The ISM Code Implementation to date

1. The ISM Code Implementation to date Piraeus 10/12/2008 John Couyou For the benefit of business and people

2. TEN (10) YEARS LATER ISM Code How it all begun PROBLEM……..an accident and claims explosion CAUSE………….human error SOLUTION……..management systems

3. TEN (10) YEARS LATER ISM Code ALMOST 10 YEARS OF ISM IMPLEMENTATION What was the ISM intended for ? Key players’ commitment - theory & practice MAJOR Implications Benefits & Drawbacks Legal aspects – Court rulings Enforcement – Enforcement penalties Future prospects

4. TEN (10) YEARS LATER ISM Code What was the ISM intended for ? Provide an International Standard for management and operation of ships. (TMSA - ISO STANDARDS – BMSA ?) Address the responsibilities of people who manage ships. (ASHORE – MSC-MEPC7/Circ 6) Address the responsibilities of people who operate ships. (ONBOARD)

5. TEN (10) YEARS LATER ISM Code What was the ISM intended for ? Provide an International Standard for pollution prevention. ( MARPOL – ISO 14001/2004 – Vessel General Permit…….ISM 1.2.3) Support and encourage the development of a safety culture. Establish safety management objectives. Establish an SMS by the Company to fit its own organization

6. TEN (10) YEARS LATER ISM Code OtherKey Players .. agents , charterers, classification societies acting in their capacity as classification society , classification societies acting on behalf of Flag State Administration ,Flag State Administrations ,H&M Underwriters , P&I Clubs representatives ,PSC inspectors , pilots ,press , professional bodies ,ship brokers ,ship owners associations , surveyors ,consultants ,auditors* , trade unions , university lecturers/academics …

7. TEN (10 ) YEARS LATER ISM Code MAJOR Implications Company organization & Masters Ship specific SMS , structure and maintenance Ship and Equipment maintenance Rules & regulations awareness Training Legal aspects Insurance Administration & costs

8. TEN (10) YEARS LATER ISM Code BENEFITS & DRAWBACKS It is a reliable management tool if used properly It is effective in reducing accidents and damages (claims) if used properly Risks are assessed and sensible precautions are taken when used sensibly It helps increase awareness and compliance with rules and regulations It improves/enforces safety consciousness and improves management skills of personnel

9. TEN ( 10 ) YEARS LATER ISM Code BENEFITS & DRAWBACKS It is not a prescriptive enough management tool (cf. TMSA) Often , SMS Procedures may not be relevant Working practices may be costly to change Very scarcely ,time and resources are diverted from the principal purpose of carrying cargo profitability Checklists burden the system ,to satisfy auditing requirements

10. TEN ( 10 ) YEARS LATER ISM Code BENEFITS & DRAWBACKS It is increasingly becoming an administrative burden Too many rules and regulations directed to poorly trained personnel Communication language ( too many languages ! ) Lack of “proper” training. Training needs are rarely reported Lack of adaptability –on company side-with regards to ship-types and trade patterns (number of shore personnel, frequency of onboard visits)

11. TEN ( 10 ) YEARS LATER ISM Code BENEFITS & DRAWBACKS R.O , R.S.O. , Flag Administration , P.S.C. behaviors may create problems of application , interpretation ,variation in objective standards Lack of proper SMS monitoring and superficial evaluation (Int. Audits-Master’s Reviews-Supt. Inspections-Evaluation of documentation received-Investigation & analysis etc. ) Shipping is a multinational and multifaceted industry with a globalized labor force. Diversity of opinions and experiences play a significant role in ISM implementation

12. TEN ( 10 ) YEARS LATER ISM Code BENEFITS & DRAWBACKS Non conformities still appear as a “black mark” ( In the company – to the Majors – to PSC- to Auditors ) Misguided ideas that large and repetitive quantities of paperwork (and administration to function) and ticking boxes and numerous checklists could ( ! ) replace good seamanship and proper training.

13. TEN (10) YEARS LATER ISM Code Legal aspects EURASIAN DREAM…..car carrier…..07/02/02 Ruling : a framework upon which good practice should be hung. ………………………………………………………………………………………... TOREPO…..product tanker…..18/07/02 Ruling : a prudent manager/master could very well organize their companies’/ships’ work to follow best practice and reasonableness guidelines ………………………………………………………………………………………... PATRAIKOS II …..container ship…..09/05/2002 Ruling : failure to exercise due diligence in checking the background ,training and qualifications of the second mate

14. TEN (10) YEARS LATER ISM Code COURT RULINGS The court has scrutinized the SMS and the documented systems very closely .Voluminous and particularly irrelevant manuals have been criticized by the court. It is unacceptable for a ship owner/manager to dump ready made procedures, manuals, etc. onboard a ship and just expect those onboard to get on with it. The recruiting , vetting, familiarization and training of sea staff has come under very close scrutiny particularly when an incident occurs because of human error.

15. TEN (10) YEARS LATER ISM Code COURT RULINGS The evidence required has not been limited to the particular incident. Evidence was needed to be produced , that , good procedures were in place and that, for most of the time, those procedures were being correctly implemented and followed. The courts expect certain things (evidence) to be produced , but will also expect “ audit trails” to be capable of being followed. If the operator can demonstrate that he has a good system in place and all involved were doing their best to properly implement their SMS , then they should not be unreasonably punished by the courts.

16. TEN (10 ) YEARS LATER ISM Code Enforcement Commitment from the top Management Designated Person & Master & ALL Internal Auditors Recognized Organizations Flag Administrations Port State Controls Insurers Courts

17. TEN ( 10 ) YEARS LATER ISM Code Enforcement Penalties Deficiencies Detentions Non Conformities & Additional Audits Fines by Flag Administrations Withdrawal of ISM Certificates ( RARE ) Loss of insurance claims Extensive SMS revisions

18. TEN ( 10 ) YEARS LATER ISM Code Future prospects In the short and medium term ,the ISM Code was designed to discover and eliminate substandard ships ,together with substandard owners and managers ,not to mention many others who contribute to their survival and ,in some cases , prosperity. EXPERIENCE SHOWS THAT IT IS WORKING

19. TEN ( 10 ) YEARS LATER ISM Code Can then , the ships be safely managed … ? …at one level the answer really is yes and no, but at a deeper level there is a complicated and often complex and conflicting picture , which should not surprise anyone if one considers that one is dealing with a multinational , multifaceted industry with a globalised labor force. Therefore diversity of opinions and experiences are to be expected. IT IS A SLOW PROCESS

20. Ships’ safe operation management ISM Code THANK YOU FOR YOUR ATTENTION