Commercial Vessel Compliance

5/11/2016: 2016 Offshore Technology Conference – Safety management systems and risk-based inspections

Maritime Commons attended the 2016 Offshore Technology Conference (OTC) to provide you with a wrap-up of what was covered by the U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement (BSEE).

The assistant commandant for U.S. Coast Guard prevention policy, Rear Adm. Paul Thomas, and BSEE director, Brian Salerno, shared the stage on a speaking panel titled, ‘Perspectives Regarding Safety and Safety Management from Senior Regulatory Leadership.’

The panel was moderated by Charlie Williams, executive director for the Center for Offshore Safety (COS)- an industry sponsored organization focused exclusively on offshore safety on the U.S. Outer Continental Shelf.

For those of you who were unable to attend, Maritime Commons is providing a condensed version of Thomas and Salerno’s remarks in a four-part series. These remarks are not ‘as delivered’ but provide a condensed version of the panel highlights in the ‘panel-conversational’ style. The below questions and answers focus on safety environmental management systems (SEMS) and safety management systems (SMS).

Question: Are there going to be regulations directly aimed at safety culture?

Brian Salerno:

SEMS is a very good construct and it’s clearly moving in the right direction, but there are additional elements that we’d like to see built in, so the question then becomes what’s the best way to approach that? We could look at additional regulations – we’ve chosen not to do that for now. We think there may be other ways to get to the desired effect, and the way that we’re approaching it now quite honestly is to work very closely with the American Petroleum Institute (API) and revisions to Recommended Practice 75 (RP 75). We collectively agree that there should be more emphasis on factors such as process management, human factors and cyber. We’re engaged in looking at other alternatives as well, but our fundamental belief is that we’ve got a good thing going but could improve on it.

Paul Thomas:

We’re in the middle of a ruling with for safety management systems for vessels on the outer continental shelf, so I’m limited on what I can say, but we published the mass rule. Congress asked us to do a report on the value of safety management systems and we finished that report. My view is that these operations are very complex and some of them are taking place on vessels not currently required to have a safety management system in place. This is because they are not all covered by the SMS rule depending on where they are and how they are operating.

We need to have well-developed and well-implemented safety management systems that help those passengers and crews understand, assess and manage the risk. We will continue to push for safety management system requirements. We’re looking forward to the conversation and input from all stakeholders; it remains a high priority.

Question: If we have the capability of measuring something, then that allows our crews to understand what is going on. If we don’t measure it, even though it’s there, our crews don’t actually have a chance of understanding they have a problem and that’s very hard to sense. Will there be more ‘what-if’ games and modeling of what is going on, with regards to well control and well intervention, to understand what could potentially happen?

Brian Salerno:

I agree. If you look at how the well control rule ties in with SEMS, there are a lot of overlaps. As far as gaming out what can go wrong, I think that’s always worthwhile; that’s part of SEMS thinking and contingency planning – it’s just good management overall. I think scenario-based planning is extremely valuable.

Question: Could you talk about the about the pilot for risk-based inspections and the future of that?

Brian Salerno:

We have a risk-based inspection pilot underway, and there are about a half a dozen companies that we will interact with to test this approach. We are trying a lot of things at once; we’ve taken some lessons from the North Sea and how they conduct inspections; we are using a team approach that involves inspectors, engineers and SEMS experts, and it takes place over the course of several days. What we hope to gain is a better appreciation of our predictive models. The program was built on studies and analysis based on the complexity of the operations and a number of other management features such as the age of the facility. It gets put together in a model that was developed by a national lab, and we are testing that to make sure it works. Ultimately, I think the risk-based methodology will be refined and simplified to focus on the most meaningful elements.

When you have different factors that point to the potential elevation of risk, it doesn’t necessarily mean that a facility is poorly managed. It just means that there are risk indicators that deserve greater attention. Ultimately, we’re looking for a system that we can apply across the board. We’re looking to target our limited resources at the greatest risks. Some facilities may, inherently, represent a greater collection of risk than others. But on a different level, this also means that there are certain components that represent greater levels of risks than others. We’re still in that exploratory, learning, phase; we’re appreciative of companies that are involved early on.

Paul Thomas:

In learning about risk-based inspections, we look at the level of risk associated with operating that particular vessel. We’re also looking at certain things like ownership and change of ownership because those can also be risk factors. We are looking at factors that can alter the frequency and scope of visits. We hope to do it in a way that rewards operators that have fewer risk indicators. It is not a punishment, but rather a way to help us decide where we are going to put our resources.

Question: What role do you see third party certification (SEMS, Q2, ISO) playing within your risk-based inspection program?

Paul Thomas:

I see it as an indicator that we reduce government oversight when third parties are employed to provide outside oversight. I think third parties will always be an integral part of the Coast Guard’s regulatory regime because it has to be. The key with third parties is to figure out the right oversight of the third parties themselves in a way that doesn’t subject the industry to too great a burden.

Brian Salerno:

I guess one of the obvious ways we rely on third parties is SEMS, we have the authority ourselves to conduct audits but that’s seldom done; the vast majority are done by third parties and COS is really a big part of helping to register those service providers. The new Well Control Rule includes expanded use of 3rd parties to verify critical component capability and maintenance. This would fit with the existing SEMS elements related to maintenance of safety critical equipment.

Question: How do you all feel about contractors voluntarily getting out in front of concerns and issues… the industry doing things themselves?

Brian Salerno:

Even though it lies outside regulatory requirements, it says a lot about them taking their safety management responsibility seriously and incorporating SEMS as a good business practice. Something that has been a recurring concern for BSEE is the occasional disconnect between operators and contractors. However, when you have contractors and companies who are voluntarily developing programs and third party audits of those programs, you are really closing the gap. It’s a good idea, it may not be required but it’s absolutely a good practice.

Paul Thomas:

I think that there are solutions to these challenges and operators realize that it’s good for them and their business practice. The Coast Guard is limited in resources and it’s encouraging to see industry commit to safety management and take the initiative to utilize third parties in doing so.

Question: What is your message to industry about SEMS, the future of it and where you think it’s going?

Brian Salerno:

My hope and expectation is that we will see more meaningful results from the next round of audits. Thanks to COS, we’ve had the opportunity to reach a lot of people with the results from the first round. The whole system was audited and has been improved. People are in different places when it comes to SEMS implementation; there are many companies that had safety management systems before SEMS was required. The idea is that people aren’t all starting from the same place. I think we’ll see a growing reliance on SEMS as a way to manage safety. It’s the human element that we need to pay attention to. It’s how people make decisions and maintain their equipment. It’s all those things that fundamentally are the most significant factors in safety management that we need to focus on.

Salerno and Thomas want to continue this discussion on Maritime Commons. If you want to follow up with any thoughts or questions, post them here or to Twitter using the hashtag #BSEEUSCG.

In addition to this post, be sure to read the other three posts from the 2016 Offshore Technology Conference.

Part 1: Opening remarks
Part 2: Joint coordination and data sharing
Part 3: Safety management systems
Part 4: Finishing up the discussion

This blog is not a replacement or substitute for the formal posting of regulations and updates or existing processes for receiving formal feedback of the same. Links provided on this blog will direct the reader to official source documents, such as the Federal Register, Homeport and the Code of Federal Regulations. These documents remain the official source for regulatory information published by the Coast Guard.