International Management Code for the Safe Operation of Ships and for Pollution Prevention (International Safety Management (ISM) Code)

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 96

46 CFR Parts 2, 31, 71, 91, 107, 115, 126, 175, 176, and 189

[CGD 95-073]

RIN 2115-AF44

International Management Code for the Safe Operation of Ships and

for Pollution Prevention (International Safety Management (ISM) Code)

AGENCY: Coast Guard, DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to develop regulations which parallel

the international requirements for safety management systems required

of companies and their U.S. vessels that are engaged on foreign

voyages. This action is mandated by the Coast Guard Authorization Act

of 1996. These proposed regulations will allow responsible persons and

their U.S. vessel(s) to develop safety management systems to enhance

vessel operating safety and reduce pollution incidents in compliance

with internationally and nationally mandated deadlines. The proposed

regulations will also permit recognized organizations to receive

authorization from the U.S. to audit safety management systems and

issue international convention certificates.

DATES: Comments must reach the Coast Guard on or before July 30, 1997.

Comments sent to the Office of Management and Budget (OMB) on

collection of information must reach OMB on or before June 30, 1997.

ADDRESSES: You may mail comments to the Executive Secretary, Marine

Safety Council (G-LRA/3406) (CGD 95-073), U.S. Coast Guard

Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or

deliver them to room 3406 at the same address between 9:30 a.m. and 2

p.m., Monday through Friday, except Federal holidays. The telephone

number is (202) 267-1477. You must also mail comments on collection of

information to the Office of Information and Regulatory Affairs, Office

of Management and Budget, 725 17th Street NW., Washington, DC 20503,

ATTN: Desk Officer, U.S. Coast Guard.

The Executive Secretary maintains the public docket for this

rulemaking. Comments, and documents as indicated in this preamble, will

become part of this docket and will be available for inspection or

copying at room 3406, U.S. Coast Guard Headquarters, between

[[Page 23706]]

9:30 a.m. and 2 p.m., Monday through Friday, except Federal holidays.

The material proposed for incorporation by reference is available for

inspection at room 1210, U.S. Coast Guard Headquarters.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Gauvin, Project Manager,

Vessel and Facility Operating Standards Division (G-MSO-2), at (202)

267-1053, or fax (202) 267-4570.

SUPPLEMENTARY INFORMATION:

Request for Comments

The Coast Guard encourages interested persons to participate in

this rulemaking by submitting written data, views, and arguments.

Persons submitting comments should include their names and addresses,

identify this rulemaking (CGD 95-073) and the specific section of this

document to which each comment applies, and give the reason for each

comment. Please submit two copies of all comments and attachments in an

unbound format, no larger than 8\1/2\ by 11 inches, suitable for

copying and electronic filing. Persons wanting acknowledgment of

receipt of comments should enclose stamped, self-addressed postcards or

envelopes.

The Coast Guard will consider all comments received during the

comment period. It may change this proposed rule in view of the

comments.

The Coast Guard plans no public hearing. Persons may request a

public hearing by writing to the Marine Safety Council at the address

under ADDRESSES. The request should include the reasons why a hearing

would be beneficial. If it determines that the opportunity for oral

presentations will aid this rulemaking, the Coast Guard will hold a

public hearing at a time and place announced by a later notice in the

Federal Register.

This is the Coast Guard's first ``plain English'' regulation.

Clear, more readable regulations are essential for the success of our

government's reinvention initiative. We encourage your comments on this

new way of writing regulations.

Background and Purpose

This proposed rule is necessary to fulfill the mandates of 46

U.S.C. 3203, as added by section 602 of the Coast Guard Authorization

Act of 1996, Pub. L. 104-324, 110 Stat. 3901. The purpose of this rule

is to establish a national safety management system and requirements

for the development, documentation, auditing, certification and

enforcement of responsible persons and vessel safety management systems

consistent with the U.S. adopted international regulations of Chapter

IX of the International Convention for the Safety of Life at Sea

(SOLAS) 1974, as amended. Chapter IX of SOLAS, ``Management for the

Safe Operation of Ships,'' requires that all vessels to which SOLAS is

applicable, and their companies, have effective safety management

systems developed to meet the performance elements of the International

Safety Management (ISM) Code (International Maritime Organization (IMO)

Resolution A.741(18)).

Safety management systems for vessel transportation operations were

first formalized in November 1987, in response to the HERALD OF FREE

ENTERPRISE disaster, when the IMO adopted Resolution A.596(15),

``Safety of Passenger Ro-Ro Ferries.'' This resolution concluded that

vessel safety could be greatly enhanced by establishing improved vessel

operating practices. It further requested that the IMO Maritime Safety

Committee (MSC) and Marine Environmental Protection Committee (MEPC)

develop guidelines for shipboard and shore-based management procedures

for safer vessels and pollution prevention.

On October 19, 1989, the MSC and MEPC guidelines for development of

enhanced safety management practices were adopted by the IMO as

Resolution A.647(16), ``Guidelines on Management for the Safe Operation

of Ships and for Pollution Prevention.'' This first set of

recommendations provided performance standards for the maritime

industry on vessel safety management systems and encouraged continuous

improvement in safety management skills within the maritime industry

worldwide. It noted that vessel safety could be increased and

environmental pollution decreased for all vessels which used documented

company and vessel operating management practices. Safe operating

practices, implemented through documented procedures and company

policies, would provide better results in vessel safety than

governments' attempts to regulate operating practices.

IMO Resolution A.647(16) was endorsed by the U.S. and published as

an enclosure to Navigation and Vessel Inspection Circular (NVIC) No. 1-

90, ``Recommendation Concerning Management Practices for Safe Ship

Operation and Pollution Prevention,'' published August 17, 1990. NVIC

1-90 recommendations were intended as guidelines for industry use.

These guidelines were intended to document management procedures that

increased the levels of safety aboard vessels and reduced pollution

incidents. The Coast Guard concluded that operating efficiency and

profitability is increased for a vessel, if the owner or managing

operator provides effective supervision and plans a safety strategy

which anticipates problems and provides direction to manage important

day-to-day vessel and shore-based operations. It was also found that

the effective use of a safety management system specifically enhances

the ability of a company's shore-based personnel to respond to vessel

operational needs or emergencies.

Since the adoption of IMO Resolution A.647(16) in 1989, the MSC and

MEPC have continued to refine and amend the performance standards and

elements required for enhancement of safety management systems. This

was because significant marine casualties continued to occur despite

engineering and technological innovations. The Coast Guard's analysis

of marine casualties over the past 30 years illustrated that the

national and international maritime community applied engineering and

technological solutions to promote safety and minimize the consequences

of marine casualties. In an effort to further reduce casualties, the

role of the ``human element'' in the maritime safety equation was

evaluated.

Recent casualty studies concluded that in excess of 80 percent of

all high consequence marine casualties may be directly or indirectly

attributable to the ``human element.''

Consequently, the international maritime community saw the need to

emphasize shipboard safety management practices to minimize human

errors or omissions. These types of errors play a part in virtually

every casualty, including those where structural or equipment failure

may be the direct cause.

During the last eight years, two subsequent IMO resolutions were

adopted due to work by the MSC and MEPC that incorporated the earlier

recommendations and guidelines. These IMO resolutions are:

IMO Resolution A.681(17), adopted November 6, 1991,

``Procedures for the Control and Operational Requirements Related to

the Safety of Ships and Pollution Prevention''; and

IMO Resolution A.741(18), adopted November 4, 1993, ``The

International Management Code for the Safe Operation of Ships and for

Pollution Prevention (International Safety Management (ISM) Code).''

Adoption of these resolutions increased the performance elements

required to enhance the marine management skill practices documented as

part of the safety management

[[Page 23707]]

system. These new performance elements included:

Written management procedures that document relevant

national and international regulations which are applicable to vessel

operations;

Designation of a person within the company who is

responsible to oversee and maintain the safety management system. This

person has complete communication authority from the lowest employee

level to the top management of the company to ensure that vessel

operation problems reach all levels of management unobstructed; and

Internal company auditing and reporting procedures to

ensure continuous improvement to the safety management system by owner

and managers.

The U.S. has been at the forefront providing input, analysis and

direction for MSC and MEPC development of these resolutions. The U.S.

recognized that the human element needed to be addressed and initiated

the Prevention Through People (PTP) program which examines and defines

the critical role that the human element plays in maritime safety. The

PTP concept asserts that safe and profitable operations require a

systematic approach toward the constant and balanced interaction

between the elements of management, the work environment, individual

behavior, and appropriate technology. The ISM Code provides this

systematic approach to the mariner with the policy and procedures

needed to understand their duties and address the human element issues

and risks that can prevent casualties from occurring. The voluntary

certification of safety management systems by U.S. vessels in domestic

trade supports the PTP strategies to bring government and industry

together in making cultural change and partnerships to address the

human element in maritime operations and pollution prevention.

Accordingly, the Coast Guard endorsed the guidance provided by the

ISM Code in IMO Resolution A.741(18), and provided it as a reference in

NVIC No. 2-94 published March 15, 1994, ``Guidance Regarding Voluntary

Compliance with the International Management Code for the Safe

Operation of Ships and for Pollution Prevention.'' NVIC 2-94 canceled

the earlier NVIC 1-90.

In May 1994, Chapter IX of SOLAS, ``Management for the Safe

Operation of Ships,'' was adopted at the IMO's Conference of

Contracting Governments to SOLAS, 1974. Chapter IX of SOLAS mandates

that all vessels subject to SOLAS, and their companies, have effective

safety management systems developed and in use that conform to the

performance elements of the ISM Code (IMO Resolution A.741(18)).

Companies whose U.S. flag vessels trade internationally (engaged on a

foreign voyage) and are subject to SOLAS, must have their safety

management system externally audited and must receive the appropriate

international certificates from the U.S. or from a recognized

organization authorized to act on behalf of the U.S.

The adoption of Chapter IX of SOLAS will become effective for

companies whose vessels are subject to the provisions of SOLAS and are

engaged in international trade as follows:

Beginning July 1, 1998, for vessels transporting more than

12 passengers; and tankers, bulk freight vessels, or high speed freight

vessels of at least 500 gross tons; and

Beginning July 1, 2002, for freight vessels and self-

propelled mobile offshore drilling units of at least 500 gross tons.

The ISM Code marks a significant philosophical shift in the

maritime community's approach by recognizing the human element's role

in preventing marine casualties and ensuring vessels are operated

responsibly in accordance with domestic and international standards.

The ISM Code is seen as a major contributor to industry's self-

evaluation and action to address the human element concerns. It is

intended to change the current approach of regulatory compliance from

industry's passive defect notification and correction response mode to

an aggressive approach to safety. Under this proactive approach,

potential discrepancies are resolved by the companies themselves before

casualties can occur.

The ISM Code performance elements require the development of safety

management systems which document and communicate the owner's policy,

chain of authority, and operational and emergency procedures. It also

requires management reviews, internal audits and corrections of non-

conformities in a company's management procedures. The documentation of

a safety management system provides the basis for auditing the

employee's knowledge, ashore and afloat, of the company's procedures

and policies. It illustrates owner, manager and master responsibilities

specifically and ensures that all national and international standards

are documented in the system's procedures.

To ensure that the U.S. public and maritime industry understood the

mandatory requirements of the ISM Code, the Coast Guard published a

notice in the Federal Register on October 5, 1995 (60 FR 52143). This

notice explained the adoption of the ISM Code by the Contracting

Parties of SOLAS, and scheduled four public meetings held at the

following times and locations:

October 30, 1995,--Federal Building, Seattle, Washington;

November 1, 1995,--Port Authority Building, Long Beach,

California;

November 13, 1995,--Holiday Inn Downtown, New Orleans,

Louisiana; and

November 16, 1995,--Port Authority Building, New York

City, New York.

At these public meetings, the Coast Guard received comments on

implementation of the international requirements and provided a

presentation on the U.S.'s voluntary safety management system

guidelines in NVIC 2-94. Comments received at these meetings were audio

taped and are a part of this docket.

On January 26, 1996, RADM James C. Card, the Assistant Commandant

for Marine Safety and Environmental Protection (G-M), sent a personal

letter to each owner of a U.S. vessel required to be certificated by

the international requirements of the ISM Code. This was done to ensure

that the U.S. flag vessel owners understood that the U.S. had adopted

Chapter IX of SOLAS, and the ISM Code would be mandatory for their

companies and U.S. vessels.

Discussion of Proposed Rules

The incorporation of the ISM Code's tenets into U.S. regulations is

required by section 602 of the Coast Guard Authorization Act of 1996.

This section added Chapter 32 ``Management of Vessels'' to Title 46

U.S. Code. The Secretary of Transportation is required by 46 U.S.C.

3203 to prescribe regulations that establish a safety management system

for the responsible persons and vessels to which Subtitle II of 46

applies. The safety management system must be consistent with the ISM

Code and must include:

A safety and environmental protection policy;

Instructions and procedures to ensure safe operation of

vessels and protection of the environment in compliance with

international and U.S. law;

Defined levels of authority and lines of communication

between, and among, personnel onshore and on the vessel;

Procedures to report accidents and nonconformities with 46

U.S.C. chapter 32;

[[Page 23708]]

Procedures to prepare for and respond to emergency

situations; and

Procedures for internal audits and management reviews of

the system.

The Secretary of Transportation's authority under 46 U.S.C. Chapter

32 and 46 U.S.C. 3103 was delegated to the Commandant of the Coast

Guard in title 49, Code of Federal Regulations (CFR), Sec. 1.46 (fff)

and (ggg), published as a final rule in the Federal Register on April

24, 1997 (62 FR 19935).

Safety Management System

The Coast Guard is implementing the requirements for safety

management systems and related requirements to implement the provisions

of Chapter IX of SOLAS, in new 33 CFR part 96. To establish safety

management system requirements, the Coast Guard is proposing to use

existing industry based standards or previously adopted international

standards to the greatest extent possible. Under the proposed rules,

responsible persons and their U.S. vessels subject to Chapter IX of

SOLAS and IMO Resolution A.741(18) will be able to meet these

international requirements at the same time they comply with parallel

U.S. statutory requirements and regulations. For those vessels or

companies that are not subject to the SOLAS requirements and not

required to meet these regulations, the proposed Sec. 96.210(c) permits

them to voluntarily meet the standards of part 96 and Chapter IX of

SOLAS. Proposed Secs. 96.220, 96.230, 96.240, and 96.250 establish the

safety management system, and detail the specific objectives,

functional requirements, documentation and reporting required for

consistency with the ISM Code and to comply with Federal law.

46 U.S.C. 3204 requires that responsible persons submit a safety

management plan to the Secretary describing how they will comply with

the regulations pertaining to the safety management system. The

Secretary must review this plan to determine if it is consistent with

and will assist in implementing the safety management system. Once

compliance is assured, then the Secretary issues a Safety Management

Certificate and a Document of Compliance certificate.

Responsible persons are owners of vessels or other persons,

organizations or companies who have assumed responsibility for the

operation of a vessel from the owner. Responsible persons who are not

owners have agreed to take over the duties and responsibilities imposed

by the safety management system and the requirements of these proposed

rules. To be consistent with these proposed regulations and the

elements of the ISM Code, and for ease of understanding by the user of

the regulations, the term ``company(nies)'' will be used in the place

of responsible person(s) where needed for grammatical correctness and

readability of the proposed regulations.

Chapter IX of SOLAS does not contain requirements for, or a

definition of, a ``safety management plan.'' SOLAS does require,

however, specific documentation as part of an individual vessel's or

company's safety management system. The nature of this documentation

describes how the vessel or company will comply with the requirements

of the ISM Code. Proposed Secs. 96.240 and 96.250 adopt SOLAS

documentation and reporting requirements, which require the vessel or

company to demonstrate how it complies with the ISM Code. As proposed

here, the documentation and reporting requirements of proposed

Secs. 96.240 and 96.250 will suffice as the ``safety management plan''

required by 46 U.S.C. 3204.

Proposed Secs. 96.330 and 96.340 set forth requirements for a

responsible person or company to obtain a Document of Compliance

certificate or Safety Management Certificate. Proposed Secs. 96.350 and

96.360 provide criteria for Interim Document of Compliance certificates

and Interim Safety Management Certificates. These sections parallel IMO

Resolution A.788(19), ``Guidelines on Implementation of the

International Safety Management (ISM) Code by Administrations,''

adopted November 23, 1995.

Organizations Acting on Behalf of the U.S.

Section 603 of the Coast Guard Authorization Act of 1996 (46 U.S.C.

3103) permits the Secretary, and the Commandant through authority

delegated from the Secretary as noted above, to rely on reports,

documents and records of other reliable persons as evidence of

compliance with Subtitle II of Title 46, U.S. Code. Under the authority

of 46 U.S.C. 3103, this rulemaking will allow organizations previously

recognized by the Coast Guard under 46 CFR part 8, to obtain

authorization under proposed 33 CFR part 96, subpart D to audit safety

management systems and issue Document of Compliance certificates and

Safety Management Certificates on behalf of the U.S.

The Coast Guard will only authorize organizations that are

recognized in accordance with 46 CFR part 8, subpart B, ``Recognition

of a Classification Society.'' Experience within other industries has

shown that subject matter expertise is essential for proper functioning

of a quality or safety management certification scheme. Use of the

criteria in 46 CFR part 8, subpart B, will ensure that the

organizations selected to be authorized by these proposed rules will

have the expertise and capabilities to properly carry out this function

for the U.S.

Because the Coast Guard proposes to authorize recognized

organizations to issue safety management system certificates,

certification will not be completed directly by the Coast Guard. Coast

Guard personnel would require extensive training and resources which

already exists in the commercial industry. Commercial organizations

recognized under 46 CFR part 8, and authorized under these proposed

rules, already have the training and resources available to carry out

the auditing requirements consistent with the international guidelines

of the ISM Code. By permitting organizations to carry out this

function, the Coast Guard will be able to effectively oversee the

proper execution of regulatory implementation and certification. The

implementation of these proposed regulations will better utilize Coast

Guard resources to oversee these and other marine functions carried out

by others on behalf of the U.S.

Proposed 33 CFR part 96, subpart D sets the standard for

organizations that will be authorized to act on behalf of the Coast

Guard for the Flag Administration. This parallels the standards of IMO

Resolution A.739(18), ``Guidelines for the Authorization of

Organizations Acting on Behalf of the Administration,'' adopted

November 4, 1993, and is incorporated by reference into the proposed

rules. These international guidelines establish the minimum standards

that each organization is reviewed for and must meet in order to

complete safety management audits, marine surveys or inspections, and

certifications on behalf of a Flag Administration.

The authorization of foreign based classification societies under

these proposed rules in subpart D will be subject to the reciprocity

requirements of Sec. 96.430(a)(5). This section is based on 46 U.S.C.

3316 as amended by the Coast Guard Authorization Act of 1996. This

statute requires reciprocity to the American Bureau of Shipping for

certain delegations of authority to foreign based classification

societies.

Proposed Sec. 96.440 establishes requirements, consistent with the

guidelines in IMO Resolution A.739(18), for organizations seeking

authorization to act on behalf of the U.S. Proposed

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Sec. Sec. 96.430, 96.440, and 96.450 establish requirements for

authorization requests and agreements of authorization between

recognized organizations and the Coast Guard. Following the

international guidelines incorporated into these proposed sections will

ensure that organizations selected by the Coast Guard to act on behalf

of the U.S. have the qualifications acceptable by all parties to SOLAS

worldwide.

In order to ensure that authorized organizations maintain the high

standards necessary to perform audits and issue certificates on behalf

of the U.S., proposed Sec. 96.470 provides for an annual Coast Guard

evaluation of an organization's audit procedures. If the organization

fails to maintain the standards established in part 96, subpart D, the

Coast Guard can terminate the organization's authorization under

proposed Sec. 96.470. Certificates issued by that organization will

remain valid until the certificate expiration date or the next periodic

safety management audit date, whichever occurs first. An organization

which has its authorization terminated is required under proposed

Sec. 96.490 to provide a written explanation of its loss of

authorization and a list of organizations authorized to act on behalf

of the U.S. to the responsible persons for companies and vessels

certificated by that organization. The organization must explain the

status of the companies and vessels, and how certificates can be

transferred to another U.S. authorized organization.

Proposed Sec. 96.495 establishes the appeal procedures for a

responsible person who does not agree with actions taken by the

authorized organizations for their company's or vessel's safety

management system. By permitting responsible persons to appeal directly

to the Commandant, Coast Guard oversight of actions by authorized

organizations is ensured.

Safety Management Audits for U.S. Companies

In order to verify that a vessel or the company represented by a

responsible person is in compliance with the requirements of the safety

management system established under proposed Secs. 96.220, 96.230,

96.240, and 96.250, safety management audits will be performed by the

authorized organizations under proposed Sec. 96.320. This requires that

audits be performed consistent with IMO Resolution A.788(19).

In addition to safety management audits performed initially to

verify compliance with the safety management system, 46 U.S.C. 3205(c)

requires periodic reviews to determine continued compliance with the

safety management system. The proposed rules require a responsible

person to request periodic safety management audits, to be performed in

accordance with proposed Sec. 96.320. Periodic audits are defined in

proposed Secs. 96.330(f) and 96.340(e)(2).

In the event that a responsible person fails to request a periodic

audit, or if a major non-conformity is found within a company's or

vessel's safety management system during a safety management audit, the

Coast Guard may revoke the company's Document of Compliance certificate

or a vessel's Safety Management Certificate. If a Document of

Compliance certificate is revoked, all Safety Management Certificates

issued to the vessel(s) owned and operated by that responsible person,

will become invalid under proposed Sec. 96.340(e)(3). This is because,

without a valid Document of Compliance certificate, all such vessels

are operating under a non-conforming safety management system. After a

company resumes operations under a valid Document of Compliance

certificate, the responsible person for the company's vessel(s) must

request and complete a satisfactory safety management audit prior to

receiving a valid Safety Management Certificate.

Compliance and Enforcement

To ensure compliance with the ISM Code requirements by vessels in

U.S. waters, proposed Sec. 96.380 permits the Coast Guard to board U.S.

and foreign vessels to determine if the safety management system is

being observed and practiced during vessel operations. During this

process, the Coast Guard will also verify that a valid copy of the

company's Document of Compliance certificate and a valid vessel Safety

Management Certificate are on board. A vessel may be detained under

authority of this proposed section, if its personnel are not following

its safety management system or if the vessel is not carrying the

appropriate certificates. Proposed Sec. 96.390 authorizes the Coast

Guard to deny entry of a vessel into a port or terminal under the

authority of 46 U.S.C. 3204(c).

For vessels from a country not a party to Chapter IX of SOLAS,

proposed Sec. 96.370 requires those vessels to have evidence of a

safety management system consistent with the ISM Code. Failure to

comply will subject these vessels to the compliance and enforcement

procedures of proposed Sec. 96.380.

Amendments to Existing Regulations

A second category of proposed rules will amend existing general

SOLAS certification regulations to incorporate the requirements for

safety management systems in various parts of 46 CFR for specific

vessel types. These regulatory amendments will expand upon current

applicability of SOLAS certification and the safety management

certification for each U.S. vessel type engaged in international trade,

and are referenced to 33 CFR part 96 as follows:

Vessel Inspections, International Convention for the

Safety of Life at Sea, 1974. (46 CFR 2.01-25);

Tank vessel, Safety Management Certificate (46 CFR 31.40-

30);

Passenger vessel, Safety Management Certificate (46 CFR

71.75-13);

Freight vessel, Safety Management Certificate (46 CFR

91.60-30);

Self-propelled mobile offshore drilling unit, Safety

Management Certificate (46 CFR 107.415);

Small passenger vessel, Safety Management Certificate (46

CFR 115.925);

Offshore supply vessel, Safety Management Certificate (46

CFR 126.480);

Small passenger vessel, Safety Management Certificate (46

CFR 176.925); and

Oceanographic research vessel, Safety Management

Certificate (46 CFR 189.60-30).

The third category of proposed rules specifically involves safety

management system certification for approximately 72 U.S. small

passenger vessels and their responsible persons. These U.S. small

passenger vessels involved in international trade are divided into two

categories:

Small passenger vessels which must meet 46 CFR, subchapter

T, parts 175 through 185 (known in the U.S. marine industry as ``T

boats''); and

Small passenger vessels which must meet 46 CFR, subchapter

K, parts 114 through 122 (known in the U.S. marine industry as ``K

vessels'').

The Coast Guard reviewed the management strategies used by U.S.

small passenger vessels (less than 100 gross tons) certificated under

SOLAS for international trade. The Coast Guard's G-M Business Plan

requires that there be a recognition between different types of

passenger vessels to determine the types of risks and management

strategies affecting their operations. Of the 72 U.S. small passenger

vessels potentially affected by this proposed rulemaking, approximately

54 vessels fall into the ``T boat'' category. This review showed that T

boats which carry less than 49 passengers overnight and not more than

150 passengers, and operate on routes less than 20 miles

[[Page 23710]]

from shore in international trade, are typically manned and operated by

small companies made up of one to five employees. In these cases, the

responsible person for the vessel is usually the vessel's operator or

master, who is involved in every decision and action related to the

management and operation of that vessel. In light of the nature of

these vessels' operations, and the fact that the owner oversees the

vessels everyday, a safety management system meeting the requirements

of these proposed rules could be seen as overwhelming for a small

company with limited resources.

Historical vessel casualty information on these small passenger

vessels was reviewed to determine any basis of risk. The review did not

indicate a larger than normal risk when compared to other T boats in

operation within U.S. domestic waters only. This review of historical

casualty information included only vessel incidents involving

groundings, allisions, collisions, propulsion equipment failures,

pollution incidents, fires and navigational errors. This review of

casualty information did not include incidents which occurred on these

vessels that were reported as marine casualties, which included only

personal injuries, such as: Diving accidents; slips and falls;

passenger medical ailments; passenger illnesses; or other such non-

vessel related mishaps to passengers.

Other factors determined from this review support the concept of

hands-on, responsible person management of T boats. They include:

Vessel employees with long tenures of employment (a number of these

vessels are family owned and operated); vessels operate on short

routes, close to shore on protected waters; a low number of passengers

are carried; and a short amount of time is spent underway from shore or

from the vessel's home dock.

This review reinforced our belief that the existing oversight

management strategies and hands-on operation of T boats by their

responsible persons, can be considered equivalent to providing safety

management systems for these specific 54 small passenger vessels.

Small passenger vessels subject to the requirements of 46 CFR

subchapter T have traditionally been allowed equivalencies to SOLAS

requirements in accordance with Chapter I, Regulation 5 of SOLAS. This

is allowed, if the equivalence is at least as effective as that

required by the regulations. The existing SOLAS equivalency provision

for these small passenger vessels is found at 46 CFR 176.930. Because

equivalencies for ``T boats'' are currently allowed, the Coast Guard

proposes to amend 46 CFR 176.930 to allow ``T boat'' owners to apply

for an equivalence to the requirements of 33 CFR part 96, at their

option. The Coast Guard plans on partnering with the responsible

persons of this limited number of T boats to develop safety management

systems that are equivalent to manage the risks these vessels see in

their limited operations. Specific actions for equivalence applications

will be provided by the Coast Guard as a separate directive from this

rulemaking action, if the proposed revision to Sec. 176.930 is

incorporated in the final rule.

The remaining 18 small passenger vessels applicable to these

proposed rules are regulated under subchapter K. ``K vessels'' are

normally owned and operated by larger companies with similar management

issues associated to those of deep draft fleets, such as: large number

of passengers carried; large number of persons employed, onshore and

onboard the vessels; unrestricted international routes with overnight

underway capability; day to weekly underway operations from shore; and

the responsible persons reliance on a management company to oversee and

manage the day to day operation of the vessel. Furthermore, due to the

complexity of the operation of these vessels, the crews require a

higher level of training and management by the company.

A historical vessel casualty review showed that K vessels in

international trade had a higher risk of casualties than vessels of

similar size in operation within U.S. domestic waters. The casualties

reviewed for this determination were also vessel related casualties and

did not include passenger injury or illness related incidents.

Small passenger vessel owners not wishing to apply for an

equivalence allowed for T boats or, whose vessels must comply with 46

CFR subchapter K, must meet the safety management system requirements

of the proposed regulations in 33 CFR part 96. Comments on this

proposal are specifically requested.

Incorporation by Reference

Material that would be incorporated by reference is listed in

Sec. 96.130. The material is available for inspection where indicated

under ADDRESSES. Copies of the material are available from the sources

listed in Sec. 96.130.

Before publishing a binding rule, the Coast Guard will submit this

material to the Director of the Federal Register for approval of the

incorporation by reference.

Regulatory Evaluation

This proposed rule is not a significant regulatory action under

section 3(f) of Executive Order 12866 and does not require an

assessment of potential cost and benefits under section 6(a)(3) of that

Order. It has not been reviewed by the Office of Management and Budget

under that Order. It is not significant under the regulatory policies

and procedures of the Department of Transportation (DOT) (44 FR 11040,

February 26, 1979).

A draft Regulatory Evaluation under paragraph 10e of the regulatory

policies and procedures of DOT is available in the docket for

inspection or copying where indicated under ADDRESSES. A summary of the

Evaluation follows:

The Coast Guard estimates that the proposed regulations will affect

approximately 370 U.S. vessels registered for international trade,

which are owned by approximately 153 different owners. Of these owners,

approximately 96 own 190 U.S. vessels which will be required to comply

with these proposed rules by July 1, 1998. Of the remaining 180 U.S.

vessels, 57 owners must comply by July 1, 2002. The proposed

regulations will also affect any owners or vessels that voluntarily opt

to meet the requirements of proposed 33 CFR part 96.

The Coast Guard expects that the total costs for ISM Code

implementation falls into two categories for each company affected. The

first category involves costs incurred by the responsible persons to

have their company and vessel(s) safety management system externally

audited and certificated. The second category involves the development

and training costs for safety management systems.

Audit and Certification Costs

The Coast Guard surveyed a small representative group of companies

that operate U.S. vessels and the three organizations (American Bureau

of Shipping (ABS), Det Norske Veritas (DNV), and Lloyd's Register of

Shipping (LRS)), that had been accepted to complete the voluntary

auditing and certification of safety management systems in accordance

with NVIC 2-94. Because actual audit and certification costs are

internal to the company's profit and loss determinations, and therefore

proprietary, the companies surveyed provided cost estimates only. The

three organizations provided cost estimates for services involving

initial audits and certification for companies and their vessel(s). All

cost data provided varied widely due to the size of the company, number

of personnel, type of vessels and the number of

[[Page 23711]]

vessels owned and engaged in international trade.

To clearly describe the costs of audit and certification, companies

have been separated into three categories of large, medium and small

sized companies, based on the number of personnel required to operate a

company and the number of vessels a company operates.

Large size companies. Included here are 71 companies which own

approximately 275 U.S. vessels that must meet the requirements of these

proposed rules. These companies operate deep draft tankers (liquid and

gas carriers), freight vessels (container, roll-on/roll-off (RO-RO),

combination, break bulk carriers), bulk vessels (ore and grain

carriers), and self-propelled mobile offshore drilling units.

It is estimated that the external audit and certification cost for

these companies are:

Initial audit and certification of company=$7,000.

Company periodic certificate audit (4)=approx. $7,000 per

audit.

Initial audit and certification of vessel=$5,000.

Vessel intermediate certificate audit (1)=approx. $5,000.

The costs for initial audit and certification of 71 large

companies, plus 4 yearly periodic audits during the life of each

certificate, is estimated at $497,000 annually. [(number of companies)

x 5 (certification + audits) x cost / 5 (years) = $ total cost per

year] The costs for audit and certification of 275 vessels owned by

large companies, plus one intermediate audit during the life of each

certificate, is estimated at $550,000 annually. [(number of vessels)

x 2 (certification + audit) x cost / 5 (years) = $ total cost per

year] The total cost per year for the certification of large size

companies and their vessels is estimated at $1,047,000 per year after

July 1, 2002.

Between July 1, 1998, and July 1, 2002, 40 of these large size

companies and 157 of their vessels will not be required to be

certificated due to the later effective date of the proposed rules for

freight vessels and self-propelled mobile drilling units. Between July

1, 1998, and July 1, 2002, cost estimates for certification of safety

management systems per year would be reduced to $217,000 for companies

and $236,000 for vessels. A total cost is estimated at $453,000

annually from July 1, 1998, to July 1, 2002.

Medium size companies. These include 17 companies with 23 U.S.

vessels. These companies operate oceangoing tugs, industrial support

vessels (offshore supply service vessels, cable laying vessels, etc.),

and research vessels.

It is estimated that the audit and certification cost for these

companies are:

Initial audit and certification of company=$5,000.

Company periodic certificate audit (4)=approx. $5,000 per

audit.

Initial audit and certification of vessel=$3,000.

Vessel intermediate certificate audit (1)=approx. $3,000.

Therefore, the cost for audit and certification of 17 medium size

companies, plus four yearly periodic audits per the life of each

certificate, is estimated at $85,000 annually. The cost for audit and

certification of 23 vessels owned by medium size companies, plus one

intermediate audit per life of certificate, is estimated at $27,600

annually. A total cost per year for certification actions of all medium

size companies owning U.S. vessels is estimated at $112,600 per year.

It must be remembered that due to the type of vessels that fall into

this size company category, the effective date for implementation of

safety management systems for all medium size companies would be July

1, 2002.

Small size companies. These include 65 companies, which own 72 U.S.

vessels. These companies own U.S. passenger vessels engaged in a

foreign voyage while carrying 12 or more passengers. The proposed rules

will become effective for all passenger vessels on July 1, 1998. Small

size companies include T boats and K vessels.

It is estimated that the average audit and certification costs for

these companies are:

Initial audit and certification of company=$1,000.

Company periodic certificate audit (4)=$500 per audit.

Initial audit and certification of vessel=$800.

Vessel intermediate certificate audit (1)=$500.

The cost for initial audit and certification of 65 small size

companies, plus 4 yearly periodic audits per the life of each

certificate, is estimated at $39,000 annually. The cost for initial

audit and certification of 72 vessels owned by small size companies,

plus 1 intermediate audit per the life of each certificate, is

estimated at $18,720 annually. The total estimated cost per year for

certification actions of all small size companies owning U.S. vessels

equals $57,720.

However, this proposed rule provides an alternative to alleviate

the costs imposed on some of these small companies. It is proposed that

T boats, be provided with an equivalence to Chapter IX of SOLAS under

their inspection for certification by the U.S. This equivalence would

cover the 53 owners of the 54 U.S. small passenger vessels (1 owner

owns 2 vessels). If that occurs, no further cost for certification

would be incurred by these small passenger vessels, as this examination

of the vessel and company's safety management systems would be

completed as part of the Coast Guard's examination for issuance of the

Certificate of Inspection (COI). This is already covered under the

vessel's user fee.

Of the K vessels not covered by the SOLAS equivalence proposed in

this rulemaking, the 12 owners of the 18 U.S. vessels would be required

to develop and have their company and vessel(s) safety management

systems audited and certificated by July 1, 1998.

Total audit and certification cost. The total cost for audit and

certification is estimated at $514,780 annually for the period July 1,

1998, through June 30, 2002. On July 1, 2002, the cost will increase to

an estimated $1,217,280 annually. This is because additional U.S.

vessels and companies will be required to comply with Chapter IX of

SOLAS and 46 U.S.C. 3203(a). This cost may increase or decrease after

that time due to the fluctuation in the number of companies and U.S.

vessels which are registered to be engaged in international trade. The

Coast Guard encourages the maritime industry and the general public to

submit comments on these estimated costs.

Safety Management System Development and Employee Training Costs

To ascertain the costs to develop safety management systems and to

train employees to use these systems, the Coast Guard surveyed a small

representative group of U.S. vessel owners and operators that developed

safety management systems consistent with IMO resolutions. Some of

those surveyed voluntarily certificated their company and vessel(s)

safety management systems in accordance with Coast Guard NVIC 2-94.

When surveyed on the specific costs required to develop a safety

management system, the general response was that the companies could

not provide a detailed or accurate cost assessment until they had seen

the proposed regulations. Some indicated that their company had already

developed and certificated quality assurance programs as part of, or

prior to, development of a safety management

[[Page 23712]]

system, and could not provide data on initial development costs. In

those cases, their internal costs were marginal to meet the ISM Code

requirements, as compared to the companies who must develop safety

management systems under these proposed rules. Others indicated that

the development of quality assurance and safety management systems are

a component of the cost of doing business because these systems are

required by contractual agreements. Consequently, they were unable to

attribute specific costs to safety management system development.

Overall, it is difficult to determine the incremental costs

incurred by these companies to develop safety management systems. This

is because these systems are developed for companies that can range in

size from the operation of one small passenger vessel by its owner, who

is the vessel's master, to a U.S. oceangoing container vessel company

with thousands of employees and 37 deep draft vessels. Development

costs will also depend on whether a company internally develops its

safety management system or hires an outside consultant to do it. The

various types of vessels, companies, and the requirements necessary to

run any one of them, will affect development costs. Therefore, it is

requested that comments, data, and documentation on the costs to

develop a safety management system be submitted by vessel owners,

operators, the maritime industry and the general public.

Training costs include the instruction of personnel in the new

safety management systems, both ashore and aboard vessels, and the

documentation of training in the company's safety management systems to

meet the ISM Code. These costs can include on-the-job reading,

classroom training provided by the company to its employees, consultant

training programs completed in house, and on-the-job demonstration and

training drills.

Training costs will also vary due to the wide range of companies

required to comply with these regulations. For example, training costs

for a company that has 5,000 employees will be much higher than the

training costs of a company with 5 employees.

Training costs are also effected by the fact that many shipboard

personnel of U.S. vessels engaged in international trade have received

training regarding the performance elements of the ISM Code through the

implementation of the 1995 Amendments to the International Convention

of Training, Certification, and Watchkeeping for Seafarers (STCW),

1978. Thus, a substantial portion of these training costs may be

related to STCW implementation, and not to ISM Code implementation.

When surveyed on the costs involved to train employees on the use

of safety management systems, cost estimates ranged from $10,000 for

larger companies with deep draft vessels, to $0 for companies who had

integrated their training costs into their normal safety training

budget. So little information was received and the differences in

estimates was such, that a valid estimate of training costs could not

be made. It is believed that different factors, including those

training costs of the STCW requirements, were combined into these cost

statements. Due to the variation of the types of companies and vessels

that will be subject to these proposed rules, the Coast Guard is

requesting that the maritime industry and general public submit

comments, data, and documentation on training costs expected to be

incurred by companies and vessels of all sizes and varied

organizational structure.

Benefits

The Coast Guard expects that the proposed rule will have economic

benefits and the potential to reduce marine casualties. With the

development of safety management systems, a reduction in costs

attributable to shipboard personnel injuries and liability is likely. A

reduction of risk due to fewer vessel casualties and liabilities is

also expected. Because safety management systems include pollution

prevention procedures, the Coast Guard expects a reduction in pollution

incidents which could result in environmental damage. It also expects

reduced company and vessel liability and regulatory fines due to these

incidents. Delays in vessel operation and scheduling can be eliminated

or significantly reduced because the lines of authority and

communication will be defined between personnel onshore and on the

vessel. With fewer marine casualties, costs associated with insurance

claims and vessel insurance premiums should also decrease.

As with other industries, it is anticipated that preventive actions

provided by clear and communicated procedures and policies will allow

for proactive management styles. Over time, the maritime industry

should realize substantial savings in cost that far outweigh start up

and maintenance fees for safety management systems. These savings

include reduction of: lost worker's hours due to injury, loss of vessel

operation due to repairs, and costs due to fines and judicial actions

against the company and its vessel(s). The Coast Guard specifically

solicits comments on the benefits of this proposed action.

Small Entities

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the

Coast Guard must consider whether this proposed rule, if adopted, will

have a significant economic impact on a substantial number of small

entities. ``Small entities'' include small businesses, not-for-profit

organizations that are independently owned and operated and are not

dominant in their fields, and governmental jurisdictions with

populations of less than 50,000.

This rulemaking will affect U.S. oceangoing vessels of specific

categories of more than 500 gross tons, or passenger vessels of any

size carrying more than 12 passengers in international trade. The

greatest impact will fall on large U.S. oceangoing shipping companies,

which have 1 to 37 deep draft vessels over 500 gross tons and are not

considered as small business concerns or small business entities.

Today, there are approximately 5,600 small and large passenger

vessels certificated for operation under the U.S. flag. Approximately

370 of those U.S. flag vessels will be affected by this proposed rule

and the mandatory requirements of the ISM Code. Out of those 370 U.S.

vessels, approximately 72 are small passenger vessels on limited

international routes in the sportfishing, tourism and cruising trade.

Only the small passenger vessel companies appear to have less than 500

employees within their firms or claim gross revenues far below the

defined base of a small entity. Thus, for the purposes of this

rulemaking, the 72 small passenger vessels are the only companies that

appear to meet the definition of a small entity under this section.

Costs for these small passenger vessels to develop a safety

management system, provide training and document procedures will be

considerably less than larger companies due to the limited number of

employees, routes, and passengers. Most of these companies operate with

less than 5 employees. In some cases, the owner is the master of the

vessel, and the crew are close relatives of the owner. There is long

term tenure of the employees in these small companies, and since most

positions aboard are unlicensed or undocumented, training consists of

basic operations which are required to be documented by the existing

[[Page 23713]]

regulations for small passenger vessels in 46 CFR.

Furthermore, the Coast Guard proposes to permit vessels in the ``T

boat'' category to comply with the ISM Code through an equivalence

under 46 CFR part 176.930, at their option. This would eliminate the

$860.00 certification cost for each vessel, per year, as discussed in

the preceding cost/benefit analysis. All 54 of the ``T boats'' may opt

to satisfy these requirements by that equivalence.

An initial evaluation showed that the cost of this rulemaking would

not have a significant economic impact on a substantial number of small

business entities as described above. Therefore, the Coast Guard

certifies that under 5 U.S.C. 605(b), this proposal, if adopted, will

not have a significant impact on a substantial number of small

entities. If however, you think that your business or organization

qualifies as a small entity and that this proposal will have a

significant economic impact on your business or organization, please

submit a comment (see ADDRESSES) explaining why you think it qualifies

and in what way and to what degree this proposal will economically

effect it.

Assistance for Small Entities

In accordance with section 213(a) of the Small Business Regulatory

Enforcement Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard

wants to help small entities understand this proposed rule so they can

better evaluate its effects on them and participate in the rulemaking

process. If your small business is affected by this rule and you have

questions concerning its provisions or options for compliance, please

contact Mr. Robert M. Gauvin, Project Manager, Vessel and Facility

Operating Standards Division (G-MSO-2), at (202) 267-1053, or fax (202)

267-4570.

Collection of Information

The proposed rule provided for a collection of information under

the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). As

defined in 5 CFR 1320.361, ``collection of information'' includes

reporting, recordkeeping, monitoring, posting, labeling, and other

similar actions. The title and description of the information

collections, a description of the respondents, and an estimate of the

total annual burden follow. Included in the estimate is the time for

reviewing instructions, searching existing sources of data, gathering

and maintaining the data needed, and completing and reviewing the

collection.

Summary of the Collection of Information

This proposal contains collection-of-information requirements in

the following sections: 33 CFR 96.250, 96.320, 96.330, 96.340, 96.350,

96.360, and 46 CFR 2.01-25, 31.40-30, 71.75-13, 71.75-20, 91.60-30,

91.60-40, 107.417, 115.925, 126.480, 175.540, 176.925, 176.930,189.60-

30, 189.60-40.

DOT No.: 2115-0056; 2115-0626, and 2115.

Administration: U.S. Coast Guard.

Title: International Management Code for the Safe Operation of

Ships and for Pollution Prevention (International Safety Management

(ISM) Code).

Need for Information: 46 U.S.C. Chapter 32 and Chapter IX of SOLAS

require that U.S. companies and their vessels comply with the ISM Code.

The ISM Code is a mandatory international convention requirement

paralleled in U.S. law which will come into effect:

On July 1, 1998, for passenger vessels, and tankers, bulk

freight and high speed freight vessels over 500 gross tons engaged in

foreign trade; and

On July 1, 2002, for freight vessels and self-propelled

mobile offshore drilling units over 500 gross tons engaged in foreign

trade.

Information showing the compliance status of responsible persons

and their U.S. vessels must be provided to the Coast Guard by

recognized organizations authorized by the Coast Guard to act on behalf

of the U.S. To comply, a responsible person, company and vessel(s)

owned and operated by that person, must establish a safety management

system and prepare internal audit reports for the responsible person's

company and vessel(s) which demonstrate compliance with the ISM Code.

Preparation of these reports requires a new information collection.

Title 46, chapter 32 also requires that a responsible person's

company and U.S. vessel(s) possess Document of Compliance certificates

and Safety Management Certificates, respectively, as evidence of

compliance with the ISM Code. Recognized organizations authorized to

act on behalf of the U.S. and the Coast Guard will issue these

certificates. To prepare and issue these certificates, an amendment to

existing 2115-0056 is required.

Safety management systems will be externally audited and reported

on by the authorized, recognized organizations through a review of the

internal audit reports prepared by a company. Since the Coast Guard

reviews this information that documents the ISM Code compliance, 2115-

0626 requires amendment.

Proposed use of Information: The information will be used by the

Coast Guard or recognized organizations authorized to act on behalf of

the U.S. to determine if responsible persons and their vessels are

complying with the ISM Code. If in compliance, Document of Compliance

certificates and Safety Management Certificates will be issued.

Frequency of Response: Initially, all responsible persons who own

or operate U.S. vessels subject to these proposed rules will develop

their internal auditing system and recordkeeping requirements. Once

established, these procedures will state when internal audits and

reports of the audits will be completed and reviewed, at the discretion

of the responsible person. These reports will be reviewed by authorized

recognized organizations during safety management audits of both the

company and its vessel(s) safety management systems. It is expected

that, at a minimum, an internal audit report will be prepared prior to

each safety management audit.

Company safety management systems will be externally audited once

to verify compliance with the ISM Code and to issue a company its

Document of Compliance certificate. The Document of Compliance

certificate is valid for five years and requires that an annual

verification audit be completed. After five years, one renewal safety

management audit will be conducted and a new certificate will be

issued.

Once a company receives its Document of Compliance certificate, its

U.S. flag vessel(s) will undergo an initial safety management audit, to

verify compliance with the ISM Code and to issue a Safety Management

Certificate. The Safety Management Certificate is valid for five years

and requires one intermediate verification audit during that time.

After five years, one renewal safety management audit will be conducted

and a new certificate will be issued.

Recognized organizations authorized to complete certification

actions on safety management systems for the U.S. will complete

external audit reports which will be reviewed by the Coast Guard at a

minimum of once a year.

Burden of Response: Companies of various sizes will be required to

maintain internal audit reports in order to comply with the ISM Code.

The burden of compliance is expected to be lower for those U.S.

companies with few employees and/or vessels because less documentation

will be required, and thus, preparation time is shorter. Preparation of

these internal reports will allow companies and vessels to continuously

be certificated to

[[Page 23714]]

international safety management system requirements. Additionally,

recognized organizations, acting on behalf of the U.S., will review

these internal reports during safety management audits, and will then

prepare external audit reports which document a company or vessel's

compliance or non-compliance with the ISM Code. If in compliance,

Document of Compliance certificates and Safety Management Certificates

will be issued by the organizations. External audit reports and

certificates will be reviewed by the Coast Guard.

The burden estimate for the companies and their vessels is as

follows:

Small passenger vessels (T boats); 54 x .5 hours (per

report)=27.0 annually.

Other vessels; 316 (vessels) x 1 hour (audit report) x

.4 (report frequency)=126.4 hours.

Company review of audits; [316 (vessels) x 2 hour (audit

report) x .4 (frequency of report)] + [100 (companies) x 2 hours

(audit review)]=452.8 hours.

It is estimated that the recognized organizations will expend the

following personnel hours to review internal audit reports, prepare

external audit reports, and issue certificates to companies and U.S.

vessels:

Review of internal audit reports: [2 (audits/year/company)

x 4 hours (complete report + review report) x 100 (companies)] + [2

(audits/year/vessels) x 5 hours (complete report + review report) x

316 (vessels)]=3,960 hours.

Review of external audit reports; [316 + 100 (U.S. vessels

and companies)/5 years] x .5 hours=41.6 hours.

Endorsement of Document of Compliance certificates; 100

(companies) x .25 hours=25 hours.

Endorsement of Safety Management Certificates; 316

(vessels) x .25 hours/5 years=15.8 hours.

Vessel and company handling of certificates; 416

(certificates) x .25 hours/5 years=20.8 hours.

It is expected that the Coast Guard will review audits and

certificates and expend the following estimated personnel hours:

For small passenger vessels; 54 (vessels) x .5

(hours)=27.0 hours.

For other vessels; 316 (vessels) x .5 (hours) x .4

(frequency)=63.2 hours.

Review of recognized organization actions and reports on

vessels; 316 (vessels) x 3 (hour)=948 hours.

Number of Respondents: Companies and their U.S. vessels which are

over 500 gross tons or carry more than 12 passengers, engaged in

international trade. Recognized organizations who opt to apply for

authorization to act on behalf of the U.S. to review and certificate

the safety management systems of companies and their U.S. vessels.

Estimated Total Annual Burden: The Coast Guard is submitting the

required information to OMB for review under section 3504 (h) of the

Paperwork Reduction Act. It is estimated that the following annual

hours are required to complete the record and reportkeeping required by

this proposal:

Companies and U.S. vessels--3,981 hours for internal audit

reports.

Recognized Organizations--1,168 hours for external audit

reports and certification requirements.

Coast Guard--559 hours for review of audit reports,

certificates, and company data.

As required by section 3507(d) of the Paperwork Reduction Act of

1995, the Coast Guard has submitted a copy of this proposed rule to the

Office of Management and Budget (OMB) for its review of the collection

of information.

The Coast Guard solicits public comment on the proposed collection

of information to (1) evaluate whether the information is necessary for

the proper performance of the functions of the Coast Guard, including

whether the information would have practical utility; (2) evaluate the

accuracy of the Coast Guard's estimate of the burden of the collection,

including the validity of the methodology and assumptions used; (3)

enhance the quality, utility, and clarity of the information to be

collected; and (4) minimize the burden of the collection on those who

are to respond, as by allowing the submittal of responses by electronic

means or the use of other forms of information technology.

Persons submitting comments on the collection of information should

submit their comments both to OMB and to the Coast Guard where

indicated under ADDRESSES by the date under DATES.

Persons are not required to respond to a collection of information

unless it displays a currently valid OMB control number. Before the

requirements for this collection of information become effective, the

Coast Guard will publish notice in the Federal Register of OMB's

decision to approve, modify, or disapprove the collection.

Federalism

The Coast Guard has analyzed this proposed rule under the

principles and criteria contained in Executive Order 12612 and has

determined that this proposed rule does not have sufficient

implications for federalism to warrant the preparation of a Federalism

Assessment.

Environment

The Coast Guard considered the environment impact of this proposed

rule and concluded that under paragraph 2.B.2.e(34) of Commandant

Instruction M16475.1B, this proposed rule is categorically excluded

from further environmental documentation. Paragraph 2.B.2.e(34)(d)

categorically excludes regulations concerning manning, documentation,

measurement, inspection and equipping of vessels. A ``Categorical

Exclusion Determination'' is available in the docket for inspection or

copying where indicated under ADDRESSES.

List of Subjects

33 CFR Part 96

Administrative practice and procedure, Incorporation by reference,

Marine Safety, Reporting and recordkeeping requirements, Safety

management systems, Vessels.

46 CFR Part 2

Marine safety, Reporting and recordkeeping requirements, Vessels.

46 CFR Part 31

Cargo vessels, Marine safety, Reporting and recordkeeping

requirements, Safety management systems.

46 CFR Part 71

Marine safety, Passenger vessels, Reporting and recordkeeping

requirements, Safety management systems.

46 CFR Part 91

Cargo vessels, Marine safety, Reporting and recordkeeping

requirements, Safety management systems.

46 CFR Part 107

Marine safety, Oil and gas exploration, Reporting and recordkeeping

requirements, Safety management systems, Vessels.

46 CFR Part 115

Marine safety, Passenger vessels, Report and recordkeeping

requirements, Safety management systems.

46 CFR Part 126

Marine safety, Offshore supply vessels, Reporting and recordkeeping

requirements, Safety management systems.

46 CFR Part 175

Marine safety, Passenger vessels, Report and recordkeeping

requirements, Safety management systems.

[[Page 23715]]

46 CFR Part 176

Marine safety, Passenger vessels, Report and recordkeeping

requirements, Safety management systems.

46 CFR Part 189

Marine safety, Oceanographic research vessels, Reporting and

recordkeeping requirements, Safety management systems.

For the reasons discussed in the preamble, the Coast Guard proposes

to amend 33 CFR Ch. I and 46 CFR Ch. I as follows:

1. Add part 96 to read as follows:

33 CFR PART 96--RULES FOR THE SAFE OPERATION OF VESSELS AND SAFETY

MANAGEMENT SYSTEMS

Subpart A--General

Sec.

96.100 Purpose.

96.110 Who does this subpart apply to?

96.120 Definitions.

96.130 Incorporation by reference.

Subpart B--Company and Vessel Safety Management Systems

96.200 Purpose.

96.210 Who does this subpart apply to?

96.220 What makes up a safety management system?

96.230 What objectives must a safety management system meet?

96.240 What functional requirements must a safety management system

meet?

96.250 What documents and reports must a safety management system

have?

Subpart C--How Will Safety Management Systems be Certificated and

Enforced?

96.300 Purpose.

96.310 Who does this subpart apply to?

96.320 What is involved to complete a safety management audit and

when is it required to be completed?

96.330 Document of Compliance certificate: What is it and when is

it needed?

96.340 Safety Management Certificate: What is it and when is it

needed?

96.350 Interim Document of Compliance certificate: What is it and

when can it be used?

96.360 Interim Safety Management Certificate: What is it and when

can it be used?

96.370 What are the requirements for vessels of countries not party

to Chapter IX of SOLAS?

96.380 How will the Coast Guard handle compliance and enforcement

of these regulations?

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

Subpart D--Authorization of Recognized Organizations to Act on Behalf

of the U.S.

96.400 Purpose.

96.410 Who does this subpart apply to?

96.420 What authority may an organization ask for under this

subpart?

96.430 How does an organization submit a request to be authorized?

96.440 How will the Coast Guard decide whether to approve an

organization's request to be authorized?

96.450 What happens if the Coast Guard disapproves an

organization's request to be authorized?

96.460 How will I know what the Coast Guard requires of my

organization if my organization receives authorization?

96.470 How does the Coast Guard terminate an organization's

authorization?

96.480 What is the status of a certificate if the issuing

organization has its authority terminated?

96.490 What further obligations exist for my organization if the

Coast Guard terminates its authorization?

96.495 How can I appeal a decision made by an authorized

organization?

Authority: 46 U.S.C. 3201 et. seq.; 46 U.S.C. 3103; 46 U.S.C.

3316, as amended by Sec. 607, Pub. L. 104-324, 110 Stat. 3901; 49

CFR 1.45, 49 CFR 1.46.

Subpart A--General

Sec. 96.100 Purpose.

This subpart implements Section 602, ``Safety Management'' (46

U.S.C. 3201-3205) of the Coast Guard Authorization Act of 1996 (Pub. L.

104-324, 110 Stat. 3901), which requires responsible persons and their

vessels to comply with the requirements of Chapter IX of the

International Convention for the Safety of Life at Sea (SOLAS), 1974,

International Management Code for the Safe Operation of Ships and for

Pollution Prevention (International Safety Management (ISM) Code),

adopted in London on May 24, 1994.

Note: Chapter IX of SOLAS is available from the International

Maritime Organization, Publication Section, 4 Albert Embankment,

London, SE1 75R, United Kingdom, Telex 23588. Please include

document reference number ``IMO-190E'' in your request.

Sec. 96.110 Who does this subpart apply to?

This subpart applies to you if--

(a) You are a responsible person who owns a U.S. vessel(s) and must

comply with Chapter IX of SOLAS;

(b) You are a responsible person who owns a U.S. vessel(s) that is

not required to comply with Chapter IX of SOLAS, but requests

application of this subpart;

(c) You are a responsible person who owns a foreign vessel(s) that

trades in U.S. waters, which must comply with Chapter IX of SOLAS; or

(d) You are a recognized organization applying for authorization to

act on behalf of the U.S. to conduct safety management audits and issue

international convention certificates.

Sec. 96.120 Definitions.

As used in this part--

Administration means the Government of the State whose flag the

ship is entitled to fly.

Authorized Organization Acting on behalf of the U.S. means an

organization that is recognized by the Commandant of the U.S. Coast

Guard under the minimum standards of subpart B of 46 CFR part 8, and

has been authorized under this section to conduct certain actions and

certifications on behalf of the United States.

Captain of the Port (COTP) means the U.S. Coast Guard officer as

described in 33 CFR 6.01-3, commanding a Captain of the Port zone

described in 33 CFR part 3, or that person's authorized representative.

Commandant means the Commandant, U.S. Coast Guard.

Company means the owner of a vessel, or any other organization or

person such as the manager or the bareboat charterer of a vessel, who

has assumed the responsibility for operation of the vessel from the

shipowner and who on assuming responsibility has agreed to take over

all the duties and responsibilities imposed by this part or the ISM

Code.

Document of Compliance means a certificate issued to a company or

responsible person that complies with the requirements of this part or

the ISM Code.

International Safety Management (ISM) Code means the International

Management Code for the Safe Operation of Ships and Pollution

Prevention, Chapter IX of the Annex to the International Convention for

the Safety of Life at Sea (SOLAS), 1974.

Non-conformity means an observed situation where objective evidence

indicates the non-fulfillment of a specified requirement.

Major non-conformity means an identifiable deviation which poses a

serious threat to personnel or vessel safety or a serious risk to the

environment and requires immediate corrective action; in addition, the

lack of effective and systematic implementation of a requirement of the

ISM Code is also considered a major non-conformity.

Objective Evidence means quantitative or qualitative information,

records or statements of fact pertaining to safety or to the existence

and implementation of a safety management system element, which is

based on observation, measurement or test and which can be verified.

Officer In Charge, Marine Inspection (OCMI) means the U.S. Coast

Guard officer as described in 46 CFR 1.01-15(b), in charge of an

inspection zone described in 33 CFR part 3, or that person's authorized

representative.

[[Page 23716]]

Recognized organization means a national or international

organization which has applied and been recognized by the Commandant of

the Coast Guard to meet the minimum standards of 46 CFR part 8.

Responsible person means--

(a) The owner of a vessel to whom this part applies, or

(b) Any other person that--

(1) Has assumed the responsibility from the owner for operation of

the vessel to which this part applies; and

(2) Agreed to assume, with respect to the vessel, responsibility

for complying with all the requirements of this part.

(c) A responsible person may be a company, firm, corporation,

association, partnership or individual.

Safety management audit means a systematic and independent

examination to determine whether the safety management system

activities and related results comply with planned arrangements and

whether these arrangements are implemented effectively and are suitable

to achieve objectives.

Safety Management Certificate means a document issued to a vessel

which signifies that the responsible person or its company, and the

vessel's shipboard management operate in accordance with the approved

safety management system.

Safety Management System means a structured and documented system

enabling Company and vessel personnel to effectively implement the

responsible person's safety and environmental protection policies.

SOLAS means the International Convention for the Safety of Life at

Sea, 1974, as amended.

Vessel engaged on a foreign voyage means a vessel to which this

part applies that is--

(a) Arriving at a place under the jurisdiction of the United States

from a place in a foreign country;

(b) Making a voyage between places outside the United States; or

(c) Departing from a place under the jurisdiction of the United

States for a place in a foreign country.

Sec. 96.130 Incorporation by reference.

(a) The Director of the Federal Register approves certain material

that is incorporated by reference into this subpart under 5 U.S.C.

552(a) and 1 CFR part 51. To enforce any edition other than that

specified in paragraph (b) of this section, the Coast Guard must

publish notice of the change in the Federal Register and the material

must be available to the public. You may inspect all material at the

Office of the Federal Register, 800 North Capitol St., NW., Suite 700,

Washington, DC and at the U.S. Coast Guard, Office of Design and

Engineering Standards (G-MSE), 2100 Second St., SW., Washington, DC

20593-0001, and receive it from the source listed in paragraph (b) of

this section.

(b) The material approved for incorporation by reference in this

subpart and the sections affected are as follows:

American National Standards Institute (ANSI)

11 West 42nd St., New York, NY 10036.

ANSI/ASQC Q9001-1994, Quality Systems--Model for Quality

Assurance in Design, Development, Production, Installation, and

Servicing, 1994--96.430

International Maritime Organization IMO

4 Albert Embankment, London, SE1 7SR, United Kingdom.

Resolution A.741(18), International Management Code for the Safe

Operation of Ships and for Pollution Prevention, November 4, 1993--

96.220, 96.370

Resolution A.788 (19), Guidelines on Implementation of the

International Safety Management (ISM) Code by Administrations,

November 23, 1995--96.320, 96.440

Resolution A.739(18), Guidelines for the Authorization of

Organizations Acting on Behalf of the Administration, November 4,

1993--96.440

Subpart B--Company and Vessel Safety Management Systems.

Sec. 96.200 Purpose.

This subpart establishes the minimum standards that the safety

management system of a company and its U.S. flag vessel(s) must meet

for certification to comply with the requirements of 46 U.S.C. 3201-

3205 and Chapter IX of SOLAS, 974. It also permits companies with U.S.

flag vessels that are not required to comply with this part to

voluntarily develop safety management systems which can be certificated

to standards consistent with Chapter IX of SOLAS.

Sec. 96.210 Who does this subpart apply to?

(a) This subpart applies--

(1) To a responsible person who owns or operates a

U.S. vessel(s) engaged on a foreign voyage which meet the

conditions of paragraph (a)(2) of this section;

(2) To all U.S. vessels engaged on a foreign voyage that are--

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

(ii) A tanker, a bulk freight vessel, a freight vessel or a self-

propelled mobile offshore drilling unit (MODU) of 500 gross tons or

more; and

(3) To all foreign vessels engaged on voyages operating in U.S.

waters and subject to Chapter IX of SOLAS.

(b) This subpart does not apply to--

(1) A barge;

(2) A recreational vessel not engaged in commercial service;

(3) A fishing vessel;

(4) A vessel operating only on the Great Lakes or its tributary and

connecting waters; or

(5) A public vessel, which includes a U.S. vessel of the National

Defense Reserve Fleet owned by the U.S. Maritime Administration and

operated in non-commercial service.

(c) Any responsible person and their company who owns and operates

a U.S. flag vessel(s) which does not meet the conditions of paragraph

(a) of this section, may voluntarily meet the standards of this part

and Chapter IX of SOLAS and have their safety management systems

certificated.

(d) The effective date for the requirements of this part are--

(1) On or after July 1, 1998, for--

(i) Vessels transporting 12 or more passengers engaged on a foreign

voyage; or

(ii) Tankers, bulk freight vessels, or high speed freight vessel of

at least 500 gross tons or more.

(2) On or after July 1, 2002, for freight vessels and self-

propelled mobile offshore drilling units (MODUs) of at least 500 gross

tons or more.

Sec. 96.220 What makes up a safety management system?

(a) The safety management system must document the responsible

person's--

(1) Safety and pollution prevention policy;

(2) Functional safety and operational requirements;

(3) Recordkeeping responsibilities; and

(4) Reporting responsibilities.

(b) A safety management system must also be consistent with the

functional standards and performance elements of IMO Resolution

A.741(18).

Sec. 96.230 What objectives must a safety management system meet?

The safety management system must:

(a) Provide written safe practices for vessel operation and a safe

working environment for the type of vessel the system is developed for;

(b) List safeguards against all identified risks;

(c) List expected actions to continuously improve safety management

skills of personnel ashore and aboard vessels, including preparation

for emergencies related to

[[Page 23717]]

both safety and environmental protection; and

(d) Ensure compliance with mandatory rules and regulations, and

take into account all national, international, and industry guidelines,

standards and codes when developing written procedures for the safety

management system.

Sec. 96.240 What functional requirements must a safety management

system meet?

The functional requirements of a safety management system must

include--

(a) A written statement from the responsible person stating the

company's safety and environmental protection policy;

(b) Instructions and procedures to provide direction for the safe

operation of the vessel and protection of the environment in compliance

with Titles 33 and 46 of the U.S. Code, and international conventions

to which the U.S. is a party (SOLAS, MARPOL, etc.);

(c) Documents showing the levels of authority and lines of

communication between shoreside and shipboard personnel;

(d) Procedures for reporting accidents, near accidents, and

nonconformities with provisions of the company's and vessel's safety

management system;

(e) Procedures to prepare for and respond to emergency situations

by shoreside and shipboard personnel;

(f) Procedures for internal audits on the operation of the company

and vessel(s) safety management system; and

(g) Procedures and processes for management review of company

internal audit reports and correction of nonconformities that are

reported by these or other reports.

Sec. 96.250 What documents and reports must a safety management system

have?

The documents and reports required for a safety management system

under Sec. 96.330 or Sec. 96.340 must include the written documents and

reports itemized in Table 96.250. These documents and reports must be

available to the company's shore-based and vessel(s)-based personnel:

Table 96.250 Safety Management System Documents and Reports

------------------------------------------------------------------------

Type of documents and reports Specific requirements

------------------------------------------------------------------------

(a) Safety and environmental (1) Meet the objectives of Sec. 96.230;

policy statements. and

(2) Are carried out and kept current at

all levels of the company.

(b) Company responsibilities (1) The owners name and details of

and authority statements. responsibility for operation of the

company and vessel(s);

(2) Name of the person responsible for

operation of the company and vessel(s),

if not the owner;

(3) Responsibility, authority and

interrelations of all personnel who

manage, perform, and verify work

relating to and affecting the safety and

pollution prevention operations of the

company and vessel(s); and

(4) A statement describing the company's

responsibility to ensure adequate

resources and shore-based support are

provided to enable the designated person

or persons to carry out the

responsibilities of this subpart.

(c) Designation in writing of (1) Have direct access to communicate

a person or persons to with the highest levels of the company

oversee the safety and with all management levels ashore

management system for the and aboard the company's vessel(s);

company and vessel(s).

(2) Have the written responsibility to

monitor the safety and environmental

aspects of the operation of each vessel;

and

(3) Have the written responsibility to

ensure there are adequate support and

shore-based resources for vessel(s)

operations.

(d) Written statements that (1) Carry out the company's safety and

define the Master's environmental policies;

responsibilities and

authorities.

(2) Motivate the vessel's crew to observe

the safety management system policies;

(3) Issue orders and instructions in a

clear and simple manner;

(4) Make sure that specific requirements

are carried out by the vessel's crew and

shore-based resources; and

(5) Review the safety management system

and report non-conformities to shore-

based management.

(e) Written statements that (1) Ability to make decisions about

the Master has overriding safety and environmental pollution; and

responsibility and authority

to make vessel decisions.

(2) Ability to request the company's help

when necessary.

(f) Personnel procedures and (1) Masters of vessels are properly

resources which are qualified for command;

available ashore and aboard

ship.

(2) Masters of vessels know the company's

safety management system;

(3) Owners or companies provide the

necessary support so that the Master's

duties can be safely performed;

(4) Each vessel is properly crewed with

qualified, certificated and medically

fit seafarers complying with national

and international requirements;

(5) New personnel and personnel

transferred to new assignments involving

safety and protection of the environment

are properly introduced to their duties;

(6) Personnel involved with the company's

safety management system know the

relevant rules, regulations, codes and

guidelines;

(7) Needed training is identified to

support the safety management system and

ensure that the training is provided for

all personnel concerned;

(8) Communication of relevant procedures

for the vessel's personnel involved with

the safety management system is in the

language(s) understood by them; and

(9) Personnel are able to communicate

effectively when carrying out their

duties as related to the safety

management system.

[[Page 23718]]

(g) Vessel safety and (1) Define tasks; and

pollution prevention

operation plans and

instructions for key

shipboard operations.

(2) Assign qualified personnel to

specific tasks.

(h) Emergency preparedness (1) Identify, describe and direct

procedures. response to potential emergency

shipboard situations;

(2) Set up programs for drills and

exercises to prepare for emergency

actions; and

(3) Make sure that the company's

organization can respond at anytime, to

hazards, accidents and emergency

situations involving their vessel(s).

(i) Reporting procedures on (1) Report non-conformities of the safety

required actions. 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.

(j) Vessel maintenance (1) Inspect vessel's equipment, hull, and

procedures. (These machinery at appropriate intervals;

procedures verify that a

company's vessel(s) is

maintained in conformity

with the provisions of

relevant rules and

regulations, with any

additional requirements

which may be established by

the company.).

(2) Report any non-conformity with its

possible cause, if known;

(3) Take appropriate corrective actions;

(4) Keep records of these activities;

(5) Identify specific equipment and

technical systems that may result in a

hazardous situation if a sudden

operational failure occurs;

(6) Identify measures that promote the

reliability of the equipment and

technical systems identified in

paragraph (j)(5), and regularly test

standby arrangements and equipment or

technical systems not in continuous use;

and

(7) Include the inspections required by

this section into the vessel's

operational maintenance routine.

(k) Safety management system (1) Procedures which establish and

document and data maintain control of all documents and

maintenance. data relevant to the safety management

system;

(2) Documents are available at all

relevant locations, i.e., each vessel

carries on board all documents relevant

to that vessel's operation;

(3) Changes to documents are reviewed and

approved by authorized personnel; and

(4) Outdated documents are promptly

destroyed.

(l) Safety management system (1) Periodic evaluation of the safety

internal audits which verify management system's efficiency and

the safety and pollution review of the system in accordance with

prevention activities. the established procedures of the

company, when needed;

(2) Types and frequency of internal

audits, when they are required, how they

are reported, and possible corrective

actions, if necessary;

(3) Determining factors for the selection

of personnel, independent of the area

being audited, to complete internal

company and vessel audits; and

(4) Communication and reporting of

internal audit findings for critical

management review and to ensure

management personnel of the area audited

take timely and corrective action on

deficiencies found.

------------------------------------------------------------------------

Subpart C--How Will Safety Management Systems be Certificated and

Enforced?

Sec. 96.300 Purpose.

This subpart establishes the standards for the responsible person

of a company and its vessel(s) to obtain the required and voluntary,

national and international certification for the company's and vessel's

safety management system.

Sec. 96.310 Who does this subpart apply to?

This subpart applies:

(a) If you are a responsible person who owns a vessel(s) registered

in the U.S. and engaged on foreign voyages;

(b) If you are a responsible person who owns a vessel(s) registered

in the U.S. and volunteer to meet the standards of this part and

Chapter IX of SOLAS;

(c) To all foreign vessels engaged in foreign trade operating in

U.S. waters and subject to Chapter IX of SOLAS; or

(d) If you are a recognized organization authorized by the U.S. to

complete safety management audits and certification required by this

part.

Sec. 96.320 What is involved to complete a safety management audit and

when is it required to be completed?

(a) A safety management audit is any of the following:

(1) An initial audit which is carried out before a Document of

Compliance certificate or a Safety Management Certificate is issued;

(2) A renewal audit which is carried out before the renewal of a

Document of Compliance certificate or a Safety Management Certificate;

(3) Periodic audits including--

(i) An annual verification audit, as described in Sec. 96.330(f) of

this part, and

(ii) An intermediate verification audit, as described in

Sec. 96.340(e)(2) of this part.

(b) A satisfactory audit means that the auditor(s) agrees that the

requirements of this part are met, based on review and verification of

the procedures and documents that make up the safety management system.

(c) Actions required during safety management audits for a company

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

(1) Review and verify the procedures and documents that make up a

safety management system, as defined in subpart B of this part.

[[Page 23719]]

(2) Make sure the audit complies with this subpart and is

consistent with IMO Resolution A.788(19), Guidelines on Implementation

of the International Safety Management (ISM) Code by Administrations.

(3) Make sure the audit is carried out by a team of Coast Guard

auditors or auditors assigned by a recognized organization authorized

to complete such actions by subpart D of this part.

(d) Safety management audits for a company and their U.S. vessel(s)

are required--

(1) Before issuing or renewing a Document of Compliance

certificate, and to keep a Document of Compliance certificate valid, as

described in Secs. 96.330 and 96.340 of this part.

(2) Before issuing or renewing a Safety Management Certificate, and

to maintain the validity of a Safety Management Certificate, as

described in Sec. 96.340 of this part. However, any safety management

audit for the purpose of verifying a vessel's safety management system

will not be scheduled or conducted for a company's U.S. vessel unless

the company first has undergone a safety management audit of the

company's safety management system, and has received its Document of

Compliance certificate.

(e) Requests for all safety management audits for a company and its

U.S. vessel(s) must be communicated--

(1) By a responsible person directly to a recognized organization

authorized by the U.S.

(2) By a responsible person within the time limits for an annual

verification audit, described in Sec. 96.330(f) of this part, and for

an intermediate verification audit, described in Sec. 96.340(e)(2) of

this part. If he or she does not make a request for a safety management

annual or verification audit for a valid Document of Compliance

certificate issued to a company or a valid Safety Management

Certificate issued to a vessel, this is cause for the Coast Guard to

revoke the certificate as described in Secs. 96.330 and 96.340 of this

part.

(f) If a non-conformity with the safety management system is found

during the audit, it must be reported in writing to the company's owner

or vessel's master by the auditor as described in IMO Resolution

A.788(19).

Sec. 96.330 Document of Compliance certificate: what is it and when is

it needed?

(a) You must hold a valid Document of Compliance certificate if you

are the responsible person who, or company which, owns a U.S. vessel

engaged in foreign voyages, carrying 12 or more passengers, or is a

tanker, bulk freight vessel, freight vessel, or a self-propelled mobile

offshore drilling unit of 500 gross tons or more.

(b) You may voluntarily hold a valid Document of Compliance

certificate, if you are a responsible person who, or a company which,

owns a U.S. vessel not included in paragraph (a) of this section.

(c) You will be issued a Document of Compliance certificate only

after you complete a satisfactory safety management audit as described

in Sec. 96.320 of this part.

(d) All U.S. and foreign vessels that carry 12 or more passengers

or a tanker, bulk freight vessel, freight vessel, or a self-propelled

mobile offshore drilling unit of 500 gross tons or more, must carry a

valid copy of the company's Document of Compliance certificate onboard

when on a foreign voyage.

(e) A valid Document of Compliance certificate covers the type of

vessel(s) on which a company's safety management system initial safety

management audit was based. The validity of the Document of Compliance

certificate may be extended to cover additional types of vessels after

a satisfactory safety management audit is completed on the company's

safety management system which includes those additional vessel types.

(f) A Document of Compliance certificate is valid for 60 months. It

must be verified annually through a safety management verification

audit within three months before or after the certificate's anniversary

date.

(g) Only the Coast Guard may revoke a Document of Compliance

certificate from a company which owns a U.S. vessel. The Document of

Compliance certificate may be revoked if--

(1) The annual safety management audit and system verification

required by paragraph (f) of this section is not requested by the

responsible person; or

(2) Major non-conformities are found in the company's safety

management system during a safety management audit or other related

survey or inspection being completed by the Coast Guard or the

recognized organization chosen by the company or responsible person.

(h) When a company's valid Document of Compliance certificate is

revoked by the Coast Guard, a satisfactory safety management audit must

be completed before a new Document of Compliance certificate for the

company's safety management system can be reissued.

Sec. 96.340 Safety Management Certificate: what is it and when is it

needed?

(a) Your U.S. vessel engaged on a foreign voyage must hold a valid

Safety Management Certificate if it carries 12 or more passengers, or

if it is a tanker, bulk freight vessel, freight vessel, or a self-

propelled mobile offshore drilling unit of 500 gross tons or more.

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

Certificate even if your vessel is not required to by paragraph (a) of

this section.

(c) Your U.S. vessel may only be issued a Safety Management

Certificate or have it renewed when your company holds a valid Document

of Compliance certificate issued under Sec. 96.330 of this part and the

vessel has completed a satisfactory safety management audit of the

vessel's safety management system set out in Sec. 96.320 of this part.

(d) A copy of your company's valid Document of Compliance

certificate must be on board all U.S. and foreign vessels which carry

12 or more passengers, and must be onboard a tanker, bulk freight

vessel, freight vessel, or a self-propelled mobile offshore drilling

unit of 500 gross tons or more, when engaged on foreign voyages or

within U.S. waters.

(e) A Safety Management Certificate is valid for 60 months. The

validity of the Safety Management Certificate is based on--

(1) A satisfactory initial safety management audit;

(2) A satisfactory intermediate verification audit requested by the

vessel's responsible person, completed between the 24th and 36th month

of the anniversary date of the certificate; and

(3) A vessel's company holding a valid Document of Compliance

certificate. When a company's Document of Compliance certificate

expires or is revoked, the Safety Management Certificate for the

company-owned vessel(s) is invalid.

(f) Renewal of a Safety Management Certificate requires the

completion of a satisfactory safety management system audit which meets

all of the requirements of subpart B of this part. A renewal of a

Safety Management Certificate cannot be started unless the company

which owns the vessel holds a valid Document of Compliance certificate.

(g) Only the Coast Guard may revoke a Safety Management Certificate

from a U.S. vessel. The Safety Management Certificate will be revoked

if--

(1) The vessel's responsible person does not ask for and complete a

satisfactory intermediate safety management audit required by paragraph

(e)(2) of this section; or

(2) Major non-conformities are found in the vessel's safety

management system during a safety management

[[Page 23720]]

audit or other related survey or inspection being completed by the

Coast Guard or the recognized organization chosen by the vessel's

responsible person.

Sec. 96.350 Interim Document of Compliance certificate: What is it and

when can it be used?

(a ) An Interim Document of Compliance certificate may be issued to

help set up a company's safety management system when--

(1) A company is newly set up or in transition from an existing

company into a new company; or

(2) A new type of vessel is added to an existing safety management

system and Document of Compliance certificate for a company.

(b) A responsible person for a company operating a U.S. vessel(s)

that meets the requirements of paragraph (a) of this section, may send

a request to a recognized organization authorized to act on behalf of

the U.S. to receive an Interim Document of Compliance certificate that

is valid for a period up to 12 months. To be issued the Interim

Document of Compliance certificate the vessel's company must--

(1) Demonstrate to an auditor that the company has a safety

management system that meets Sec. 96.230 of this part; and

(2) Provide a plan for full implementation of a safety management

system within the period that the Interim Document of Compliance

certificate is valid.

Sec. 96.360 Interim Safety Management Certificate: What is it and when

can it be used?

(a) A responsible person may apply for an Interim Safety Management

Certificate when--

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

(2) Takes responsibility for the management of a U.S. vessel which

is new to the responsible person or their company.

(b) An Interim Safety Management Certificate is valid for 6 months.

It may be issued to a U.S. vessel which meets the conditions of

paragraph (a) of this section, when--

(1) The company's valid Document of Compliance certificate or

Interim Document of Compliance certificate applies to that vessel type;

(2) The company's safety management system for the vessel includes

the key elements of a safety management system, set out in Sec. 96.220,

applicable to this new type of vessel;

(3) The company's safety management system has been assessed during

the safety management audit to issue of the Document of Compliance

certificate or demonstrated for the issuance of the Interim Document of

Compliance certificate;

(4) The master and senior officers of the vessel are familiar with

the safety management system and the planned set up arrangements;

(5) Written documented instructions have been extracted from the

safety management system and given to the vessel prior to sailing;

(6) The company plans an internal audit of the vessel within three

months; and

(7) The relevant information from the safety management system is

written in English, and in any other language understood by the

vessel's personnel.

Sec. 96.370 What are the requirements for vessels of countries not

party to Chapter IX of SOLAS?

(a) Each foreign vessel which carries 12 or more passengers, or is

a tanker, bulk freight vessel, freight vessel, or self-propelled mobile

offshore drilling unit of 500 gross tons or more, operated in U.S.

waters, under the authority of a country not a party to Chapter IX of

SOLAS must--

(1) Have on board valid documentation showing that the vessel's

company has a safety management system which was audited and assessed,

consistent with the International Safety Management Code of IMO

Resolution A.741(18);

(2) Have on board valid documentation from a vessel's Flag

Administration showing that the vessel's safety management system was

audited and assessed to be consistent with the International Safety

Management Code of IMO Resolution A.741(18); or

(3) Show that evidence of compliance was issued by either a

government that is party to SOLAS or an organization recognized to act

on behalf of the vessel's Flag Administration.

(b) Evidence of compliance must contain all of the information in,

and have substantially the same format as a--

(1) Document of Compliance certificate; and

(2) Safety Management Certificate.

(c) Failure to comply with this section will subject the vessel to

the compliance and enforcement procedures of Sec. 96.380 of this part.

Sec. 96.380 How will the Coast Guard handle compliance and enforcement

of these regulations?

(a) While operating in waters under the jurisdiction of the United

States, the Coast Guard may board a vessel to determine that--

(1) Valid copies of the company's Document of Compliance

certificate and Safety Management Certificate are on board, or evidence

of the same for vessels from countries not party to Chapter IX of

SOLAS; and

(2) The vessel's crew or shore-based personnel are following the

procedures and policies of the safety management system while operating

the vessel or transferring cargoes.

(b) A foreign vessel that does not comply with these regulations,

or one on which the vessel's condition or use of its safety management

system do not substantially agree with the particulars of the Document

of Compliance certificate, Safety Management Certificate or other

required evidence of compliance, may be detained by order of the COTP

or OCMI. This may occur at the port or terminal where the violation is

found until, in the opinion of the detaining authority, the vessel can

go to sea without presenting an unreasonable threat of harm to the

port, the marine environment, the vessel or its crew. The detention

order may allow the vessel to go to another area of the port, if

needed, rather than stay at the place where the violation was found.

(c) If any vessel that must comply with this part or with the ISM

Code does not have a Safety Management Certificate and a copy of its

company's Document of Compliance certificate on board, a vessel owner,

charterer, managing operator, agent, master, or any other individual in

charge of the vessel that is subject to this part, may be liable for a

civil penalty under 46 U.S.C. 3318. For foreign vessels, the Coast

Guard may request the Secretary of the Treasury to withhold or revoke

the clearance required by 46 U.S.C. App. 91. The Coast Guard may ask

the Secretary to permit the vessel's departure after the bond or other

surety is filed.

Sec. 96.390 When will the Coast Guard deny entry into a U.S. port?

(a) Unless a foreign vessel is entering U.S. waters under force

majeure, no vessel shall enter any port or terminal of the U.S. without

a safety management system that has been properly certificated to this

subpart if--

(1) It is engaged in foreign trade; and

(2) It is carrying 12 or more passengers, or a tanker, bulk freight

vessel, freight vessel, or self-propelled mobile offshore drilling unit

of 500 gross tons or more.

(b) The cognizant COTP will deny entry of a vessel into a port or

terminal under the authority of 46 U.S.C. 3204(c), to any vessel that

does not meet the

[[Page 23721]]

requirements of paragraph (a) of this section.

Subpart D--Authorization of Recognized Organizations To Act on

Behalf of the U.S.

Sec. 96.400 Purpose.

(a) This subpart establishes criteria and procedures for

organizations recognized under 46 CFR part 8, to be authorized by the

Coast Guard to act on behalf of the U.S. The authorization is necessary

in order for a recognized organization to perform safety management

audits and certification functions delegated to the Coast Guard as

described in this part.

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

authorized to act under this subpart, send a self-addressed, stamped

envelope and written request to the Commandant (G-MSE), 2100 Second

Street SW., Washington, DC 20593-0001.

Sec. 96.410 Who does this subpart apply to?

This subpart applies to all organizations seeking authorization to

conduct safety management audits and issue international safety

management certificates on behalf of the U.S. that are recognized under

46 U.S.C. part 8.

Sec. 96.420 What authority may an organization ask for under this

subpart?

(a) An organization may request authorization to conduct safety

management audits and to issue the following certificates:

(1) Safety Management Certificate;

(2) Document of Compliance certificate;

(3) Interim Safety Management Certificate; and

(4) Interim Document of Compliance certificate.

(b) [Reserved]

Sec. 96.430 How does an organization submit a request to be

authorized?

(a) A recognized organization must send a written request for

authorization to the Commandant (G-MSE), Office of Design and

Engineering Standards, 2100 Second Street SW, Washington, DC 20593-

0001. The request must include the following:

(1) A statement describing what type of authorization the

organization seeks;

(1) Documents showing that--

(i) The organization has an internal quality system with written

policies, procedures and processes that meet the requirements in

Sec. 96.440 of this part for safety management auditing and

certification; or

(ii) The organization has an internal quality system based on ANSI/

ASQC C9001 for safety management auditing and certification; or

(iii) The organization has an equivalent internal quality standard

system recognized by the Coast Guard to complete safety management

audits and certification.

(3) A list of the organization's exclusive auditors qualified to

complete safety management audits and their operational area;

(4) A written statement that the procedures and records of the

recognized organization regarding its actions involving safety

management system audits and certification are available for review

annually and at any time deemed necessary by the Coast Guard; and

(5) If the organization is a foreign classification society that

has been recognized under 46 CFR part 8 and wishes to apply for

authorization under this part, it must demonstrate the reciprocity

required by 46 U.S.C. 3316, by providing with its request for

authorization an affidavit from the government of the country in which

the classification society is headquartered. This affidavit must

provide a list of authorized delegations by the flag state of the

administration of the foreign classification society's country to the

American Bureau of Shipping, and indicate any conditions related to the

delegated authority. If this affidavit is not received with a request

for authorization from a foreign classification society, the request

for authorization will be disapproved and returned by the Coast Guard.

(b) Upon the satisfactory completion of the Coast Guard's

evaluation of a request for authorization, the organization will be

visited for an evaluation as described in Sec. 96.440(b) of this part.

Sec. 96.440 How will the Coast Guard decide whether to approve an

organization's request to be authorized?

(a) First, the Coast Guard will evaluate the organization's request

for authorization and supporting written materials, looking for

evidence of the following--

(1) The organization's clear assignment of management duties;

(2) Ethical standards for managers and auditors;

(3) Procedures for auditor training, qualification, certification,

and requalification that are consistent with recognized industry

standards;

(4) Procedures for auditing safety management systems that are

consistent with recognized industry standards and IMO Resolution

A.788(19);

(5) Acceptable standards for internal auditing and management

review;

(6) Record-keeping standards for safety management auditing and

certification;

(7) Methods for reporting non-conformities and recording completion

of remedial actions;

(8) Methods for certifying safety management systems;

(9) Methods for periodic and intermediate audits of safety

management systems;

(10) Methods for renewal audits of safety management systems;

(11) Methods for handling appeals; and

(12) Overall procedures consistent with IMO Resolution A.739(18),

``Guidelines for the Authorization of Organizations Acting on Behalf of

the Administration.''

(b) After a favorable evaluation of the organization's written

request, the Coast Guard will arrange to visit the organization's

corporate offices and port offices for an on-site evaluation of

operations.

(c) When a request is approved, the recognized organization and the

Coast Guard will enter into a written agreement. This agreement will

define the scope, terms, conditions and requirements of the

authorization. Conditions of this agreement are found in Sec. 96.460 of

this part.

Sec. 96.450 What happens if the Coast Guard disapproves an

organization's request to be authorized?

(a) The Coast Guard will write to the organization explaining why

it did not meet the criteria for authorization.

(b) The organization may then correct the deficiencies and reapply.

Sec. 96.460 How will I know what the Coast Guard requires of my

organization if my organization receives authorization?

(a) Your organization will enter into a written agreement with the

Coast Guard. This written agreement will specify--

(1) How long the authorization is valid;

(2) Which duties and responsibilities the organization may perform,

and which certificates it may issue on behalf of the U.S.;

(3) Reports and information the organization must send to the

Commandant (G-MOC);

(4) Actions the organization must take to renew the agreement when

it expires; and

(5) Actions the organization must take if the Coast Guard should

revoke its authorization or recognition under 46 CFR part 8.

(b) [Reserved]

[[Page 23722]]

Sec. 96.470 How does the Coast Guard terminate an organization's

authorization?

At least every 12 months, the Coast Guard evaluates organizations

authorized under this subpart. If an organization fails to maintain

acceptable standards, the Coast Guard may terminate that organization's

authorization, remove the organization from the Commandant's list, and

further evaluate the organization's recognition under 46 CFR part 8.

Sec. 96.480 What is the status of a certificate if the issuing

organization has its authority terminated?

Any certificate issued by an organization authorized by the Coast

Guard whose authorization is later terminated remains valid until--

(a) Its original expiration date,

(b) The date of the next periodic audit required to maintain the

certificate's validity, or

(c) whichever of paragraphs (a) or (b) of this section occurs

first.

Sec. 96.490 What further obligations exist for an organization if the

Coast Guard terminates its authorization?

The written agreement by which an organization receives

authorization from the Coast Guard places it under certain obligations

if the Coast Guard revokes that authorization. The organization agrees

to send written notice of its termination to all responsible persons,

companies and vessels that have received certificates from the

organization. In that notice, the organization must include--

(a) A written statement explaining why the organization's

authorization was terminated by the Coast Guard;

(b) An explanation of the status of issued certificates;

(c) A current list of organizations authorized by the Coast Guard

to conduct safety management audits; and

(d) A statement of what the companies and vessels must do to have

their safety management systems transferred to another organization

authorized to act on behalf of the U.S.

Sec. 96.495 How can I appeal a decision made by an authorized

organization?

(a) A responsible person may appeal a decision made by an

authorized organization by mailing or delivering to the organization a

written request for reconsideration. Within 30 days of receiving your

request, the authorized organization must rule on it and send you a

written response. They must also send a copy of their response to the

Commandant (G-MOC).

(b) If you are not satisfied with the organization's decision, you

may appeal directly to the Commandant (G-MOC). You must make your

appeal in writing, including any documentation and evidence you wish to

be considered. You may ask the Commandant (G-MOC) to stay the effect of

the appealed decision while it is under review.

(c) The Commandant (G-MOC) will make a decision on your appeal and

send you a response in writing. That decision will be the final Coast

Guard action on your request.

PART 2--VESSEL INSPECTIONS

2. Revise the authority citation for part 2 to read as follows:

Authority: 33 U.S.C. 1903; 43 U.S.C. 1333; 46 U.S.C. 3103, 3205,

3306, 3703; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; 49

CFR 1.46; Subpart 2.45 also issued under the authority of Act of

Dec. 27, 1950, Ch. 1155, secs. 1, 2, 64 Stat 1120 (see 46 U.S.C.

App. note prec.1).

3. In Sec. 2.01-25, add paragraph (a)(1)(ix) and revise paragraph

(a)(2) to read as follows:

Sec. 2.01-25 International Convention for Safety of Life at Sea, 1974.

(a) * * *

(1) * * *

(ix) Safety Management Certificate.

(2) The U.S. Coast Guard will issue through the Officer In Charge,

Marine Inspection, the following certificates after performing an

inspection or safety management audit of the vessel's systems and

determining the vessel meets the applicable requirements:

(i) Passenger Ship Safety Certificate.

(ii) Cargo Ship Safety Construction Certificate except when issued

to cargo ships by a Coast Guard recognized classification society at

the option of the owner or agent.

(iii) Cargo Ships Safety Equipment Certificate.

(iv) Exemption Certificate

(v) Nuclear Passenger Ship Safety Certificate.

(vi) Nuclear Cargo Ship Safety Certificate.

(vii) Safety Management Certificate, except when issued by a

recognized organization authorized by the Coast Guard.

* * * * *

PART 31--INSPECTION AND CERTIFICATION

4. Revise the authority citation for part 31 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306, 3703;

49 U.S.C. 5103, 5106; E.O. 12234; 45 FR 58801; 3 CFR, 1980 Comp., p.

277; E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; 49 CFR

1.46. Section 31.10-21 also issued under the authority of Sec. 4109,

Pub. L. 101-380, 104 Stat. 515.

5. Add Sec. 31.40-30 to read as follows:

Sec. 31.40-30 Safety Management Certificate--T/ALL.

(a) All tankships on an international voyage must have a valid

Safety Management Certificate and a copy of their company's valid

Document of Compliance certificate on board.

(b) All such tankships must meet the applicable requirements of 33

CFR part 96.

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

Sec. 31.40-40 Duration of Convention certificates---T/ALL.

* * * * *

(b) A Cargo Ship Safety Construction Certificate and a Safety

Management Certificate shall be issued for a period of not more than 60

months.

* * * * *

PART 71--INSPECTION AND CERTIFICATION

7. Revise the authority citation for part 71 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3205, 3306; E.O.

12234, 45 FR 58801; 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR

54757, 3 CFR, 1991 Comp., p. 351; 49 CFR 1.46.

8. Add Sec. 71.75-13 to read as follows:

Sec. 71.75-13 Safety Management Certificate.

(a) All vessels on an international voyage must have a valid Safety

Management Certificate and a copy of their company's valid Document of

Compliance certificate on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

9. In Sec. 71.75-20, revise paragraph (a) to read as follows:

Sec. 71.75-20 Duration of certificates.

(a) The certificates are issued for a period of not more than 12

months, with exception to a Safety Management Certificate which is

issued for a period of not more than 60 months.

* * * * *

PART 91---INSPECTION AND CERTIFICATION

10. Revise the authority citation for part 91 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 3205, 3306; E.O. 12234;

45 FR 58801; 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR 54757, 3

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

11. Add Sec. 91.60-30 to read as follows:

Sec. 91.60-30 Safety Management Certificate.

(a) All vessels on an international voyage must have a valid Safety

[[Page 23723]]

Management Certificate and a copy of their company's valid Document of

Compliance certificate on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

12. In Sec. 91.60-40, revise paragraph (b) to read as follows:

Sec. 91.60-40 Duration of certificates.

* * * * *

(b) A Cargo Ship Safety Construction Certificate and a Safety

Management Certificate are issued for a period of not more than 60

months.

* * * * *

PART 107--INSPECTION AND CERTIFICATION

13. Revise the authority citation for part 107 to read as follows:

Authority: 43 U.S.C. 1333; 46 U.S.C. 3205, 3306, 5115; 49 CFR

1.45, 1.46; Sec. 107.05 also issued under the authority of 44 U.S.C.

3507.

14. Add Sec. 107.415 to read as follows:

Sec. 107.415 Safety Management Certificate.

(a) All self-propelled mobile offshore drilling units of 500 gross

tons or over on an international voyage must have a valid Safety

Management Certificate and a copy of their company's valid Document of

Compliance certificate on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

(c) A Safety Management Certificate is issued for a period of not

more than 60 months.

PART 115--INSPECTION AND CERTIFICATION

15. Revise the authority citation for part 115 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306; 49

U.S.C. App. 1804; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp.,

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

1.46.

16. Add Sec. 115.925 to read as follows:

Sec. 115.925 Safety Management Certificate.

(a) All vessels that carry more than 12 passengers on an

international voyage must have a valid Safety Management Certificate

and a copy of their company's valid Document of Compliance certificate

on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

(c) A Safety Management Certificate is issued for a period of not

more than 60 months.

PART 126--INSPECTION AND CERTIFICATION

17. Revise the authority citation for part 126 to read as follows:

Authority: 46 U.S.C. 3205, 3306; 33 U.S.C. 1321(j); E.O. 11735,

38 FR 21243, 3 CFR, 1971-1975 Comp., p. 793; 49 CFR 1.46.

18. Add Sec. 126.480 to read as follows:

Sec. 126.480 Safety Management Certificate.

(a) All offshore supply vessels of 500 gross tons or over on

international voyages must have a valid Safety Management Certificate

and a copy of their company's valid Document of Compliance certificate

on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

(c) A Safety Management Certificate is issued for a period of not

more than 60 months.

PART 175--GENERAL PROVISIONS

19. Revise the authority citation for part 175 to read as follows:

Authority: 46 U.S.C. 2103, 3205, 3306, 3703; 49 U.S.C. App.

1804; 49 CFR 1.45, 1.46; 175.900 also issued under authority of 44

U.S.C. 3507.

20. In Sec. 175.540, add paragraph (d) to read as follows:

Sec. 175.540 Equivalents

* * * * *

(d) The Commandant may accept alternative compliance arrangements

in lieu of specific provisions of the International Safety Management

(ISM) Code (IMO Resolution A.741(18)) for the purpose of determining

that an equivalent safety management system is in place on board a

vessel. The Commandant will consider the size and corporate structure

of a vessel's company when determining the acceptability of an

equivalent system. Requests for determination of equivalency must be

submitted to Commandant (G-MOC) via the cognizant OCMI.

PART 176--INSPECTION AND CERTIFICATION

21. Revise the authority citation for part 176 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2103, 3205, 3306; 49

U.S.C. App. 1804; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp.,

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

1.46.

22. Add Sec. 176.925 to read as follows:

Sec. 176.925 Safety Management Certificate.

(a) All vessels that carry more than 12 passengers on an

international voyage must have a valid Safety Management Certificate

and a copy of their company's valid Document of Compliance certificate

on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

(c) A Safety Management Certificate is issued for a period of not

more than 60 months.

23. Revised Sec. 176.930 to read as follows:

Sec. 176.930 Equivalents.

As outlined in Chapter I (General Provisions) Regulation 5, of

SOLAS, the Commandant may accept an equivalent to a particular fitting,

material, apparatus, or any particular provision required by SOLAS

regulations if satisfied that such equivalent is at least as effective

as that required by the regulations. An owner or managing operator of a

vessel may submit a request for the acceptance of an equivalent

following the procedures in Sec. 175.540 of this chapter. The

Commandant will indicate the acceptance of an equivalent on the

vessel's SOLAS Passenger Ship Safety Certificate or Safety Management

Certificate, as appropriate.

PART 189--INSPECTION FOR CERTIFICATION

24. Revise the authority citation for part 189 to read as follows:

Authority: 33 U.S.C. 1321(j); 46 U.S.C. 2113, 3205, 3306; E.O.

12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 277; E.O. 12777, 56 FR

54757, 3 CFR, 1991 Comp., p. 351; 49 CFR 1.46.

25. Add Sec. 189.60-30 to read as follows:

Sec. 189.60-30 Safety Management Certificate.

(a) All vessels on an international voyage must have a valid Safety

Management Certificate and a copy of their company's valid Document of

Compliance certificate on board.

(b) All such vessels must meet the applicable requirements of 33

CFR part 96.

26. In Sec. 189.60-40, revise paragraph (b) to read as follows:

Sec. 189.60-40 Duration of certificates.

* * * * *

(b) A Cargo Ship Safety Construction Certificate and a Safety

Management Certificate are issued for a period of not more than 60

months.

* * * * *

[[Page 23724]]

Dated: April 23, 1997.

J.C. Card,

Rear Admiral, U.S. Coast Guard, Assistant Commandant for Marine Safety

and Environmental Protection.

[FR Doc. 97-11189 Filed 4-30-97; 8:45 am]

BILLING CODE 4910-14-P