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The Time For ISM Is Near

Unfortunately, bad things can happen to good companies.

One of the questions looming before the maritime industry is whether the new International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (ISM Code) will provide shipowners or operators protection from criminal prosecution or civil liability due to environmental violations.

To make matters worse, the Department of Justice recently announced that the maritime industry is at the top of its target list for criminal prosecution for environmental violations. Shipowners and operators must realize that under the new Code, paperwork compliance alone will not provide protection. The fact is that if a company should suffer a maritime incident or casualty resulting in environmental violations the company and top management will become a likely target for criminal prosecution.

The maritime industry is being forced to reinvent its approach to safety and pollution prevention — and with good reason. Despite the technological innovations and modern equipment on today's vessels, approximately 80 percent of all serious marine casualties are attributed in some degree to human error.

The clock is ticking for companies to meet ISM Code requirements which become mandatory July 1, 1998 for passenger vessels, passenger highspeed craft, oil tankers, chemical tankers, gas carriers, bulk carriers, and cargo high speed craft of 500 or more gross tons engaged on a foreign voyage. Compliance for certain other vessels is not required until July 1, 2002.

The U.S. Coast Guard (USCG) already has a head start.In January this year it started requiring vessels subject to the ISM Code to provide advance notice of arrival information related to ISM Code compliance. In March USCG published Port State Control guidelines that provide guidance to USCG boarding officers to go beyond checking only for a Document of Compliance and a Safety Management Certificate but to also conduct an expanded exam if "clear grounds" exist supporting such an exam. Companies must ensure that its ISM system can truly withstand the scrutiny that will assuredly follow an incident. Vessel owners and operators cannot afford to breathe a sigh of relief just because appropriate ISM certifications have been obtained. The work has just begun. Owners and operators now musts focus on how best to internally implement the ISM Code to minimize owner or operator criminal or civil liability should an incirdent occur. The ISM Code is expressed in broad terms based on general principles and objectives to allow flexibility for a company to tailor its ISM safety management system to meet the needs of its corporate and vessel operating practices.

There are, however, a few ISM Code principles that should be viewed as critical to ensure that the system meets its intended purpose and that it best protects the company from the intense scrutiny that will follow an unfortunate incident.

• Commitment from the Top: Ensure that top management practices what it preaches and actually understands the ISM safety management system.

• Seafarer Familiarization with the System: Ensure that the system reflects actual practice of the company and its employees. A "paper" system that is not integrated as a true part of everyday business will not achieve desired results.

• Entity Responsible for the ISM System: Vessel owners are well advised to carefully pick ship management companies to assume these duties and ensure that adequate contractual remedies are available for a breach. • From a legal perspective, a manager will likely be treated as an agent of a vessel owner, thus fixing the owner's liability for the manager's acts or omissions.

• Consistency with the ISM Code and ISM Guidelines: Companies should carefully compare their ISM system with the ISM Code and Guidelines which will be viewed as the international standard should there be an incident. • Master's Responsibilities and Authorities - Ensure that company policies do not alter the timehonored responsibilities of the master related to safety and environmental compliance.

• Shoreside Support of the Master and Vessel Operations: The designated person and other company officials must closely monitor vessel needs and provide quick and adequate support.

Communications with the Designated Person - Top management should establish an effective system to document on a regular basis communication with the Designated Person to demonstrate the company commitment to the ISM system.

• Non-Conformities, Accidents, Hazardous Conditions, andCorrective Actions: Companies should vigilantly adhere to and enforce these procedures and ensure that items identified as needing corrective action be quickly addressed.

As the deadline for implementing the ISM Code approaches, it is time for companies to examine the human element of the ISM system.

Assuming the appropriate documents and certificates have been obtained, aggressive compliance with the ISM Code may help the shipowner demonstrate that there was no culpable conduct if the ISM Code is implemented properly. In such a case, accidents or incidents may be viewed as truly unavoidable. Conversely, if compliance is viewed as a paperwork exercise, a shipowner may provide a roadmap of deficiencies for a prosecutor to follow.

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