliance certificatemay be extended to cover additionaltypes of vessels after a satisfactory safetymanagement audit is completed on thecompany’s safety management systemwhich includes those additional vesseltypes.

(f) A Document of Compliancecertificate is valid for 60 months. Thecompany’s safety management systemmust be verified annually by the CoastGuard or by an authorized organizationacting on behalf of the U.S. through asafety management verification audit,within three months before or after thecertificate’s anniversary date.

(g) Only the Coast Guard may revokea Document of Compliance certificatefrom a company which owns a U.S.vessel. The Document of Compliancecertificate may be revoked if—

(1) The annual safety managementaudit and system verification requiredby paragraph (f) of this section is notcompleted by the responsible person; or

(2) Major non-conformities are foundin the company’s safety managementsystem during a safety managementaudit or other related survey orinspection being completed by the CoastGuard or the recognized organizationchosen by the company or responsibleperson.

(3) The Coast Guard or an authorizedorganization acting on its behalf isdenied, or restricted access to, anyvessel, record or personnel of thecompany, at any time necessary toevaluate the safety management system.

(h) When a company’s validDocument of Compliance certificate isrevoked by the Coast Guard, asatisfactory safety management auditmust be completed before a newDocument of Compliance certificate forthe company’s safety managementsystem can be reissued.

§ 96.340 Safety Management Certificate:what is it and when is it needed?

(a) Your U.S. vessel engaged on aforeign voyage must hold a valid SafetyManagement Certificate if it carriesmore than 12 passengers, or if it is atanker, bulk freight vessel, freightvessel, or a self-propelled mobileoffshore drilling unit of 500 gross tonsor more.

(b) Your U.S. vessel may voluntarilyhold a valid Safety Management

Certificate even if your vessel is notrequired to by paragraph (a) of thissection.

(c) Your U.S. vessel may only beissued a Safety Management Certificateor have it renewed when your companyholds a valid Document of Compliancecertificate issued under § 96.330 of thispart and the vessel has completed asatisfactory safety management audit ofthe vessel’s safety management systemset out in § 96.320 of this part.

(d) A copy of your company’s validDocument of Compliance certificatemust be on board all U.S. and foreignvessels which carry more than 12passengers, and must be onboard atanker, bulk freight vessel, freightvessel, or a self-propelled mobileoffshore drilling unit of 500 gross tonsor more, when engaged on foreignvoyages or within U.S. waters.

(e) A Safety Management Certificate isvalid for 60 months. The validity of theSafety Management Certificate is basedon—

(1) A satisfactory initial safetymanagement audit;

(2) A satisfactory intermediateverification audit requested by thevessel’s responsible person, completedbetween the 24th and 36th month of thecertificate’s period of validity; and

(3) A vessel’s company holding avalid Document of Compliancecertificate. When a company’sDocument of Compliance certificateexpires or is revoked, the SafetyManagement Certificate for thecompany-owned vessel(s) is invalid.

(f) Renewal of a Safety ManagementCertificate requires the completion of asatisfactory safety management systemaudit which meets all of therequirements of subpart B in this part.A renewal of a Safety ManagementCertificate cannot be started unless thecompany which owns the vessel holdsa valid Document of Compliancecertificate.

(g) Only the Coast Guard may revokea Safety Management Certificate from aU.S. vessel. The Safety ManagementCertificate will be revoked if—

(1) The vessel’s responsible personhas not completed an intermediatesafety management audit required byparagraph (e)(2) of this section; or

(2) Major non-conformities are foundin the vessel’s safety managementsystem during a safety managementaudit or other related survey orinspection being completed by the CoastGuard or the recognized organizationchosen by the vessel’s responsibleperson.


§ 96.350 Interim Document of Compliancecertificate: what is it and when can it beused?

(a) An Interim Document ofCompliance certificate may be issued tohelp set up a company’s safetymanagement system when—

(1) A company is newly set up or intransition from an existing companyinto a new company; or

(2) A new type of vessel is added toan existing safety management systemand Document of Compliance certificatefor a company.

(b) A responsible person for acompany operating a U.S. vessel(s) thatmeets the requirements of paragraph (a)of this section, may send a request to arecognized organization authorized toact on behalf of the U.S. to receive anInterim Document of Compliancecertificate that is valid for a period upto 12 months. To be issued the InterimDocument of Compliance certificate thevessel’s company must—

(1) Demonstrate to an auditor that thecompany has a safety managementsystem that meets § 96.230 of this part;and

(2) Provide a plan for fullimplementation of a safety managementsystem within the period that theInterim Document of Compliancecertificate is valid.

§ 96.360 Interim Safety ManagementCertificate: what is it and when can it beused?

(a) A responsible person may applyfor an Interim Safety ManagementCertificate when—

(1) A responsible person takesdelivery of a new U.S. vessel; or

(2) Takes responsibility for themanagement of a U.S. vessel which isnew to the responsible person or theircompany.

(b) An Interim Safety ManagementCertificate is valid for 6 months. It maybe issued to a U.S. vessel which meetsthe conditions of paragraph (a) of thissection, when—

(1) The company’s valid Document ofCompliance certificate or InterimDocument of Compliance certificateapplies to that vessel type;

(2) The company’s safety managementsystem for the vessel includes the keyelements of a safety managementsystem, set out in § 96.220, applicable tothis new type of vessel;

(3) The company’s safety managementsystem has been assessed during thesafety management audit to issue theDocument of Compliance certificate ordemonstrated for the issuance of theInterim Document of Compliancecertificate;

(4) The Master and senior officers ofthe vessel are familiar with the safety

management system and the planned setup arrangements;

(5) Written documented instructionshave been extracted from the safetymanagement system and given to thevessel prior to sailing;

(6) The company plans an internalaudit of the vessel within three months;and

(7) The relevant information from thesafety management system is written inEnglish, and in any other languageunderstood by the vessel’s personnel.

§ 96.370 What are the requirements forvessels of countries not party to Chapter IXof SOLAS?

(a) Each foreign vessel which carriesmore than 12 passengers, or is a tanker,bulk freight vessel, freight vessel, orself-propelled mobile offshore drillingunit of 500 gross tons or more, operatedin U.S. waters, under the authority of acountry not a party to Chapter IX ofSOLAS must—

(1) Have on board validdocumentation showing that the vessel’scompany has a safety managementsystem which was audited and assessed,consistent with the International SafetyManagement Code of IMO ResolutionA.741(18);

(2) Have on board validdocumentation from a vessel’s FlagAdministration showing that thevessel’s safety management system wasaudited and assessed to be consistentwith the International SafetyManagement Code of IMO ResolutionA.741(18); or

(3) Show that evidence of compliancewas issued by either a government thatis party to SOLAS or an organizationrecognized to act on behalf of thevessel’s Flag Administration.

(b) Evidence of compliance mustcontain all of the information in, andhave substantially the same format asa—

(1) Document of Compliancecertificate; and

(2) Safety Management Certificate.(c) Failure to comply with this section

will subject the vessel to the complianceand enforcement procedures of § 96.380of this part.

§ 96.380 How will the Coast Guard handlecompliance and enforcement of theseregulations?

(a) While operating in waters underthe jurisdiction of the United States, theCoast Guard may board a vessel todetermine that—

(1) Valid copies of the company’sDocument of Compliance certificate andSafety Management Certificate are onboard, or evidence of the same forvessels from countries not party toChapter IX of SOLAS; and

(2) The vessel’s crew or shore-basedpersonnel are following the proceduresand policies of the safety managementsystem while operating the vessel ortransferring cargoes.

(b) A foreign vessel that does notcomply with these regulations, or oneon which the vessel’s condition or useof its safety management system do notsubstantially agree with the particularsof the Document of Compliancecertificate, Safety ManagementCertificate or other required evidence ofcompliance, may be detained by orderof the COTP or OCMI. This may occurat the port or terminal where theviolation is found until, in the opinionof the detaining authority, the vessel cango to sea without presenting anunreasonable threat of harm to the port,the marine environment, the vessel orits crew. The detention order may allowthe vessel to go to another area of theport, if needed, rather than stay at theplace where the violation was found.

(c) If any vessel that must complywith this part or with the ISM Codedoes not have a Safety ManagementCertificate and a copy of its company’sDocument of Compliance certificate onboard, a vessel owner, charterer,managing operator, agent, Master, or anyother individual in charge of the vesselthat is subject to this part, may be liablefor a civil penalty under 46 U.S.C. 3318.For foreign vessels, the Coast Guard mayrequest the Secretary of the Treasury towithhold or revoke the clearancerequired by 46 U.S.C. App. 91. TheCoast Guard may ask the Secretary topermit the vessel’s departure after thebond or other surety is filed.

§ 96.390 When will the Coast Guard denyentry into a U.S. port?

(a) Except for a foreign vessel enteringU.S. waters under force majeure, novessel shall enter any port or terminalof the U.S. without a safety managementsystem that has been properlycertificated to this subpart or to therequirements of Chapter IX of SOLASif—

(1) It is engaged on a foreign voyage;and

(2) It is carrying more than 12passengers, or a tanker, bulk freightvessel, freight vessel, or self-propelledmobile offshore drilling unit of 500gross tons or more.

(b) The cognizant COTP will denyentry of a vessel into a port or terminalunder the authority of 46 U.S.C. 3204(c),to any vessel that does not meet therequirements of paragraph (a) of thissection.


Subpart D—Authorization ofRecognized Organizations To Act onBehalf of the U.S.

§ 96.400 Purpose.(a) This subpart establishes criteria

and procedures for organizationsrecognized under 46 CFR part 8,subparts A and B, to be authorized bythe Coast Guard to act on behalf of theU.S. The authorization is necessary inorder for a recognized organization toperform safety management audits andcertification functions delegated by theCoast Guard as described in this part.

(b) To receive an up-to-date list ofrecognized organizations authorized toact under this subpart, send a self-addressed, stamped envelope andwritten request to the Commandant (G–MSE), 2100 Second Street SW.,Washington, DC 20593–0001.

§ 96.410 Who does this regulation applyto?

This subpart applies to allorganizations recognized by the U.S.under 46 CFR part 8, subpart A and B,who wish to seek authorization toconduct safety management audits andissue relevant international safetycertificates under the provisions of theISM Code and voluntary certificates onbehalf of the U.S.

§ 96.420 What authority may anorganization ask for under this regulation?

(a) An organization may requestauthorization to conduct safetymanagement audits and to issue thefollowing 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 submita request to be authorized?

(a) A recognized organization mustsend a written request for authorizationto the Commandant (G–MSE), Office ofDesign and Engineering Standards, 2100Second Street SW, Washington, DC20593–0001. The request must includethe following:

(1) A statement describing what typeof authorization the organization seeks;

(2) Documents showing that—(i) The organization has an internal

quality system with written policies,procedures and processes that meet therequirements in § 96.440 of this part forsafety management auditing andcertification; or

(ii) The organization has an internalquality system based on ANSI/ASQC

C9001 for safety management auditingand certification; or

(iii) The organization has anequivalent internal quality standardsystem recognized by the Coast Guard tocomplete safety management audits andcertification.

(3) A list of the organization’sexclusive auditors qualified to completesafety management audits and theiroperational area; and

(4) A written statement that theprocedures and records of therecognized organization regarding itsactions involving safety managementsystem audits and certification areavailable for review annually and at anytime deemed necessary by the CoastGuard.

(b) If the organization is a foreignclassification society that has beenrecognized under 46 CFR part 8,subparts A and B, and wishes to applyfor authorization under this part, it mustdemonstrate the reciprocity required by46 U.S.C. 3316 for ISM Codecertification. The organization mustprovide, with its request forauthorization an affidavit from thegovernment of the country in which theclassification society is headquartered.This affidavit must provide a list ofauthorized delegations by the flag stateof the administration of the foreignclassification society’s country to theAmerican Bureau of Shipping, andindicate any conditions related to thedelegated authority. If this affidavit isnot received with a request forauthorization from a foreignclassification society, the request forauthorization will be disapproved andreturned by the Coast Guard.

(c) Upon the satisfactory completionof the Coast Guard’s evaluation of arequest for authorization, theorganization will be visited for anevaluation as described in § 96.440(b) ofthis part.

§ 96.440 How will the Coast Guard decidewhether to approve an organization’srequest to be authorized?

(a) First, the Coast Guard will evaluatethe organization’s request forauthorization and supporting writtenmaterials, looking for evidence of thefollowing—

(1) The organization’s clearassignment of management duties;

(2) Ethical standards for managers andauditors;

(3) Procedures for auditor training,qualification, certification, andrequalification that are consistent withrecognized industry standards;

(4) Procedures for auditing safetymanagement systems that are consistent

with recognized industry standards andIMO Resolution A.788(19);

(5) Acceptable standards for internalauditing and management review;

(6) Record-keeping standards forsafety management auditing andcertification;

(7) Methods for reporting non-conformities and recording completionof remedial actions;

(8) Methods for certifying safetymanagement systems;

(9) Methods for periodic andintermediate audits of safetymanagement systems;

(10) Methods for renewal audits ofsafety management systems;

(11) Methods for handling appeals;and

(12) Overall procedures consistentwith IMO Resolution A.739(18),‘‘Guidelines for the Authorization ofOrganizations Acting on Behalf of theAdministration.’’

(b) After a favorable evaluation of theorganization’s written request, the CoastGuard will arrange to visit theorganization’s corporate offices and portoffices for an on-site evaluation ofoperations.

(c) When a request is approved, therecognized organization and the CoastGuard will enter into a writtenagreement. This agreement will definethe scope, terms, conditions andrequirements of the authorization.Conditions of this agreement are foundin § 96.460 of this part.

§ 96.450 What happens if the Coast Guarddisapproves an organization’s request to beauthorized?

(a) The Coast Guard will write to theorganization explaining why it did notmeet the criteria for authorization.

(b) The organization may then correctthe deficiencies and reapply.

§ 96.460 How will I know what the CoastGuard requires of my organization if myorganization receives authorization?

(a) Your organization will enter into awritten agreement with the Coast Guard.This written agreement will specify—

(1) How long the authorization isvalid;

(2) Which duties and responsibilitiesthe organization may perform, andwhich certificates it may issue on behalfof the U.S.;

(3) Reports and information theorganization must send to theCommandant (G–MOC);

(4) Actions the organization must taketo renew the agreement when it expires;and

(5) Actions the organization must takeif the Coast Guard should revoke itsauthorization or recognition under 46CFR part 8.


(b) [Reserved]

§ 96.470 How does the Coast Guardterminate an organization’s authorization?

At least every 12 months, the CoastGuard evaluates organizationsauthorized under this subpart. If anorganization fails to maintain acceptablestandards, the Coast Guard mayterminate that organization’sauthorization, remove the organizationfrom the Commandant’s list ofrecognized organizations, and furtherevaluate the organization’s recognitionunder 46 CFR part 8.

§ 96.480 What is the status of a certificateif the issuing organization has its authorityterminated?

Any certificate issued by anorganization authorized by the CoastGuard whose authorization is laterterminated remains valid until—

(a) Its original expiration date,(b) The date of the next periodic audit

required to maintain the certificate’svalidity, or

(c) Whichever of paragraphs (a) or (b)occurs first.

§ 96.490 What further obligations exist foran organization if the Coast Guardterminates its authorization?

The written agreement by which anorganization receives authorization fromthe Coast Guard places it under certainobligations if the Coast Guard revokesthat authorization. The organizationagrees to send written notice of itstermination to all responsible persons,companies and vessels that havereceived certificates from theorganization. In that notice, theorganization must include—

(a) A written statement explainingwhy the organization’s authorizationwas terminated by the Coast Guard;

(b) An explanation of the status ofissued certificates;

(c) A current list of organizationsauthorized by the Coast Guard toconduct safety management audits; and

(d) A statement of what thecompanies and vessels must do to havetheir safety management systemstransferred to another organizationauthorized to act on behalf of the U.S.

§ 96.495 How can I appeal a decision madeby an authorized organization?

(a) A responsible person may appeala decision made by an authorizedorganization by mailing or delivering tothe organization a written request forreconsideration. Within 30 days ofreceiving your request, the authorizedorganization must rule on it and sendyou a written response. They must alsosend a copy of their response to theCommandant (G–MOC).

(b) If you are not satisfied with theorganization’s decision, you may appealdirectly to the Commandant (G–MOC).You must make your appeal in writing,including any documentation andevidence you wish to be considered.You may ask the Commandant (G–MOC)to stay the effect of the appealeddecision while it is under review.

(c) The Commandant (G–MOC) willmake a decision on your appeal andsend you a response in writing. Thatdecision will be the final Coast Guardaction on your request.

TITLE 46—SHIPPING

PART 2—VESSEL INSPECTIONS

2. Revise the authority citation forpart 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; 49CFR 1.46; Subpart 2.45 also issued under theauthority 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) toread as follows:

§ 2.01–25 International Convention forSafety of Life at Sea, 1974.

(a) * * *(1) * * *(ix) Safety Management Certificate.(2) The U.S. Coast Guard will issue

through the Officer In Charge, MarineInspection, the following certificatesafter performing an inspection or safetymanagement audit of the vessel’ssystems and determining the vesselmeets the applicable requirements:

(i) Passenger Ship Safety Certificate.(ii) Cargo Ship Safety Construction

Certificate, except when issued to cargoships by a Coast Guard recognizedclassification society at the option of theowner or agent.

(iii) Cargo Ships Safety EquipmentCertificate.

(iv) Exemption Certificate.(v) Nuclear Passenger Ship Safety

Certificate.(vi) Nuclear Cargo Ship Safety

Certificate.(vii) Safety Management Certificate,

except when issued by a recognizedorganization authorized by the CoastGuard.* * * * *

PART 31—INSPECTION ANDCERTIFICATION


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, 1991Comp., 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 ManagementCertificate—T/ALL.

All tankships to which 33 CFR part 96applies on an international voyage musthave a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance certificate on board.

6. In § 31.40–40, revise paragraph (b)to read as follows:

§ 31.40–40 Duration of Conventioncertificates—T/ALL.* * * * *

(b) A Cargo Ship Safety ConstructionCertificate and a Safety ManagementCertificate shall be issued for a periodof not more than 60 months.* * * * *



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, 56FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR1.46.


§ 71.75–13 Safety Management Certificate.All vessels to which 33 CFR part 96

applies on an international voyage musthave a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance 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, withexception to a Safety ManagementCertificate which is issued for a periodof not more than 60 months.* * * * *



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.


§ 91.60–30 Safety Management Certificate.All vessels to which 33 CFR part 96

applies on an international voyage must


have a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance 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 ManagementCertificate are issued for a period of notmore than 60 months.* * * * *



Authority: 43 U.S.C. 1333; 46 U.S.C. 3205,3306, 5115; 49 CFR 1.45, 1.46; § 107.05 alsoissued 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 overto which 33 CFR part 96 applies, on aninternational voyage must have a validSafety Management Certificate and acopy of their company’s valid Documentof Compliance certificate on board.

(b) A Safety Management Certificate isissued for a period of not more than 60months.



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, 1971–1975Comp., p. 743; E.O. 12234, 45 FR 58801, 3CFR, 1980 Comp., p. 277; 49 CFR 1.46.


§ 115.925 Safety Management Certificate.(a) All vessels that carry more than 12

passengers on an international voyagemust have a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance certificate on board.

(b) All such vessels must meet theapplicable requirements of 33 CFR part96.

(c) A Safety Management Certificate isissued for a period of not more than 60months.



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.


§ 126.480 Safety Management Certificate.

(a) All offshore supply vessels of 500gross tons or over to which 33 CFR part96 applies, on an international voyagemust have a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance certificate on board.

(b) A Safety Management Certificate isissued for a period of not more than 60months.

PART 175—GENERAL PROVISIONS


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 44U.S.C. 3507.

20. In § 175.540, add paragraph (d) toread as follows:

§ 175.540 Equivalents.

* * * * *(d) The Commandant may accept

alternative compliance arrangements inlieu of specific provisions of theInternational Safety Management (ISM)Code (IMO Resolution A.741(18)) for thepurpose of determining that anequivalent safety management system isin place on board a vessel. TheCommandant will consider the size andcorporate structure of a vessel’scompany when determining theacceptability of an equivalent system.Requests for determination ofequivalency must be submitted toCommandant (G–MOC) via thecognizant OCMI.



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, 1971–1975Comp., p. 793; E.O. 12234, 45 FR 58801, 3CFR, 1980 Comp., p. 277; 49 CFR 1.46.


§ 176.925 Safety Management Certificate.

(a) All vessels that carry more than 12passengers on an international voyagemust have a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance certificate on board.

(b) All such vessels must meet theapplicable requirements of 33 CFR part96.

(c) A Safety Management Certificate isissued for a period of not more than 60months.

23. Revise § 176.930 to read asfollows:

§ 176.930 Equivalents.

As outlined in Chapter I (GeneralProvisions) Regulation 5, of SOLAS, theCommandant may accept an equivalentto a particular fitting, material,apparatus, or any particular provisionrequired by SOLAS regulations ifsatisfied that such equivalent is at leastas effective as that required by theregulations. An owner or managingoperator of a vessel may submit arequest for the acceptance of anequivalent following the procedures in§ 175.540 of this chapter. TheCommandant will indicate theacceptance of an equivalent on thevessel’s SOLAS Passenger Ship SafetyCertificate or Safety ManagementCertificate, as appropriate.



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, 56FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR1.46.

25. Add § 189.60–30 to read asfollows:

§ 189.60–30 Safety ManagementCertificate.

All vessels to which 33 CFR part 96applies on an international voyage musthave a valid Safety ManagementCertificate and a copy of theircompany’s valid Document ofCompliance 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 ManagementCertificate are issued for a period of notmore than 60 months.* * * * *

Dated: December 16, 1997.R.C. North,Rear Admiral, U.S. Coast Guard, AssistantCommandant for Marine Safety andEnvironmental Protection.[FR Doc. 97–33528 Filed 12–19–97; 3:32 pm]BILLING CODE 4910–14–M